ERCOT's Latest Capacity, Demand And Reserves Report Shows Texas Has Ample Energy Reserves

  • Release Date: February 28, 2014

AUSTIN, TEXAS – The Texas Association of Manufacturers today applauded ERCOT for continuing its work to improve its forecasting, which now shows dramatically improving reserve margins over previous estimates. ERCOT, which manages much of the state’s electricity grid, issued its latest Capacity, Demand and Reserves (CDR) report today.

“Based on the reserve calculations submitted to the Public Utility Commission (PUC) of Texas by the Brattle Group last month, the state’s reserve levels are more than adequate to reliably and economically serve customers’ needs into the foreseeable future,” said Tony Bennett, president of the Texas Association of Manufacturers. “Today’s Capacity, Demand and Reserves report from ERCOT also reinforces that reserves in Texas are in good shape.”

According to Bennett, the reserve margins presented in today’s CDR report are significantly higher than ERCOT’s forecasts in the last CDR report in May 2013. The report demonstrates that the market is producing sufficient reserves.

The CDR’s Executive Summary indicates a 16 percent reserve margin for the summer of 2014, a vast improvement over the margin predicted by ERCOT less than a year ago, according to Bennett. Although a table in the body of the report references a lower margin for 2014, the report’s Executive Summary identifies several plants, totaling over 2,000 megawatts of capacity, that are due to come on line in time for the likely summer peak. Adding these plants gives ERCOT another three percent in reserves for a total 16 percent cushion.

“In addition to the improvements reflected in ERCOT’s latest report, the report’s forecasts don’t reflect appropriate values for a number of generation resources and plants that have been announced and financed, which if included would put these numbers above 13.75 percent through 2019, which is the current ERCOT reserve target,” said Bennett.

“Today’s CDR report from ERCOT is the latest in a series of studies and reports that show that the energy-only electricity market is working and will continue to deliver reliable and competitively-priced power for all Texans,” said Bennett. “The numbers strongly indicate that the Texas Public Utility Commission made the right decision to redirect its efforts away a mandated forward capacity market, which would create subsidies and increased costs for Texas consumers.”

Media contact: Gretchen Fox, gfox@gfoxconsulting.com, 512-694-4326