How Do Ancillary Electricity Services Affect TX Energy Rates?

by | Jun 24, 2024 | Utility News | 0 comments

Are Ancillary Services Part of Your Electric Bill?

Ancillary services provided by generators help keep your lights on, especially during extreme weather and high demand.
Learn what ancillary services are and why these generator functions are so important to keeping the lights on in extreme weather.

To keep our electric grid more stable, ERCOT buys ancillary services on a daily basis. These generator services work to keep the grid at its ideal frequency and avoid problems or even power failures. Believe it or not, ERCOT spends millions of dollars on these services each month. Those costs get kicked all the way down the line and come out of your pocket. So, how do ancillary electricity services affect TX energy rates?

What Are Ancillary Electric Services in TX?

Basically, ancillary services provided by Texas generators keep our grid running smoothly. How and why this happens is more complicated.

That’s because our grid runs at about 60 Herz (Hz). Yet, it can fluctuate a lot, even minute to minute. Straying too far from 60Hz can cause damage to grid hardware, flickering lights and power in homes, and even outages. In extreme weather, risks get higher. Also, when our grid is more unstable, you can see big spikes in electric rates and higher Texas electric bills.

For these reasons, ERCOT must keep grid demand and supply balanced. So, ERCOT buys ancillary services daily to prep for the needs of the next day. There are four main service types:

  • Regulation Up/Down: generators ready to go instantly and kicks in moment to moment to correct minor changes in frequency.
  • Response Reserve Service: generators that can quickly correct a few different problems in response to moderate changes in frequency.
  • ERCOT Contingency Reserve Service: stops bigger changes in frequency and provides power to correct, but is slower to respond.
  • Non-Spinning Reserve Service: generators that take time to power (or spin) up, but tackles major changes in frequency loss. For example, when a power plant suddenly goes offline.

How Do Grid Services Affect Me?

Simply put, these services keep the lights on! More importantly, these services help avoid serious power outages like what happened after Winter Storm Uri in 2021. In other words, these services are lifesaving.

On the other side of the coin, ancillary services are pricey. Furthermore, it’s a cost you have to pay. In fact, ERCOT charges Texas electric suppliers to cover ancillary service expenses. As a result, suppliers bump up their electricity rates to cover those charges. In 2022, ERCOT estimated that ancillary service costs added about $0.0003-$0.0006/kWh to electric rates. At the end of the day, that made your electricity about 1.5%-2.3% more expensive.

While there is no way to get around these costs, you still have the power to choose your own electric plan. That means you can find a cheap rate to help you save money while still benefiting from a stabilized grid. Your best route to find a great plan is comparing your options with Power Choice Texas. Find your new plan today at https://www.powerchoicetexas.org.

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