ERCOT Uplift Would Be Used to Compensate Generators for Oscillation Protection Under One (of Three) Staff Proposal

Staff of the Public Utility Commission of Texas have filed three potential options for next steps in the Commission's investigation of subsynchronous oscillation (SSO).

Of note, Staff Proposal "B" would address existing instances of SSO risk only on the CREZ lines.

Proposal B would provide that certain generation resources vulnerable to SSO risk, as determined by ERCOT, "shall" install protection on their facilities.

Option B provides that a, "limited subset of existing generation resources directed by ERCOT to implement protection shall receive a one-time reimbursement for demonstrated costs associated with engineering, procurement, construction, and installation of such measures up to a specified cap."

"Costs would be recoverable through an uplift mechanism to the ERCOT market," under this option.

Staff explained that Proposal B would allow cost recovery for a subset of existing generation resources at risk of SSO, but would not permit uplift for generation resources that may become vulnerable due to future topology changes.

In contrast, Staff Proposal "A" would address current and future instances of SSO risk. Generation resources would not be mandated by Proposal A to protect their facilities, but may do so at their discretion, and would not be eligible for cost recovery.

Staff Proposal C would consist of additional studies and another workshop to provide additional information. Proposal C suggests an extended project timeline to allow Staff to gather more information. Proposal C permits Staff to hold an additional workshop to gather stakeholder perspectives on the necessary parameters for the detailed study of SSO risk, which, "could allow Staff to characterize a more prescriptive approach to detailed study in the rule but would delay resolution of the cost recovery issue." Under Proposal C, Staff anticipates that it would report back to the Commissioners on findings and activities in the first quarter of 2015.

Staff does not express a preference for any of the three options

Project 42631