Texas Commission addresses policy concerns for DC ties

A November 21, 2023, PUCT staff (Staff) memo addressed ERCOT’s Planning Guide Revision Request (PGRR) 105, responding to ERCOT's request for guidance regarding "Deliverability Criteria for DC Tie Imports." Staff expressed concerns that PGRR 105 contradicted Commission policies established in resolving directives associated with the proposed Direct Current (DC) tie by Southern Cross Transmission LLC, now Southern Spirit. Staff emphasized potential policy contravention, cost implications for ERCOT consumers, and a lack of control if PGRR 105 were to be implemented.

During the PUCT’s November 30, 2023 open meeting discussion, Commissioner Cobos explained the background, stating that ERCOT had previously “zeroed out” DC ties in their transmission reliability criteria due to concerns about the dependability of resources from other markets. The Commission had closed out the directives related to this issue in September 2022, believing that ERCOT had completed the necessary work. However, in April 2023, PGRR 105 was filed, proposing changes to planning guides to ensure full deliverability of DC ties.

Commissioner Cobos raised concerns about PGRR 105 potentially reversing prior precedent, shifting from 0% to 100% deliverability and impacting policy considerations. She questioned whether the Commission was comfortable with 100% given these uncertainties and suggested exploring a middle ground.

Commissioner Glotfelty acknowledged his omission when closing out the directives, highlighting the need for regulatory and financial certainty for DC lines, which he noted are financed differently from AC lines. He supported PGRR 105, proposing flexibility in planning models to determine necessary upgrades for full flow.

Commissioner McAdams expressed concerns about the process and its implications across ERCOT's policies, emphasizing the potential impact on the existing framework supporting system reliability and affordability. He questioned the allocation of costs and suggested that PGRR 105 could unravel significant aspects of the system.

Commissioner Cobos was uncomfortable with PGRR 105, suggesting that Southern Spirit should already have regulatory certainty. She expressed uncertainties about DC ties' dedicated transmission infrastructure costs compared to traditional generators.

Commissioner Glotfelty argued that PGRR 105 would add certainty to import levels, increasing the likelihood of financing a facility. He asserted that 0% deliverability was unacceptable to him, adding that 100% was no different from any other generator.

Commissioners Glotfelty and Cobos agreed to work together to develop questions for stakeholders, aiming to address the issue again in January 2024. The Commission instructed Staff to open a project, issue questions for stakeholders, in anticipation of resuming the discussion on February 1, 2024.

The discussion revealed concerns about potential policy conflicts, uncertainties in cost allocation, and the need for regulatory and financial certainty in the context of DC ties within the ERCOT system. The Commission opted for further stakeholder engagement to explore a middle ground and address the complexities associated with PGRR 105.