Texas might experience summer power shortages as the state heads into the hottest months of the year, a utilities official told local leaders on Tuesday morning.

As Texas’ population continues to climb year after year, the Electric Reliability Council of Texas, or ERCOT, released a forecast projecting record electric use this summer. 

As state demand continues to increase, supply is decreasing, as coal plants continue to close around Texas, leaving ERCOT to potentially issue energy alerts or even implement rotating blackouts. 

In preparation as Texas heads into July and August, New Braunfels Utilities presented an ERCOT assessment and energy overview to educate New Braunfels leaders and nearby media personnel about ERCOT and how NBU fits into the independent system operator.

What is ERCOT?

“When you think about all the high transmissions lines across the country, they’re actually split into three entities,” said David Hubbard, director of energy markets and customer solutions for NBU.

“One is the eastern interconnect, the other is the western interconnect, and then we have ERCOT … What ERCOT does, is it’s ERCOT’s job to basically balance the electric grid. They don’t own any transmission or generation but they manage generators coming online and sending energy through transmission lines to loads such as us.”

With more than 1,800 active market participants that generate, move, buy, sell or use wholesale electricity in the ERCOT system, it is the only interconnection or “power pool” that doesn’t cross state lines in the nation — making it not susceptible to federal regulations, Hubbard said.

“The Texas Legislature restructured the Texas electric market in 1999 by unbundling the investor-owned utilities and creating retail customer choice in those areas,” states an ERCOT Inc. fact sheet.

ERCOT has four primary responsibilities: system reliability, planning and operations; wholesale market settlement for electricity production and delivery; retail switching process for customer choice; and open access to transmission.

Working with a historically low planning reserve margin of 7.4% as the state’s coal plants continue to close, ERCOT reports identified “a potential need to call an energy alert at various times this summer.”

ERCOT last hit its record peak demand on July 19, 2018 with 73,473 megawatts. One megawatt of electricity can power about 200 Texas homes during periods of peak demand.

Operating on a scale system of private and public communication, ERCOT does not begin to alert the public of dropping reserves until it has less than 2,300 megawatts of energy, although it alerts internal communications anywhere below 3,000 megawatts when not expected to recover in 30 minutes.

“At this point, ERCOT will issue an (internal) advisory just letting people know that the situation is continuing to degrade,” said Ashely Van Booven, CPA and demand response coordinator for NBU. “We reached this level five times in June, and once in July already.”

Beyond internal communications, there are three ERCOT emergency alert levels — with the most extreme being “EEA 3.” At EEA 3, there are less than 1,000 megawatts in reserve and ERCOT begins mandatory rotating blackouts.

“We last entered an EEA level 3 in 2011,” said Van Booven.

NBU Chief Electrical Engineer Gregory Thomas, said the event of Feb. 2, 2011 was due to an unexpected critical winter blast through the Central Texas area.

“While there were some preparations made for that event, the ambient temperatures were so severe that generation movements started to trip offline, they could not operate in those weird temperatures. All the while, those temperatures were causing demand to spike — so loss of generation coupled with a spike in demand just led to a critical deficiency.”

The situation lasted 7½ hours, Thomas said. 

“After that event ERCOT did issue some mandatory updates to a lot of those generators,” Hubbard said.

How NBU fits into the grid

As one of the 1,800-plus active market participants, NBU is just a small fish in a big pond when it comes to ERCOT. 

With ERCOT issuing 100% of the load shed obligation to most of the state, the Lower Colorado River Authority acts as a regional arm and sends out its 5.7% of the total load shed obligation to all utilities in its area proportionally. 

It is from here that NBU is left to send out its 0.41% of the total load shed obligation to its customers. 

“Most of the summer events will happen between the hours of 3 p.m. and 7 p.m.,” Hubbard said. 

Still, NBU is working hard to add energy to ERCOT’s grid and increase the usage of smart energy sources to the state’s load.

 “As we move forward, NBU has some initiatives that we’ve already implemented or are implementing that are moving us into a smart utility route, or as we refer to it — NBU Smart,” Hubbard said. “The first one is by 2021, 40% of all the power used by NBU’s customers will be from renewable resources.”

NBU’s profile will be made up from 24% solar, 13% wind, 2% from biomass and 1% from hydropower, Hubbard said. 

By feeding more energy into ERCOT, NBU is helping replace lost like the closing coal plants with inexpensive renewable sources, said Ian Taylor, CEO of NBU. 

“It just so happens that the reason we’re able to get to 40% is because we’ve looked at all our generation sources and the decision was made … that solar in West Texas is the next purchase we need to make, because it’s generation profile so closely matches our load profile,” Taylor said. “So at a time where power is very expensive, we’ve contracted for very inexpensive solar out in West Texas.” 

NBU also has two of its wastewater treatment facilities as part of ERCOT’s demand-response programs. 

ERCOT has two formal demand-response programs that customers can sign up for and bid what ERCOT sees as non-critical load into the Emergency Response Service program, Van Booven said. 

“These customers contract directly with ERCOT for this load,” Van Booven said. “So when we reach these EEA level 1 and 2 stages, these customers already know they have bid this obligation to ERCOT and ERCOT says, ‘Okay we need these reserves now.’” 

The needed load is dropped from the customer to be used elsewhere by ERCOT.

“Essentially by dropping their load, they are relieving strain on the grid and allowing that generation to serve a bigger purpose,” Van Booven said.

Both of these programs are programs ERCOT pays participants to partake in, Hubbard said.

“There’s also another program, LR — load as a resource, which works basically the exact same way,” Hubbard said.

There is no cost for customers to enroll — they get paid, but they do have to their obligation shut down in 30 minutes in the event of a situation, Van Booven said.

“We actually have two of our wastewater treatment plants enrolled in this program now and we are now offering this as a start to our commercial customers, if they would like to participate in ERS and put their load in and put their bid in with the (qualified scheduling entities), can process that,” Van Booven said. “Right now we don’t have any NBU customers active on this, the ERS participation periods are four months at a time, so the next enrollment period is coming up in the fall.”

As technology becomes more advanced, NBU is helping implement more ways to conserve energy and help maintain ERCOT reserves.

“We’ve spent the last couple years moving into smart electric and water meters,” Hubbard said. “Throughout our system, we have a 99.8% penetration of smart electric meters installed, and we’re at 70.3% for water meters.”

“We’re also starting an initiative to install smart street lights with automated dimming, also installation of remote sensors on both the electric and water lines, and we’ve started a drone inspection program for our utility poles and right-of-ways.”


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