10 Pages Posted: 2 Oct 2013
Date Written: September 12, 2013
Electricity resource adequacy is the most urgent and controversial challenge facing the Electric Reliability Council of Texas (ERCOT) market. The policy discussions have neglected some very simple steps that could be taken to promote demand response and reduce peak demand. An allocation of some of the responsibility for non-spinning reserves based on the contribution of a load serving entity (LSE) to peak demand would encourage LSEs to undertake programs to reduce their contribution to the peak. An extension of the four coincident peak (4 CP) pricing used to charge large industrial energy consumers for transmission services to smaller commercial and residential loads would encourage smaller consumers to reduce their peak usage. Narrowing the definition of “peak demand” in the Public Utility Commission of Texas (PUCT) energy efficiency rules would encourage energy efficiency measures better focused on peak demand reduction.
Keywords: Electricity market restructuring, demand response, resource adequacy, ERCOT
Suggested Citation: Suggested Citation
Zarnikau, Jay, Three Simple Steps to Clip the Peak in the Texas (ERCOT) Electricity Market (September 12, 2013). USAEE Working Paper No. 13-143. Available at SSRN: https://ssrn.com/abstract=2334001 or http://dx.doi.org/10.2139/ssrn.2334001