Texas regulatory panel moves to bolster state power reserves

Reuters News
Posted: Oct 25, 2013 2:27 PM

HOUSTON (Reuters) - A divided Texas Public Utility Commission (PUC) on Friday moved to create a mandatory reserve margin for electricity to address a potential power shortfall in future years.

The state's primary grid, the Electric Reliability Council of Texas (ERCOT), currently has a 13.75 percent "target" reserve margin, a generating surplus as a cushion against blackouts. Because it is only a target, neither the grid agency nor the PUC can enforce the reserve margin or order companies to build new generation to supply the $29 billion wholesale market.

Electricity use in Texas has been growing faster than generation is being built, shrinking the reserve margin and increasing the prospect of rolling outages when supplies are stretched, the grid operator has warned.

The PUC has been studying the state's electric "resource adequacy" problem for more than two years and its discussion of how to attract new power plants is being watched in other U.S. power markets.

On Friday, Brandy Marty, the newest member of the three-member commission, backed Chairman Donna Nelson to support the move to a mandatory reserve margin although there was no formal vote.

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"I would support a mandatory reserve margin," Marty said, in some of her first comments since joining the commission in August.

Commissioner Ken Anderson said he opposed the change and was upset that Nelson pushed to make a decision at Friday's open meeting with little notice.

(Reporting by Eileen O'Grady in Houston; Editing by Steve Orlofsky)