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Electric Reliability Council of Texas

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Electric Reliability Council of Texas, Inc. (ERCOT)
Type501(c)(4), charitable organization
74-2587416[1]
HeadquartersAustin, Texas
Chief Executive Officer
Pablo Vegas[2]
Bill Flores (interim)
Vice Chair, Board of Directors
Bill Flores
Websiteercot.com
ISOs and RTOs of North America as of 2024

The Electric Reliability Council of Texas, Inc. (ERCOT) is an American organization that operates Texas's electrical grid, the Texas Interconnection,[3][4] which supplies power to more than 25 million Texas customers and represents 90 percent of the state's electric load.[5] ERCOT is the first independent system operator (ISO) in the United States.[6] ERCOT works with the Texas Reliability Entity (TRE),[7] one of six regional entities within the North American Electric Reliability Corporation (NERC) that coordinate to improve reliability of the bulk power grid.[8]

As the ISO for the region, ERCOT dispatches power on an electric grid that connects more than 46,500 miles of transmission lines and more than 610 generation units.[9] ERCOT also performs financial settlements for the competitive wholesale bulk-power market and administers retail switching for 7 million premises in competitive choice areas.[9]

According to an ERCOT report, the major sources of generating capacity in Texas are natural gas (51%), wind (24.8%), coal (13.4%), nuclear (4.9%), solar (3.8%), and hydroelectric or biomass-fired units (1.9%).[10]

ERCOT is a membership-based 501(c)(4) nonprofit corporation,[11][12] and its members include consumers, electric cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities (transmission and distribution providers), and municipally owned electric utilities.[13]

Power demand in the ERCOT region is typically highest in summer, primarily due to air conditioning use in homes and businesses. The ERCOT region's all-time record peak hour occurred on August 10, 2023, when consumer demand hit 85,508 MW.[14] A megawatt of electricity can power about 200 Texas homes during periods of peak demand.[15] By 2022, ERCOT had 2 GW of grid batteries, with another 6 GW underway.[16]

History

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At the beginning of World War II, several electric utilities in Texas agreed to operate together as the Texas Interconnected System (TIS) to support the war effort. During the war, the grid was interconnected to other states and excess power generation was sent to industries on the Gulf Coast, providing a more reliable supply of electricity for production of metal and other material needed for the war.[17]

Recognizing the reliability advantages of remaining interconnected, TIS members continued to operate and develop the interconnected grid. TIS members adopted official operating guides for their interconnected power system and established two monitoring centers within the control centers of two utilities, one in North Texas and one in South Texas.

In 1970, ERCOT was formed to comply with NERC requirements. However, the Texas grid is not subject to regulation under the Federal Power Act, being an intrastate grid for the purposes of that law. On May 4, 1976, Central Southwest Holdings attempted to force the issue, with an event that was later called the "Midnight Connection", where it connected the grid to Oklahoma for a few hours. This caused lawsuits about whether federal regulation then applied, however the judgement was that this was not sufficient.[17]

The deregulation of the Texas electricity market occurred in two phases: the wholesale generation market in 1995 and the rest of the sector in 1999.[18] The 1999 deregulation was aimed at counteracting a shortage of generation capacity in the state.[19] Since deregulation, retail providers and power generators were unregulated, although regulations on transmitters continued to control the placement of electrical lines. The legislation abolished the former system, in which power was both generated and consumed locally.[18] Instead, under the deregulated regime, retailers could contract with providers across the state, creating a complex market.[18] The 1999 deregulation also dropped limits on rate increases. Prior to deregulation, residential electricity rates were significantly below the national average; after deregulation, residential electricity rates increased, rising 64% between 1999 and 2007.[20]

2011 winter storm power losses

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In early February 2011, a major winter storm impacted Texas; freezing and extreme cold at natural gas pipelines and wells, as well as generating units (such as coal-fired power plants and wind turbines) caused power outages across Texas affecting 3.2 million customers. ERCOT and its regulator, the Public Utility Commission of Texas, failed to adopt a mandatory standard for preparing electricity infrastructure for such occurrences (winterization), despite recommendations from the Federal Energy Regulatory Commission and North American Electric Reliability Corporation (NERC). Texas's failure to prepare left the state vulnerable to winter-storm blackouts, including the major disaster that occurred ten years later in February 2021.[21]

