Environmental Defense Fund Report Says Texas PUC Should "Maintain Or Strengthen" Creditworthiness Requirements For Retail Electric Providers

A report prepared for the Environmental Defense Fund concerning resource adequacy and demand-side resources in the ERCOT market says that the Texas PUC, "should maintain or strengthen requirements that all major power purchasers – REPs and Qualified Scheduling Entities – are credit-worthy counter-parties."

"This will protect the value of power purchase agreements for financing new investments and reduce the risk of defaults for customers and the market as a whole," the report says

Similar to past recommendations from similarly-aligned groups, the Environmental Defense Fund report calls for market changes to allow for greater participation of demand resources in the ERCOT market.

"[T]he PUCT and ERCOT should facilitate participation in ERCOT’s wholesale market of customer-aggregated, automated demand response and other distributed energy resources as dispatchable resources (e.g., a 'virtual power plant') that are integrated into the electricity supply stack," the Environmental Defense Fund report said

The report did not include any specific recommendations to achieve this policy. However, past reports from similarly-aligned groups have sought to allow demand-side resources to participate in the market outside of the current paradigm, in which a QSE assumes the entire obligation of a defined amount of load (LSE), or represents a Resource Entity (including a load resource Resource Entity).

The report also states, "Though it is appealing to have demand and DER resources show up as active, quasi-supply bidders in the spot market, the rules and high entry costs of becoming active market participants may dissuade such participation and limit demand and distributed generation initiatives. This could harm, rather than enhance, ERCOT’s system reliability and resilience."