Transcript Tab 4: CEO UPDATE H.B. “Trip” Doggett President & Chief Executive Officer Board of Directors Meeting ERCOT Public November 13, 2012

Tab 4: CEO UPDATE
H.B. “Trip” Doggett
President & Chief Executive Officer
Board of Directors Meeting
ERCOT Public
November 13, 2012
FINANCIAL PERFORMANCE (UPDATED THROUGH OCTOBER)
YTD BUDGET VS. ACTUAL PERFORMANCE: $5.2 MILLION FAVORABLE
$5.1 Million favorable 2011 carry forward
REVENUES
$0.7 Million favorable other revenues
$0.6 Million unfavorable system administration fees
$4.1 Million unfavorable outside services
EXPENSES
$2.1 Million favorable salary & related benefits
$1.4 Million favorable hardware & software maintenance or licensing
$0.8 Million favorable facility & equipment costs
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FINANCIAL PERFORMANCE (UPDATED THROUGH OCTOBER)
YEAR-END PERFORMANCE FORECAST: $3.8 MILLION FAVORABLE
$5.1 Million favorable 2011 carry forward
REVENUES $0.5 Million unfavorable system administration fees
$4.8 Million unfavorable outside services
EXPENSES
$2.3 Million favorable salaries & related benefits
$1.8 Million favorable hardware & software maintenance or licensing
$0.8 Million favorable facility & equipment costs
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IMPACTS OF ECONOMY & WEATHER – 2012
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EXTREME WEATHER ASSESSMENT PROGRAM
• ERCOT requested extreme weather assessment, fuel surveys
and winter weatherization plans from all Resource Entities
• Site Visits start in Nov 2012
– Forty generation sites selected (based on performance on Feb 2, 2011)
for review of weatherization preparedness
– ERCOT staff developed a best practice winterization checklist to review
extreme weather preparedness
– Checklist was developed from causes of unit trips and derates that
occurred on Feb 2-4, 2011, and resultant lessons learned
•
The Public Utility Commission of Texas recently submitted their
Report on Extreme Weather Preparedness Best Practices to the 82nd
Legislature
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ALTERNATE FUEL CAPABILITY FOR 2012-2013 WINTER
• 47 units have the capability to generate from 75% to 100% of
their seasonal net maximum winter rating using fuel oil
– Most units have the capability to switch to fuel oil while
remaining on-line
– The transition time varies from 30 minutes to 24 hours with the
majority being less than 6 hours
• Capacity by hours of operation using fuel oil
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Hours
Capacity (MW)
0 – 24
5685
24 – 36
4137
36 – 72
3189
72 – 96
2989
96 – 168
1800
> 168
1608
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FERC CONFERENCE – SOUTHWEST COLD WEATHER EVENT
• Conducted by FERC at ERCOT on September 25
• Purpose was to determine what follow-up actions have been
taken in ERCOT in response to the February 2, 2011 event
• Two panels (Generation & Transmission) made up of
representatives from ERCOT, NERC, TRE, Calpine, Luminant,
NRG, CenterPoint and ONCOR made statements and answered
questions from FERC Staff
• Questions from FERC staff centered on
– Actions taken by the parties since the event
– Response to recommendations made in the August 2011 report on the
event by FERC and NERC staff
– Sufficiency of those actions and responses to avoid another similar
event
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LOSS OF LOAD PROBABILITY (LOLP) STUDY
•
ERCOT conducts a LOLP study and updates its recommendation to the
Board of the target reserve margin in ERCOT every two years
•
The last study was presented to the Board in Nov 2010
•
ERCOT is working with Ecco International Inc. to complete the current
study
•
Earlier this year, ERCOT acquired updated hourly wind generation
patterns to use in the LOLP study and initial results from the LOLP study
indicated a potential problem with the wind generation patterns
– The wind consultant had used wind generation curves consistent with the latest
wind turbine models to represent the capabilities of existing wind units in ERCOT
(which were built over the last 10 years)
– Given the recent improvements in wind turbine technology, this overestimated
the likely output from these wind units
•
New wind generation patterns have been received from the vendor and the
LOLP study is being rerun
•
ERCOT expects to bring draft results to the Generation Adequacy Task
Force (GATF) in early December
•
Earliest date for Board consideration is projected to be Jan or Mar 2013
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RESOURCE ADEQUACY
• The House State Affairs Committee, chaired by Representative
Byron Cook, held a hearing focused on RA on Oct 24th
– The Committee heard from the PUC, ERCOT, the Brattle Group
and stakeholders, who addressed the issue and proposed
solutions
• The PUC, at their Oct 25 workshop approved
– Increasing in the system-wide offer cap as follows
• $5,000/MWh effective Jun 1, 2013
• $7,000/MWh effective Jun 1, 2014
• $9,000/MWh effective Jun 1, 2015
– Increasing the Peaker Net Margin (PNM) threshold to $300K for
2012 & 2013
– Requiring ERCOT to set the PNM threshold in 2014 and beyond
at three times the cost of new entry of new generation plants
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DEPARTMENTAL HIGHLIGHTS
External Affairs
• ERCOT hosted the annual ISO/RTO Council Communications
meeting in Austin from October 22-23
• Communications representatives from across the country and
Canada discussed
– Crisis communications and social media strategy
– Issues facing ISOs in 2013
– Internal communications
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SPOTLIGHT ON: EXPERT CONTRIBUTIONS TO INDUSTRY
Sarma Nuthalapati
Operations Engineer Sr.
Hired: 08/30/2007
Resmi Surendran
Manager, Market
Analysis
Hired: 02/11/2004
Diran Obadina
Principal, Systems
Development
Hired: 05/01/2003
John Adams
Principal, Resource
Integration
Hired: 12/09/1996
•
The McGraw Hill Handbook for Electrical Engineers is a general reference of all
elements of power engineering, from basic AC quantities to wiring of equipment to
transmission system operations
•
Contributions to the Section on “Independent System Operators in Unregulated Power
Utilities” in the Power System Operations Chapter
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