Over the last several months there have been a number of developments within the Electric Reliability Council of Texas (ERCOT) region. The most significant have been the issuance of a Joint Blackstart Availability Study and the opening of a rulemaking related to generation interconnection allowance. This alert will summarize both of those developments.
FERC, NERC, and the Texas Regional Entity Issue a Joint Blackstart Availability Study
At its opening meeting on 19 December 2023, the Federal Energy Regulatory Commission (FERC), along with North American Electric Reliability Corporation (NERC) and Texas Reliability Entity (TRE) staff, jointly presented their findings on the Blackstart and Next-Start Resource Availability Study (the Study).1 The Study was subsequently filed with the Public Utility Commission of Texas (PUCT) on 2 January 2024, in PUCT Project No. 54702. The Study was conducted in response to the electric generation failure in ERCOT caused by the devastating Winter Storm Uri in February 2021. This failure resulted in a loss of power for more than 4.5 million homes, at least 57 deaths across 25 Texas counties, and over US $195 billion in property damage.2
The Study marks the second collaboration between FERC, NERC, and TRE on Winter Storm Uri issues, with the first being a holistic review of the impacts of the storm.3 The 2021 Cold Weather Report noted that availability of blackstart resources was a potential concern and area for further study. The instant Study represents the culmination of those follow-up efforts.
For purposes of the Study, blackstart is defined as restarting the system after a major part of the electrical network has been de-energized, and blackstart resources are defined as those resources capable of being started independently and without external power. Conversely, a next-start resource is the next resource to be energized once a blackstart resource begins producing power. Blackstart is particularly relevant to ERCOT given its limited connections with the Eastern and Western Interconnections, which limit the opportunity to use resources from neighboring regions to restart the grid after a de-energization event. The Study focuses on information received voluntarily from nine electric and natural gas market participants in the ERCOT market, related to characteristics of blackstart and next-start resources, the fuel supply contracts, and delivery infrastructure serving those resources; their testing; and the operational protocols, personnel, and training procedures applicable to those resources.
The Study used these factors to observe beneficial practices that would aid other blackstart resources in the region and provides recommendations aimed at improving winterization and blackstart system restoration.
Beneficial Practices Blackstart Resources Should Consider
The Study identified several beneficial practices blackstart resources and utilities should consider implementing to better prepare for a blackout, based on practices observed from the Study participants.
Permanent measures
Implementing permanent winterization measures to reduce reliance on temporary solutions at a generating resource, such as portable space heaters, lowering overall maintenance needs.
Expanded blackstart resource list
Keeping an updated list of alternative blackstart capable resources that are not identified in the blackstart system restoration plan. This alternative list could be used during a blackout if the identified blackstart resources become unavailable, encouraging flexibility and resiliency to the blackstart system restoration plans.
Enhanced testing
Performing additional testing of blackstart resources is crucial to confirm the viability of those resources in advance of a potential emergency. Expanded testing can be used to update system models and refine blackstart system restoration training programs.
Battery performance in extreme weather
Understanding the effect of extreme cold weather on the operability and performance of backup batteries located on communication paths and at critical transmission substations is vital for maintaining operational integrity.
Recommendations
The recommendations are tailored to apply to all entities that play a role in blackstart system restoration, and are practices currently not in use, or which could be enhanced. The Study presents seven targeted recommendations, which fall related to system restoration planning and testing, natural gas supply availability and gas-electric coordination, and prioritization of natural gas supply and transportation to blackstart resources.
The first four recommendations apply to the entities responsible for developing and implementing a blackstart system restoration plan. The Study defines a system restoration plan as a plan required to allow for restoring the transmission operator’s system following a blackout scenario and the use of blackstart resources is required to restore the shut-down area to a state whereby the choice of the next load to be restored is not driven by the need to control frequency or voltage.
Fuel supply
The Study recommends that electric and natural gas entities to examine the diversity of fuel, single points of failure, fuel arrangements, and other limitations of each blackstart resource. Fully understanding these elements would provide entities with insight into the likelihood of blackstart resource availability, which could also help entities prepare for, mitigate, and respond to a blackout.
Expand the scope of blackstart plans
ERCOT and utilities developing blackstart plans should evaluate and incorporate a wide variety of options into those plans. For example, entities should consider using electrical bypasses, high voltage direct current ties, variable frequency transformers, block load transfers, and nonfuel energy resources. These alternatives would be helpful during a blackout if natural gas to blackstart and next-start resources is limited or unavailable.
Off-site natural gas storage
Incorporate off-site natural gas storage in the entities’ blackstart system restoration plans. During a blackout, the natural gas supply chain may be severely stressed or completely unavailable. Therefore, stored natural gas could help blackstart and next-start resources secure fuel more quickly and reliably in the event of a blackout.
Alternate fuel testing
Require blackstart resources to perform alternate fuel startup tests completely on alternate fuel. Having blackstart resources capable of starting completely on alternate fuel would be immensely helpful during a blackout when external electricity sources and primary fuel are unavailable.
The last three recommendations apply to states and authorities with appropriate jurisdiction necessary for developing and implementing a blackstart system restoration plan and prioritizing natural gas supply.
