When the retail market partially opens to competition in Texasnext June, it will be a “whole new ballgame,” according to anofficial with the Electric Reliability Council of Texas, but moregeneration, additional transmission lines and increased capacityshould guarantee the state faces no problems similar to those seenby California this year.

Kent Saathoff, manager of transmission market operations for theERCOT Independent System Operator based in Austin, spoke in Houstonyesterday to the Gulf Coast Power Association. Saathoff, whoprovided an annual update on transmission and power generation forthe state, also offered a glimpse of what the state is likely tolook like from a generation and transmission standpoint.

On June 1, 2001 ERCOT will implement a 5% test program ofderegulation of the electricity market. Then, on Jan. 1, 2002, afull-scale implementation of retail access in ERCOT begins.Saathoff said it might seem like it’s far away, but he advisedcompanies to get ready now.

“Beginning next year, it’s going to be a whole new ballgame,”Saathoff said. “You need to find someone to handle your retailelectricity needs or you need to do it yourself.” Saathoff addedthat independents will be moving in to provide ancillary services,and Texas facilities need to decide how they want to proceedbecause congestion costs will be “spread throughout the allocatedarea.”

Saathoff dismissed the idea that Texas, second in population toCalifornia and still growing, could suffer similar deregulationproblems that West Coast has experienced this year. By next year,when the market begins, Saathoff said the state would have severalthings already in place to remove generation and transmissionproblems:

– A new Limestone-Watermill 345 kV line in service and four moretransmission projects on the drawing board;

– More generation on line: between 4,000 and 7,000 MW from powerplants that will be on line by next summer;

– Total capacity of 66,000 MW, and a peak load of 57,000 MW bynext June.

“A lot of generation is on the books but a lot is already goingto be there,” he said. Saathoff did warn the generators there thatthey needed to keep building power plants to ensure the future.

“A lot of generation in ERCOT is over 30 years old, and it’salmost not economical to run it anymore,” he said. “So, keepbuilding. We don’t want to be in a situation like California, andwe should never be.”

ERCOT, which is one of 10 Regional Reliability Councils in theNorth American Electric Reliability Council (NERC) Organization,represents a bulk electric system located totally within the Stateof Texas and serves about 85% of Texas’s electrical load.

Currently, it has a generating capability of about 65,000 MW andexperienced a 1999 summer peak demand of about 54,849 MW. Becauseof its intrastate status, the primary regulatory authority forERCOT utilities is the Public Utility Commission of Texas. TheFederal Energy Regulatory Commission (FERC) exercises limitedauthority.

ERCOT membership currently consists of retail consumers, sixcooperatives and river authorities, six municipals owninggeneration or transmission, four investor-owned utilities, 13independent power producers, 23 power marketers and 14 transmissiondependent utilities.

To assist with the switch to a retail marketplace, ERCOT isscheduling market seminars on a regular basis. The next one isscheduled Sept. 25-26 in Austin. For information about the seminars,call ERCOT at (512) 343-7215. To learn more about the deregulationfuture in the state, see the website at www.texaschoiceprogram.com.

©Copyright 2000 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.