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Staff of the Texas Public Utilities Commission issues its Final Recommendation on Reliability Standard Assessment and CONE Assumptions.  This recommendation will be considered at the Commission’s April 17, 2026 Open Meeting, Agenda Item No. 24.

“On January 15, 2026, ERCOT filed its initial modeling assumptions for the triennial reliability standard assessment and a proposal to update the Cost of New Entry (CONE) value. Seventeen interested parties provided written feedback on these assumptions, including the Independent Market Monitor. On March 23, 2026, ERCOT filed its final assumptions, incorporating feedback provided by the interested parties.

Staff generally agrees with the assumptions that ERCOT included in their final recommendation. Staff provides this memo to highlight assumptions where Staff’s view diverges from that of ERCOT.4 This memo also highlights specific recommendations from ERCOT and the interested parties that, while not able to be incorporated into the 2026 reliability standard assessment, Staff believes warrant additional consideration in future reliability standard assessments.”

CONE for the 2026 Reliability Standard Assessment

Staff Recommendation: The Commission should direct ERCOT to conduct a limited update on the CONE value, continuing to use the frame combustion turbine as the selected reference technology. The updated CONE value should be reported in real dollars, not nominal. The review should include information from any frame combustion turbines included in recent Commission approved CCN amendments. The Commission should also direct Sta# to plan to conduct a full CONE study in 2028 to better understand and consider a broader selection of reference technologies, and the expected market revenues each would receive, ahead of the 2029 reliability standard assessment.

Reliability Standard Assessment Modeling Assumptions

Resource Mix [ERCOT Assumption 1.1

“Staff Recommendation: The generation mix should incorporate Texas Energy Fund projects with executed loan or grant agreements, even those that are not currently included in the CDR. The Commission should also direct ERCOT to investigate alternative approaches for identifying what generation should be included in the expected system configuration for the three – year forward year in future reliability standard assessments.”

Coal and Natural Gas Prices [ERCOT Assumption 1.51

“Staff Recommendation: ERCOT’s proposed fuel price recommendations are sufficient for the base case, but they should conduct a sensitivity for the Year 2029 based on the NYMEX natural gas futures as an alternative benchmark.”

Load Forecast [ERCOT Assumption 2.11

“Staff Recommendation: ERCOT should use the 2026 RTP-compliant load forecast for the 2026 reliability standard assessment, even if it causes a schedule delay. The reliability standard assessment schedule should be revised to ensure that feedback windows for interested parties to file comments are not truncated. ERCOT should conduct sensitivities around the large load forecast and curtailment assumptions. In addition, ERCOT should make the details and results of these scenarios available to stakeholders. In addition, Stalf recommends ERCOTfile in this project the results Of large load forecast submitted for the years 2026-2029 as soon as practicable so the Commission can weigh how much delay will be caused until data is verified and if ERCOT will be requiring any adjustments per TAC 25.370(e)(2)(B). This will help Stalf to revise the future timelines.”

Weather Year Weighting [ERCOT Assumption 2.41

“Staff Recommendation: ERCOT’s default weather year weighting should give each weather year equal weighting. Improved methodologies in this area are worth exploring, and ERCOT and interested parties should work towards developing those ahead of the 2029 reliability standard assessment.”

Transmission Representation [ERCOT Assumption 3.11

“Staff Recommendation: ERCOT should not move forward with the zonal analysis within the 2026 reliability standard assessment.”

Thermal Resource Unplanned Outage Modeling, Weather-Related [ERCOT Assumption 4.21

“Staff Recommendation: ERCOT should use the 85%weatherization effectiveness that has been previously used as the base case. In addition, the Commission should direct ERCOT to file an updated historical weather study no later than November 1, 2028 to ensure the most recent data is included in establishing the weatherization effectiveness in 2029.”

Magnitude Criterion [ERCOT Assumption 7.1

“Staff Recommendation: ERCOT should use the methodology they have proposed, using the reported 2026 magnitude value and scaling it up for 2029. ERCOT should ensure that the value for 2029 aligns with the updated load forecast from the 2026 RTP compliance plan. The magnitude values should not include the curtailment of any large loads consistent with SB 6, and ERCOT should review the methodology used for determining the magnitude values, and if warranted, propose improvements prior to the 2029 reliability standard assessment.”