ERCOT Terminates NRG’s RMR Contract

ERCOT Terminates NRG’s RMR Contract

Feb 28, 2017

by Margarita Fournier; Copyright 2016 by Competitive Assets, LLC.  All rights reserved

When last May, ERCOT announced that it had signed a Reliability Must Run (RMR) agreement with NRG for its Greens Bayou Unit 5, there was much disquiet in the market about the expensive, two-year contract. Subsequently, stakeholders and ERCOT staff spent many hours, working on ways to shorten the contract and/or to avoid future RMR situations. And now, on 2/27/17, ERCOT issued a market notice – W-A032916-05 Operationsannouncing the termination of the contract with NRG by 5/29/17.

In the notice, ERCOT stated that by 10/17/16, it had completed “additional studies for Greens Bayou Unit 5, incorporating newly approved Nodal Protocol Revision Request (NPRR) 788 criteria and confirmed that Greens Bayou Unit 5 was still needed to support ERCOT transmission system reliability until July 31, 2017, when the Colorado Bend II Generating Station was expected to become operational (See Market Notice W-A032916-04).  The most recent Generator Interconnection Status (GIS) Report (January 2017), posted on the Resource Adequacy page of ERCOT’s website, indicates that the Colorado Bend II Generating Station is now expected to become operational in June 2017. 

Pursuant to paragraph 1(l) of ERCOT Protocol Section 3.14.1, ERCOT must provide contemporaneous notice to all Market Participants of an elimination of an RMR Unit.  Based upon the October 2016 RMR studies, the January 2017 GIS Report, and ERCOT’s judgment, ERCOT has provided NRG with notice of termination of the RMR Agreement for Greens Bayou Unit 5.  Such notice was provided today, February 27, 2017.  Section 3(A)(2) of the RMR Agreement requires ninety (90) days’ advance written notice to NRG and therefore the RMR Agreement will terminate on Monday, May 29, 2017.”

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