ERCOT computers improving; pilot to go forward

By Ann de Rouffignac
OGJ Online

HOUSTON, July 25 -- After a series of delays, the Texas wholesale and retail electricity pilot will proceed on schedule July 31, said Tom Noel, CEO of the Electric Reliability Council of Texas Inc.

The ERCOT board met Wednesday and agreed systems were ready to allow the test of the competitive market to begin, Noel said. After filing complaints with the Texas Public Utility Commission earlier, some market participants agreed the system operator has made strides in correcting communication difficulties among computers.

The generators were also scheduling power more efficiently. "We haven't had a complaint about this in a week," Noel said. Progress has been made improving settlement statements some wholesale participants called "grossly inaccurate," he said. Some retailers had urged the PUC to delay the start of the pilot until settlement statements were accurate, while others argued against a delay.

"The settlements are not perfect," said Noel. "Very few settlement statements are 100% of the time perfectly accurate."

He likened the problem to an individual electric customer whose meter can't be read because of a "German Shepherd in the backyard." While the statement for that month might not be exactly accurate, next month the meter will be read to get an exact statement.

Municipally owned utility City Public Service of San Antonio which is participating in the Texas wholesale market lobbied for accurate statements. During tests of the ERCOT settlement systems, CPS received a $2.23 billion bill from ERCOT for replacement reserve services. Market clearing prices used to calculate the invoices were at times in the thousands of dollars per megawatt-hour and at other times negative, according to a filing with the commission.

"They [ERCOT] have implemented some fixes on the pricing," said Dan Jones, director of market policy and planning for CPS. He said he hopes CPS won't be getting any more outlandish bills. Jones said if CPS does receive bills in the thousands of dollars per megawatt -hour, then it will switch to manual settlement.

Jones said CPS is still not receiving accurate load readings from ERCOT. "But if they don't get it right, we have the meters out there," he said. "We can always get back to those meters."

CPS didn't rule out the possibility the problem with calculating load could be coming from the company's side. But most likely, it was ERCOT's aggregation process, he said.

"It's a lot better though," said Jones, who expressed confidence errors will be corrected. "In a perfect world, I would like to see 2 more months of end-to-end testing."

With respect to the retail market, Noel said the retailers are now receiving individual customers' usage histories. Retailers complained they were not getting the usage histories from the utilities before.

"We sent over 500 usage histories," Noel said. "We are making excellent progress." He said there are no problems with computer connections between the transmission and distribution utilities and the individual retailers.

Noel said ERCOT will also begin switching customers from utilities to their chosen suppliers, but he said the process will accommodate no more than 100 customers/day. "There is a significant backlog of customer switches that should keep us busy until late August," he said.

Very few of the 80,000 customers who have chosen a retail provider as part of the pilot program have been switched to the new company. And none have received power from a new provider. By the end of August that should be rectified he said.