The new CEO of ERCOT Pablo Vegas gave his first press conference in his official capacity last week. He was joined by Peter Lake, Chairman of the Texas Public Utility Commission (PUC).

“The board is confident we have the right person,” said Peter Lake, Chairman of PUC. “Pablo has extensive experience in all elements of grid operations. He has a very impressive background in both the electricity and natural gas sectors, and importantly he also has a strong background in IT and technology. Which was a key focus for the board in their search process and is a key part of ERCOT operations.”

Both Vegas and Lake explained the finishing of phase one of the power grid’s market reforms that were conducted after the grid froze during Winter Storm Uri. “I’m continuing to make sure that we’re executing and operating to meet those expectations [of a reliable power grid],” said Vegas. 

Both Chairman Lake and Vegas expressed that the power grid reforms have made the grid the most reliable it has been, have stepped up to every challenge the grid faced over the summer, and will continue to do so for the people of Texas, even if the polling shows Texans do not agree.

Vegas expressed that one of his main goals is to increase and regain Texan’s trust in the power grid. When asked by a reporter how to rebuild trust in the grid with Texans, Vegas answered that he believes the key is in reliable execution. “The performance over the past summer, achieving reliable operations over extreme weather conditions, that’s how you continue to build trust,” said Vegas. “We continue to be tested; we continue to pass those tests. That’s how we rebuild the trust and the faith in the reliability of the electric grid.”

Vegas and Lake answered questions from the press on where the power grid was headed, how reliable has it grown, and what the new market reforms the power grid is implementing.

“Pablo takes over the grid at a time when it is more reliable than ever,” said Chairman Lake. “Many of the reforms you mentioned, and many others have ensured that the lights have stayed on this past winter…. never entered emergency conditions,” Lake said this was true even when the grid was stretched over the summer.

When asked if any coal or natural gas generation projects are coming out of the system, Chairman Lake said that phase two of the power grid plans will incentivize new generations. 

Chairman Lake stated that they have worked well with the Railroad Commission, natural gas industry partners, and the Texas State Operation Center, to ensure continuing operations from both the natural gas side and electric power side for energy in Texas homes.

This includes the exchange of operational information such as natural gas supply for the power industry and how they share information during power outages, supply chain, maintenance schedules, and so on. Vegas notes that there is a willingness in the industries to share information for more excellent grid reliability.

Chairman Lake touted the new maintenance scheduling reforms working well for the state of Texas. “The control of the maintenance schedules of our fleet of generators is one of the important reforms that we’ve put in place since the winter storm and that ensures that…we now can spread those outages out over a longer period of time so there’s no single day or single week where we have an unusually high number of outages,” said Lake.

Lake also discussed the rate increases due to the grid reforms. According to Lake, the total additional reliable reforms have cost an average of $1.25 a household per month. However, several reporters called out that there were numbers that would cost consumers up to billions of dollars.

“The billion-dollar cost increase was a hypothetical number offered as part of almost an academic study,” said Chairman Lake. “It was not the actual spent. That was purely hypothetical. The actual spent is a much, much lower number; and that number is reflected in the $1.25 per household per month cost,” said Lake. The data to support that is available publicly.

Lake had to clarify that predicted costs are run by a Reliability Deployment Price Adder (RDPA) that assumes the cost will be high when a unit goes through a “Reliability Unit Commitment (RUC).”

The RUC finds “(1) insufficient generation to meet projected demand and (2) payments otherwise available to resources that are ordered to come online will not provide sufficient compensation.”

Lake ensured consumers that when a unit goes through an RUC, it is when they have sufficient reserves which ERCOT wants to maintain. So, it only went up a few cents.

  When asked about the extra money going to building new generators, but no new fossil generators are being built, Lake answered that would be part of phase two for the power grid market reform. 

Separately, Lake gave a status update on the securitization of loans and the distribution of proceeds.

Both Lake and Vegas answered a question on cryptocurrency mining using a lot of energy. “We want to be able to serve any business that wants to do business in Texas,” said Vegas. “The state of Texas does not subsidize crypto mining above any other industry. Crypto miners along with any other large energy user in the state of Texas have the ability to take advantage of ancillary services and other products in the market that are part of operating large loads in the state of Texas.”

When asked about covering for power generators, Chairman Lake stated, “So going into the winter of 2022, the first winter after Uri, all of our generators had new winterization requirements that can in certain circumstances include coverings, insulation, heat tracing of water pipes, wind brakes to protect critical parts of the plant.”

Phase two’s proposals and blueprints won’t be made available until after the election. According to Lake, phase two wants to be delivered as soon as possible. It will be issued publicly as soon as possible. Aiming for mid-November or a bit later. Then there will be a public comment period and the PUC will make any changes needed. Will present to the Legislature in January.