ERCOT passes first proposed reform to program that watchdog says cost utilities $12.5B in 2023

Claire Hao | Source: Houston Chronicle | Posted 06/22/2024

The board of the Electric Reliability Council of Texas approved a first attempt to reform a program that by one estimate cost utilities as much as $12.5 billion in 2023. Representatives for consumer groups and electricity retailers, however, opposed the proposed change. The ERCOT Contingency Reserve Service, or ECRS, was created to prevent a repeat of the blackouts that hit in the February 2021 freeze and was first deployed in June 2023. Designed to increase or decrease the supply of electricity within 10 minutes if needed, ERCOT credited ECRS for helping it prevent outages last summer as extreme heat and record-shattering power demand pushed the grid to its limit.

AI generated summary

The Electric Reliability Council of Texas (ERCOT) has approved the reform of the ERCOT Contingency Reserve Service (ECRS) program, which aims to prevent the recurrence of blackouts like those experienced during the February 2021 freeze. However, consumer groups and electricity retailers have opposed the proposed changes due to concerns about costs, with estimates suggesting the program could have cost utilities up to $12.5 billion in 2023.

ERCOT's independent watchdog criticized the ECRS rollout, citing artificial shortages that led to spikes in wholesale electricity prices. The approved rule allows for the release of ECRS resources to the real-time market under specific criteria, set at a price floor of $750 per megawatt-hour. Despite opposition from some industry experts, ERCOT CEO Pablo Vegas sees the potential cost reduction as a significant improvement, highlighting the complexities involved in balancing competing interests in the energy market.

Link to Original Article

Please find the link to the full article below. (Please note that content provider might require a paid subscription)

Source Link: https://www.houstonchronicle.com/business/energy/article/ercot-ecrs-fix-puct-texas-19518701.php

Create a free trial account: Sign Up

Grid monitor is free to try. No credit card required

ERCOT passes first proposed reform to program that watchdog says cost utilities $12.5B in 2023

AI generated summary

Link to Original Article

Create a free trial account: Sign Up

Already have an account? Login