On June 8, 2022, the Public Utility Commission of Texas (“Commission”) filed a memo from its Infrastructure Division requesting that electric utilities, power generation companies, municipally owned utilities, and electric cooperatives (“Entities”) operating outside of the Electric Reliability Council of Texas (“ERCOT”) provide to Commission Staff unredacted copies of their Emergency Operations Plans (“EOP”). Entities that operate both outside of the ERCOT power region and in the ERCOT power region, and entities that operate solely in the ERCOT power region and have already provided an unredacted EOP to ERCOT (as required by the Emergency Operations Plan rule (16 TAC §25.53), are not required to provide the Staff an unredacted EOP.
Continue Reading Public Utility Commission Requests Unredacted Emergency Operations Plans From All Applicable Entities by June 24, 2022

It has been almost a year since Texas’ Lone Star Infrastructure Protection Act (“LIPA”) was signed into law by Governor Abbott on June 18, 2021, and took effect. In the past year, we have seen developers, tax investors, and purchasers of renewable energy projects alike address compliance with LIPA in varied ways.
Continue Reading A Year Out: Renewable Energy Developer and Investor Compliance with the Texas Lone Star Infrastructure Protection Act

The second meeting of the Electric Reliability Council of Texas’s (ERCOT) Large Flexible Load Task Force (LFLTF) facilitated an opportunity for ERCOT, ERCOT market participants (MPs), and bitcoin miners to get to know one another through educational presentations and dialogue. Over 250 participated in-person and virtually.

ERCOT began the event by providing a detailed overview of its interim interconnection process that it hopes to turn into a long-term and permanent process in the future. This interim process enables large loads like bitcoin mining operations to quickly (within 150 days) interconnect with the ERCOT grid while also maintaining grid reliability and meeting existing interconnection requirements. ERCOT anticipates that as much as 17GW of large flexible loads may seek to interconnect with the ERCOT grid by 2026. The bulk of these interconnection requests are expected to be made in north and west Texas.

Continue Reading ERCOT, Market Participants, and Bitcoin Miners Become Acquainted at Second Task Force Meeting

Effective March 25, 2022, the Electric Reliability Council of Texas (“ERCOT”) began requiring documentation from large electrical loads like cryptocurrency miners before allowing them to connect to the Texas power grid. Through a Market Notice, ERCOT established an interim process requiring transmission service providers (“TSPs”) to submit interconnection studies that meet the requirements of the National Electric Reliability Council’s Reliability Standard FAC-00202 for interconnection of certain large loads. Specifically, TSPs will be required to submit the studies for interconnection of the following types of loads:

  • New loads not co-located with a Resource with total demand within the next two years of 75 MW or greater;
  • Existing loads not co-located with a Resource increasing total demand by 75 MW or greater within the next two years;
  • New loads co-located with a Resource with total demand within the next two years of 20 MW or greater; or
  • Existing loads co-located with a Resource increasing total demand by 20 MW or greater within the next two years.


Continue Reading ERCOT Now Requires Cryptocurrency Miners to Provide Information on Their Impact to the Texas Power Grid

On November 10, 2021, ERCOT held a workshop on Generation Entity Winter Weather Preparedness.  At this workshop, ERCOT provided an explanation of its approach to implementing the Public Utility Commission’s Winter Emergency Preparedness Rule,[1] which was issued in August 2021 in response to legislative directives contained in Texas Senate Bill 3 (“SB 3”).  The new rule aims to ensure that the electric industry is prepared to provide continuous reliable electric service throughout this upcoming winter season and to comply with the statutory deadline for the adoption of weather emergency preparedness reliability standards set forth in SB 3.
Continue Reading Texas Winter Readiness Update – November 10, 2021

During the 87th regular legislative session, the Texas Legislature passed several bills to address energy-related issues resulting from Winter Storm Uri. Together, the legislation required an overhaul of the ERCOT board of directors, expanded the Public Utility Commission of Texas (“PUCT”) from three to five members, imposed weatherization requirements on generation and transmission assets in ERCOT and on certain components of natural gas infrastructure, and directed a redesign of the ERCOT market to ensure grid reliability. As of September 1st , all of these laws were effective.
Continue Reading Legislative Check-In on Energy-Related Mandates from the 87th Regular Session

