Texas Generator, PUCT Staff Seek Approval Of Voluntary Mitigation Plan

Luminant Energy Company LLC and Staff of the Public Utility Commission of Texas have filed for approval of a Voluntary Mitigation Plan (VMP) which would, pursuant to PURA § 15.023(f) and 16 Tex. Admin. Code § 25.504(e), specify offering practices that Luminant can use when offering its generation resources into the Electric Reliability Council of Texas real-time energy market during the term of the agreement and specify that those offering practices will not be considered an abuse of market power.

Under the proposed agreement, adherence to this VMP, while it remains effective, shall provide Luminant with an absolute defense against allegations of abuse of market power through economic withholding with respect to the specific behaviors addressed by the VMP

The VMP addresses Luminant's offer strategy for six different technology types: nuclear, solid-fuel (coal and lignite), non-quick start natural gas, quick start natural gas, intermittent renewable resources (wind and solar), and batteries. With respect to nuclear, coal, and natural gas fired units, the VMP will only apply to units in Luminant's fleet at the time of approval of the VMP.

Apart from provisions allowing parties to terminate the VMP earlier, the VMP shall automatically terminate without any further action by a Party upon the earlier of: (a) ERCOT's go-live date for Real Time Co-optimization; or, (b) The day that is seven years from the date the Commission approves this VMP; or, (c) The day Luminant's Installed Generation Capacity, as that term is defined in 16 Tex. Admin. Code § 25.5, drops below 5% of the total ERCOT Installed Generation Capacity in the most recent Estimate of Installed Generation Capacity in ERCOT Memorandum filed in Project No. 39870, or its successor project.

The VMP provides that:

• Day-Ahead Market (DAM) Offers and Bids: Offers and/or bids for energy and ancillary services in the DAM can be made at prices up to and including HCAP.

• Loads in SCED: Bids for energy may be submitted at any price, subject to any load bid caps set by the PUC.

• Nuclear Units: Energy Offer Curves (EOCs) for the Comanche Peak units shall be submitted into the real-time market with values no higher than $10/MWh.

• Non-Spinning Reserve Service: Any MWs from On-Line and Off-Line NSRS shall be offered at prices no higher than $250/MWh, unless required by an applicable ERCOT Protocol. This section does not apply to offers pursuant to a separate VMP provision governing Quick Start CTs

• Intermittent Renewable Resources (IRRs): Any MWhs from IRRS [sic] (including wind and solar) shall be offered at no higher than $10.00/MWh.

• Batteries: Energy Offer Curve (EOCs) from each unit shall be no greater than the higher of (1) the price point on the ERCOT Power Balance Penalty Curve associated with capacity equal to the Summer Rating HSL of each unit or (2) five (5) times the highest hourly DAM price for the Resource Node for the operating day.

• The VMP also governs offers from Lignite and Coal Units, Non-Quick Start Operated and Non-Combined Cycle Natural Gas Units; Combined Cycles, and Quick Start CTs, as described in detail in the VMP which can be seen here

Docket 49858