ERCOT has changed the protocols to update the prices that distributed generation (often times back up generators) may receive in future years for energy they provide to the grid. Traditionally, distributed generation over 1 MW would be paid a load zone price as opposed to the nodal price that generation is typically paid in the ERCOT market. The load zone price is the same as what loads in the area will be charged for energy provided by ERCOT. This provided some degree of price security that the price ERCOT was paying for the generation was consistent with market prices being charged to users in the same region.
This situation will soon change and in the future, distributed generation over 1 MW will be paid a nodal price. The nodal price will vary wildly by generation site and can be more, or possibly much less than the load zone price that has be paid for this generation to date.
As an example, during one recent heavy system usage condition in August 2019 there were areas of extremely high nodal prices and some areas experiencing low to negative nodal pricing. In this situation, some distributed generators nodal prices could actually result in the generator paying ERCOT for energy the generator provided into the grid during times of high usage demand.
ERCOT is allowing existing distributed generation to obtain a ten-year exception for distributed generation over 1 MW that will allow them to capture the load zone price for excess generation if they register their distributed generation with ERCOT prior to the end of 2019. Distributed generation under 1 MW will not be impacted under the current changes and will continue to get the historic load zone price it has always received.
TCAP encourages any TCAP member with on-site backup generation over 1 MW that may possibly sell into the grid to consider getting their facilities over 1MW registered and exempted prior to the end of 2019. Please contact Margaret Somereve of TCAP (email@example.com, 972-764-3136) or Bill Starnes of Resolved Energy (firstname.lastname@example.org, 512-331-4949 x102) if you have any questions or need assistance to get a facility registered.
Jordan Wollman has been working as a consultant to TCAP since 2010 for brand positioning and marketing. He has extensive experience with public sector and non-profit clients including cities, economic development, chambers of commerce, and tourism and attractions. He is the founder of Misfit Brands, a brand strategy firm located in Dallas, TX.