ERCOT Launches ECRS Ancillary Service: What it means for Texas consumers
ERCOT recently added a new Ancillary Service called ECRS to provide additional support to stabilize the Texas electric grid.
Historically, ERCOT has utilized 4 Ancillary Services to stabilize the Grid: Regulation up, Regulation Down, Responsive Reserve Service and Non-Spin Reserve Service. Given the amount of intermittent generation that is on the grid, coupled with the lack of new thermal generation and the continued electricity demand growth in ERCOT, an additional resource was created to assist with preventing grid failures and it’s called ERCOT Contingency Reserve Service (ECRS).
The new ECRS is being treated as a change in law by most if not all Retail Electric Providers (REP). This new ancillary service has been working its way through the administrative law process for some time and finally came to fruition this year. Nevertheless, most REPS have begun passing this new cost through since the beginning of June of 2023.
What is the Cost of This New Service
The short and long answer is that it will vary from meter to meter, from REP to REP and also may depend on when a contract was entered into, as well as the profile of the specific ESID. However, a sampling of various REPs of different types of load profile meters reveals a pass-through cost of about $0.20 to $2.50 per MWH.
Currently some REPS are willing to include the ECRS as a fixed component of a load following fixed price, while others simply are not willing to include it and prefer passing it through. There is no right or wrong answer to how this is treated. On one hand a REP may put a substantial risk premium on this variable, however, it may give a consumer comfort to know that it is included in the price, allowing the REP to bear the risk.
It’s Wise to Ask You Advisor or Service Provider
- Is ECRS included in my price?
- If not, how much do you anticipate it will cost as a passthrough?
Note: Make sure you compare REPS who will and will not pass it through. If the delta seems to high, there is probably a high risk premium associated with including ECRS. Ask what ECRS will cost on a per MWH basis and ask if it is being marked up.
In this ever-increasing world of energy complexity, it is vital to have a firm grasp on these and other energy components. It can make a significant difference in your overall energy cost. We here at Acclaim put in the time and research necessary to find the best options and are here to help guide you to make the best decisions based on information that is available.