Third party audit confirms Texas congestion charges

Ann de Rouffignac
OGJ Online

HOUSTON, Nov. 5 — The Texas grid operator said auditors confirmed the calculations and allocation of certain transmission congestion charges, which market participants complained were “excessive.”

In a letter to the cochairman of the committee overseeing Texas electricity deregulation, Tom Noel, CEO of the Electric Reliability Council of Texas, said PriceWaterhouseCoopers “verified the accuracy” of the charges. The report is scheduled to be submitted to the ERCOT board of directors at its November meeting.

Wholesale electricity buyers complained the ERCOT charge known as the balancing energy neutrality adjustment (BENA) was “unexplainably high.” BENA includes all the obligations and credits incurred by ERCOT, after completing the wholesale settlement process.

These “left over” sums are then allocated to all market participants according to the their level of participation in the market. As a clearinghouse, ERCOT is revenue neutral.

Systemwide, BENA charges have reached about $90 million since the market opened July 31, according testimony at a legislative hearing Friday in Austin. ERCOT was not expecting these costs to surpass $20 million for a year or so. Instead they reached $20 million in 2 weeks.

ERCOT said a new system scheduled to be in place by Feb. 14 will assign congestion costs directly to the parties that cause it, correcting the problem.

Municipally owned utilities and cooperatives that participate in ERCOT’s wholesale market but not in retail choice have the “privilege of paying a lot of these costs,” Rep. Steven Wolens (D-Dallas) said Friday. “The co-ops aren’t happy about it and are squawking,” he said.

City Public Service of San Antonio said it tried to determine why the BENA charges were so high and found there was a “residual amount that couldn’t be explained,” said Dan Jones, director, market policy and planning. “City Public Service believes that QSE’s [qualified scheduling entities] are “grossly over scheduling,” said Jones. But Jones conceded CPS did not have access to the necessary data to be sure.

Congestion occurs when buyers and sellers schedule more load than there is available transmission capacity. If too much power in the south is scheduled to be transported to load centers in the north, for example, the lines connecting the generation with the load become congested, explained Sam Jones, chief operating officer, at the hearing.

To unwind the congestion and maintain reliability, under the existing system ERCOT must pay generators in the south to turn off power plants and pay generators in the north to step up generation. ERCOT pays the congestion costs (BENA) and then charges them back to all market participants proportionately.

ERCOT’s Sam Jones said schedulers are warned about congestion 1 hr before the schedules are locked in. They can change schedules but most don’t, he said. To avoid congestion, ERCOT then turns to previously submitted bids to turn generation on or off and pays the schedulers accordingly.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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