What is ERCOT?

Friday August 12, 2011
Posted at 08:07

If you live in Texas, chances are the electricity that gets delivered to your home is managed by the Electric Reliability Council of Texas, or ERCOT. You may not have heard of ERCOT, but it’s important to know who they are and what they do since they play a critical role in making sure that the lights in your home come on when you flip a switch.

The Public Utility Commission of Texas (PUCT) regulates the state’s electricity industry, including independent electricity management agencies like ERCOT, public utilities like CenterPoint and Oncor, and alternative retail electric suppliers like Spark Energy.

In turn, ERCOT, the state’s largest electricity management agency, oversees the electric grid, which receives electricity from power generators and distributes it to homes and businesses using electric utilities. In all, ERCOT serves 23 million Texas customers representing 85 percent of the state’s electric load and 75 percent of the state’s land area.

ERCOT’s Three Main Functions

ERCOT serves three main functions with regard to the management of the delivery of electricity in Texas:

1. Schedules energy transfers — ERCOT ensures the electric grid can accommodate scheduled energy transfers from more than 550 generation units along more than 40,550 miles of transmission lines. ERCOT monitors transfer schedules from wholesale buyers and sellers on a daily basis, makes sure the grid can handle those schedules and makes sure that gaps in schedules can be filled.
2. Maintains grid reliability — ERCOT makes sure that electricity can be reliably transmitted to homes and businesses by managing the electricity supply on the grid and monitoring the flow of electricity between the power generation companies that put electricity into the grid and the public utilities that deliver electricity to customers.
3. Manages retail transactions — ERCOT serves as the central hub for all retail power transactions. Not only does the agency manage the financial settlement for the competitive wholesale bulk-power market, but it also administers the process that customers undergo when switching from their electric utility to an alternative retail electric supplier or from one retail electric supplier to another. When electric customers switch, ERCOT ensures that all of the information related to that transaction is accurately delivered to the appropriate companies in a timely manner.

Sources

ERCOT website, “About ERCOT.”

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