ERCOT Budget To Increase by 40% Next Year

ERCOT logo | Image by Hanson L

The Electric Reliability Council of Texas will receive a significant increase in its budget for the upcoming year, with funding for this initiative coming from increased fees charged to electricity companies that sell power to consumers.

Nearly $119 million will be added to the state grid manager’s current $287 million budget, with the residential customer impact of the budgetary increase anticipated to be less than 20 cents per month, as reported by The Texas Tribune.

The Public Utility Commission (PUC) unanimously approved a budget increase of around 40% for the Electric Reliability Council of Texas (ERCOT) during its latest meeting on November 2.

ERCOT has enacted a number of measures since the failure of the power grid during Winter Storm Uri, the severe weather event of February 2021, as well as this summer in the face of record-breaking and oppressive heat. Grid operators recently announced that the grid is now ready to handle the demand needed to maintain stability through this year’s winter months, as previously reported by The Dallas Express.

Attorneys representing ERCOT originally claimed the organization needed more funds to comply with regulations, hire staff, and fight legal battles. ERCOT planned to add 171 positions, such as attorneys, system operators, and communication experts.

ERCOT had initially presented a revised recommendation for an increase in fees in June of this year. This plan recommended an “increase in the system administration fee (SAF) rate fee from $0.555 to $0.710 per megawatt-hour effective January 1, 2024, representing a compound annual growth rate of 3.1%,” per its webpage.

“Periodic System Administration Fee rate increases are necessary due to load growth rate projected to be lower than ERCOT’s Department Net Expenditures cost growth rate,” it argued.

However, the PUC commissioners would only approve a small fee and budget increase compared to what ERCOT requested, per The Texas Tribune.

This new budget will raise ERCOT’s “system administration fee rate” from $0.555 per megawatt-hour to $0.63 per megawatt-hour beginning next year, per Fox 4 News.

According to ERCOT, this is the first fee rate increase since 2016.

Opponents of this increase argue that ERCOT can accomplish its goals with a much smaller fee increase. ERCOT officials had discussed the costs of operation as well as measures to maintain power following a report claiming that its spending practices had created a price hike in the millions, as previously reported by The Dallas Express

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