Texas Bulk Power Study-- An Overview

Abstract

In the 1980's, several significant changes have evolved in markets for electric power in Texas. Cogeneration, fuel market volatility, electric system reliability, generation and transmission facility construction delays, construction cost escalation, regional disparities in load growth, severe economic cycles, and a variety of legal, health and environmental issues have contributed to increasing uncertainty in the utility planning process. Through more coordination and power pooling among the state's major utilities within the Electric Reliability Council of Texas (ERCOT), a potentially higher level of bulk power transactions may reduce some uncertainty and result in cost savings to the utilities involved. However, both the transactions potential and any corresponding changes in operating costs are quite sensitive to assumptions about the price of natural gas for use as a utility boiler fuel. A large computer model which simulates the operation of the utilities under the extreme boundary conditions of zero transactions and fully coordinated economic dispatch results in a range of transactions from 5% to 14% of total system energy requirements and a range of cost savings from less than 1% to nearly 6% of the ERCOT system variable operating costs.