Texas regulators, power market stakeholders debate RMR rule fixes
Texas regulators and power market stakeholders on Wednesday brainstormed how best to limit the Electric Reliability Council of Texas use of reliability-must-run contracts and how to price their services when needed.
Julia Harvey, Public Utility Commission of Texas director of wholesale market policy, conducted a rulemaking workshop for Project No. 46369, with topics including the use of RMR capacity in various ERCOT capacity calculations, the timeline for evaluating RMR and must-run alternative studies, and the approval process for RMR contracts.
The workshop resulted from ERCOT’s signing an RMR agreement in June for NRG Texas’ 371-MW 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.
Bill Barnes, NRG Energy director of regulatory affairs, noted that his company is “balanced” with about 12,000 MW of peakload through its retail arm, including Reliant, and about 10,000 MW of generation.
“RMR is a symptom of a larger problem within the ERCOT wholesale market structure,” Barnes said. “Our primary objective is to ensure healthy and sustainable retail and wholesale electricity markets. We believe RMR represents a disruption to both. The presence of RMR indicates the market has failed to retain and attract sufficient resources to meet ERCOT’s reliability criteria. The best solution to RMR is to not have any.”
But Katie Coleman, an attorney representing Texas Industrial Energy Consumers, said, “We don’t necessarily agree that an RMR contract represents market failure.”
Instead, TIEC views the need for an RMR unit as a problem with delays in transmission planning, Coleman said.
Certain stakeholders advocated excluding RMR units’ capacity from a generating company’s fleet total for purposes of determining market power and for excluding RMR units’ capacity from the amount available long term in ERCOT’s Capacity, Demand, and Reserves Report, which is issued twice a year.
Stakeholders also advocated a variety of scenarios for the notice period between when a resource owner issues a “notice of suspension of operations,” which is currently 90 days before the proposed date of discontinued operations. A PUC strawman proposal suggested lengthening this to 180 days, but some stakeholders advocated shorter periods.
“Extending it to 180 days is unnecessary,” said Marka Shaw, Exelon regulatory affairs manager. “We think 45 days should be enough to know if a unit is needed.”
