Aug. 29 — AUSTIN — The Public Utility Commission of Texas (PUCT) voted Thursday to adopt a reliability standard for the Electric Reliability Council of Texas (ERCOT) region. Establishing a reliability standard across ERCOT will allow for regular assessments of the grid’s ability to meet consumer demand and help PUCT and ERCOT determine what market or reliability improvements may be needed in the future.
“The ERCOT grid is more reliable today than ever, and we know our system must continue to evolve to meet the growing demand for power in our state,” PUCT Chairman Thomas Gleeson said in a press release. “As we improve our grid to support Texas’ future, it is critical that we clearly define the standard by which we expect the market and the system to operate. By establishing a reliability standard for the ERCOT region today, we are setting a strong expectation for the market and charting a clear path to further ensure the reliability of electricity.”
The adoption of the reliability standard satisfies the requirements set forth in Senate Bill 3, as passed by the 87th Texas Legislature and signed by Governor Greg Abbott. The final rule adopted today is filed in PUCT Docket No. 54584.
Under the rule adopted by the Commission today, the ERCOT network must meet three criteria to continue to meet the reliability standard:
— Frequency — In the ERCOT region, an outage due to an insufficient power supply to meet demand can be expected to occur on average no more than once every ten years.
— Duration — A potential power outage due to an inadequate power supply to meet demand is expected to last less than 12 hours.
— Magnitude — The amount of electricity lost during a potential power outage due to an inadequate power supply to meet demand is expected to be less than the amount of electricity that can be safely rotated during a power outage.
A detailed explanation of these criteria can be found in the regulations.
The rule also establishes a process for regularly assessing the reliability of the ERCOT region. Beginning January 1, 2026, ERCOT must conduct a probability-based assessment every three years to determine whether the energy system meets the reliability standard and is expected to continue to meet the standard over the next three years. If ERCOT determines that the system does not meet the reliability standard, it must include in its report to the commission recommended changes to the ERCOT market design that would address the shortfall and outline the potential costs of those changes. The PUCT would then give the public 30 days to comment on the ERCOT assessment.
If ERCOT’s assessment indicates that the system does not meet the reliability standard, the Independent Market Monitor (IMM) must conduct an independent assessment and the commission staff must make their own recommendations on potential changes to the market design and associated costs. The commission would then review ERCOT’s assessment, the IMM’s assessment, the commission staff’s recommendations, and public comments to determine whether changes to the market design are necessary.
During Thursday’s public meeting, commissioners also approved a Value of Lost Load (VOLL), an estimate of the value of electricity reliability to consumers, for the ERCOT region. Using results from a survey of ERCOT consumers and an ERCOT analysis, commissioners approved a VOLL of $35,000 per megawatt-hour. This value will also help PUCT evaluate potential improvements in the market or reliability.
More information about the development of the reliability standard is available in PUCT Docket No. 54584. More information about the VOLL and the consumer survey is available in PUCT Docket No. 55837.
