Ancillary Services in the ERCOT Crisis
Ancillary Service costs ensure reliability of the electric grid. There are four principal ISO-wide ancillaries that historically range from $3.00/MW to $4.00/MW. During the February 2021 winter weather event these ancillaries saw extreme spikes. These ancillaries are not capped with price limits. It’s important to note that these pricing variables can be presented differently among retail electricity providers.
If retroactive adjustments to clearing prices are not made, it is possible to see these prices increase to unprecedented levels. The data source for these charts is the Day Ahead Market clearing prices for these ancillaries as published by ERCOT. ERCOT pays this amount to generation units to provide the service. The total amount ERCOT pays is charged to Load Serving Entities based upon a proration determined by load share. The actual amount charged to customers is typically much lower because it is spread across all megawatt hours.
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