Outlook for the Electric Industry in
Texas
David Hurlbut, Senior Economic Analyst
Public Utility Commission of Texas
Energy Analysis Forum
August 13, 2001
National Renewable Energy Laboratory
Electric restructuring
July 31, 2001: ERCOT becomes single control area
Pilot project participation at or near maximum in
major ERCOT markets
Very slow pilot project activity in non-ERCOT
portions of Texas
8/8/2001 Public Utility Commission of Texas 2
ERCOT control area
8/8/2001 Public Utility Commission of Texas 3
January 1, 2002
Customer choice begins
Incumbent utilities must unbundle generation, T&D,
retail activities
MOUs and co-ops may choose whether to compete
8/8/2001 Public Utility Commission of Texas 4
Electric restructuring
Power generation companies
• Unregulated
• PUC has authority to address market power
Transmission and distribution
• Regulated
• T&D charges are nonbypassable
Retail sales
• Unregulated
• Customer protection rules
8/8/2001 Public Utility Commission of Texas 5
Renewable power
Legislative goal for renewables: 2,000 MW of new
capacity by 2009
For retailers, a renewable portfolio standard
For generators, a renewable energy credit trading
program
8/8/2001 Public Utility Commission of Texas 6
Renewable power
Market incentives
Tap into customer preference for clean energy
Labeling standards (fuel mix, emissions)
Allow retailers to use renewable energy credits to back
“green” electric service offerings
8/8/2001 Public Utility Commission of Texas 7
Electricity
Facts label
Standard disclosure
required of all retail
electric providers
8/8/2001 Public Utility Commission of Texas 8
Current capacity (MW)
Nucle ar Hydro
7.6% 1.0%
Coal
32 .5 %
Natura l gas
59 .0 %
Source: EPA,
E-GRID 2000 database
8/8/2001 Public Utility Commission of Texas 9
Total generation (MWh)
Hydro
Nuclear 0.5%
13.2%
Natur al gas
40.1%
Coal
Source: EPA, 46.3%
E-GRID 2000 database
8/8/2001 Public Utility Commission of Texas 10
Ozone-season generation
Hydro
Nucle ar 0.3%
11 .1 %
Natura l gas
46 .8 %
Coal
41 .8 %
Source: EPA,
E-GRID 2000 database
8/8/2001 Public Utility Commission of Texas 11
Utility GWh sales (ERCOT)
Source: PUCT, 2000 Annual Update of Generating Electric Utility Data
8/8/2001 Public Utility Commission of Texas 12
MWh per customer (ERCOT)
Source: PUCT, 2000 Annual Update of Generating Electric Utility Data
8/8/2001 Public Utility Commission of Texas 13
ERCOT peak demand
Source: PUCT, 2000 Annual Update of Generating Electric Utility Data
8/8/2001 Public Utility Commission of Texas 14
New capacity in ERCOT
All generation Wind power
29,830 MW planned 1,280 MW planned
61% under construction or 49% under construction or
with interconnect with interconnect
agreement agreement
8/8/2001 Public Utility Commission of Texas 15
Future wind projects
Counties with
planned wind
projects
8/8/2001 Public Utility Commission of Texas 16
On the agenda
Transmission constraints
Wind resources are in West Texas, demand is I-35
corridor eastward
Scheduling dispatch
ERCOT is developing reliability models
Gulf Coast wind power
8/8/2001 Public Utility Commission of Texas 17
Outlook for the Electric Industry in
Texas
David Hurlbut, Senior Economic Analyst
Public Utility Commission of Texas
Energy Analysis Forum
August 13, 2001
National Renewable Energy Laboratory