Texas PUC To Drop Proposed Use of ERS Resources For Local Relief In Final Rule

During an open meeting yesterday, Texas PUC Commissioners agreed that a final order revising the Emergency Response Service (ERS) rule should omit language that would allow ERS resources to be used to relieve local transmission congestion or emergencies, with Commissioner Kenneth Anderson stating that the rulemaking process has identified a need for action on other issues, including integrating distributed generation into SCED and proceeding with co-optimization in the ERCOT real-time market

With Chairman Donna Nelson expressing concern over potential price suppression impacts, as well as other issues, Commissioners agreed that the final rule should not allow, as earlier proposed, ERS resources to be used to relieve local transmission congestion or emergencies. A revised proposal for adoption will be presented for action at the next open meeting.

Instead, the final rule will mirror the original concept in opening the rulemaking, which was to allow ERS resources to opt-out of their ERS contract in order to participate in any ERCOT process seeking alternatives to an RMR agreement.

Anderson noted that, "There's a bigger issue that this rulemaking has identified, which is, distributed generation, whether its paired with a load or on its own, needs to be integrated into ERCOT."

"My own personal view is that it needs to be; I think they should get the LMP," Anderson said

Anderson said that he understands that ERCOT is working on the issue and strongly encouraged ERCOT to make enabling distributed generation participation in SCED a priority. "There are [distributed] resources out there that have the ability to be integrated into SCED, make bids, and follow dispatch instructions," Anderson said

Moreover, Anderson said that the bigger question of loads being used to relieve either congestion or provide emergency or other services, goes back to the, "fundamental fix," which is co-optimizing the real-time market

"I still haven't seen the report yet, but I understand that ERCOT has done a cost-benefit study on multi-interval SCED (what the Chairman and I first knew as look-ahead SCED) that finds it's not cost-effective," Anderson said

While Anderson has not yet read any such report, Anderson said that, assuming such report ends the consideration of multi-interval SCED for now, "that then opens up the question about going ahead and co-optimizing the real-time market."

Anderson noted that, if the PUC were to move forward with co-optimization, such action would help with proper price signals and dispatch, hopefully minimizing RUCs. If co-optimization were adopted, Anderson said that the Commission, while not required, could also adopt local ORDCs that reflect scarcity.

"I am not expressing an opinion on that now," Anderson stressed, but suggested that such action would help address congestion and local transmission issues.

Nelson suggested that such issues, that were implicated by the rulemaking but outside of its scope, be further addressed at a future open meeting

Nelson also said that she does not believe funding for ERS should be increased. Certain stakeholders, citing the proposed use of ERS for local congestion issues, had proposed the annual ERS expenditure cap be raised

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