Monday, February 18, 2019

ERCOT Board of Directors Briefs: Feb. 20, 2018

ERCOT Sets New Wind Record, Preps for Summer

AUSTIN, Texas — ERCOT CEO Bill Magness found himself playing catch up during his Feb. 20 report to the ISO’s Board of Directors, revising a slide on the fly with the latest record for wind production.

“As is often true with wind records in ERCOT,” Magness said, pointing to Jan. 11’s 17,376 MW of wind generation, “that record has already been broken.”

Bill Magness delivers his CEO report as Director Clifton Karnei (left) and PUC of Texas Commissioner Arthur D’Andrea listen. | © RTO Insider

At 10:05 p.m. the night before, the ERCOT system set its latest record by generating 17,541 MW of wind energy.

Looking ahead, Magness said tightening reserve margins following the retirement of more than 4.3 GW of generation make the upcoming summer “all about performance.” Including delayed projects and more than 3.8 GW of new resources, the ISO has seen its reserve margin shrink from 18.9% to 9.3%, leaving it with 77.2 GW of capacity on hand to meet a projected summer peak of almost 73 GW.

“We at ERCOT are doing everything we can think of with people and processes to prepare for what’s coming,” he said. “But I think everybody in the market is doing that as well. We all understand it’s about good performance.”

Additional resources, much of it solar and other renewables, are on the way. ERCOT received 196 interconnection requests last year, more than any year going back to 2007. Utility-scale solar projects accounted for 56% of those requests.

Magness reported a preliminary $10.8 million favorable variance in net revenues, driven by colder weather and under-budget project and hardware expenses.

He also shared what he called a “more tasteful” Super Bowl-related factoid than water usage during the game: the frequency increase in all three interconnections following a 20-second NBC Sports equipment failure that caused television screens to go black late in the first half. Magness said data from the Texas Synchrophasor Network showed that the loss of load was roughly the same as a large generator tripping, but with frequency up rather than down.

ERCOT staff also reported that it is addressing a delayed $2.4 million congestion revenue rights system upgrade with additional vendor resources and increased defect resolution.

“There is an urgency behind this,” said Mandy Bauld, director of ERCOT’s project management office. “We need the system to function because we need certainty around the auctions.”

Directors Grant ‘Critical’ Status to West Texas Project

The board accepted staff’s recommendation that it designate part of a West Texas transmission project as being “critical” to system reliability. The designation means a 345-kV line’s certificate of convenience and necessity application at the Public Utility Commission of Texas will be expedited — and its construction likely completed sooner.

Billo | © RTO Insider

Jeff Billo, ERCOT’s senior manager of transmission planning, told directors that load projections in the Permian Basin’s Delaware Basin — “The hot spot of hot spots,” he said — have grown from a peak of 22 MW in 2010 to a projected 964 MW in 2021. The project’s original study last year had a committed load of 533 MW in 2021.

“To say that this is load growth that we have never really experienced before is an understatement,” Billo said.

The board approved the transmission line as part of the Far West Texas Project last year. The $336 million project consists of two 345-kV lines necessary to support continued oil and gas development southwest of Odessa. (See ERCOT Board Approves West Texas Transmission Project.)

Oncor, one of three companies involved in the project, has submitted two additional projects to ERCOT’s Regional Planning Group, and is also pondering load-shed schemes to maintain reliability before the two upgrades are in place. Billo said Oncor was confident it could have the 345-kV line in service by 2020, if it was designated as “critical” to reliability.

The board also approved a resettlement of the Greens Bayou Unit 5 reliability-must-run agreement with NRG Texas Power, resulting in a $25,949.96 refund to ERCOT. The RMR contract was terminated in May 2017, but costs to NRG were allocated over 31 days that month, instead of the 29 days during which the agreement was in place. (See ERCOT Ending Greens Bayou RMR May 29.)

Board Re-elects Chairs, Confirms TAC Chairs

The board wasted no time in re-electing Craven Crowell and former PUC Commissioner Judy Walsh as its chair and vice chair, respectively. Crowell, an industry veteran and eight-year chairman of the Tennessee Valley Authority, and Walsh have served in their positions since January 2012.

ERCOT Board of Directors CEO Bill Magness

Craven Crowell (head of the U) chairs ERCOT’s February Board of Directors Meeting. | © RTO Insider

The complete board then re-elected Magness as ERCOT’s CEO and ratified the ISO’s officers. The directors also confirmed the elections of Dynegy’s Bob Helton and the Texas Office of Public Utility Counsel’s Diana Coleman as the Technical Advisory Committee’s chair and vice chair, respectively.

Seven NPRRs Gain Unanimous Approval

Representing the Consumer Market segment, Director Nick Fehrenbach with the city of Dallas pulled a nodal protocol revision request (NPRR841) from the consent agenda over concerns it might result in unintended consequences for bid strategies in the day-ahead market.

The NPRR would correct an oversight in a previous change request (NPRR782) by revising the calculations used to determine the make-whole payment for incorporating the ancillary services infeasibility charge. Those charges are clawed back from generators that are unable to provide ancillary services because of a transmission constraint or through some fault not their own.

Fehrenbach said he wanted to avoid changes in market bid strategies “when there’s no longer the threat of that infeasibility charge” and requested staff monitor participants’ behavior.

“I want to make sure we don’t have a big upswing [in make-whole payments], and if there is, see if it has an impact on behavior or strategy,” he said.

Fehrenbach ended up making the motion to pass NPRR841, which carried unanimously.

The board approved six other NPRRs, including one designed to maintain ERCOT’s independence from FERC oversight, and a system change request (SCR) on its consent agenda:

  • NPRR819: Removes language referencing “data errors” for resettlement of the day-ahead and real-time markets; gives the ERCOT board authority to direct a day-ahead resettlement parallel to its authority to direct a real-time resettlement; removes references to undefined “declarations” of resettlements; changes the thresholds that determine a resettlement; and fixes a semantics error.
  • NPRR842: Defines a “study area” as an ERCOT-designated “geographic region,” separate from a weather zone or load zone.
  • NPRR844: Corrects the current process of including capacity that is modeled but not yet commercially operational in the outage scheduler, which is then reflected in the outage report.
  • NPRR852: Creates a more efficient approval process when updating the CRR activity calendar; removes unnecessary “advisory approval” language; and moves the calendar’s approval from the TAC to the Wholesale Market Subcommittee.
  • NPRR855: Clarifies the criteria for including new and retiring resources in the seasonal peak average capacity estimation calculations used for ERCOT’s Capacity, Demand and Reserves report. The revisions apply to wind, solar, DC ties, hydro and all-inclusive generation resources within private-use networks.
  • NPRR861: Clarifies ERCOT can and will take all actions necessary to preserve its jurisdictional status quo and its market participants with respect to FERC. Possible actions include but are not limited to ordering the disconnection of transmission facilities and denial or curtailment of an electronic tag.
  • SCR794: Updates how the security-constrained economic dispatch limit is calculated by ERCOT’s Transmission Constraint Manager to consider how the megavolt-ampere flows compare to actual limits.

PUC Chair DeAnn Walker thanked the board for passing NPRR861, saying it was very important to her.

“Chairman Walker, as long as you’re happy, we’re happy,” Crowell said.

— Tom Kleckner