Aug 6, 2013 | Archives

Transactive Energy is Coming to the Wild West

by | Aug 6, 2013 | Archives

Transactive Energy is a hot buzzword recently, so I’m going to join the bandwagon and highlight a place where they’re building the foundation for transactive energy.

Texas and more specifically, the ERCOT service area, continues to move forward in establishing an environment where transactive energy services can grow. There are two significant factors that make Texas unique: pervasive retail choice and Smart Meter Texas (SMT).

Starting in 2002, competitive retail choice was mandated for all customers served by the investor-owned utilities. Today, about 60% of all customers purchase their electricity from a competitive supplier since cooperative and municipal utilities are not required to participate.

The next piece of the puzzle is Smart Meter Texas which is probably less familiar to most readers. In 2007, after the Texas legislature passed a bill (HB 3693) to push the deployment of smart meters, the PUCT established a project for the stakeholders to work through the implementation issues. One of the end results was the creation of a joint venture by the four Transmission, Distribution Service Providers (TDSPs). The TDSPs are the portions of the former IOUs that are now responsible for the wires and substations from the generation plants down to and including the meters. The joint venture is Smart Meter Texas and it provides several important functions. First, it’s a consolidated data warehouse for electric meter usage data. SMT provides access to the meter data for customers, retail electric providers and authorized third parties. In addition to meter usage data, it provides an interface for the installation and use of Home Area Network (HAN) devices. These are all common functions that other utilities have put in place as well. SMT is notable because they’ve established common, interoperable interfaces for these functions that streamline how customers, retailers and third party market participants interact regardless of who owns the meter.

Smart Meter Texas continues to develop and later this year third party companies will be able to use the SMT web portal and APIs to access meter data and HAN devices if they have been authorized to do so by the customer. Texas has been and continues to be focused on customer data privacy, so I’ll repeat myself. The customer determines who is authorized to view their meter data and interact with their HAN devices.

With those pieces in place, the stage is almost set for a transactive energy future. Maybe. ERCOT transitioned to a nodal market at the end of 2010 and there have been recent calls for a capacity market to supplement the existing energy market. Additional changes might be warranted to better include customers in the ancillary service market.

Regardless of the current market structure and its future potential changes, the customer side of the equation is moving ahead nicely and the Texas environment is going to allow for significant experimentation to see how customers, retailers and third party aggregators can mutually benefit.

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