What Are Ancillary Services and How Do They Affect TX Energy Rates?

by | Jun 21, 2024 | Industry News, Save Money

Do Ancillary Services Increase Power Rates?

Ancillary services are used to keep the ERCOT grid running each day. Learn what they do and how they affect your Texas electric rates.
ERCOT uses ancillary services to plan for electricity demand each day. This way, it can line up enough energy to keep the grid balanced and reliable. Learn how these costs affect your Texas electricity rates and what you should do.

A lot of stuff goes into your electric bill. Your local utility includes their charges applicable to everyone. Also,your electric company assesses costs according to your plan. But there’s something baked into your plan rate you probably don’t know about – ancillary services. They help balance each day’s supply and demand to keep the ERCOT grid efficient. 

Certainly, ancillary services raise the price you pay for power. However, they don’t show up as line items on your monthly bill. Instead, retail providers, co-ops, and cities pay these costs. In turn, you pay for them within your electric rate. There’s no such thing as a free lunch, right!? These services ensure you have reliable home and business electricity each day. 

Ancillary services costs often confuse Texas energy shoppers. But it's very simple.  We dig into what they are and how they affect your monthly bill.
If you’re confused by talk of ERCOT ancillary services costs, don’t worry. We dig into the simple facts to show what they are and how they affect your monthly bill.

What Are Ancillary Services? 

ERCOT walks a fine line to balance how much power is available with how much people need. They monitor data minute to minute, and they buy ancillary services one day ahead on the open market. These services help ERCOT throttle up and down how much power it has each second of every day. Therefore, ERCOT can deploy these services quickly to address grid needs. 

According to Modo Energy, the four services have their own purposes:

  • Regulation Service Up and Regulation Service Down – Responding within five seconds, this service corrects minor frequency deviations. ERCOT aims for 60 Hz on the grid. These tweaks help the grid run at its best. 
  • Responsive Reserve Service – If a power plant trips offline, this service can respond within a minute to stop frequency changes. Talk about fast! You can’t get a fast food hamburger that quickly! But you can fix a power plant going offline. 

You’ll never feel ERCOT pulling these levers. You’ll only realize when these measures aren’t enough. In that case, blackouts can occur. And as Texans have found out over the past few years, blackouts can cause deaths when mixed with extreme weather. That makes keeping the lights on critical to every Texan in the ERCOT area. 

Shopping For Power Plans 

Retailers must factor these grid balancing services into their costs for electricity. So, when you shop for power plans, there’s no way to remove these costs from your plan’s rate. After all, they’re needed to keep the ERCOT grid running. But, when you shop for power plans, you want to compare plans to find the one that best suits your family’s power usage. This way, you’ll pay less on your monthly bills. And that all starts when you shop at https://www.texaselectricityratings.com/electricity-rates.

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