The wheel keeps turning and turning and turning…
We’ve been chronicling the most recent bout of misery that Texas’ electricity markets are handing customers this year in this blog and in the paper (and to think 2008 started on such an up note for power!), but here’s what others have been writing about the problem lately.
• While many retailers are going out of business with a bang, some go out with a whimper, the Fort Worth Star-Telegram writes.
And how many ways are there to explain what ERCOT, the state grid operator, is doing to try to fix the recent spikes in wholesale power prices?
• Here’s what we said in Saturday’s paper:
“The change approved Friday relaxes some restrictions on where ERCOT can buy power and the price it can pay, which it hopes will allow more precise control of congestion.”
“We were using a tool to fix certain problems that was not particularly effective,” said Dan Jones, the independent market monitor for ERCOT. “There will still be problems with congestion, but we can now handle it more effectively.”
Ercot will be allowed to pay high prices to some generators, but not have to offer that same price to all generators in the market at the same time, the previous rule.
ERCOT had been limited in using power based on the price the generators are asking, with the cheapest bids going first ….. However, the cheapest power plant in a zone might not be in a position to ease a congestion point. Now ERCOT may call on a plant to fire up to address a congested line, even if that plant didn’t make the cheapest bid.
• The Associated Press’ explanation (via Forbes’ web site):
The changes allow Ercot to address congestion using a local rather than a regional approach. The grid operator can dispatch units that may not be the lowest priced, but provide power to specific areas to relieve transmission bottlenecks, Ercot officials said.
• A Dallas-area blog had this to say about the recent turmoil, which may set the mood for next year’s Texas legislative session:
I don’t care about DART or homeland security or taxes or toll roads. I want electricity system reform that will guarantee reliable service and honest competition. I don’t think that’s asking too much. Do you?