PUC votes to adopt PCM option

The Public Utility Commission of Texas (PUCT) this week voted unanimously to adopt the Performance Credit Mechanism (PCM) electric market design option and a set of guiding principles for implementation to strengthen reliability, accountability, and affordability of the Electric Reliability Council of Texas (ERCOT) electric grid. The ERCOT grid serves more than 26 million Texas electricity customers.

The Commission will defer implementation of all elements of the PCM until such time as the 88th Legislature has an opportunity to review the PCM and its guiding principles and provide guidance or direction based upon the market design option’s merits. Texans and other stakeholders will continue to provide input as plans for implementation are developed.

The agency’s action is the culmination of 18 months of extensive public and stakeholder engagement, analysis, and deliberation. During that time, PUCT Commissioners and staff held multiple open meetings and work sessions, heard dozens of hours of public testimony, and received thousands of pages of input and feedback on suggestions to strengthen operational and market reliability. The PUCT also commissioned an expert study of market design options by the industry-leading consulting firm, Energy and Environmental Economics (E3).

In addition to adoption of the PCM, the Commission directs ERCOT to develop bridging options to retain existing power plants and build new generation resources until the PCM can be fully implemented and open a project to evaluate and establish an appropriate reliability standard for ERCOT.

The Commission’s Order and Chairman Lake’s memo can be found here.