puc memo

The Texas PUC Memo that was inspired by Tesla’s VPP Pilot

Credit: TX PUC

A few days ago, the Texas Public Utility Commission (PUC) said that it was creating a memo to address issues that Commissioner McAdams touched upon in the July 11 workshop. To recap, Tesla Energy has been working with the PUC and the Electric Reliability Council of Texas (ERCOT).

The focus is on educating the utility and the commission about the benefits of allowing Tesla Powerwall customers in Texas to participate in virtual power plants (VPPs).

Tesla’s U.S. Energy Markets Policy Lead, Arushi  Sharma Frank has been present at every meeting and has been working diligently to advocate for clean energy and Tesla Energy’s Texas customers.

The Memo

The previously mentioned future memo addresses some of the issues that Commissioner McAdams brought up in the July 11 workshop. He and Commissioner Glotfelty co-authored the memo.

The memo reads as follows:

As discussed during the June 16, 2022, Open Meeting and July 11, 2022, Aggregated Distributed Energy Resources (DER) Pilot Workshop, we support efforts to create a pilot project to test impacts of small-scale DER aggregation in the ERCOT market.

The pilot will answer questions related to how aggregated distributed generation can support reliability, enhance the wholesale market, incentivize investment, potentially reduce transmission and distribution investments, and support better load management during emergencies.

In the short term, we expect the pilot will bring in vital megawatts (MWs) of resources for participation in the ERCOT market.

ERCOT staff are required to prepare and present a governing document detailing the project scope to ERCOT’s board of directors.

The PUC will form a Task Force to identify operational obstacles to launching a pilot program and to assist ERCOT in drafting the governing document.

The next meeting to discuss the purpose and structure of the Task Force will be held on July 28, 2022. The governing document should be presented to the ERCOT board by October 11, 2022, so that it can meet a desired pilot start in the first quarter of 2023.

The Guiding Principles

The memo included five guiding principles that the commissioners want the pilot project to consider. They are:

  1. Understand the impact of having ancillary services carried on the distribution system.
  2. Create a structure that incentivizes competition and attracts broad DER participation through load-serving entities (LSEs).
  3. Measure the impacts of relieving or causing congestion on the distribution system, and study how to transition distribution-level aggregations to more granular dispatch and settlement.
  4. Ensure adequate customer protection is in place and information is anonymized.
  5. Start simple while ensuring economies of scale exist on a MW [megawatt]  basis to attract broad participation. The pilot parameters should have the flexibility to progress to more complex scenarios as participation increases.



Project Scope.

This next section of the memo addresses the governing document that shares the project scope with ERCOT’s board of directors. These topics are scale, duration, transmission and distribution utilities participation, interchange of customers, and reliability.

The following is from the memo detailing each topic:

  • Scale – Aggregations should be constrained within a load zone, with a single LSE, and served by the same transmission and distribution service provider (TDSP) with the potential for DER Management Systems (DERMS) aggregators to participate in the future. Participating TDSPs may limit pilot area based on feeder availability and information provided by LSEs related to their DER customers.
  • Duration – The pilot should continue until implementation of ERCOT market rules to accommodate aggregation or until ERCOT deems the pilot project unnecessary. We expect a minimum of 3 years which will allow for incorporation of EMS upgrades, testing of customer migration, and qualifying resources for ERCOT services.
  • TDSP Participation – It is imperative that competitive area transmission and distribution utilities (TDUs) and non-opt-in entities (NOIEs) participating in the pilot are willing participants and actively engaged to ensure safety and quality of experience to their customers. We expect reliability to be the ultimate consideration by TDSPs for qualifying DER customers.
  • Interchange of Customers – The acquisition of customers should be handled by the LSE with terms and conditions to provide relevant operational data and a good customer experience that prioritizes affordability and reliability.
  • Reliability – TDSPs should have the ability to manage participation considering system constraints, regular maintenance, and emergency situations. ERCOT in participation with the TDSPs shall be enabled to mitigate operational hazards and demands in this new era of transmission and distribution management.

You can read the full memo here. Have tips? You can email them to johnna@teslarati.com.

The Texas PUC Memo that was inspired by Tesla’s VPP Pilot
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