House Representative

Cook, Byron

FOR IMMEDIATE RELEASE 12/16/2011

State Affairs Chairman Byron Cook Responds to Critical ERCOT Report on Generation Capacity

Recently Released Report Raises Significant Generation Adequacy Concerns in 75 percent of the State

AUSTIN -- "The House Committee on State Affairs, which has jurisdiction over electric utility matters, will thoroughly examine the critical issue of generation adequacy in the Electric Reliability Council of Texas (ERCOT), which covers 75 percent of this state," Representative Bryon Cook (Corsicana) announced today.

Committee members will work closely with the Public Utility Commission, ERCOT and many other utility experts to consider recommendations and carefully vet proposals and initiatives to ensure that the state continues to have a reliable supply of electricity.

"As chair of State Affairs, developing solutions to the energy shortage, while being mindful of the cost to consumers, is a top priority. The goal is for policymakers to seek positive solutions for the state's lack of generation adequacy. The committee's work will likely result in rule and statutory changes that addresses the short-term need for electricity, as well as a long-term and dependable plan for meeting the state's future power demands," stated Cook.

"A Capacity Demand and Reserves report released last week by ERCOT indicates that power reserve margins are likely to fall below the minimum targets as early as next summer. Shrinking reserve margins increase the risk of rotating outages if generation reliability issues are not addressed," remarked Cook.

ERCOT manages the flow of electric power to 23 million Texas customers - representing 85 percent of the state's electric load and 75 percent of the Texas land area. While ERCOT does not directly control the supply of electricity, their responsibility is to inform policymakers of the need for increased generation resources, energy efficiency measures or demand response efforts. ERCOT's recently released biannual assessment for the next 10 years indicates a decrease in available resources used to avoid rotating outages.

ERCOT Chief Executive Office, Trip Doggett said, "We are very concerned about the significant drop in the reserve margin. 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 conservations appeals."

A number of factors have contributed to the power generation shortage predicted in the report. Several of the state's power plants have been forced to announce a potential reduction in operations due to impending federal regulations. Additionally, the recent drought has restricted the availability of water needed to cool equipment, cutting production further. While the current amount of energy affected by the drought is relatively small at this time, a continuing drought could further imperil power supplies. Due to uncertain economic times, the availability of investment capital has also tightened.

Link to view the ERCOT report:
http://www.ercot.com/content/news/presentations/2011/CDR_2011WinterUpdate.pdf

For more information and to follow the activities of the State Affairs committee visit www.capitol.state.tx.us.

All Texans can help by conserving electricity and water resources. Tips on how to cut back on utility use are available on the State Energy Conservation Office's website http://www.seco.cpa.state.tx.us/consumers/.


CONTACT:
Toni Barcellona
800-643-7026