After Winter Storm Uri devastated the ERCOT grid, calls for industry reform rang out across the state of Texas. For the past few months, public hearings and floor debates have considered wide-ranging proposals to harden the ERCOT system against extreme weather events and address the financial consequences of the storm. The Legislature considered numerous bills dealing with issues such as energy and ancillary services repricing, market rules and price formation, generation weatherization, ERCOT and Texas Public Utility Commission (“PUCT”) reform, debt securitization, and the appropriate role and accountability of renewable resources in securing reliability of the grid. Below we provide an overview of the most significant energy legislation proposed during the recent Texas legislative session, both related and unrelated to Winter Storm Uri fallout. The Legislature passed bills that will affect all segments of the Texas energy economy, which collectively will prompt significant change in the years ahead. We have described bills that “passed” as those that have been enrolled or have already been signed into law by the Governor (Bills that have an asterisk in this article have been signed by the Governor.). We note that the veto period extends for 20 days post-session, which ended May 31st , so as of this writing it remains possible the Governor may veto some of these bills, though we have no indication he intends to do so. We will update this post after the veto period expires to note any such vetoes.
Continue Reading A Legislative Session in Review: Taking a Look at Key Energy Bills that Did (and Did Not) Pass During the 87th Regular Session

In the wake of winter storm Uri, ERCOT market participants are grappling with the resulting financial fallout. Many are now familiar with actions the Texas Public Utility Commission took during the February weather event with the intent to bring and maintain as much generation online as possible – notably ordering ERCOT to implement a temporary adjustment to the scarcity pricing mechanism designed to result in real time prices reaching the system-wide high offer cap at the statutory maximum of $9,000/mWh during the height of the generation forced outages.

Now, more than two months removed from the storm, the resulting financial impacts are having serious repercussions across the ERCOT market. Several retail electric providers have filed for bankruptcy, lawsuits are underway against a wide swath of market participants and regulators (ERCOT, the Public Utility Commission, generators, REPs, gas utilities, etc.), and countless market participants are faced with paying record-high bills for a range of reasons, including the need to procure energy in the real-time market during scarcity conditions, to obtain high priced gas supplies, to cover positions when their resources incurred outages, or exposure to uplift of default amounts owed to ERCOT. Complicating that, ERCOT has failed to pay many who did perform during the storm due to the short payment of some market participants, which means those who performed may not soon realize revenue associated with that performance. Additionally, the higher prices for power and ancillary services prompted ERCOT to substantially increase Counter-Party collateral requirements. Last month, the Public Utility Commission issued an order in Docket 51812 extending the deadline to dispute ERCOT invoices related to the winter event from 10 business days (under the current ERCOT Protocols) to six months. Since this order, the Commission has taken no additional action to address issues related to settlement invoices resulting from the storm.
Continue Reading ERCOT Unveils Plan for Invoicing Default Uplift Charges

ERCOT has experienced more attention to and development of Private Use Networks (“PUN”) in the last months and years. This post summarizes what these “islands in the grid” are, their positive attributes, and how to create one.

If you find this post helpful, or would like to hear more about PUNs, we will be presenting more detailed information on this subject in a March 30th “Private Use Networks & Self-Generation: What You Need to Know” webinar, in which we will also address audience questions.

You can register for the free webinar using this link.

What’s a PUN?

Private Use Network is defined by ERCOT as “[a]n electric network connected to the ERCOT Transmission Grid that contains Load that is not directly metered by ERCOT (i.e., Load that is typically netted with internal generation).”  While a PUN is interconnected to the ERCOT system, it functions largely as an island within the ERCOT system that has both generation and load (separate from station load).  A PUN can contain many different categories of resources and loads, all of which are behind an ERCOT-polled settlement (“EPS”) meter. ERCOT models a PUN in its system models (used for transmission planning and for interconnection studies) if it contains at least 10MW generation, has more than one connection to the ERCOT grid, or provides ancillary services. For settlement purposes, ERCOT will settle the net of generation and load during any interval so that if the PUN is “net load” in an interval, it will be settled as load, and as generation if energy delivered to the system during interval exceeds energy consumed.
Continue Reading Private Use Networks & Self-Generation: What You Need to Know

Lawmakers of the 86th Texas Legislature passed several bills in regular session related to storage and cybersecurity, as well as a bill extending the expiration of a Chapter 312 tax abatement program that benefits renewable energy. These energy-related bills passed by the Texas Legislature are discussed below, as are notable bills that failed to gain traction this session.

Continue Reading Bills Related to Storage and Cybersecurity and Other Energy Issues Signed into Law After Close of 86th Texas Legislature’s Regular Session