Thursday, February 21, 2019

ERCOT Briefs: Week of Jan. 7, 2019

PUC Asks Legislators for Clarity on Battery Storage Ownership

By Tom Kleckner

The Texas State Capitol, home to the 86 Texas Legislature.

As part of its 2019 Scope of Competition in Electric Markets report to the Texas Legislature, the Public Utility Commission is asking legislators to help provide clarity on whether transmission and distribution utilities (TDUs) can own and operate energy storage devices (Project 48017).

The PUC said that the ownership and deployment of electricity from battery storage devices “has emerged as an issue that would benefit from legislative clarity.”

“I don’t want the state to get behind on the development of batteries into our system,” Commission Chair DeAnn Walker said during an open meeting last month.

The PUC opened a rulemaking on the issue (48023) in January 2018, shortly after it rejected AEP Texas’ request to connect two battery storage facilities in West Texas to the ERCOT grid. (See “PUC Opens Rulemaking on Distributed Battery Storage,” LP&L Finalizing Agreements in ERCOT Move.)

The commission has received 63 responses to its request for comments. The TDUs argued the state’s Public Utilities Regulatory Act permits their ownership or operation of energy storage devices as long as the TDUs don’t sell electricity or participate in the market for electricity (except as a customer). The generators asserted that PURA requires an owner or operator of storage facilities or equipment to register as a power generating company, and that a TDU can’t legally be a utility and a generator.

PUC Chair DeAnn Walker | © RTO Insider

“One side says PURA is clear, that TDUs can’t own [battery storage]. The other side said PURA is clear, that TDUs can own it,” Walker said during the December open meeting. “I think that speaks to whether PURA is clear.”

The commission appears to be just as divided. Walker found herself siding with some of AEP’s arguments last January, while Commissioner Arthur D’Andrea expressed his concerns over regulated utilities “playing in [the generators’] space.”

The PUC is scheduled to take up the rulemaking during its Jan. 17 open meeting.

The commission’s report will be filed with the 86th Legislature on Monday. The Legislature went into its biennial session Jan. 8 and will finish May 27.

In the report, the commission recommends that the threshold for reviewing mergers and acquisitions of power generation companies be changed from 1% to 10% of installed generation capacity in ERCOT. It doesn’t recommend changing the 20% ownership limit of installed generation capacity.

Other recommendations include:

  • Requiring retail electric brokers to register with the PUC in a manner similar to retail electric aggregators;
  • Establishing a collaborative cybersecurity outreach program with utilities; and
  • Considering a person in default if they don’t respond to a commission’s notice of violation within 20 days.

Energy Consumption Exceeds Expectations

The ERCOT market consumed more than 376 million MWh of power in 2018, a 5.3% increase over the year before, according to the grid operator’s year-end Demand and Energy report.

The final total of 376,357,477 MWh was almost 5 million above the forecast of 370,619,525.

Combined cycle gas units accounted for 38.19% of the energy consumed, with coal-fired generation at 24.78%, wind at 18.55% and nuclear at 10.93%.

ERCOT’s energy use was a dramatic increase from the previous two years, a sign of the state’s booming economy. The market consumed 357,408,316 MWh in 2017 and 351,559,301 MWh in 2016.

Texas added 365,000 jobs in the 12 months that ended in November, and its 3.7% unemployment rate is the lowest on record, according to the Labor Department.

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