Operating Reserves Solution in Texas Could Add $70/MWh to Prices, Contribute Incremental $400,000 to Peaker Net Margin

ERCOT has filed a supplement to backcast pricing impacts from implementing an operating reserves demand curve under the B+ Solution, now using 2,300 MW as the minimum contingency level, which indicates energy market price increases of up to $70/MWh.

Specifically, ERCOT found that for the combined 2011 and 2012, the energy-weighted average price increase from Solution B+ at 2,300 MW would have been $21/MWh at a $5,000/MWh price cap, and $42/MWh at a $9,000/MWh price cap.

The increase in each individual year ranged from $7/MWh (2012 @ $5,000 cap) to $70/MWh (2011 @ $9,000 cap).

The additional contribution to Peaker Net Margin from Solution B+ at 2,300 MW would have ranged from $53,000 (2012 @ $5,000 cap) to $400,000 (2011 @ $9,000 cap).

Link to ERCOT analysis

ERCOT had previously provided a backcast using 1,375 MW and 1,750 MW as the minimum contingency level

Docket 40000