Advanced Technologies in the Texas Electric Market

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Advanced Technologies in the Texas Electric Market
Julie Parsley, Commissioner Public Utility
Commission of Texas National Energy Marketers
Association March 31, 2004
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Advanced Technologies in the Texas Electric
Market

• ERCOT Market and Basic Framework
• Opportunities for Advanced Technologies
• Competitive Energy Services
• Competitive Metering
• Distributed Generation
• Energy Storage
• High Temperature Conductors
• Power Electronics
• FACTS Devices
• HVDC Ties
• Broadband Over Power Lines

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Texas Electric Market

• The electric industry in ERCOT is approximately
• 17 billion a year at the wholesale level
• 24 billion a year at the retail level
• ERCOT represents approximately 85 of Texas
• About 300 million MWh of power flow through the
  ERCOT system on an annual basis
• Prices have increased due to rising natural gas
  prices
• The wholesale price has been approximately
  55/MWh
• The retail price has been approximately 80/MWh

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ERCOT Boundaries Within ERCOT Only Texas PUC has
Jurisdiction in Other Areas, Texas and the FERC
Have Jurisdiction
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Restructured Electric Market
Power Generation Companies (PGCs)
Transmission and Distribution Utilities (TDUs)
Retail Electric Providers ( REPs)
End User
Retail Provider
Retail Provider
Retail Provider
Regulated Open Access
Unregulated
Unregulated
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Basic Framework of the ERCOT Market

• PGCs register with the PUC and must comply with
  the ERCOT Protocols and the PUCs wholesale code
  of conduct.
• TDUs must provide nondiscriminatory access to
  wholesale transmission service. Pricing is based
  on a postage stamp method. TDUs must offer
  standard terms of service.
• REPs contract with PGCs for power to serve retail
  customers. Customers may contract with
  competitive energy services providers for
  additional products and services.
• REPs must meet certain financial and technical
  qualifications to be certified by the PUC. REPs
  must comply with the PUCs customer protection
  standards.

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PUC and ERCOT Oversee the Market

• Role of the PUC
• Continue to regulate service quality and rates
  for TDUs
• Ensure a fair competitive playing field for all
  unregulated services
• Establish and enforce customer protections
• Oversee ERCOT
• Role of ERCOT, the Independent System Operator
  (ISO)
• Central control center for grid operations
• Maintain system reliability
• Customer registration agent for customer
  switching
• Conduct transmission planning

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Competitive Energy Markets Require Services that
the Power System Was Not Developed to Provide

• The transmission system was not developed for
  commercial sales.
• Electricity consumption is increasing and power
  quality is important to sensitive
  microprocessor-based equipment.
• The conventional grid must be transformed to a
  smart electricity network.

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Competitive Energy Services (CES)

• Utilities are prohibited from providing CES as of
  September 1, 2000.
• Opportunities for CES providers
• Specialize in particular competitive services
  (e.g., load-management, lighting, facilities
  operations, transformation equipment, hedging and
  risk management) without providing electricity.
• Partner with REPs to provide CES with
  electricity.
• CES are generally available on a competitive
  basis.
• Utility can petition to provide a CES if it is
  not widely available.
• Affected person or PUC staff can petition to
  designate other services as CES or end a
  utilitys provisioning of a CES.

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Competitive Metering

• Competitive metering for commercial and
  industrial (CI) customers began January 1,
  2004. Metering for residential customers is
  provided by the TDU until the later of September
  1, 2005, or the date on which at least 40 of the
  residential customers are served by unaffiliated
  REPs.
• CI customers may choose who owns the meter (the
  retail customer, REP, TDU, or other person
  authorized by the customer) and the customer owns
  the meter data.
• ERCOT has a stakeholder process to establish and
  periodically revise a list of meters qualifying
  as competitive meters.
• To date, customer participation is lacking. The
  PUC is examining whether there are potential
  barriers.

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Distributed Generation (DG)

• Customers are entitled to access to on-site DG.
• DG is an electrical generating unit(s) located at
  a customers point of delivery up to ten MWs
  which is connected at a voltage less than 60 kV.
• DG adds more competitive options, provides cost
  savings, and benefits the electric system during
  periods of capacity constraints.
• Texas has approximately 220,305 kWs of DG
  capacity.
• Wholesale market redesign efforts to move from a
  zonal model to a nodal system should accommodate
  future expansion and innovation.
• For more information, go to
  http//www.puc.state.tx.us/electric/business/dg/dg
  .cfm.

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Energy Storage

• Compressed Air Energy Storage (CAES) basically
  uses technology to store energy in the form of
  compressed air in an underground salt cavern.
• CAES could be used to optimize non-firm
  generation and manage transmission congestion
  constraints.
• Study performed in 2003 in connection with
  curtailments of wind generation in West Texas.
• There are regulatory implications surrounding
  cost recovery for assets (storage) that are
  neither purely transmission, nor purely
  generation.

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High Temperature Conductors

• High temperature conductors (HTCs) may be an
  attractive alternative to new wires to address
  thermal limitations and loading issues
• HTCs can increase transfer capability using
  existing towers and ROW.
• HTCs do not require regulatory approval through
  the CCN process.
• Aluminum Conductor Composite Reinforced (ACCR)
• Can provide transmission capacities up to 3 times
  greater than traditional Aluminum Conductor Steel
  Reinforced (ACSR).
• ACCR cost is 4 to 6 times the cost of ACSR.
• Aluminum Conductor Steel Supported (ACSS)
• ACSS has been used in Texas since 2000.
• One Texas utility has approximately 2,000 circuit
  miles of ACSS and is participating in research on
  a national level testing five different types of
  conductors.
• ACSS cost premium is only 10 over ACSR.

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Power Electronics

• Power electronics improve system stability and
  enable higher power transfer levels over greater
  distances.
• Flexible AC Transmission Systems (FACTS) devices
  
• Can help with functions that are required for
  smooth operation of the electrical network
  (frequency control, load-flow control, reactive
  power, and voltage stability).
• Can control the power flow and increase transfer
  capability.
• Do not require regulatory CCN approval or
  additional ROW.
• High-Voltage DC (HVDC) ties
• Increase the capacity of an existing power grid
  and allow power transmission between
  unsynchronized AC systems.
• Require CCN approval.
• Texas has three HVDC ties and one pending CCN
  case for an additional HVDC tie with Mexico.

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Broadband Over Power Lines (BPL)

• Over 5,000 comments and replies received in
  response to the FCCs April 2003 Notice of
  Inquiry addressing areas such as potential
  benefits, potential interference, and measurement
  procedures.
• NARUC task force formed in December 2003.
• FCC NPRM issued Feb. 2004.
• ATT recently announced that it was exploring
  opportunities in Texas.
• Texas PUC has not formally addressed the many
  surrounding issues.

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