No Substantive Opposition to Operating Reserves Demand Curve Proposal, Except Fear It Might Foreclose Gravy Train

No substantive opposition to the B+ Operating Reserves Demand Curve was voiced yesterday during a Texas workshop on the subject, other than from supporters of alternative market designs who fear it might preclude the need for their preferred outcomes.

Specifically, in terms of being a more efficient market design than the status quo, it did not appear any stakeholder would aver that the B+ Operating Reserves Demand Curve is inferior to the current market. Some stakeholders, including certain load interests, withheld judgment wanting to continue to study the proposal for various impacts.

The opposition which was voiced to the curve amounted to opposition not to the curve itself, but as using the curve as the sole resource adequacy solution in ERCOT. Concerns from capacity owners, seeking a centralized capacity market, were that the ORDC may substantially raise prices without guaranteeing reliability -- an ironic concern given that capacity payments under a forward, centralized capacity market have not assured reliability in ISO New England, as the ISO recently detailed (see prior story).

In any case, when pressed by Commissioner Kenneth Anderson as to how the B+ Operating Reserves Demand Curve would not be an improvement versus the current market, no stakeholder could provide a convincing answer.

That being said, the specific parameters of an Operating Reserves Demand Curve continued to be tweaked. While such modifications are consistent with the original proposal at a broad level, Chairman Donna Nelson requested more time to review the impact of specific changes, to ensure that they would not run counter to the goals of achieving efficient energy market pricing.

However, Anderson hoped that any additional study could be completed quickly, as, "the sooner that we can get this [a form of ORDC] in place, the better it is for the market, and we can move on to other market efficiency issues," such as, potentially, co-optimization, loads in SCED, load participation in the day-ahead market, and other issues.