Texas PUC chair raises concerns over ERCOT independence
In Texas, ERCOT’s independence is sacrosanct. While other regions include capacity markets and other reliability rules in their market models, policymakers in the Lone Star State laud what they say is a freer, more efficient market in ERCOT.
Texas’s unique market model is partly due to its independence from federal regulation. ERCOT’s grid is not synchronously connected with other U.S. states, so it does not trigger the interstate commerce clause of the Constitution that would see it fall under the purview of the federal government.
That could change if a few key transmission projects are complete, Chair Walker detailed in November and December memos ahead of PUCT open meetings.
The Nogales transmission project, proposed in 2015 by Hunt Consolidated, aims to connect Arizona to the Mexican grid. At the same time, Mexico is moving forward with plans to connect the grid in its peninsular state of Baja California to the rest of the nation’s electrical system.
Baja California is currently connected to the U.S. through transmission ties at the California border. If the projects were completed, the Nogales project and other connections with the Mexican grid could allow electricity from California to enter the Texas system, triggering FERC jurisdiction, Walker warned.
Market participants can request FERC issue jurisdictional waivers, Walker noted, and the owners of Nogales have already asked that DOE pause its application for a cross-border Presidential Permit until jurisdictional issues are resolved.
Coping with the Mexican grid upgrades could prove more difficult. Last month, power authorities announced plans for a 1.5 GW line to connect Baja California with the rest of the Mexican grid.