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TPUC Chairman Asks If PCM Cost Cap Can Be An Average Verses Absolute Annual Cost Cap
In a memorandum in advance of the March 7th open meeting, Texas Public Utilities Chairman Gleeson questioned how the statutory $1 billion cost cap performance credit mechanism (PCM) should be applied.
The Texas PUC Commissioners were scheduled to consider an ERCOT filing on draft design parameters options at the open meeting.
Chairman Gleeson memo raised the following questions:
“The $1 billion cost cap. Should this be an absolute annual cost cap or an average annual net cost cap? What affect does the cost cap have on the feasibility of achieving target reliability?”
Given that HB 1500 provides that PCM may not be adopted by the PUC unless, among other things, the PUC ensures that, “the net cost to the ERCOT market of the credits does not exceed $1 billion annually, less the cost of any interim or bridge solutions that are lawfully implemented, except that the commission may adjust the limit: (A) proportionally according to the highest net peak demand year-over-year with a base year of 2026; and (B) for inflation with a base year of 2026[.]”
Chairman Gleeson Memorandum (03/06/2024)
ERCOT PCM Draft Design Parameters Options Memorandum (02/29/2024)
Staff Response Memo to Commissioner Cobos’ Questions (11/21/2023)
Restyle Request Memo (11/03/2021)
55000 (08/03/2023)
(Performance Credit Mechanism ( PCM ))
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