ERCOT panel advances rule changes for #RMR studies, compensation RSS Feed

ERCOT panel advances rule changes for RMR studies, compensation

The Electric Reliability Council of Texas would change how it handles reliability-must-run studies and compensation under proposals advanced Thursday by ERCOT’s Protocol Revision Subcommittee.

The Protocol Revision Subcommittee saved discussion of three RMR-related nodal protocol revision requests for the end of its meeting, and the last such favorable endorsement vote was on Nodal Protocol Revision Request 788, which revises rules about how ERCOT would conduct studies to determine whether a unit that has been proposed to suspend operations or retire is needed for local reliability purposes.

As explained in the original request by sponsor Randa Stephenson, Lower Colorado River Authority vice president for wholesale markets, existing rules “are overly conservative in the operational horizon for these studies.”

The version of NPRR 788 approved Thursday requires the use of “process consistent with ERCOT planning studies” and requires a potential RMR unit to “have a meaningful impact on the expected transmission overload,” according to an ERCOT filing in the proceedings. In effect, NPRR 788 raises the minimum level of impact on a possible transmission overload by certain physical standards, such as shift factors.

All of the nodal protocol revision requests approved Thursday next go to ERCOT’s Technical Advisory Committee for approval, and ultimately must be approved by the ERCOT Board of Directors. TAC meets next on September 29 and the Board meets next on October 11.

The RMR rule changes have resulted from ERCOT’s signing an RMR agreement in June for NRG Texas’ Greens Bayou 5 natural gas-fired generator to operate for the summer months, starting this July and continuing through June 2018, mainly to cope with a transmission constraint in the northwest area of the ERCOT Houston region. Stakeholders have estimated that the project could cost about $60 million, which would be uplifted to market participants.

That may not be the last RMR contract executed this year, as ERCOT has notified Calpine that the grid needs Calpine’s 400-MW Clear Lake Power Plant in Pasadena, Texas, which Calpine had planned to retire in February 2017, to continue operating for reliability purposes.

Another RMR-related rule change endorsed Thursday was NPRR 795, which requires that if an RMR unit receives a substantial sum for capital expenditures to keep it operational, and the operator of that unit later decides to return it to service in the market, the operator must repay that capital expenditure amount, less appropriate depreciation. If, at the end of an RMR contract the operator first decides not to return the unit, the operator must repay the positive salvage value of the capital expenditures.

Read full article at Platts