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Through challenging summer, Bill Magness and ERCOT kept the lights on

September 17, 2018

Bill Magness knows that with Texas heat comes Texas-sized-levels of air conditioning; His job is to keep the lights on across the state, even when record power demand on the hottest summer strains power supplies and tests the power grid.

Magness is the CEO of the Electric Reliability Council of Texas, or ERCOT, which manages about 90 percent of the Texas power grid on which 25 million customers depend. ERCOT, contending wit the lowest power reserves in years was tested vigorously this summer as power consumpton broke multiple records in July, topping out on July 19 when 73,259 megawatts were consumed between 4 p.m. and 5 p.m. That was more than 1,000 megawatts higher than the previous record set the previous afternoon.

A megawatt can power roughly 200 Texas homes during peak use, according to ERCOT.

Magness recently spoke with reporter Rye Druzin. Edited excerpts follow.

Q: Can you explain to ordinary Texans the history of what’s changed in the state’s energy market?

A: Traditionally, utilities serve an area. They did everything for you from provide the bill to your house, all the way to run the generating plants, to stringing the wires. The Legislature in Texas saw reason, outside the areas of the municipal utilities and the cooperatives that have existed for a long time, to restructure that market.

Really what it did was open up opportunities for new investment in the generation of power, whether that’s natural gas, nuclear, coal, solar, wind. Those opportunities were opened up through deregulation. So in cities where there is competition, you have choices of any number of electric providers with different deals that appeal to you. Then the poles and wires, the transmission of electricity was maintained as a regulated service by the public utility commission.

Q: So, what is ERCOT then?

A: The way that we manage the grid is sort of like air traffic control. I kind of look at it as making sure all the planes stay in the air. For electricity, supply and demand have to be in very close balance at all times.

Q: How did the portion of Texas’ grid that ERCOT manages handle this summer?

A: We knew that the reserves that we had to work with were tighter than they had been for the few years prior.We really put an emphasis inside ERCOT and in our relationships with the market participants on performance.

There were also a lot of days when the wind production was high when we needed it. So the various types of generation came through.

Q: Did ERCOT dodge a bullet this summer?

A: I think the industry operated effectively, performed very well, and we had certainly some very hot, pretty extreme weather periods. It’s probably going to go down as one of the hottest summers on record, but it wasn’t hot everywhere all at once for a really long time. Part of it is sort of an operations mentality that the bullet’s coming at you every day from somewhere.

Q: Demand has grown across the state with more population coming in, massive petrochemical complexes being built along the coast, and oil and gas activity consuming even more power out in West Texas. Can ERCOT cope with this continued growth?

A: We’re going to have to manage it. The challenge is keeping up with that growth. The kind of load growth we’re seeing can be pretty explosive, like the West Texas. We call them “lumpy loads” because they come in big chunks and need to be served all at once.

The way the ERCOT market is structured and set up is to respond to market demand. As we see this increasing demand, we see new generation come on.

We’ve added a lot of generation. A lot of it’s wind, but over the history of restructuring in Texas, we’ve added thousands of megawatts of gas, wind, coal — in one period we were adding a lot of coal — that market opportunity’s there as you see the demand increase. The question is, as policymakers look at it, “Have we set the right framework to bring the supply that we need to meet that demand that we expect to have?” That’ll determine what we see.

rdruzin@express-news.net

twitter.com/druz_journo

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