Highlights on CDR Inputs

PUCT Workshop on CDR Inputs, 3/14/13

By Margarita Fournier and Denise Stokes

 Points of Interest

 On 3/14/13, the PUCT held a workshop on inputs that go into the Capacity, Demand, and Reserves (CDR) Reports, which are produced by ERCOT twice a year.

• First, the Co-Chair of the Generation Adequacy Task Force (GATF) presented information (21) on the current CDR process and proposed changes.  He said that ERCOT also develops Loss-of-Load Expectation (LOLE) studies, which are related to CDR, but not the same.
• He described the CDR as containing a one-hour, peak-load calculation to provide a snapshot of the installed-reserve margin in future years.  To develop a planning-reserve margin, ERCOT uses a “one-in-ten LOL event” reliability standard.
• The assumptions that go into CDR are approved at the stakeholder level (i.e., by the Technical Advisory Committee (TAC)); the planning reserve margin is approved by the ERCOT Board.
• Nodal Protocol Revision Request NPRR489 (Planning Reserve Margin), which is expected to be approved by the Board in March, will move CDR assumptions into the ERCOT Protocols, and make them subject to approval by the Board.
• Currently, the CDR inputs include load forecast, Emergency Response Service (ERS), other Demand Response (DR) programs (e.g., energy efficiency), DC Tie capacity, switchable capacity, Private Use Networks (PUNs), installed-capacity assumptions, planned-unit additions, renewables, mothballed capacity, and retiring units.
• At the workshop, participants debated how to add wind power to CDR, including what should be the Effective Load-Carrying Capability (ELCC) and the need to distinguish between the coastal and West Texas wind.  (Commissioner Anderson commented that the decision on which ELCC to use may end up at the Commission.)
• Commissioner Anderson said that he is particularly interested in the load forecast, noting that the current bias has led to higher forecasts.  This could prove problematic if the reserve margin becomes a mandate (and not just a target).
• ERCOT staff stated that they are switching to a different economic forecast, since the one used before (i.e., Moody’s base case scenario) tended to overstate non-farm employment growth.
• Both Chairman Nelson and Commissioner Anderson mentioned a recent request by NERC’s CEO, Mr. Cauley, to ERCOT to provide information on the current plans to address resource adequacy.  The Chairman said that she had met with officials from NERC, and they acknowledged that their authority is limited to just asking for a report.
• At the end of the workshop, a representative of the Texas Industrial Energy Consumers (TIEC) suggested several ways for revising the CDR to make it more accurate and “realistic” (e.g., by accounting for the flattening of load at peak).  He added that an efficient energy-only market will always show some capacity shortage in future years.

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