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The Board of Directors of the Electric Reliability Council of Texas met on August 16, 2022, to discuss regular business concerning ERCOT. The Board heard updates from ERCOT staff about operations and matters concerning potential rule changes. The Board also voted on several matters requiring approval. An agenda for the meeting can be found here.

This report is intended to give you an overview and highlight of the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

Item 1. Call General Session to Order and Announce Proxies

  • Foster – Officially announces Pablo Vegas as new President and CEO of ERCOT, yesterday’s urgent meeting resulted in hiring Vegas, thanks Brad Jones for service.  See attached for his employment contract that was filed at the PUCT.

Item 3. Consent Agenda items passed.

Item 6. Load Forecasting Overview

  • Jeff Billo – Provides overview of load forecasting done by ERCOT
  • 3 different types – short term forecast (5-minute forecast for next 2 hours), mid term load forecast (hourly forecast for next 7 days), long term load forecast (hourly forecast for next 10-30 years)
  • Biggest challenge for midterm load forecast are weather forecast challenges, multiple weather forecast models, two staff meteorologists
  • Biggest challenge for long term load forecast are rapid load growth in different sectors – crypto currency, industrial, electric vehicles, oil and gas

Item 7. Independent Market Monitor (IMM) Report

  • Real time energy prices have gone up this year, implied heat rates also up, both compared to last year
  • NonSpin cost per load has become higher than Responsive Reserve, due to more demand for NonSpin
  • Average load and peak load have both increased for all zones in 2022, biggest differences are in North and South zone
  • More market tweaks may be needed to see improvements of self-generators, need to align what ERCOT and the market see
  • Operating Reserve Demand Curve had level increase in January 2022, impact of shift on energy costs approximately $1B as of July 31, total ORDC adder impact on energy costs for same period was $2B

Item 8. TAC Report items passed

  • NPRR1142, ERS Changes to Reflect Updated PUCT Rule – Two revision requests pertain to ERS, increase annual budget for ERS and allows ERCOT flexibility to contract ERS for up to 24 hours in ERS standard contract term (passed with one member voting against)
  • Also had unanimous endorsements from TAC on multiple projects, including Roanoke Area upgrades and Bearkat project, and Southern Cross projects

Item 9. Board-Tabled Revision Requests, NPRR1112, Reduction of Unsecured Credit Limits

  • Unsecured credit is currently capped at $50M, TAC wants to lower to $30M as maximum
  • Had 1 market participant with unsecured credit who did not pay, expecting them to pay
  • NPR1067 was looking at this issue from a global perspective, TAC recommends lowering the cap and revisiting the issues brought up by NPR1067 to introduce a more global perspective
  • Chair Lake – Will not reduce in liquidity real time market?
    • No, you are moving certainty in real time market
  • Brad Jones – Does not agree (with TAC), other ISO’s allow for unsecured credit, no other financial market does this, should eliminate credit
  • Board member – Believes we should eliminate the credit
  • Chair Foster – Agrees, ERCOT should not extend credit to its market participants, should not have to assume their risk, should eliminate credit, hoping to file a motion to do this and have it go into effect on September 30, 2023
  • Motion to reject the TAC recommendation and recommend approval of NPRR1112 with a proposed effective date of September 30, 2023

Item 10. ERCOT Recommendations to PUC Project No. 46304, Oversight Proceeding Regarding ERCOT Matters Arising Out of PUC Docket No. 45624 Relating to DC Tie Project Proposed by Southern Cross Transmission, LLC

  • ERCOT staff provides overview of Southern Cross DC Tie project, which would connect ERCOT with the eastern grid
  • Need to accept three ERCOT Determinations:
    • Directive 1 – Registration and Market Segment, Southern Cross has determined they are not interested in becoming a market segment, close this directive
    • Directive 11 – Cost Allocation, costs have been already allocated by previous determinations, Southern Cross obligated to cover costs
    • Directive 12 – QSE Costs, costs associated with exports over DC Ties already addressed by previous directives
  • Motion to approve ERCOT Recommendations to PUC Project No. 46304; passes

Item 11. Bearkat – North McCamey – Sand Lake 345-kV Transmission Line Addition RPG Project

  • Asking for endorsement and to designate this project as critical
  • Motion to approve Bearkat – North McCamey – Sand Lake 345-kV Transmission Line Addition RPG Project; passes

Item 12. Roanoke Area Upgrades RPG Project

  • Asking for endorsement and to designate this project as critical
  • Motion to approve Roanoke Area Upgrades RPG Project; passes