2021 winter storm power losses

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See also: February 13–17, 2021 North American winter storm and 2021 Texas power crisis
Natural gas prices spiked to $23.86 on February 17, 2021[22]
In February 2003 there was a similar spike in natural gas prices because of shortages[23]
Reduced electricity from coal, nuclear, and wind power plants contributed to the shortage on February 15 and afterwards.[24]
Texas Power Crisis February 2021
  Wind power
  Solar power
  Nuclear power
  Combined cycle natural gas power
  Natural gas power
  Coal power

During a major cold-weather event in mid-February 2021, ERCOT declared a statewide emergency, due to a 34,000 MW shortfall in generation that caused widespread blackouts.[25] At 1:25 a.m. on February 15, ERCOT began requesting blackouts from service providers.[26] On February 16, electricity shortages caused the price of electricity to spike to over $9,000 per megawatt-hour (MWh),[25][27][28] whereas the week before, the lowest price of power had been less than $30 per MWh.[29][30] Some retail electricity providers were possibly facing huge losses or bankruptcy,[31] and customers of Griddy reported receiving absurdly high electric bills.[32][33]

Approximately 4 million customers in Texas were without electricity for various times during the multi-day storm.[25] At first, rotating outages lasting from 10 to 40 minutes were imposed on millions of customers, but those outages lasted many hours for some and over 48 hours for others, while millions more were spared from any hardship.[34][35] During the power loss, some Texans were forced to survive in record freezing temperatures down to −2 °F (−19 °C).[36]

On February 16, Governor Greg Abbott declared that ERCOT reform would be an emergency priority for the state legislature, and there would be an investigation of the power outage to determine long-term solutions.[37] A 357-page report had been written after the 2011 power outage in Texas,[38] which seemed to have been ignored, because too many critical generators still lacked appropriate weatherization in 2021,[29][39] especially the natural gas system.[26]

Texans outside the ERCOT-controlled grid had a different power experience.[4] Relatively few electric customers lost power in those regions. In counties around El Paso in western Texas, El Paso Electric reported that, as a result of it having investing millions in cold weather upgrades after the 2011 cold snap, 3,000 customers lost power for less than five minutes. In counties around Beaumont in eastern Texas, Entergy suffered relatively few outages either, because of previous winterization efforts.[40]

The first lawsuits against ERCOT grid mismanagement were filed on February 19, 2021.[41][42] On March 8, 2021, ERCOT began releasing a weekly market notice that includes entities that have paid previously identified short-pay amounts and provides an updated estimate of the aggregate outstanding short-pay amount.[43]

On February 16, 2021, it was reported that at least 10 deaths were linked to the 2021 ERCOT grid power outages.[44] By late March, the total number of deaths surpassed 110.[45] A comprehensive review of news reports, death certificates, and lawsuit filings from every county in Texas led a team of journalists in Houston to set the death toll at 194,[46] while a later review of excess deaths by journalists at BuzzFeed estimated the full true, indirect mortalities to be between 426 and 978, four to five times higher than the final toll.[47] An 11-year-old boy, Cristian Pavon, who died of suspected hypothermia was among the deaths caused by ERCOT's grid system. Pavon's family sued Entergy Texas and ERCOT for gross negligence.[48]

Bill Magness, CEO of ERCOT, was fired on March 4, 2021, for his role in the 2021 power loss incident.[49] The board delivered a 60-day termination notice to Magness, who had been president and CEO since 2016. The board said he would serve in those roles for the next two months.[50]

2023 shift in electricity generation mix

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In 2023, Texas's energy landscape saw significant growth in solar capacity, notably on the ERCOT grid, with solar installations, including those with storage, increasing by 35% from the previous year, leading to a reduction in midday natural gas usage. Solar generation peaked at 5.3 GWh in the summer and 3.8 GWh in the winter, while wind generation remained the largest renewable contributor at 108,000 GWh. ERCOT anticipates a substantial rise in solar capacity, with plans for 24 GW of solar and 13 GW of battery storage additions by 2025, compared to a modest 3 GW increase in both wind and natural gas capacities.[51] ERCOT reported that energy demand on the power grid reached a record 85 gigawatts in 2023 — the hottest year recorded in Texas. In 2024, ERCOT projected that demand could reach 150 gigawatts by 2030. The increase in demand is the result of large users, including data centers and crypto currency mining operations, as well as oil and gas production that is switching from gas- and diesel-generated power to electricity.[52]

Governance

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ERCOT is governed by a board of directors and subject to oversight by the Public Utility Commission of Texas (PUC) and the Texas Legislature.[53][11]

