AUSTIN, Texas — A resolution between the Electric Reliability Council of Texas (ERCOT) and Austin Energy regarding the winter storm of February 2021 has resulted in ERCOT paying millions of dollars.
According to a memo released by Austin Energy, ERCOT will pay Austin Energy approximately $2.86 million to cover losses incurred during the winter storm that occurred from Feb. 14, 2021, to Feb. 15, 2021.
Austin Energy reported that during that time period, the energy company worked with ERCOT to help reduce Fayette Power Project's (FPP) output. By reducing FPP's power output, Austin Energy stated it "incurred financial costs by not being able to sell the power into the ERCOT market and by needing to purchase power on the ERCOT Real-Time Market to cover its contractual obligations."
ERCOT's protocols state "if a resource's output is reduced at ERCOT's direction, that entity may be eligible for a payment if it can show financial harm because it was unable to meet market or bilateral obligations."
Because Austin Energy has an obligation to its customers, the company had to buy power through ERCOT to meet those needs. Therefore, Austin Energy said "without the additional FPP energy sales to the ERCOT market acting as a price hedge," Austin Energy incurred additional costs. The energy company filed an Alternative Dispute Resolution (ADR).
On Friday, ERCOT stated it will pay Austin Energy approximately $2.86 million. However, ERCOT will not pay out approximately $733,000 for other settlement intervals saying it did not find losses occurred and "are not compensable under the Protocols."
The $2.86 million will be applied to the Power Supply Adjustment.