The Public Utility Commission of Texas (PUCT) has voted to significantly improve short- and long-term electric grid reliability for Texas by enacting major reforms to the state’s wholesale electricity market.
Unveiled on December 16 the Phase I reforms, which are to be implemented as soon as possible, include the following:
- Lowering the high systemwide offer cap to $5,000/MWh from $9,000/MWh, with effect from January 1
- Raising the minimum contingency level – the minimum amount of reserves considered necessary to avoid a cascading blackout – from 2,300MW to 3,000MW
- Making changes to the Operating Reserve Demand Curve to ensure market prices reach the cap before an Energy Emergency Alert requires an appeal for public power conservation
- Changing the market to improve price signals for load-managed resources
- Setting higher energy efficiency program standards
- Working to facilitate the aggregation of load resources
- Allowing the deployment of Emergency Response Service (ERS) before an EEA is declared
- Considering changing ERS procurement process to a physical capacity based on a $50M annual spending cap
- Implementing a fast frequency response ancillary service
- Facilitating the inclusion of loads in the non-spinning reserve ancillary service
- Developing a firm fuel-based reliability service similar to ERCOT’s Black Start ancillary service
- Compensating resources, such as conventional generators, that provide voltage support
- Accelerating implementation of the ERCOT Contingency Reserve Service, a type of ramping ancillary service, and allocate its costs “consistent with cost-causation principals, in a non-discriminatory manner”
Phase 2 policies will be developed over the coming weeks.
Wayne Muncaster, VP for North America at GridBeyond, commented:
“The energy crunch is not a fleeting issue that will go away in the near future. It’s crucial that we take action now to preserve our grid, the engine of the Texas economy, over the long-term. The solutions are out there.
“The focus so far from the Governor and Legislature has been on ERCOT’s supply-side. It is reassuring that now that investment in demand response, energy storage and energy efficiency is being rightfully considered as a cost-effective means to manage pressure on the supply-side.”