The Electric Reliability Council of Texas (ERCOT) approved the request from the Texas Municipal Power Authority (TMPA) to permanently mothball the Gibbons Creek power plant, a 470 megawatt (MW) coal plant located just a few miles east of Bryan/College Station.
TMPA is owned by three Texas cities, Denton, Garland, and Bryan, all of which have sought large-scale solar power to meet their energy demand in the past year. The Sierra Club has been advocating for a transition from coal to clean energy, such as solar, wind, and energy storage, and the permanent mothballing of Gibbons Creek represents a great step towards a state free of coal pollution.
What is mothballing? ERCOT (the electric grid operator for most of Texas) protocols define mothball according to the common usage of the word. Essentially, it's not operating, but has not been approved for decommissioning or retirement, which requires an additional layer of evaluation. The unit remains in ERCOT’s model as potentially available capacity, and could be reactivated, but there is a process for doing so.
Given recent hand-wringing about the expected smaller reserve margin next summer (the expected maximum amount of power available to meet demand), electric generators have been pushing the PUC to increase what’s known as the “price adder” (technically, it’s called the Operating Reserve Demand Curve), which is an extra payment to generators meant to make the wholesale power market reflect perceived free market conditions. Generators argue that an increase is needed to incentivize building new generation (more power plants), which, they say, would help address the shrinking reserve margin.
Well, it just so happens that the PUC also decided today to increase the price adder by 0.25 in April, and another 0.25 by the end of the year. While no one can predict how much this will impact consumers, it is likely to increase generator revenues by tens of millions of dollars this summer. The PUC also ordered ERCOT to begin the multi-year process of co-optimizing energy and ancillary services, which should actually make our market more efficient and lower prices. The PUC also declined to adopt “marginal” transmission losses in energy prices, which is a good thing because it would have increased costs to get West Texas wind and solar to where people live and work.
Our Conservation Director, Cyrus Reed, has been following both processes closely and had this to say about today’s decisions at the PUC:
“We are pleased that ERCOT found our energy market can continue to function well without Gibbons Creek, and that the PUC agreed to move forward on co-optimization but rejected the call to undermine renewable energy through implementing marginal transmission losses. While we do not believe a price-adder is needed, we appreciate that Chairman Walker chose to phase in the price-adder in two stages and chose the lower level than generators sought. This more reasonable adjustment should mean consumers’ pocketbooks are hurt less.”
Image source: UNT