ERCOT working on generation-related seams issues
Electric Reliability Council of Texas stakeholders will spend the next few weeks discussing how to resolve issues about 4,159 MW of generation along ERCOT’s seams that can switch from supplying ERCOT to another market and vice versa.
During Wednesday’s ERCOT Wholesale Market Subcommittee meeting, Bill Blevins, ERCOT grid operations director, presented a staff white paper to describe how ERCOT’s rules currently handle switchable resources, challenges presented by these resources to the ERCOT market and grid operations, potential changes to resolve those challenges and recommendations among the solution options presented.
Power plants relevant to this issue include:
–Antelope Elk Energy Center, 740-MW of natural gas-fired generation in Hale County in the West Texas section of Southwest Power Pool;
–Frontera Generation Facility, 524-MW of natural gas-fired combined-cycle generation in Hidalgo County in ERCOT’s southern tip;
–Tenaska Frontier Generation Station, an 830-MW NGCC plant in Grimes County, Texas, in the East Texas region of the Midcontinent Independent System Operator’s Texas Hub;
–Tenaska Gateway Generating Station, an 845-MW NGCC plant in Rusk County, Texas, in SPP’s Northeast Texas region; and
–Tenaska Kiamichi Generating Station, a 1,220-MW NGCC plant in Pittsburg County, Oklahoma, near SPP’s southern border.
Several “challenges” presented by the situation are cited in the white paper.
For example, how should such resources be designated in ERCOT’s software, and when could a switchable resource be dispatched to operate under the reliability unit commitment process in normal operating conditions?
Also, if ERCOT needs to suspend a switchable unit’s ability to switch to another grid for reliability purposes, what kind of make-whole payment should be included? ERCOT staff recommended paying resource cost, the cost of any contractual obligation penalty and the cost of any market obligation penalty.
Clayton Greer, Morgan Stanley vice president for commodities, said such a practice would require a change to ERCOT protocols.
Another issue might occur in an emergency. For example, how might a switchable resource currently under a neighboring system’s control be released for use in ERCOT under emergency conditions?
Also, how might a switchable resource be required to report its outage status, and how can a switchable resource affect congestion revenue rights financial positions?
Greer said other US ISOs maintain joint seams committees with neighboring grid operators to resolve such issues, but Blevins expressed doubt that other ISOs would be willing to send representatives to meet with ERCOT stakeholders to discuss them.
Rather than obtaining regulatory approval for any proposed changes, Blevins said almost all could be resolved with changes in agreements between the relevant grid operators, or “reliability coordinators.”
Greg Thurnher, Shell Energy North America general manager of regulatory policy, said, “These resources were built to have the privilege to switch between two grids.”
Thurnher added that the plants were built to comply with existing rules, and he would advocate either codifying the existing situation or, if changes are made, providing make-whole payments, which “in our opinion, opportunity cost must be included.”
Discussions continue Thursday with ERCOT’s Reliability and Operations Subcommittee, and more details are to be resolved at the level of working groups for managers of qualified scheduling entities and congestion.
RMR RFP IN THE WORKS
The Wholesale Market Subcommittee also learned that ERCOT plans to issue on Monday a request for proposal for resources that could offer cost-effective, reliable alternatives for the reliability-must-run contract recently established with NRG Texas Power to keep its Greens Bayou 5 generator operating.
On June 14, the ERCOT Board of Directors approved a 25-month RMR contract for the 371-MW natural gas-fired generator to operate during summer peak periods through June 2018. The contract provides a stand-by payment of $3,185/hour during the months of the agreement, which would cost almost $21 million.
Entities that may want to respond to the RFP must submit any questions by July 15, ERCOT must respond to those questions by July 22, and “must-run alternative” proposals are due August 19. ERCOT staff plans to present the proposals to ERCOT’s Regional Planning Group on September 20 and to ERCOT’s Technical Advisory Committee on September 29.