ERCOT is prepared for this summer, with monthly resource adequacy outlook in place, showing little to no risk of entering emergency conditions.
Summer weatherization inspections and training exercises have taken place, and new generation resources have come online, including solar, wind, and gas resources.
Pablo Vegas highlighted ongoing efforts to drive improved reliability, such as the approval of the draft reliability standard and evaluation of alternatives to mitigate risks associated with new South Texas IROLs.
He also discussed the impact of recently approved EPA rules on coal and gas units, emphasizing potential reliability risks and ERCOT's support of Texas' motion challenging these rules.
6 - 2024 Summer Outlook - Discussion
6.1 - 2024 Summer Weather and Operations - Discussion - Dan Woodfin
Meteorologists expect this summer to not be as hot as last summer
El Nino is fading, La Nina is building, indicating lower precipitation
Expect active hurricane season, with potential flooding from tropical systems
Current assessment expects sufficient generation in most hours, but higher risk during sunset hours
South Texas constraints may limit available generation, slightly elevating risk
No major wide area reliability issues expected, but potential for congestion in certain areas
Additional challenges from tornado-related transmission line damage, mostly resolved
New tools in place to assess and manage impact of batteries on system capacity
Changes in operational rules implemented for summer, aimed at more efficient operation
Concerns mostly revolve around having enough demand response from large flexible loads, such as crypto miners
The update covers the new multi-step operating reserve demand curve price floors for the upcoming summer.
The modification of the ORDC to include multi-step price floors aims to incentivize greater self-commitment of units and hopefully reduce the number of rucks.
The impact and effectiveness of the ORDC floors will be observed this summer during potentially more scarce conditions.
Natural gas prices for 2024 are trending closely to 2023, with earlier 2024 prices slightly below 2023 but now converging to be close to the same.
Forward electricity prices for 2024 are trending higher than 2023, but the prices have come down slightly since the presentation slide was put together.
The 2022 natural gas prices and corresponding gas prices were significantly higher due to international problems.
The overall trend indicates forward prices for 2024 being higher than last year, but potentially not as high as initially indicated by the graph.
7 - Board Education – Load Forecasting - Discussion - Dan Woodfin/ Jeff Billo
Short term load forecast is used for security constrained economic dispatch
Midterm load forecast is used for reliability and unit commitment decisions
Long term load forecast is used for planning and budgeting
ERCOT uses internal neural net models and external vendor forecast models
They use various weather scenarios to create load forecasts
Demand response from price responsiveness and 4CP has grown significantly
ERCOT is developing machine learning algorithms to incorporate demand response into load forecasting
ERCOT noted significant changes in the long term load forecast due to the impact of AI and new demand from industrial customers
8 - Independent Market Monitor - IMM - 2023 State of the Market Report for the ERCOT Electricity Markets - Discussion - IMM
Energy prices in 2023 saw a 13% reduction in real-time energy price, driven by a 60% decrease in natural gas price.
Energy market was found to be competitive in 2023, with low frequency of market power exercising opportunities.
Increase in load trend observed in all four zones
Approximately 10.5 gigawatts of new supply was introduced, mostly in renewables such as wind, solar, and energy storage, and some from natural gas-fired plants.
Market indicated sufficient revenue for new generation investment, with four out of the last six years providing ample revenue.
Congestion costs were down 15% in 2023, attributed to upgrades in the Houston area, weather patterns, and generation outages.
Four recommendations made by IMM, including increasing constraint shadow prices, modifying proxy offer curve for renewable resources, and improving ecrs procurement and deployment.
9 - TAC Report - Discussion - TAC Chair
9.1 - Non-Unanimous and Other Selected Revision Requests Recommended by TAC for Approval - Vote
TAC unanimously voted to recommend approval of twelve revision requests, with two revision requests having opposing votes
The two non-unanimous revision requests discussed were NPRR1224 and NOGRR245
Highlights from the May 22 TAC meeting included the unanimous endorsement of the Oncor West Texas 345 kV infrastructure rebuild project and the mitigated offer caps for hydro resources
Additional TAC meetings were held on May 10, May 31, and June 7 specifically to consider NOGRR245
NPRR1224 introduces a manual trigger for releasing ECRS from SCED dispatchable resources when the system power balance constraint is consistently violated by at least 40 MW for ten consecutive minutes
The proposal also requires that energy offer curves for the capacity assigned to ECRS be offered at no less than $750 per megawatt hour
The original proposal was for a 30 MW threshold for the power balance constraint violation, but stakeholders arrived at a 40 MW threshold instead
The NPRR was part of a compromise position that was voted through TAC with a supermajority vote, including the price floor
10 opposing votes, unanimously opposed in the consumer segment and IREP segment, but remaining segments unanimously voted for NPRR1224
Opposition was supportive of earlier deployment of ERCOT, but had concerns about the offer floor, suggesting lower numbers like $250 or $500
Additional comments were received from various stakeholders after TAC
There was also discussion about another NPRR (NPRR1232) in the TAC process, which would automatically release some amount of online ERCOT and supports the higher price level
The board is looking for an urgent decision on this topic
ERCOT conducted an RFI and had discussions with joint commenters including Invenergy, Nextera, Southern Power, Avangrid, and Clearway.
