Texas regulators briefed on power grid's preparations for Dec. 22 cold snap

Texas regulators learned Dec. 15 how the Electric Reliability Council of Texas is preparing for a cold snap that is expected to bring sub-freezing low temperatures to much of central Texas beginning Dec. 22.

The Intercontinental Exchange on-peak power price for Dec. 19-23 surged about $40 to around $114/MWh, while off-peak contracts rose $22 to trade around $100/MWh.

"You will notice there is a lot of chatter on social media about the changing weather situation that we saw on the horizon for next week," said Kristi Hobbs, ERCOT vice president for public relations, during the Public Utility Commission of Texas meeting. "The earliest forecast was quite eye-opening, but the forecast ... [is] very hard to predict that far out about the accuracy."

Forecasts based on various models are currently moving toward "a little bit more convergence," Hobbs said, with the cold front arriving the afternoon or evening of Dec. 22 with temperatures in the Dallas-Fort Worth region below 20 degrees Fahrenheit and temperatures in the 20s F farther south toward Austin and San Antonio, Hobbs said.

"The latest forecast shows some chance for snow, but that would be north of the Dallas region and into the Panhandle region, not a wide impact across the state," Hobbs said.

If the seven-day forecast Dec. 16 calls for temperatures of 25 F or below in the major metro areas in the north and central areas, "we would issue an operating condition notice," Hobbs said.

Weatherization inspections

"That does not mean emergency," Hobbs said. "That is just an alert to our market participants to make sure that they are looking at the same forecast that we are seeing and making the preparations. That way the generation units are fully weatherized, and the transmission service providers are ready for the upcoming cold weather."

ERCOT has so far inspected about 140 generating units for winter preparedness and plans to inspect about 100 more by Dec. 23.

ERCOT currently expects loads to range in the low to mid-50s GW during the cold snap, Hobbs said. ERCOT's winter Seasonal Assessment of Resource Adequacy forecast a seasonal peak of 67.4 GW under its base and moderate reserve capacity risk scenarios, with resources exceeding expected demand by as little as 3.8 GW or as much as 10 GW.

Commissioner Jimmy Glotfelty asked if the forecast shows any indication of how much of the state might have cloud coverage or significantly lighter winds after the cold front moves through Texas.

"At that far out, we don't have good information on that yet, but that is something that we watch for both on the solar and wind forecasts," Hobbs said.

Market reform comments

The prospect of a severe winter storm remains a concern for the PUC and ERCOT in the wake of the deadly mid-February 2021 winter storm that left about 4 million ERCOT customers without power, some for days.

PUC Executive Director Thomas Gleeson reminded the commissioners that comments were due at noon Dec. 15 in Project No. 54335, "Review of Market Reform Assessment Produced by Energy and Environmental Economics," which reviewed options for long-term market changes to upgrade reliability in ERCOT, particularly through incentivizing investment in dispatchable generation.

As of 12:38 pm CT, the PUC's website showed 113 comments on the report, which had concluded by recommending one of two options, but more may have been submitted by the deadline but not yet showing on the website.

PUC Chairman Peter Lake expressed favor for the Performance Credit Mechanism, through which performance credits produced during hours of highest reliability risk would be traded among load-serving entities—retail electric providers and vertically integrated utilities—in a voluntary forward market to meet reliability standards.

E3, however, had favored a Forward Reliability Market, requiring a centrally traded capacity market, as occurs in markets such as the PJM Interconnection and the Midcontinent Independent System Operator.

The PUC also discussed a draft Biennial Agency Report, which is to be submitted to the 88th Texas Legislature, convening Jan. 10. The draft described the PUC's activities over 2021-22 but contained no recommendations for legislative action, which are scheduled for discussion at the PUC's Jan. 12 meeting.