Executive Summary

The September board meeting had the long awaited temporal and geographic view on Batch Zero, the approval of the ERCOT proposed 2027 Ancillary Service Methodology, words on Far West Mitigation (not happening anytime soon) and Large Load Voltage Ride Through related mitigation (also not happening anytime soon), a reminder that ERCOT is working on a NOGRR to require large loads to limit their power oscillations, observations that forced generation outages are increasing, batteries are more than covering load growth, state of charge views in general, prices are low, and batteries and solar keep coming.  Pablo Vegas noted that not only is peak load higher, energy use in total is a lot higher.  There was also discussion on the Comprehensive Transmission Planning process, Planning and weatherization (MORA is showing higher risk of outages, but that is likely die to the new long term load forecast), and then there was some schadenfreude inducing news on pay packages (All reports I’ve heard say that Pablo Vegas is a nice guy, but it is hard to be super sympathetic when discussing pay packages north of $5 million – for me at least.)

So what: It seems that the mitigation around the Far West import issue might be more delayed than previously thought, as ERCOT is realizing that their Far West Load Forecast was fundamentally flawed.  Similarly mitigation related to Load Voltage Ride Through looks unlikely in the near to mid term future.  On the other hand, is is probably worth keeping an eye on the NOGRR that ERCOT is developing to restrict allowable power oscillations at loads, as that might be expensive to comply with (I expect a NOGRR245-like fight).

Agenda

• ERCOT Meeting Page

Video

• ERCOT Video (Day 1/Day 2)

Notes

• • Batch Zero Report
    • ERCOT (Jeff Billo) released time and geography data on Batch Zero.  Note that over 50% of base load is scheduled to be active in 2028 and that of the 66.4GW of baseload expected in 2032, ~29GW of it is in the North and North Central zones.

• Note on the “Energized before March 25th, 2022” bucket.

• • • • Jeff highlighted that this bucket contains large loads that were on the system prior to the start of the interim large load interconnection process.  Some of these loads have been consuming for decades.  While there is some ramp shown in this category, most of these loads are already here, and as a first order approximation, this bucket should be interpreted as already consuming and not representing additional growth. 

• Note on the “Energized after March 25th, 2022” bucket.

• • • • SOME of this load is already consuming, but only about 4GW (9GW is currently approved to energize) the balance (e.g. 8.3GW = 12.3 – 4 in 2028) represents load growth.

• Final note on all of this – in another presentation on the Faw West Texas IROL, ERCOT noted that earlier this year it had been expecting a huge Far West Texas load ramp in the summer of 2026 that never materialized.  Upon further investigation, they realized that the load ramp prediction was based upon Transmission Companies’ contracts with individual loads, which were in turn heavily influenced by the projections of the load developers.  As it turns out, this forecast has been proven to be inaccurate and ERCOT is looking at ways to ‘push the forecast to the right’ (more on that later).  As someone who is currently reading “Thinking, Fast and Slow” (which I highly recommend), it appears that the contract based forecast is a pretty straightforward example of a planning fallacy, which we would expect to be overly optimistic by a significant margin.  So why discuss the Far West issue in the context of Batch Zero?  Well, the Batch Zero load forecast information above is exactly the same as the flawed Far West load forecast; it is contract based and thus almost certainly significantly overly optimistic.  While ERCOT has decided that TSP contracts are not a good way to develop a realistic forecast for the Far West IROL issue, they have yet to apply that lesson to Batch Zero.  (It should also be noted that due to projects in the PUC currently, load will likely have to start paying transmission charges as soon as their contract dates hit, and possibly lose their allocations if they miss their energization milestones, so that may make these forecasts less optimistic, but I personally doubt it).

• ERCOT also had data on the 9.5GW of Withdrawal Limited Private Use Network (WL-OUN) projects included in the studied load.  The 9.5GW of WL-PUN loads are associated with 15.4GW of generation; 12.9GW of which is Natural Gas fired.

• • ERCOT was asked if there were any other projects that were bringing their own generation but had chosen not to pursue the WL-PUN generation; ERCOT responded that there were, but very few.
  • Note that this 9.5GW of load, to the extent that it is built and brings its own generation, is likely to have little impact on pricing, or even be slightly price depressive when it is generating more than it is consuming.

• • Ancillary Service Methodology
    • ERCOT (Nitika Mago) presented a final pitch for its version of the Ancillary Services Methodology, the Independent Market Monitor (Jeff McDonald) and the Consumers’ representative (Beth Garza) gave their pitches for lower reserve procurements (Beth’s was better received; the relationship between the IMM and the ERCOT Board of Directors is still pretty rocky, with board member John Swainson noting that whenever the IMM disagrees with the ERCOT staff, John is always going to agree with the ERCOT staff.  PUC Chair Gleeson suggested point/counterpoint meetings with the IMM and ERCOT staff and the Board), Vistra also presented its view that ERCOT should buy more reserves.

