Coal, New Projects

ERCOT forecasts unaffected by TXU plant shelving

28 February 2007 — The cancellation of eight reference coal plants by TXU, representing a combined 6,800 MW, in conjunction with agreement by environmental opponents not to oppose the buyout of the Dallas-based utility, has not had any immediate impact on future capacity reserve margins projected by the state’s power grid. In fact, the latest published capacity projections, issued February 13, extend by about a year the date when the state would officially fall below the 12.5 percent minimum reserve margin compared to last summer’s forecast.

That’s because ERCOT, like any other regional system operator, never counts its power plants before they hatch — so to speak — when projecting generating capacity. “Hatching” means getting air permits, and none of the eight reference plants, nor any of the three TXU plants already in very early stages of construction, have received air permits. Nor has additional capacity proposed by NRG and LS Power been considered in ERCOT’S projections.

ERCOT Spokeswoman Dottie Roark explains that although the Texas grid has historically only issued capacity forecasts annually (in May), because of the escalating battle over whether TXU would be allowed to build any or all of its proposed new coal units, it made an exception on February 13, issuing an “unofficial” forecast to the Texas House Regulated Industries Committee. That report extended the date from 2008 to 2009 for when state grid would drop below the minimum reserve mark.

The extension is due to the addition of at least two gas-fired units that received permits sooner than originally expected, and a delay in mothballing a large TXU gas-fired plant. Roark noted that ERCOT will continue to assess developments as they occur in the very fluid Texas power market. Trends suggest Texas will experience an influx equaling the current population of Tennessee within the next decade. The current projection states that without new or returning resources, the Texas grid would drop to 10.2 percent reserve capacity in 2009 (a deficit of 1,480 MW) and be have a greater than 4 percent deficit by 2016 (12,652 MW).