The new system should make the wholesale power market more efficient, and indirectly benefit the retail market and home consumers.


By Chris Brewster


AUSTIN — In recent months, ERCOT stakeholders and staff have continued working toward the implementation of a wholesale power market redesign they refer to as “Real-Time Co-optimization.” ERCOT, or the Electric Reliability Council of Texas, operates the state’s main power grid and facilitates some transactions within its wholesale power market. The intent of Real-Time Co-Optimization, or “RTC” as it is sometimes called, is to provide a more efficient way to procure energy and capacity. The implementation of the new RTC system will affect the state’s wholesale power market and prices, including the procurement of what are essentially capacity reserves through ERCOT’s ancillary services market.

In principle, we favor RTC because it should allow ERCOT to better utilize the state’s system fleet of power plants.  When operational, the new RTC system will permit ERCOT computers to pick the lowest-cost combination of power plants to provide energy and ancillary services together, rather than keeping those analyses separate — as is the current practice. This should make the wholesale power market more efficient, and indirectly benefit the retail energy market and home consumers.

In September and through the first part of October, stakeholders and the ERCOT Board considered and approved what they termed “key principles” to drive the RTC market overhaul. Following the approvals of those principles, ERCOT staff will draft related changes to ERCOT’s nodal market system. These also require approval from ERCOT stakeholders before the new RTC system can take effect.

Chris Brewster is an attorney with Lloyd Gosselink and represents cities at ERCOT and participates in in ERCOT matters on behalf of municipalities.