September 6, 2023 – Earlier this year, the Electric Reliability Council of Texas (ERCOT) rolled out a new daily procured ancillary service designed to help maintain transmission grid stability, but it also increases costs.

ERCOT Contingency Reserve Service (ECRS)
As part of a more considerable expansion of grid services and tools available to ensure a safe and continuous electricity supply in Texas under all weather conditions, ERCOT now procures ECRS daily to help maintain the electrical grid’s operating frequency.

ECRS is supplied under a competitive process and is in addition to the previously established “ancillary services” (Regulation Up, Regulation Down, Responsive Reserves, and Non-Spinning Reserves).

What is an ancillary service?
As a reminder, ancillary services are energy services beyond the electricity necessary for the safe and contiguous operation of the electrical grid. Ensuring the electricity supply matches the demand at all times. They also guarantee that if a power plant fails to perform or performs below expectations, other generation sources will step in and keep the lights on.

What will ECRS cost?
Unlike the other ancillary services, which have been around for years, ECRS is brand new. Thus far, its costs vary significantly daily, so the overall impact on retail prices still needs to be determined.

Tradition Energy has been working with suppliers to provide fair and equitable treatment for this new service. At this early stage, we recommend passing through the actual costs to protect against overpaying due to the high level of uncertainty.

What happens next?
ERCOT started charging for this new service earlier this summer, meaning you may already see it on your invoice as a new line item; if not, you should expect to start seeing it very soon. Your Tradition Energy Advisor will discuss contract language to account for ECRS for any new or renewal agreement you may be considering.