In the aftermath of Winter Storm Uri, the Texas electricity market has been the subject of a series of discussions aimed at improving reliability. These efforts to reform the market operated by the Electric Reliability Council of Texas (ERCOT) have been wide-ranging and have captured the attention of stakeholders and policymakers at the highest levels. To inform these market reform discussions, E3 and Beth Garza, funded by NRG and Exelon, have published a new whitepaper that proposes the LSE Reliability Obligation. The proposal a significant reform to the ERCOT electricity market in response to the provisions but forward by SB 3 to “establish requirements to meet the reliability needs of the power region.” Key elements of the LSE Reliability Obligation include:
- A formal reliability standard
- Resource accreditation that captures the limitations of all resources on an “apples-to-apples” basis
- A trigger that activates the LSE Reliability Obligation in the event of a projected supply shortfall across the entire ERCOT market
- If triggered, an LSE requirement to procure resources based on their share of system requirements, including a penalty for non-compliance
- Performance assessment of resources to ensure they perform as accredited
E3’s report, The LSE Reliability Obligation, is available here. E3 thanks NRG and Exelon for their sponsorship of this project. E3 and Beth Garza retained full editorial control over the report and are solely responsible for all contents.
E3 Study authors are Zach Ming, Arne Olson, Jack Moore, and Nick Schlag.
