SUNSET PROFILE – ELECTRIC RELIABILITY COUNCIL OF TEXAS
In a series of articles I have been profiling state agencies that are currently undergoing the sunset review process administered by the Texas Sunset Commission (www.sunset.state.tx.us). In describing the “sunset process” I have pointed out that agencies both big and small undergo the same type of review and that this review helps to ensure the effectiveness and efficiency of our state agencies. Another one of our state agencies currently undergoing the sunset review process is the Electric Reliability Council of Texas (ERCOT).
ERCOT was created by the Texas Legislature when they restructured the Texas electric market in 1999 by unbundling the investor-owned utilities and thereby created a system which provided for retail customer choice in those areas. ERCOT plays a large and important role in the health and safety of Texans by ensuring the reliable transmission of electricity. Since deregulation and the break-up of monopoly electric companies, ERCOT has assumed the significant economic role of operating key components of the wholesale electric market; facilitating wholesale electricity transactions among power generators and retailers; and serving as a registry of customer information for retailers for billing and switching.
ERCOT manages the electric grid for approximately 22 million Texans. They ensure that the “lights stay on” by coordinating the flow of power on and off the grid. The ERCOT region in Texas accounts for 85 percent of Texas’ electric consumption and for 75 percent of the Texas land area. In 2009 ERCOT managed the flow of over 308 billion kilowatts-hours (kWh) of energy; to put that into prospective, the average American home uses 11,040 (kWh) a year of electricity, that is enough energy to power over 27 million homes.
Unlike other states across the U.S., the State of Texas is unique in that most of its electric grid is not connected to the grid in the rest of the country. Because of its separateness, the ERCOT electric market is primarily regulated by the Texas Legislature and the Public Utility Commission, not federal authorities. ERCOT is designed to be managed by a Board of Directors as a nonprofit corporation.
Currently ERCOT has been tasked with overseeing Texas’ transition from a wholesale electric market that is based on four regional zones, to a marketplace based on more than 4,000 individual nodes in the ERCOT region. The goal of this market redesign is to improve the operating efficiency of the market and the electric grid by using much more accurate site-specific information for scheduling and pricing electric services.
Public participation in both the sunset review process and in legislative hearings is encouraged. If you have any questions regarding the Electric Reliability Council of Texas or the sunset review process, please don’t hesitate to contact either my Capitol or District office. My offices are available at any time to assist with questions, concerns or comments (Capitol Office, 512-463-0672; District Office, 361-949-4603).
