Texas will be short 2,600 MW during the summer 2012 peak, and reserve margins will dip to 12% owing to decisions to mothball some generation units, several delays in planned generation, and a higher load forecast, the Electric Reliability Council of Texas (ERCOT) said on Thursday.

The grid operator that manages 85% of Texas’ electric load has this year grappled with surging power demand as the state battled first a cold snap that shut down 7,000 MW of generation capacity in February and forced it to begin rolling blackouts, and then a long summer heat wave and devastating drought that required returning to service two mothballed gas plants to guard against blackouts. The Texas drought has squeezed water usage, and ERCOT said it expects increased generation outage rates because of power plant cooling issues.

The state grid operator’s December update of the capacity, demand and reserves report shows that in the summer of 2012, reserve margins are projected to be 12%, below the 13.75% target used to ensure reliable operations during higher-than-normal temperature periods and generator outages.

“We are very concerned about the significant drop in the reserve margin,” said CEO Trip Doggett. “If we stay in the current cycle of hot and dry summers, we will be very tight on capacity next summer and have a repeat of this year’s emergency procedures and conservation appeals.”

According to the ERCOT update, seven plants will be mothballed by summer 2012: the 406-MW Greens Bayou 5, Midlothian 5 (225 MW), Monticello 1 and 2 (565 MW each), and Sam Bertron 3 and 4 (230 MW each). Among units under construction, LS Power’s proposed 800-MW pulverized coal plant in Riesel, Texas; the 60-MW RRE Austin Solar project; and the 150-MW Senate Wind Project are delayed.

ERCOT is investigating several initiatives to address the capacity shortage for the short term, Doggett said. “We are working with the Public Utility Commission on several rule changes, including expansion of our emergency demand response program to allow greater participation.”

Additional protocol changes that will help in the longer term include improvements in generation owners’ outage scheduling and reporting requirements, raising the offer floors for non-spinning reserves, and resolution of pricing issues related to reliability deployments, ERCOT said.

In addition, ERCOT is working closely with transmission operators to verify the accuracy of in-service dates for generation under development and for potential projects that are currently in the final phase of the interconnection study process, Doggett said.

“Due to our concerns about generation adequacy during the record-setting summer temperatures, concerns about the future impact from the drought, and retirements related to new environmental rules, we asked transmission operators to perform a comprehensive review of the current status of each of their assigned generation interconnection projects,” Doggett said. “Given the current economic uncertainties and the uncertainty from proposed environmental regulations, we wanted to ensure that proposed in-service dates were as accurate as possible, based on the currently available information.”

ERCOT has more than 59,000 MW of generation currently under review in various stages of the interconnection process, but many of those projects are speculative and may never be completed, Doggett said. The report lists potential projects in the final phase of the interconnection study process; these range from 191 MW for 2012 to 9,000 MW in 2022.

“ERCOT’s role in the competitive market is to inform policymakers and the market of the need for increased generation resources, energy efficiency measures, or demand response efforts, but ultimately ERCOT does not control the supply of electricity needed to meet the demands of our growing economy,” Doggett said.

Sources: POWERnews, ERCOT