In the recent PLWG meeting, ERCOT and Transmission Service Providers (TSPs) engaged in detailed discussions regarding updates to the RPG cost thresholds and related review processes. These deliberations focused on the appropriateness of current tier thresholds, how inflation and project cost dynamics have evolved, and the implementation of FAC-002 qualified change definitions under new standards. The conversation also explored implications for interconnection procedures, study triggers, and ongoing stakeholder collaboration.
RPG Cost Threshold Revisions: Addressing Inflation and Project Complexity
A key concern among stakeholders is the need to revisit RPG cost thresholds more frequently than the current seven-to-eight-year cadence. The tier thresholds, originally set years ago, have not been adjusted for today’s inflation and cost realities, leading to a misalignment between thresholds and actual project costs.
Rising Project Costs and Increased Reviews
Stakeholders observed that the types of projects ERCOT reviews today are increasingly straightforward in scope — such as line rebuilds, station upgrades, and facilities that do not materially change transmission system flows. However, these projects are reviewed more frequently, largely due to their cost exceeding tier thresholds based on outdated values.
- It was noted that this “causes ERCOT to spend more time reviewing these projects,” which may not warrant extensive review given their straightforward nature.
- Current proposals include moving the tier one threshold from $100 million to $200 million.
- The tier three threshold would cover projects costing between $50 million and less than $200 million that do not require a Certificate of Convenience and Necessity (CCN).
- No changes are proposed to the tier two trigger, which remains based on projects requiring CCN at the Public Utility Commission (PUC).
Stakeholder Support and Cost Analysis
The joint TSP owners provided additional comments supporting Oncor’s initial analysis, emphasizing that the Consumer Price Index (CPI) alone is insufficient to capture cost increases:
- They highlighted increases in real estate, specialty equipment, materials, and labor costs
- A notable factor is the expanded use of temporary bypass facilities, which have significantly driven up project costs.
- CenterPoint shared that some project costs related to temporary work have nearly tripled since 2021 when adjusted to today’s dollars.
- Collectively, TSPs agree that a doubling of RPG cost thresholds since the last evaluation would be appropriate.
- There was also a suggestion to revisit thresholds more frequently than every seven years to maintain alignment with evolving market conditions.
ERCOT’s Response and Next Steps
ERCOT representatives acknowledged the value of the comments and the CPI’s role in initiating this discussion. They indicated plans to:
- Conduct internal reviews of the submitted comments.
- Reach out directly to commenters to obtain further information on project costs.
- Potentially file additional comments in the upcoming months.
ERCOT is currently tabling the NPRR (Nodal Protocol Revision Request) related to these thresholds until further discussions can be completed.
FAC-002 Qualified Change Definition Update
Separately, ERCOT presented updates related to the FAC-002 standard 5, which became effective January 1, 2024. This standard requires qualified change definitions for generation, transmission, and end-user facilities.
Background and Alignment with PGRR115
- ERCOT’s qualified change definitions for generation and transmission come from existing planning guides.
- For end-user facilities, an interim process had been in place, pending formal adoption.
- With recent approval of PGRR115 by the PUC, ERCOT is aligning the qualified change definition for end-user facilities with the formalized large load interconnection process.
- These updates will become effective July 1, 2025, in conjunction with market notices informing stakeholders.
Implementation Timeline and Market Notices
- ERCOT plans to release a market notice around June 1 to “unbox” components of NPRR1234 and PGRR115.
- The detailed interconnection process, affecting qualified change criteria, will be implemented on July 1, 2025.
- Additional provisions, such as QSA (Qualified Scheduling Arrangement), will be unboxed later.
Clarifications on “Material Change” and Stakeholder Collaboration
Stakeholders raised questions about the term “material change”, which triggers restudies and process delays but currently lacks a fully defined scope:
- Participants asked about efforts to codify what constitutes a material change.
- ERCOT representatives expressed openness to collaborating on creating a living list of material change examples, potentially incorporated into a large load interconnection handbook.
- They emphasized flexibility to capture unforeseen future changes that could affect dynamic performance and trigger restudies.
The discussions ended with plans to:
- Continue stakeholder collaboration on RPG cost thresholds and qualified change definitions.
- Hold further meetings, with the next ERCOT stakeholder meeting scheduled for June 17.
- Monitor implementation of PGRR115-related changes and market notices.
ERCOT and stakeholders remain committed to maintaining transparent processes that balance cost-effectiveness, system reliability, and regulatory compliance.
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