ERCOT’s risk of blackouts comes down to two basic factors: supply and demand. 

On the former, markets and policies are making progress — investors are developing solar power and dispatchable energy storage in ERCOT at a record rate. Texas is expected to get another six gigawatts of battery storage in 2024 alone. Solar is being deployed even faster, with seven gigawatts expected this year, padding the state’s resources when use peaks during summer afternoons. And there are currently over 15 gigawatts of natural gas in the ERCOT interconnection queue.

But skyrocketing demand could overwhelm all of that new supply, and then some…

At this morning’s PUC Open Meeting, the commissioners will discuss the Performance Credit Mechanism, or PCM, which I have described as Pretty (much a) Capacity Market.

In a memo filed yesterday, Chairman Gleeson laid out three questions for the commissioners to discuss:

Are they ready to set dates for workshops? (The first is already set for March 26)

Should the cost cap set by the Legislature be annual or a yearly average? (The law unambiguously says “annually,” page 25, line 8)

Should the ERCOT filing from last week “be the ‘implementation plan’ required by the Commission’s Order and Modified Memorandum adopting the PCM?”

The Legislature put guardrails (including the annual cost cap) on the PCM but did not require it be implemented. A Commission order can be easily set aside by another Commission order; they are not obligated to proceed.

They need to consider at least a few extra questions…