A nodal project originally estimated to cost ratepayers as little as $59.7 million is now projected to cost $658.7 million under a budget approved this week by the ERCOT board. All consumer representatives voted against the new spending plan.
ERCOT also approved a new December 2010 go-live date for the market transition. The original implementation target was for the fall of 2006.
Also included in the new nodal budget is a built-in $58.9 million cushion to offset unforeseen “contingency” costs. By way of comparison, the value of this cushion is almost as much as the original estimated cost for the entire nodal project as provided for ERCOT by Tabors Caramanis & Associates in November, 2004. (At the time, the Massachusetts-based consulting firm projected the price of nodal implementation for the grid operator at between $59.7 million and $76.3 million. It”s now expected to cost about 10 times that amount.)
The no-votes for the new spending plan came from Valero Energy counsel Andrew Dalton, representing industrial customers; Public Utility Counsel Don Ballard, representing residential customers; and Nick Fehrenbach of the City of Dallas, representing commercial customers.
The Public Utility Commission is expected to consider the new budget during a hearing that could begin in a month or so.
Is a policy analyst consultant for TCAP, a coalition of political subdivisions in Texas that purchase electricity in the deregulated market for their own governmental use. Because energy costs are typically a significant budget item to our members, TCAP is consistently looking for ways to save our members money, through cost-saving contracts, energy efficiency or demand response programs.