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Low-cost renewable energy integration causes some experts to question RTO efficacy
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Groups urge long overdue study of US electricity costs, wholesale markets
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Texas lawmakers advance big changes for ERCOT in post-Feb 14 storm bills
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Experts mull market, reliability rule changes amid Texas, regional outages
However, some of NERC’s prior recommendations have not suited the Texas energy market, according to Devin Hartman, director of energy and environmental policy at the R Street Institute, a free-market think tank. Texas requires a “market process that provides the proper financial incentives to suppliers to handle this type of risk,” he said.
“The big question, I think, in this case, is just ‘how much of an outlier event is this? ” Hartman said. “Because the ERCOT model is based on market participants who make investment decisions based on a set of probabilities, expectations about the future. … The role of standards should be differentiated based on the regulatory framework that occurs at the state level.”
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Aggregators positioned to benefit from the regulation could include any company offering load management services to consumers, said R Street Associate Fellow Chris Villarreal, who cited leading rooftop solar and residential battery installer Sunrun Inc. as one example.
Unlike FERC’s landmark demand response rule, Order 2222 did not include a broad opt-out provision for states. However, the order did include a minor exemption for smaller utilities that distributed 4 million MWhs or less in the previous fiscal year.
While RTOs and ISOs have largely been tasked with crafting their own rules to comply with the rule, Villarreal maintained that state regulators also have a crucial role to play given that the order requires grid operators to work with states to agree on the data requirements necessary for DER aggregations to safely participate in wholesale markets.