Texas PUC Staff File Report on ERCOT Reliability Standard Calculation Mechanism
September 16,2016
Staff of the Public Utility Commission of Texas have filed a new update concerning the review of the applicability of the 0.1 LOLE reliability standard in ERCOT and the evaluation of potential alternatives
Staff does not advocate a specific reliability standard in the report, nor does Staff advocate specific next steps.
Staff's report reviews the pros and cons of different reliability standards (0.1 LOLE, Economically Optimal Reserve Margin, Market Equilibrium Reserve Margin, Expected Unserved Energy, Multiple Reliability Metrics), stakeholder comments, and various options potential next steps the Commission may undertake
Among the drawbacks of the 0.1 LOLE cited by Staff is that recent studies have also shown that the reserve margin conveyed by the traditional 0.1 LOLE metric, which has its origins in the early days of utility planning, does not conform with the least-cost solution indicated by economic principles, and that 0.1 LOLE may imply a level of reliability that is significantly higher than that experienced by customers due to service interruptions related to problems on the distribution system.