ERCOT has submitted a letter to the Texas PUC in response to a request made during the Open Meeting on September 22, 2016, for input on providing an assessment of the Economically Optimal Reserve Margin (EORM) and the Market Equilibrium Reserve Margin (MERM) for the ERCOT region.

In the letter, ERCOT detailed the process used to develop the most recent EORM and MERM studies as well as two subsequent loss-of-load probabilistic studies

Noting the customization and stakeholder input required of the studies, ERCOT wrote that, if the Commission requests that ERCOT proceed with evaluating and publishing the EORM and MERM (as well as the associated levels of expected unserved energy) on a regular basis, ERCOT proposes the following actions:

1. ERCOT will work with Brattle and Commission staff to conduct one or more workshops with market participants to review the methodology and assumptions used in the original 2013 EORM study and to establish a documented methodology for conducting future EORM studies. ERCOT would expect these workshops to be completed in the first half of 2017.

2. ERCOT will complete the next EORM study based on the documented methodology. ERCOT recommends this analysis be conducted in the second half of 2018 in conjunction with the next loss-of-load analysis required by NERC in order to reduce the aggregate cost of the two studies.

3. After the next EORM analysis in 2018, ERCOT recommends that future EORM analyses be conducted every other year coincident with the loss-of-load studies required by NERC.

4. Also after the next EORM study, ERCOT will amend its market rules as appropriate to account for the change from a target reserve margin based on a one-event in ten years standard to an EORM-based criterion. ERCOT will also modify any related reliability criteria, such as the reference reserve margin for the region used in NERC reliability studies.

5. ERCOT and stakeholders will periodically reassess the EORM methodology as grid conditions change to ensure that the documented process is appropriate.

The Commission also asked ERCOT to provide a cost estimate to conduct these studies. "It is difficult to assess these costs at this time, but ERCOT expects that they would not exceed the cost of the initial 2013 Brattle study, given that an initial methodology has been established. In addition, as ERCOT is already conducting a biennial loss-of-load study, the EORM analysis, if conducted at the same time, would only represent an incremental cost above these required studies," ERCOT said

See ERCOT's letter here

Tags:
Texas   ERCOT   Energy-only   Reserve Margin  

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