Following the March 27 TAC meeting, ERCOT filed comments opposing the approved version and the board remanded the NOGRR back to TAC.
After additional TAC meetings, a revised version of NOGRR245 was approved, applying to new resources from August 1 of the year, with a gray box provision delaying implementation for nine months related to hardware changes.
ERCOT supported the bifurcation approach to give stakeholders more time to reach consensus.
There was one opposing vote in the IREP segment and oppositions filed by joint commenters since TAC.
There was a robust discussion at R&M, and it is expected that there will be negotiations between joint commenters and ERCOT on NOGRR245 outside of the TAC process.
The board is expected to direct a subsequent NOGRR to go through the TAC process and return in December.
9.2 - Reliability and Markets - R&M - Committee Recommendations on Non-Unanimous and Other Selected Revision Requests - Discussion - R&M Chair
The R&M committee considered NPRR1224 and recommended its approval as recommended by TAC, with one opposing vote by Courtney Altman for OPUC.
The committee encourages stakeholders to expedite the process for NPRR1232, which involves automated release of ECRS to SCED without manual ERCOT deployment instruction.
NOGRR245 was also considered, and the committee unanimously recommended that the board table it to allow stakeholders to work on language for bifurcating parts of the exemption process framework into a future board priority revision request.
The committee recognized the potential need for special R&M committee and board meetings in July to consider NOGRR245 if parties reach agreement on the bifurcation language.
The motion to table NOGRR245 was made, and clarifications were provided on the timeline for bringing it back, with a potential aggressive timeline of December for certain aspects.
The motion to table NOGRR245 was seconded and passed.
The committee reviewed the financial performance of the organization, the investment portfolio's compliance with current policies, and the credit requirements and certificates for lending constituents.
The company met all requirements in the credit and certificate areas.
The future calendar includes discussions on ERCOT's insurance renewals, operating budget reconciliation, planning for the 2024 audit, and the results of the 2023 401K plan savings audit.
There were no voting items.
11 - Human Resources and Governance - HR&G - Committee Report - Discussion - HR&G Chair
HR&G committee voted to recommend board approval of amendments to board policies and procedures, to clarify the revision request process and make minor clarifications
R&M committee also reviewed the policies and likely to recommend approval
Committee voted to recommend board ratification of Keith Collins as the new vice president of operations of ERCOT
The committee also discussed receiving a human resources operations report, with 44 employees added year-to-date and stabilized attrition rates
A report on board and employee conflict of interest policies and review process was received and discussed, with no direct conflict of interest issues disclosed
Employee disclosures primarily related to employees having relatives working for market participants, all appropriate disclosures were mitigated.
The R&M Committee considered revisions to its charter
The revisions correspond to amendments to the board policies and procedures and clarify other practices
The committee recommended board approval of the revised charter
Motion for approval of the R&M committee charter consistent with the red lines
No opposition, motion passes
12.2 - Oncor West Texas 345-kV Infrastructure Rebuild Regional Planning Group - RPG - Project - Vote
The Oncor West Texas Infrastructure Rebuild project is a tier one project estimated to cost $1.12 billion to address thermal overloads and load growth in the west and far west weather zones.
The project completed RPG review, was assessed by ERCOT staff, and received unanimous endorsement by TAC and by the R&M committee.
The motion to endorse the project was based on NERC and ERCOT reliability planning criteria and was passed.
ERCOT staff filed a revision request to implement dispatchable reliability and reserve service as a new standalone ancillary service.
Two resources in the aggregate distributed energy resources pilot project were successfully qualified to provide ECRS and began participating in the ECRS market in May 2024.
RTC+B is maintaining momentum in developing software open policy discoveries.
Staff continues to report on ERCOT's working with the PUC to make progress on the reliability standard and added future agenda items for large transmission studies.
The committee invited Dr. Ben Kroposki from the National Renewable Energy Lab to present on grid forming inverters and their importance to the reliability of the system.
Staff presented updates on technical projects and technology, including the market management system migration to Linux which has resulted in a 40% increase in performance.
There was a report on the ERCOT Innovation summit and discussions on ways to expand and improve the program for next year.
Updates were also provided on the Congestion Rights review performance, migration, and improvement project, as well as the RTC co-optimization update.
The projects were reported to be on budget and on time, making good progress.
The current ERCOT board chairman announced his resignation, effective at the end of the following day, leading to the need for a new chairman
Interim chair, Bill Flores, was appointed to manage the transition until a new chairman is selected
It was highlighted that ERCOT has significant work ahead, leading into a legislative session beginning in January, and the importance of having new leadership in place before this
The governor agreed with the decision for the transition to happen sooner rather than later
14.1 - Break
16 - Adjournment - Chair
The board adjourned the general session and convened in executive session, with no voting items anticipated during the executive session