ERCOT is soliciting must-run alternatives (MRAs) to the reliability-must-run agreement it recently extended to NRG Texas Power’s Greens Bayou Unit 5 in the Houston area.
The Texas grid operator issued a notice to market participants July 13, saying it is seeking “lower-cost, effective alternatives” to the RMR agreement, its first in five years.
ERCOT in June executed the agreement through September to strengthen transmission stability in the Houston region. Its Board of Directors later extended the RMR through June 2018. (See “Board Expands Greens Bayou RMR Contract to 2018,” ERCOT Board of Directors Briefs.)
Under the agreement’s terms, the 371-MW gas-powered unit must be available during summer months, between July 2016 through June 2018. ERCOT must pay $3,185/MWh year-round and an incentive factor of as much as 10% to reserve the unit’s capacity.
Qualified scheduling entities, representing generation and demand response resources, have until Aug. 24 to submit proposals. ERCOT says it will consider individual and aggregated options that provide reliability benefits comparable to the RMR unit, while providing cost savings.
ERCOT staff has said it expects that the $590 million Houston Import Project, scheduled to be completed by summer 2018, will help solve the area’s transmission concerns.
The ISO’s protocols authorize it to replace an RMR agreement with an MRA agreement if the MRA resource:
- Provides an acceptable solution to the reliability concern the RMR unit currently addresses;
- Provides at least $1 million in annual savings over the projected net annualized costs for the RMR unit; and
- Satisfies objective financial criteria demonstrating that the MRA resource’s provider is reasonably able to fulfill its performance obligations.
– Tom Kleckner