• The main issues discussed were:

• • • • Maintaining ECRS and NonSpin at or above the RRS and RegUp levels at all times – The IMM thinks this is wasteful as in recent history there has always been enough capacity online for free for this to happen without paying anyone for it.  Consumers felt that it just isn’t needed, as RRS and RegUp aren’t deployed simultaneously ever.
      • Risk Credits (depending on things historically provided for free) – The IMM thinks that ERCOT should fully lean on things that have been historically provided for free (100% Risk Credit); Consumers views were more nuanced, as she stated that 1) there didn’t appear to be much/any rigor in the determination of what value to use and rather it looked like a fudge factor to bring numbers into a palatable range, 2) She would not normally support depending on things provided for free, but 3) given that she felt that ERCOT is buying too much reserves anyway, she would prefer to not only change a parameter that is holding the procurement amounts down.  Vistra thinks that risk credits should not be used at all.
  •  System Operations Report 
    • ERCOT (Dan Woodfin) talked about two issues in his operations update, the Far West IROL and the large load voltage ride through mitigation issue.
      • Far West IROL – As mentioned above in the Batch Zero discussion, ERCOT has realized that they contract based load forecast that they were using to predict when the Far West import would become a real issue was fundamentally flawed.  They are trying to figure out how to ask loads when they are *really* going to ramp up their consumption.
      • Large Load Voltage Ride Through Mitigation – There are three areas in Texas where enough large loads that don’t have good voltage ride through protection could get to consumption levels where there is a problem requiring mitigation (i.e. 3200MW).  However, they are currently at levels well below the problematic level, so mitigation won’t be required for a while (if ever).
  • Summer Operations Overview

• There are more forced outages now-a-days.

• • • ERCOT (Dan Woodfin) noted that the summer forced outage rate is higher now than it was about 6 years ago.  He did not speculate as to why, but three things come to my mind; namely 1)the RPOL (aka MDRPOC) process limits the amount of planned outages that generators can take; presumably this pushes some outages into forced; 2) older resources are being RUC’d online more often since 2021, this can take a cumulative toll; 3) the generation fleet is, on average, about six years older than it was six years ago.  That can make a difference (ask my knees, amIright?!?!)

• It was really hot

• There was about 3.8GW of Demand Response during the all time peak at Hour Ending 19, 7/22/26.  No mention was made of the whereabouts of the 2-3GW of 4CP avoidance that ERCOT used to see prior to crypto-mining.  Puzzling.

• While Net Load has been rising, the peak net load that needed to be served by thermal generation appears to have fallen.  My take away is that so far batteries have more than kept up with load growth in ERCOT; of course, with the challenging economics for batteries, that may not continue.

• Some data on State of Charge

• Off-line capacity can present a good view on how tight the system is.  The less stuff is off-line, the tighter the conditions are.

• • Summer Markets Overview

• Prices are low, peaker net margin is low, ancillary service prices are low.

• In unrelated news Solar and Energy Storage Capacity has greatly increased.  (Jjust to be clear, that was a joke, it is clearly related news).

• Congestion has dropped, most likely due to Real-Time Co-optimization

• RUCs have increased; ERCOT blames this on batteries submitting “Flat COPs” (i.e. Current Operating Plans with static Hour Beginning State of Charge information).

• • There’s a mug for that.

• • CEO Update

• The load is a lot higher, not only the peaks, but the energy as well.

• It sure takes a lot of folks to start a podcast!

• • System Interconnection Report
    • Gas generation interconnection requests are up to 82GW (compare to 60GW at the June Board Meeting)
      • Remember, though, historically only about 20% of the generators in the queue get built.

• NOGRR245(Voltage Ride Through for Inverter Based Resources(IBRs)) is getting implemented.

• • • • ERCOT has denied 25 IBR NOGRR245 extension requests
      • ERCOT has granted 93 IBR NOGRR245 Extension Requests
      • ERCOT is doing assessments on whether to grant exemption requests for 116 IBRs (should be completed in Q4 2026)

• ERCOT is developing a NOGRR to prevent large load oscillations

• • • • Loads will probably need to install fancy batteries to comply.
  • Comprehensive Transmission Planning (CTP) Process

• ERCOT and a few stakeholders gave their thoughts on what the Comprehensive Transmission Planning Process should look like.

• • • • Popular ideas were:
        • Paths for smaller, non large load related projects to get approved outside of the CTP cycle
        • Single points of contact, direct load/ERCOT engagement (though it was noted that this was not a uniform load sentiment – i.e. TIEC wants as little direct load/ERCOT engagement as possible).
        • Bring Your Own Generation rules need to be improved.
        • Transparency needs to be increased, particularly information regarding the large load interconnection queue
        • The process should be as fast and easy as possible.
  • System Planning and Weatherization update

• The load shed outlook has increased in the MORA, but don’t get too excited because it is due mostly to the new long term load forecast from April.

• You get a bonus! And you get a bonus! Everyone gets a bonus!

• The board voted itself a $150,000 retention bonus payable on completion of their three year term.

• • Pablo gets a big raise; or does he?  Psych!

• The board also voted to approve Pablo Vegas (or maybe I should say Pablo Vega$) a nice new pay package.
• But then this happened.  Yoink!

Discussed Issues

• Batch Zero
• Ancillary Services Methodology
• Far West GTC
• Load Voltage Ride Through
• Demand Response
• Reliability Unit Commitments