The PUC has primary jurisdiction over activities conducted by ERCOT. Three PUC commissioners, including the chair, are appointed by the governor of Texas.[54]

The ERCOT organization is governed by a board of directors made up of independent members, consumers and representatives from each of ERCOT's electric market segments.[55]

The Technical Advisory Committee (TAC) makes policy recommendations to the ERCOT Board of Directors. The TAC is assisted by five standing subcommittees as well as numerous workgroups and task forces.[56]

The ERCOT board appoints ERCOT's officers to direct and manage ERCOT's day-to-day operations, accompanied by a team of executives and managers responsible for critical components of ERCOT's operation.[57]

During the February 2021 storm, it emerged that a third of ERCOT's board of directors lived outside of Texas: Chairperson Sally A. Talberg lived in Michigan, Vice-Chair Peter Cramton lived in California and worked for universities in Germany and Maryland, and three board members lived in Toronto, Illinois, and Maine respectively.[58] This revelation drew considerable anger from the public as well as elected representatives, and the board members' names and photographs were temporarily removed from the ERCOT website due to death threats.[59][60] The board was also criticized for its meeting days before the storm: though the meeting lasted more than two hours, the members spent less than a minute discussing storm preparations and readiness.[61][62][63][64] On February 23, ERCOT announced the resignation of the five out-of-state board members effective the end of the board meeting the following day.[65][66][67] In October 2021, El Paso billionaire Paul Foster became the new Chairperson even though El Paso is not part of the Texas power grid. The other open positions were filled afterwards.[68] Foster resigned in June 2024.[69]

Organizational affairs

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It has a headquarters in Austin and an additional complex in Taylor.[70]

