PUCT’s open meeting was focused on electricity market design changes that provided some guidance for market participants. A brief outline follows. A video of the broadcast can be found here.
Wholesale Market Design Implementation (P. 53298) – Discussion ensued around firm fuel storage service (FFSS) – Recall that PUCT was working on an incentive for power generators to store plant fuel onsite or nearby for use when supplies may be tight or jeopardized. FFSS payouts are capped at a total of $54 million for now, and only certain types of fuel qualify (coal and nuclear do not). The focus of the service is to provide an incentive for more localized storage and transportation of natural gas at the most reliable service level possible. The payout will be applied at $12/MMBtu for gas. Note that strict limitations apply for participation, such as common ownership of the pipeline and power plant. PUCT noted that only 500 MWs of generation were eligible to participate in this service, so bidding is not currently competitive.
ERCOT memo related to other electric services – ERCOT spokesman Woody Rickerson explained the methodologies being considered for changes to the ORDC, DRRS and PCM. ORDC changes are ongoing. The DRRS service must be competed and operational by December 2024, and a workshop will be held on July 27 to discuss it. The PCM requires many components to be defined, and implementation is expected to begin 2.5- 3 years after these definitions are known. The ERCOT memo can be found here.
For all of the changes being proposed for ERCOT to implement, Chairwoman Jackson suggested that a project management table be prepared to show deadlines along the way. The other commissioners agreed. Expect to see this table to be filed by August 17th and discussed at the August 24 meeting.
Real-Time Co-optimization progress – Completion of this important task is expected (perhaps) in 2028; ERCOT is to provide an update on timing. ERCOT’s next EMS (software systems) upgrade is expected in 2028, and RTC must be a part of that update or be delayed for more years.
Reliability Unit Commitment (RUC) – This is a process where ERCOT instructs power generation units to be ready to run and keeps adequate (or more than adequate) reserves on hand through hot and cold periods. RUC is viewed negatively by market participants because it cannot be anticipated or hedged. The costs for RUC are passed on to REPs and other market participants. The goal is to significantly reduce RUC and replace it with these other services. The DRRS service is expected to help in this regard, but it will be some time before DRRS will be fully operational.