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What is reliability? Texas power grid regulators want to know

The Public Utility Commission of Texas will define "reliability" so the power grid can better handle extreme weather events.

Texas power regulators will define what makes a piece of the power grid “reliable.” The definition will be used in future decision making.

Lawmakers passed Senate Bill 1281 in the 87th regular session, effective Sept. 1, 2021. The intent is to reduce customer cost and improve grid reliability. In it, lawmakers called for a biennial assessment of the ERCOT (Electric Reliability Council of Texas) power grid.

The assessment will show how reliable the power grid can be in extreme weather events. This came after the deadly winter storm of February 2021. The power grid was less than five minutes from catastrophic blackout. Thousands were without power for days as the temperatures dropped to single digits.

“A lot of markets are looking at transmission from a resiliency standpoint because of the factors we face here in Texas. We have hurricanes and tornadoes and everything that you can think of. In my mind, this language has to be in a rule,” PUC Commissioner Lori Cobos said.

The Public Utility Commission (PUC) must amend the Utilities Code for the assessment. Another part of S.B. 1281 shows that the PUC must consider how to build power lines faster. Transmission lines carry high-voltage currents from power plants to local areas. The lines can take years to build.

Lawmakers told the PUC to consider allowing certain projects under certain conditions to skip parts of the process.

“SECTION 1. Amends Section 37.052, Utilities Code, by adding Subsection (c), as follows: (c) Provides that an electric utility is not required to amend the utility's certificate of public convenience and necessity to construct a transmission line that connects the utility's existing transmission facilities to a substation or metering point if: (1) the transmission line does not exceed three miles in length, if the line connects to a load-serving substation or metering point, or two miles in length, if the line connects to a generation substation or metering point; (2) each landowner whose property would be directly affected by the transmission line, as provided by Public Utility Commission of Texas (PUC) rules, provides written consent for the transmission line; and (3) all rights-of-way necessary for construction of the transmission line have been purchased,” the bill analysis shows.

“If we do not address the economic transmission projects, it is tomorrow’s reliability problem. Economic transmission projects, if we do not do due diligence to get these going, they turn into projects needed for reliability in the future,” Cobos said.

“What are our metrics that we're trying to look at into the future so that we can try to head reliability and resiliency crises off of the past? Congestion may be a way to monitor that, but I like the idea that if we can get to a point where we can define the goal, I think it's better,” PUC Commissioner Will McAdams said.

Power congestion happens during high demand when the power supply cannot get from power generators to areas of demand due to not having enough power lines. In congestion, only close-proximity power plants are able to deliver power to the area without overloading the system. Relieving congestion can lower costs and improve reliability.

“So as ERCOT looks to making that new load criteria into their analysis of reliability transmission projects, I think it would behoove the commission to have some guardrails or specific criteria to help us shape as to what we're looking at for transmission, for reliability in the future,” Cobos said.

On May 10, PUC Executive Director Thomas Gleeson signed a contract with Arne Olson, senior partner of Energy and Environmental Economics Inc. (E3).

“Contractor will serve as an independent consultant to assist in the analysis, development and implementation of certain market design and market structure mechanisms in the Electric Reliability Council of Texas (ERCOT) wholesale market,” the contract shows.

E3 will help the PUC change the electricity market design and structure.

The contract shows proposed changes must include, 

  1. “Business requirements and specifications for implementation in the ERCOT wholesale market. 
  2. Policy decisions, with pros and cons, to be addressed by the Commission. 
  3. A list of ERCOT Protocols and Commission rules that would need to be revised. 
  4. A cost/benefit analysis that addresses: 
  5. Expected reliability outcomes. 
    1. Implementation and consumer cost impacts in ERCOT's competitive retail market. 
    2. Potential impacts on future monetary investment in dispatchable generation”

The contract is for $364,000 with 11 workers paid $250-$725 per hour.

A draft final report is due Aug. 8.


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