See also

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Related Energy Entities

References

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  1. ^ "Electric Reliability Council Of Texas Inc 10 10 90 - Nonprofit Explorer". ProPublica. 2021-02-23. Archived from the original on 2021-02-24. Retrieved 2021-02-24.
  2. ^ Ferman, Mitchell (16 August 2022). "Pablo Vegas, a utility executive in Ohio, named ERCOT's new CEO". The Texas Tribune. Retrieved 1 December 2022.
  3. ^ Katherine Blunt; Russell Gold (19 February 2021). "The Texas Freeze: Why the Power Grid Failed". The Wall Street Journal. ISSN 0099-9660. Wikidata Q114357264. Retrieved 2022-10-02.
  4. ^ a b "2019 ERCOT County Map". ERCOT. June 27, 2019. Archived from the original on June 30, 2019.
  5. ^ "Quick facts" (PDF). www.ercot.com. 818. Archived from the original (PDF) on 2021-02-17. Retrieved 2018-09-12.
  6. ^ "History of ERCOT". Ercot.com. Retrieved 2018-08-14.
  7. ^ "Texas Reliability Entity - About Us". Archived from the original on 2013-03-28. Retrieved 2013-04-22.
  8. ^ "NERC". www.nerc.com. Archived from the original on 2013-04-26. Retrieved 2018-08-14.
  9. ^ a b "Quick facts" (PDF). www.ercot.com. Archived from the original (PDF) on 2021-02-17. Retrieved 2018-09-12.
  10. ^ Nate Chute, What percentage of Texas energy is renewable? Breaking down the state's power sources from gas to wind., Austin American-Statesman (February 19, 2021).
  11. ^ a b "About ERCOT". www.ercot.com.
  12. ^ Chute, Nate. "Is ERCOT a government agency? Answers to 5 questions about the group that operates Texas' power grid". USA TODAY. Retrieved 2021-02-21.
  13. ^ "Membership". www.ercot.com.
  14. ^ "2023 Peak Demand Records". ERCOT. Nov 13, 2023.
  15. ^ Johnson, Brad (16 May 2022). "ERCOT Expects Record Electricity Demand for Summer Heat But Projects Sufficient Generation for Power Grid". The Texan.
  16. ^ Murray, Cameron (18 April 2023). "Is the ERCOT battery storage market going to saturate next year?". Energy Storage News.
  17. ^ a b "ERCOT's Jurisdictional Status: A Legal History and Contemporary Appraisal" (PDF). Archived from the original (PDF) on 2021-02-16. Retrieved 2021-02-19.
  18. ^ a b c Dylan Baddour, Texas' deregulated electricity market, explained, Houston Chronicle (June 8, 2016).
  19. ^ Bruce Hight, Electric Deregulation Is Working in Texas, Says Lawmaker Who Led the Effort, Texas Monthly (August 6, 2018).
  20. ^ Jay Root, Since Deregulation, Texas Utility Rates Have Soared, KXAS-TV (February 9, 2009).
  21. ^
  22. ^ "Henry Hub Natural Gas Spot Price (Dollars per Million Btu)".
  23. ^ "The Price Spike Report issued July 23, 2003" (PDF). Federal Energy Regulatory Commission. 23 July 2003. Archived (PDF) from the original on 17 November 2022. Retrieved 24 February 2023.
  24. ^ "Extreme winter weather is disrupting energy supply and demand, particularly in Texas". U.S. Energy Information Administration. February 18, 2021. Archived from the original on February 19, 2021. Retrieved March 2, 2021.
  25. ^ a b c de Luna, Marcy; Drane, Amanda (February 15, 2021). "What went wrong with the Texas power grid?". Houston Chronicle. Archived from the original on February 17, 2021.
  26. ^ a b Douglas, Erin (February 16, 2021). "Texas largely relies on natural gas for power. It wasn't ready for the extreme cold". The Texas Tribune. Archived from the original on February 18, 2021.
  27. ^ "LMP Contour Map: Real-Time Market - Locational Marginal Pricing". ERCOT. February 15, 2021. Archived from the original on February 16, 2021.
  28. ^ "Real-Time Settlement Point Prices Display for February 16, 2021". ERCOT. February 16, 2021. Archived from the original on February 17, 2021.
  29. ^ a b Englund, Will (February 16, 2021). "The Texas grid got crushed because its operators didn't see the need to prepare for cold weather". The Washington Post. Archived from the original on February 17, 2021.
  30. ^ "Real-Time Settlement Point Prices Display for February 10, 2021". ERCOT. February 10, 2021. Archived from the original on February 17, 2021.
  31. ^ Eckhouse, Brian (February 16, 2021). "Surging Texas Power Prices Promise Both Doom and Riches". Bloomberg News. Archived from the original on February 17, 2021.
  32. ^ "'People Are Greedy': The Absurd Electric Bills Slamming Texans". Daily Beast. February 17, 2021. Archived from the original on February 18, 2021.
  33. ^ "Letter from Griddy about the storm and prices". griddy.com. February 15, 2021. Archived from the original on February 16, 2021.
  34. ^ "ERCOT asks Austin Energy to shed more power, could mean outages for emergency services". Austin American-Statesman. February 16, 2021. Archived from the original on February 16, 2021.
  35. ^ Oberg, Ted; Rafique, Sarah (February 16, 2021). "48 hours without power a 'nightmare' as residents demand answers". KTRK-TV. Archived from the original on February 17, 2021.
  36. ^ "A Full List of All The Record Cold Texas Temperatures". Bay News 9. February 17, 2021. Archived from the original on February 16, 2021.
  37. ^ "Governor Abbott Declares ERCOT Reform An Emergency Item". Office of the Texas Governor. February 16, 2021. Archived from the original on February 16, 2021.
