For the second episode of the Energy Capital Podcast, I spoke with Beth Garza the former Independent Market Monitor (IMM) for ERCOT and current Senior Fellow at the R Street Institute.
Throughout the episode, Beth did a great job breaking down complex concepts to make them more easy to understand. We talked about the challenges of the changing supply and demand mix, and how the societal trauma Texans experienced during Uri complicates these problems even more.
Beth emphasized the need to increase ERCOT’s interconnections to other grids, the legal challenges to doing so, and how increased interconnection could have helped mitigate past outages. We also talked about who will need to help with the integration of demand side resources and how it can be done. Beth also provided listeners with a helpful explanation of real-time co-optimization, an incredibly important ERCOT initiative that’s necessary for a well functioning electric market.
Beth and I delved into the dangers of an unwinterized, barely regulated gas system in Texas and how its current set-up undercuts market competition and shortchanges consumers.
Of course, given her background as the IMM, we talked about market design and some of the controversial proposals to alter it, including the Performance Credit Mechanism (PCM) and ERCOT Contingency Reserve Service (ECRS). We wrapped up our conversation with a discussion of ways the energy industry needs to shift its approach to communicating with the public.
I really enjoyed this discussion and hope you do too. This podcast is for paid subscribers only and thus won’t be listed publicly on podcast apps. For details on how to listen to this podcast in your favorite podcast app, please refer to this information from Substack.
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I look forward to your feedback on the episode. Thank you for listening and for being a paid subscriber! Transcript and timestamps are below.
1:58 - About Beth
3:32 - The role and responsibilities of the Independent Market Monitor
5:57 - Understanding and managing the challenge of a changing supply mix combined with increasing demand
13:54 - Real time co-optimization: what it is and why it’s important
19:13 - ERCOT and interconnection with other grids
24:00 - How increased interconnection could have changed the outcomes during Winter Storm Uri
28:45 - Natural gas system
36:20 - The role and potential of smaller distributed energy resources as a competitive force in the market
42:30 - Do we need a new entity to be a distribution system operator (DSO), or could utilities or ERCOT play that role?
46:00 - Texas’s market design and ideas for improvement, including discussion of PCM
53:10 - Discussion of the ERCOT Contingency Reserve Service (ECRS) and the IMM’s analysis of its costs
59:52 - Conservation calls and shifting public communications strategies