What is the role of massive direct current electrical ties between Texas and the rest of the nation?

A Blog Post by Bill Moore -- 

That’s the question the Public Utility Commission of Texas has teed up for consideration in a new rulemaking project, to be launched soon.  The PUC Commissioners have many times in the past debated how to best view “merchant” DC Ties—are they like non-controllable generators, delivering power into the ERCOT grid at levels and at times determined by the importing DC Tie owners, without ERCOT input on dispatch or quantity of MWs delivered?  Or, are they like transmission lines, which are subject to ERCOT curtailment as necessary to address congestion? Or, are they like load, consuming power at a specific point, and at a level of consumption chosen solely by the load (exporting DC Tie) owner?

And how are their benefits to Texans to be determined?  On an economic basis? On a reliability basis? On both bases? Further, with respect to such benefits, should there be a default assumption regarding how much of the DC Tie capability should be considered “deliverable” to the market?  For example, should the grid operator strive to ensure “full deliverability” so that 100% of any presumed economic benefits from a DC Tie import are considered always available (or must be made available by the grid operator), even if that deliverability causes congestion or constrains full operation of one or more existing Texas generation units?  Similarly, should the Commission consider whether a DC Tie’s hypothetical reliability benefits are always available, or should it delve into the transmission grid modeling regarding reliability impacts in various grid scenarios?

In the past, for example with the Southern Spirit merchant DC Tie project, the Commission evaluated a DC Tie on an ad hoc basis and developed policies in a contested case, requiring further work by ERCOT to implement those policies.

The Commissioners indicated in April that they want a full rulemaking proceeding to consider using a more generic and more “holistic” approach to consideration of DC Ties.  Perhaps that approach might provide clarity to DC Tie developers regarding how to evaluate the economics of a possible project.

At the very least, all market participants who might be affected by further development of DC Ties connecting ERCOT to adjoining grids—including generators, retailers, utilities, and potential DC Tie developers—should be attuned to, and consider participating in, the DC Tie rulemaking to ensure full knowledge of, and the ability to potentially influence the Commission’s approach to, the ways that DC Ties might impact ongoing ERCOT power market development.