Actions Taken at ERCOT and PUCT

The Commission and ERCOT have already taken the following actions to improve market signals and encourage investment in additional generating capacity:  

  • Impose offer floors for On-Line and Off-Line Non-Spinning Reserve Service (NSRS) capacity to minimize the impact of reliability-driven administrative interventions on the market – implemented by ERCOT on January 5, 2012 (Nodal Protocol Revision Request (NPRR) 428).
  • Release On-Line Non-Spinning Reserve energy to Security-Constrained Economic Dispatch (SCED) without the need for ERCOT to issue a Non-Spin deployment instruction – implemented by ERCOT on January 5, 2012 (NPRR426).
  • Impose offer floors for Responsive Reserve Service (RRS) and Regulation Up used for capacity to minimize the impact of reliability-driven administrative interventions on the market – implemented by ERCOT on January 5, 2012 (NPRR427).
  • Formalize the process used to enter into Reliability Must Run (RMR) agreements with generators to meet capacity needs – implemented by ERCOT  on March 1, 2012 (NPRR432).
  • Establish an offer floor for Reliability Unit Commitment (RUC) units deployed for capacity – implemented by ERCOT on March 1, 2012 (NPRR435).
  • Increase by 500MW the amount of RRS procured by ERCOT and decrease by 500MW the amount of NSRS procured by ERCOT – implemented by ERCOT on April 1, 2012 (ERCOT Methodologies for Determining Ancillary Service Requirements and NPRR434).
  • Hire the Brattle Group to study the resource adequacy issue and propose possible solutions.  The Brattle Group released its report on June 1, 2012.
  • Adjust  the  compensation  for  RUC  units  brought  online  to  provide  local  reliability  and transmission relief and adjust the RUC claw-back.  The ERCOT Board adopted this change on July 17, 2012 (NPRR416).
  • Increase the system-wide offer cap to $4,500/MWh (8/1/12), $5,000/MWh (6/1/13), $7,000/MWh (6/1/14), and $9,000/MWh (6/1/15).  The PUCT-approved increases are being implemented by ERCOT on the outlined schedule (Project Nos. 37897 and 40268).
  • Adjust the width, slope, and magnitude of the Power Balance Penalty Curve in light of the increase to the System Wide Offer Cap to $4,500 per MWh – implemented by ERCOT on  August 1, 2012 (Setting the Shadow Price Caps and Power Balance Penalties in SCED).
  • Adjust the Peaker Net Margin threshold and the Low System Wide Offer Cap.  The Commission implemented this change on November 15, 2012 (Project No. 40268).
  • Examine whether changes should be made to address price suppression resulting from the “0-to-LSL”[1] problem, when a generation or load resource is deployed for reliability purposes.  Several NPRRs on this topic failed to get approved at ERCOT; this remains to be resolved through a Protocol change.


The Commission and ERCOT have also taken the following actions to remove barriers to storage technologies and to increase the amount of demand response that can be used when electricity supply threatens to exceed demand: 

  • Clarify rules regarding the regulatory treatment of energy purchased to charge a storage resource, including when such purchases may be considered wholesale transactions and when such purchases may be settled on a nodal basis.  The Commission adopted these changes on March 7, 2012 (Project No. 39917).
  • Adjust rules for the Emergency Response Service (ERS) program to allow participation by certain distributed generators and provide more flexibility to ERCOT to encourage greater participation.  The Commission adopted these changes on March 22, 2012 (Project No. 39948).
  • Give ERCOT authority to conduct pilot projects for new technologies like battery storage and new services like 30-minute ERS.    The Commission adopted this change on May 18, 2012 (Project No. 40150).
  • Explore distributed load demand response.  ERCOT worked with CenterPoint and Oncor during the summer of 2012 to implement a demand response pilot program, using aggregated-electric load of participating customers.
  • Expand the utility energy efficiency load management programs.   The Commission directed utilities to expand their load management programs for the summer of 2012.
  • Publish non-binding, near real-time, forward prices to allow electric loads to voluntarily reduce their usage in response to high prices.  ERCOT implemented this change in June 2012 (NPRR351).
  • Develop a campaign to raise public awareness of energy conservation.   Campaign elements include research, branding, messaging, television and radio public service announcements, a new website, media tours, video news releases, and public outreach. The Commission hired Sherry Matthews Advocacy Marketing to develop the campaign in April 2012.   The micro website,, was launched on July 1, 2012, and the full website will launch by the spring of 2013.”


[1]  Low Sustainable Limit.

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