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Public Utility Commission of Texas adopts new guidelines for ERCOT electrical grid

The commission voted to adopt the Performance Credit Mechanism electric market design option, which is intended to strengthen the ERCOT electrical grid.

TEXAS, USA — Changes may be coming to Texas' power grid.

The Public Utility Commission of Texas, also known as PUCT, has voted unanimously to adopt a new framework to help improve the Electric Reliability Council of Texas, or ERCOT, electric grid, which powers over 26 million Texans.

The new Performance Credit Mechanism (PCM) electric market design option is intended to implement a set of guiding principles to "strengthen reliability, accountability and affordability" of the ERCOT grid.

The 88th Legislature will review the PCM and provide their direction as needed before it is implemented by the Commission. Texans will reportedly be able to continue to provide their own input as the plan is further developed.

“We heard Texans loud and clear; they demand a reliable grid. Landmark reforms have proven effective in enhancing the reliability of the grid we have today by providing electricity during record heat and arctic blasts over the past year,” said PUCT Chairman Peter Lake. “Today, we take another historic step toward building the grid of the future by adopting a new reliability service – the Performance Credit Mechanism.”

Senate Bill 3, which was passed by the 87th Texas Legislature and signed into law by Governor Greg Abbott, directed the PUCT to create reliability standards for the electrical grid, especially to ensure that power generation is available during "times of low non-dispatchable power production", such as during severe weather. The PCM design reportedly meets the requirements of the bill.

The list of key principles of the design is in Chairman Lake’s memo on the issue, which can be found HERE.

PUCT Commissioners reportedly developed the new design over the past 18 months, during which they held open meetings, heard public testimony, commissioned an expert study by the Energy and Environmental Economics consulting firm and received thousands of pages of feedback on the issue.

In addition to adopting the PCM, the Commission is also directing ERCOT to develop options to retain existing power plants as well as build new energy resources until the PCM can be fully implemented.

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