As part of phase 1 of the PUC’s market redesign efforts, ERCOT was directed to implement a firm fuel service, as imagined in Senate Bill 3. It would be paid to gas generators that have onsite fuel storage to run for at least 48 hours. This will be implemented in two phases; the first phase for winter 22/23 will be an RFP process that is (most likely) only for oil storage for dual fuel plants; the price could be determined on a “pay as bid” process or via a single clearing price. (Pay as bid would be simpler to implement, but has some significant fairness issues, as entities with load and generation could supply their share of FFSS but still end up paying for FFSS if their costs were lower than others costs). The second phase 23/24 and beyond will possibly include more technologies and a slicker auction process. Because the payment (at least at first) will only be going to resources with fuel oil backup and not to all resources that can carry the system in times of natural gas interruption, it could have the effect of depressing prices during gas shortage events and thus actually harming coal and nuclear. At the Independent Market Monitor’s (IMM) request this Other Binding Document Revision Request was filed to offset/ameliorate that price suppression by taking the fuel oil fired resources out of the ORDC adder calculation when deployed by ERCOT, thus not harming coal and nuclear.
- 2/7/22 IMM files comments on NPRR1120 (Firm Fuel Supply Service)
- 2/15/22 ERCOT files OBDRR039
- 2/23/22 TAC approves OBDRR039)
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