ERCOT is searching for alternatives to replace capacity that will be lost with the planned retirement of three gas-fired units near San Antonio.
The Texas grid operator issued a market notice April 22 saying it plans to issue a request for proposals for must-run alternatives (MRA) to avoid a more expensive reliability-must-run (RMR) contract with CPS Energy.
“Any decision on whether to enter into an RMR or MRA service agreement must evaluate the costs and benefits of the service,” ERCOT said.
The San Antonio municipality told the ISO last month that it planned to “indefinitely suspend operations” in 2025 of three gas-fired units at its V.H. Braunig facility. The three steam turbines, dating back to the late 1960s, have a combined summer seasonal net maximum sustainable rating of 859 MW. (See CPS Energy Plans to Retire 859 MW of Gas Resources.)
Spokesperson Milady Nazir said in an emailed statement that the units’ retirement is part of the municipality’s board-approved generation plan and that the units were nearing their “operational end of life.”
However, ERCOT’s reliability analysis identified “performance deficiencies” without the CPS resources on the system and determined the power plants are needed to support system reliability. In a filing with the Texas Public Utility Commission, the grid operator’s staff said the units’ retirement would load existing transmission facilities above their normal ratings under pre-contingency conditions.
ERCOT has asked the PUC for a good-cause exception from its protocols’ timeline for RMR and MRA deadlines because of resource constraints.
“We would prefer to come up with a different timeline that still meets all the technical requirements in the protocols but gives us a little bit more time to get that RFP out and work with CPS on what a budget might look like for those units,” General Counsel Chad Seely said at the Board of Directors’ Reliability & Markets Committee.
“We will continue to have collaborative discussions with ERCOT during their review process,” Nazir said.
Seely said the ISO’s exit strategy for the RMR will “ultimately be a transmission solution.”
“Now, if there are other resources that could fulfill an MRA, that would give us the equivalent, then we can substitute for those, and that’s part of the process here,” he told the R&M committee.
The board on April 23 approved the $435 million San Antonio South Reliability II project that addresses issues south of the city. It approved another reliability project last August, proposed by CPS Energy at a projected cost of $329 million, that addresses thermal overloads in the area. (See “$435M San Antonio Project OK’d,” ERCOT Technical Advisory Committee Briefs: April 15, 2024, and “Members Endorse $329M CPS Energy Reliability Project,” ERCOT Technical Advisory Committee Briefs: July 25, 2023.)
An RMR contract would be ERCOT’s first since 2016. ERCOT entered into an agreement with NRG Texas Power over a previously mothballed gas unit near Houston. The RMR contract ended in 2017, thanks partly to transmission facilities that increased imports into the region. (See ERCOT Ending Greens Bayou RMR May 29.)
Because RMR and MRA determinations support ERCOT’s transmission reliability, costs incurred under either agreement are shared by all market participants that serve load. Costs are allocated on a load-ratio basis.
