U.S. grid agency monitors Texas effort to boost power reserve
HOUSTON, April 10
HOUSTON, April 10 (Reuters) - The top U.S. power grid watchdog says he is satisfied that Texas officials are working on concerns about shrinking electricity reserves and the greater risk of a blackout or rolling outages when power use soars in the summer.
Unlike other areas of the United States, electric consumption in Texas continues to grow, but falling wholesale prices and tight financial markets have forced a number of developers to cancel or delay plans to build new power plants.
Gerry Cauley, president of the North American Electric Reliability Corp (NERC), told an industry conference on Wednesday that his agency was monitoring regulatory changes intended to increase reserves and proposals to curb power use in times of high demand.
"It's not clear that any one or all of those will directly or effectively deal with the problem," Cauley said in a speech at the Gulf Coast Power Association conference in Houston.
Cauley said he recently met with Donna Nelson, chairman of the Public Utility Commission of Texas, and Trip Doggett, president of grid agency Electric Reliability Council of Texas (ERCOT).
"We went over all the things that are taking place in Texas." Cauley said. "It's a good list of activities to try to address the issue."
ERCOT has projected that the state's electric power reserve margin, a cushion against blackouts, will be 13.2 percent this summer, below the agency's minimum target of 13.75 percent.
The reserve margin will shrink each year through 2022, increasing the chance of a power outage from the agency's target of just once in 10 years.
ERCOT will update its forecast in May.
Cauley said NERC has no authority to order ERCOT to make any specific changes to the market or to order new generation.
ERCOT is expected to respond to NERC in writing by the end of April.
Power generators in the state include Luminant, a unit of Energy Future Holdings, which is owned by Kohlberg Kravis Roberts & Co LLP and several private equity firms; NRG Energy ; Calpine Corp ; NextEra Energy Inc and Exelon Corp.
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