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I told @joshdr83 that my plan for engaging in #energytwitter is to tweet in the morning the main clarifications I made more multiples times the day before. Starting with: A) keep in mind two components for balancing generation and load on the grid- (1/9)
1. market design, supply must meet demand in near real time 2. Reliability, other factors may effect that more or less supply or demand is needed specific places to keep grid stability or reliability i.e congestion, voltage @MartyATX @joshdr83 (2/9)
B) Re retail customers: generally retailer customers aren’t paying prices that reflect wholesale spikes unless intentionally on such a plan. They are usually on a fixed rate for consumption plus a “wire and poles” charge. (3/9)
End use customers receive these bills from either a REP (in a competitive areas served by an investor owned utility regulated by the PUCT), a municipal, or a cooperative (4/9)
C) Re market design. ERCOT is an energy only market. We rely on price signals to have supply that meets demand. This means a generator makes decisions to build more generation based on their economics on if market prices are providing incentive to do so. (5/9)
Usually the ERCOT market does through very high price spikes, in short bursts during scarcity pricing. Two mechanisms in theory help us get to high prices that reflect scarcity in addition to energy prices reflecting marginal cost: reliability deployment price adder & ORDC (6/9)
Keep in mind that load reserves numbers include load that has been deployed as an emergency product LR or ERS as a resource (lower load has same effect as increasing supply) (7/9)
D) Re capacity market: as opposed to an energy only, would pay generators ahead for a certain amount of capacity (supply, generation). *this is not a personal opinion on capacity markets but keep in mind: 1. Would likely include additional cost upfront to end use customers, (8/9)
(Cont Re capacity markets) 2. Increased capacity would likely mean increase in installed thermal capacity, 3. Changing to a capacity market design has no bearing on invoking FERC/federal jurisdiction (9/9)
