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New Natural Gas-Fired Facility, Mild Weather Spell Plenty of Summer Capacity, Says ERCOT

Texas should have plenty of generation capacity, natural gas and otherwise, to deal with an expected mild summer and the startup of one big gas-fired facility sooner than expected, officials with the Electric Reliability Council of Texas (ERCOT) said Monday.

"We expect to have adequate resource to serve peak customer demand" this summer, said ERCOT Director of System Planning Warren Lasher. He discussed the coming summer forecast in a conference call with other ERCOT executives.

ERCOT, which manages power for nearly 90% of the state's electric grid, issued a preliminary Seasonal Assessment of Resource Adequacy (SARA) in early March.

Based on spring rains, pointing to milder temperatures, and an accelerated gas-fired power plant startup, the SARA forecast was revised higher. ERCOT now expects more than 77,000 MW of available generation to serve expected peak demand of about 68,000 MW. The new assessment includes an updated peak demand forecast reflecting the milder summer weather, compared with the 12-year average used in the preliminary report.

Since March, ERCOT has added the planned startup of the 790 MW Panda Temple II facility (717 MW summer rating), which wasn't expected to be available until August. The plant already is being commissioned and should be ready to start in May, said Lasher. Commissioning to date has gone smoothly. With the wet summer, three R.W. Miller gas-fired steam units, with summer capacity rating of 403 MW, also should be available. They had been on extended outage because of insufficient cooling water.

The new generation makes up for a shortfall from the delay into the fall for starting up the 341 MW gas-fired Ector County Energy Center G, with a 294 MW summer rating, formerly known as Goldsmith Peakers.

"While we anticipate plenty of reserves, we also remind consumers that unusually extensive generation outages during extremely hot weather or localized challenges in some areas, such as the Lower Rio Grande Valley, could result in a need to reduce demand on all or part of the system," Lasher noted. South Texas along the Mexican border typically sees several 100-degree-days for in a row.

More wind capacity is going to provide a good cushion too, with the forecast for planned additions at 1,265 nameplate MW and a summer peak average capacity contribution of 152 MW. New wind generation resources totaling 1,265 MW are included as an additional 152 MW of planned resources, or 12% of total nameplate capacity.

ERCOT does not anticipate drought conditions to affect the availability of resources for the next two seasons, thanks to the El Nino weather pattern. The weather pattern has brought much appreciated rainfall to the state over the last few months, and that pattern should continue through the rest of the year, said Senior Meteorologist Chris Coleman.

"Current trends favor weather conditions similar to those we saw in 2014," said Coleman. "We also may continue to experience somewhat wetter conditions, which is good news as long-term drought conditions continue to improve in much of the state."

Compared to his previous forecast in March, Coleman now sees milder temperatures for most of the state.

"An intensifying El Nino is bringing more precipitation this year," he said. The weather pattern "may lose little influence" over Texas weather patterns through the end of the year. "Given the current wettest soil on average in recent years..." he said there likely would be "normal to above precipitation this summer," welcome news for residents who have lived through severe drought for the past few years.

As warm as the Pacific Ocean is now, which directly influences El Nino, "it adds more confidence into projecting El Nino sustaining itself moving forward."

Close to 60% of Texas no longer has drought concerns, "the largest total area since October 2010," said Coleman. Moderate to extreme drought still exists in parts of west-central and northwest parts of the state, but "the drought is unlikely to expand or intensify significantly..."

Coleman's forecast calls for possibly 10 total major storms affecting Texas this year, including four to five tropical storms and one major hurricane. The Gulf of Mexico, warmer than normal, could be more active than in recent years. Last year two hurricanes formed, making landfall in Mexico.

The Capacity, Demand and Reserves (CDR) report, a 10-year outlook also issued on Monday, is projecting a 17% planning reserve margin in the summer of 2016. The projected margin increases incrementally to 18.5% in 2017 and 21.4% in 2018. The margin declines over time from there to 10.4% in 2025.

"We continue to monitor potential impacts of various environmental regulations and other factors on the future generation resource outlook," Resource Adequacy Manager Pete Warnken said. "This CDR includes more than 4,500 MW in planned resource additions, including nearly 2,600 MW of new natural gas-fired capacity, through 2017." Peak demand forecasts in the CDR load forecast are based on 12-year average weather conditions.

The region also added nearly 1,400 MW in newly installed wind generation capacity and 29 MW of new solar capacity since the last 10-year outlook was released in December 2014. Wind generation resources are included in the summer CDR outlook at 12% of nameplate capacity for noncoastal facilities and 56% for coastal facilities.

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