Natural gas supply chain review
Assess the impact of a blackout on the natural gas supply chain, focusing on natural gas availability to the blackstart and next-start resources. This assessment could help the electric and natural gas industries better understand what action is required in a blackstart system restoration scenario, and which electric and natural gas entities are vital for blackstart system restoration.
Development of a coordinated plan
Develop a coordinated blackstart system restoration plan with entities necessary for blackstart system restoration. This plan should address the needs of both the electric and natural gas industries to help ensure a more coordinated blackstart system restoration between the electric and natural gas industries.
Prioritization of gas transportation
Entities with jurisdiction should evaluate elevating the priority of natural gas supply and transportation to blackstart and next-start resources, ensuring their availability when natural gas fuel supplies are limited during a blackout.
With a continued focus by the PUCT on weatherization and winter weather preparation, the PUCT and ERCOT may adopt some of these recommendations in the coming months, especially as there has been increasing speculation in the media as to if ERCOT is prepared for another cold winter.4
PUCT Project No. 55566 - Generation Interconnection Allowance
In response to H.B. 1500, 88 Leg., Reg. Sess. (Tx 2023) (HB1500), the PUCT opened PUCT Project No. 55566 to address generation interconnection allowances. The rulemaking is intended to implement amendments to Public Utility Regulatory Act (PURA) § 35.004(d) and new (d-1)-(d-3) enacted by HB1500. Specifically, the proposed rule amendments will establish an allowance for interconnection costs incurred by a transmission service provider (TSP) to interconnect generation resources at transmission voltage to the transmission system within the ERCOT power region. Commission staff believes that the proposed rule, if enacted, will incentivize new generation to more economically site interconnections with the ERCOT region. As currently drafted, the proposed rule change delineates costs between the TSP and generator as follows:
- A new generation resource seeking interconnection to a TSP’s transmission network is responsible for the cost of installing step-up transformers and protective devices at the point of interconnection capable of electrically isolating the generation resource.
- If the standard generation interconnection agreement between a generation resource and TSP is executed after 31 December 2025, then the interconnecting generation resource is responsible for all costs of installing interconnection facilities that are incurred by the TSP that exceed the allowance established. The TSP is responsible for the costs of installing any transmission system upgrades deemed necessary by the TSP and ERCOT that are made concurrently with the installation of the interconnection facilities.
- The allowance will be calculated by the commission as follows:
- For a generation resource interconnecting at a transmission voltage of 138 kV or less, the allowance beginning on 1 January 2026, is based on the 2023 amount of US $12 million adjusted for subsequent years.
- For a generation resource interconnecting at a transmission voltage higher than 138 kV, the allowance beginning on 1 January 2026, is based on the 2023 amount of US $22.5 million adjusted for subsequent years.
Historically, costs associated with interconnecting a generation resource to the ERCOT grid has been borne by the TSP.
Initial comments to the proposal for publication and responses to Commission questions were filed 4 January 2024. Reply comments will be filed by 18 January 2024. The Commission has specifically invited comments regarding the costs associated with, and benefits that will be gained by, implementation of the proposed rule and has stated it will consider the costs and benefits in deciding whether to modify the proposed rules on adoption.
1 Federal Energy Regulatory Commission, North American Electric Reliability Corporation, and Regional Entity Staff, Blackstart and Next-Start Resource Availability in the Texas Interconnection at 7, FERC (Dec. 19, 2023), https://www.ferc.gov/media/ferc-nerc-regional-entity-joint-blackstart-and-next-start-resource-availability-study-texas.
2 Carey W. King, The Timeline and Events of the February 2021 Texas Electric Grid Blackouts, UNIVERSITY OF TEXAS AT AUSTIN ENERGY INSTITUTE (July 2021), https://energy.utexas.edu/research/ercot-blackout-2021.
3 FERC, NERC, and Regional Entity Staff, The February 2021 Cold Weather Outages in Texas and the South Central United States (2021 Cold Weather Report), FERC (Nov. 16 2021), https://www.ferc.gov/media/february-2021-cold-weather-outages-texas-and-south-central-united-states-ferc-nerc-and (2021 Cold Weather Report).
4 Mose Buchele, Energy officials warn of winter blackout risk in Texas and beyond, KERA NEWS (Dec. 15, 2023), https://www.keranews.org/news/2023-12-15/energy-officials-warn-of-winter-blackout-risk-in-texas-and-beyond. Steven Santana, ERCOT boss reportedly believes winter blackouts warnings from groups, CHRON (Dec. 13, 2023), https://www.chron.com/news/local/article/ercot-texas-power-grid-18551336.php. Michael Murney, ERCOT joins group of U.S. utilities warning about blackouts this winter, CHRON (Dec. 12, 2023), https://www.chron.com/news/article/ercot-texas-grid-energy-18549243.php. Vivek Saxena, Texas officials warn of winter rolling blackouts; unreliable energy sources, population boom, all factors, BPR BUSINESS & POLITICS (Nov. 24, 2023), https://www.bizpacreview.com/2023/11/24/texas-officials-warn-of-winter-rolling-blackouts-unreliable-energy-sources-population-boom-all-factors-1414884/.
