The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power on the Texas Interconnection that supplies power to 24 million Texas customers â€" representing 85 percent of the state's electric load. ERCOT is the first independent system operator (ISO) in the United States and one of nine ISOs in North America. ERCOT works with the Texas Reliability Entity (TRE), one of eight regional entities within the North American Electric Reliability Corporation (NERC) that coordinate to improve reliability of the bulk power grid.
As the ISO for the region, ERCOT dispatches power on an electric grid that connects 40,500 miles of transmission lines and more than 550 generation units. ERCOT also performs financial settlements for the competitive wholesale bulk-power market and administers retail switching for 6.7 million premises in competitive choice areas.
ERCOT is a membership-based 501(c)(4) nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas (PUC) and the Texas Legislature.
ERCOT's members include consumers, electric cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities (transmission and distribution providers), and municipally owned electric utilities.
Power demands in the ERCOT region are 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, 2015, when consumer demand hit 69,877 MW. A megawatt of electricity can power about 200 Texas homes during periods of peak demand.
History
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. 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.
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. Throughout the 1980s, the organization continued to take over functions from TIS and eventually became the central operating coordinator for Texas.
The Texas Legislature amended the Public Utility Regulatory Act in 1995 to deregulate the wholesale generation market. The PUC then began the process of expanding ERCOT’s responsibilities to enable wholesale competition and facilitate efficient use of the transmission system by all market participants.
On August 21, 1996, the PUC endorsed an electric utility joint task force recommendation that ERCOT become an ISO. This ensured that an impartial, third-party organization was overseeing equitable access to the transmission system among competitive market participants. In September 1996, the change became official when the ERCOT Board of Directors initiated operations as a nonprofit ISO, the first in the United States.
The Texas Legislature restructured the Texas electric market in 1999 by unbundling the investor-owned utilities and creating retail customer choice in those areas, and assigned ERCOT four primary responsibilities:
- System reliability â€" planning and operations
- Open access to transmission
- Retail switching process for customer choice
- Wholesale market settlement for electricity production and delivery
Over the course of many years of meetings and workshops, stakeholders and market participants worked together to develop new ERCOT protocols â€" the rules and standards for implementing market functions to ensure equitable and reliable scheduling and delivery of electric power throughout the market.
In 2001, the 10 existing control areas in the ERCOT region were consolidated into a single control area administered by ERCOT. Wholesale power sales between electric utilities began to operate under the new electric industry restructuring guidelines, including centralization of power scheduling and procurement of ancillary services to ensure reliability.
The PUC ordered ERCOT to begin developing a nodal wholesale market design in September 2003, with the goal of improving market and operating efficiencies. The order was approved on April 5, 2006, and the nodal market went live on Dec. 1, 2010. The nodal market features real time generation dispatch by ERCOT, locational marginal prices for generation at more than 8,000 nodes, a day-ahead energy and ancillary services co-optimized market, day-ahead and hourly reliability-unit commitment and congestion revenue rights.
Governance
The PUC has primary jurisdiction over activities conducted by ERCOT. Three PUC commissioners, including the chair, are appointed by the Governor of Texas.
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.
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.
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.
References
External links
- ERCOT Home Page
- ERCOT Press Releases
- ERCOT Reports and Presentations
- History of ERCOT
- Public Utility Commission of Texas (PUC)
- Price map
- Current grid status