  38. ^ "Report on Outages and Curtailments during the Southwest Cold Weather Event of February 1-5, 2011 - Causes and Recommendations" (PDF). Federal Energy Regulatory Commission. August 2011. Archived (PDF) from the original on February 17, 2021.
  39. ^ Natter, Ari (February 17, 2021). "Texas Was Warned a Decade Ago Its Grid Was Unready for Cold". Bloomberg News. Archived from the original on February 18, 2021.
  40. ^ Rogalski, Jeremy (February 17, 2021). "Texas counties with fewer power outages are not part of state grid". KHOU TV. Archived from the original on February 18, 2021.
  41. ^ "Lawsuits against ERCOT allege warnings about Texas grid issues 'consciously ignored'". www.msn.com. Retrieved 2021-02-21.
  42. ^ Barrabi, Thomas (2021-02-19). "Texas power grid operator ERCOT sued over blackouts". Fox News. Retrieved 2021-02-21.
  43. ^ "Regulatory Coverage: ERCOT Discloses Short-Pay Balance of $2.5B; Organization to Release Weekly Short-Pay Report Starting March 8". www.reorg.com. Retrieved 2021-03-11.
  44. ^ Staff, Texas Tribune (2021-02-16). "Winter storm in Texas: At least 10 deaths linked to statewide disaster; Austin outages may last another day or more". The Texas Tribune. Retrieved 2021-04-03.
  45. ^ Weber, Paul J.; Stengle, Jamie (2021-03-26). "Texas death toll from February storm, outages surpasses 100". AP News. Retrieved 2024-07-12.
  46. ^ Ament, Jill; Brisbin, Shelly (2021-04-06). "Nearly 200 People Died In February's Winter Storm, Double The State's Initial Estimate". Texas Standard. Retrieved 2024-07-12.
  47. ^ Hirji, Peter Aldhous, Stephanie M. Lee, Zahra (2021-05-26). "The Texas Winter Storm And Power Outages Killed Hundreds More People Than The State Says". BuzzFeed News. Retrieved 2024-07-12.{{cite web}}: CS1 maint: multiple names: authors list (link)
  48. ^ Salcedo, Andrea (February 22, 2021). "Family of 11-year-old boy who died in unheated Texas mobile home sues power companies for over $100 million". Washington Post. Retrieved April 3, 2021.
  49. ^ Mekelburg, Madlin. "Texas power grid CEO fired after deadly February power outages". USA TODAY.
  50. ^ The Wall Street Journal, "Texas Power Grid Operator Fires CEO," March 4, 2021 [1]
  51. ^ Antonio, Katherine; Peterson, Kimberly (April 9, 2024). "Solar capacity additions are changing the shape of daily electricity supply in Texas". www.eia.gov. Retrieved 10 April 2024.
  52. ^ Guo, By Emily Foxhall and Kayla (2024-06-20). "Texas electricity demand could nearly double in six years, grid operator predicts". The Texas Tribune. Retrieved 2024-07-22.
  53. ^ "Governance". www.ercot.com.
  54. ^ "Public Utility Regulatory Act" (PDF). Archived from the original (PDF) on 2013-02-02. Retrieved 2013-04-22.
  55. ^ "Board of Directors". www.ercot.com.
  56. ^ "Technical Advisory Committee". www.ercot.com.
  57. ^ "Executive Team". www.ercot.com.
  58. ^ Mekelburg, Madlin (February 16, 2021). "ERCOT is in charge of Texas' power, but one-third of its board lives out of state". Austin American-Statesman. Archived from the original on February 17, 2021.
  59. ^ Palmer, Ewan (February 18, 2021). "ERCOT Removes Names of Board Members from Site Following Death Threats Over Texas Outages". Newsweek.
  60. ^ Fallon, Nicole (2021-02-18). "ERCOT Will Restore Board of Directors' Names to Website After Death Threats Prompted Their Removal". Newsweek. Retrieved 2021-02-21.
  61. ^ Mekelburg, Madlin. "ERCOT officials spent 40 seconds on winter storm preparedness at Feb. 9 meeting". USA TODAY. Retrieved 2021-02-21.
  62. ^ Collier, Dillon; Cienfuegos, Luis (2021-02-18). "ERCOT board meeting last week included joke about cowboy boots, less than 40 seconds of storm talk". KSAT. Retrieved 2021-02-21.
  63. ^ "Listen to ERCOT leaders spend 40 seconds on preparedness before Texas winter storm". Austin American-Statesman. Retrieved 2021-02-21.
  64. ^ "ERCOT leaders spent less than a minute discussing winter storm preparedness at Feb. 9 meeting". kiiitv.com. 19 February 2021. Retrieved 2021-02-21.
  65. ^ Douglas, Erin; Ferman, Mitchell (2021-02-23). "ERCOT board members who live outside of Texas are resigning in the aftermath of the power outage, winter storm". The Texas Tribune. Archived from the original on 2021-02-23. Retrieved 2021-02-24.
  66. ^ "4 ERCOT board members to resign amid backlash over Texas storm". www.msn.com. Retrieved 2021-02-24.
  67. ^ "5 ERCOT board members who live outside of Texas resign in aftermath of power outage, winter storm". khou.com. Retrieved 2021-02-24.
  68. ^ Kolenc, Vic (19 October 2021). "El Paso businessman Paul Foster named chairman of ERCOT board that manages Texas power grid". El Paso Times. Retrieved 18 June 2024.
  69. ^ Bennett, Adam (18 June 2024). "'These statements don't line up'. ERCOT says it's ready for summer but experts remain skeptical". KVUE (ABC news affiliate). Retrieved 19 June 2024.
  70. ^ "Locations". ERCOT. Retrieved 2021-02-21. Austin Campus Executive and Administration Center 7620 Metro Center Drive Austin, Texas 78744 [...] Taylor Campus Operations Center 800 Airport Road Taylor, Texas 76574 [...] Mailing Address 2705 West Lake Drive Taylor, Texas 76574

Further reading

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