Diana Liebmann in Law360: Texas Power Estimate Cools Capacity Market Debate

03/04/2014


In a report issued Friday, Texas’ electrical grid operator projected its current power production can exceed recommended reserve levels for years to come, giving further ammunition to opponents of a proposal for the state to adopt a capacity market designed to promote more new generation.

The Electric Reliability Council of Texas used a new methodology to calculate the load on its grid that takes into account the improved efficiencies residential and commercial power users have adopted in recent years, and found it will have a reserve margin of about 13 percent this year, rising to 16 percent this summer, when several new gas-powered plants come online. Those estimates exceed the 10.2 percent threshold recommended as the optimum economic reserve margin for the state, in a January report from consultants retained by the Public Utility Commission of Texas... 

“They defined away the problem,” Diana Liebmann of Haynes and Boone, LLP said of the ERCOT estimated.

Liebmann said the reality of the current market is that it doesn’t provide return for investments in new power plants and that interest in funding the increased capacity that will be needed down the road to support a booming population won’t pick up unless the state makes changes.

Excerpted from Law360, March 4, 2014. To view full article, click here (subscription required).

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