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Weekly Market Call

Weekly Market Call. Weekly Update. November 19, 2010. Antitrust Admonition. ANTITRUST ADMONITION

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Weekly Market Call

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  1. Weekly Market Call Weekly Update November 19, 2010 http://nodal.ercot.com 1

  2. Antitrust Admonition ANTITRUST ADMONITION ERCOT strictly prohibits Market Participants and their employees who are participating in ERCOT activities from using their participation in ERCOT activities as a forum for engaging in practices or communications that violate the antitrust laws. The ERCOT Board has approved guidelines for members of ERCOT Committees, Subcommittees and Working Groups to be reviewed and followed by each Market Participant attending ERCOT meetings. If you have not received a copy of these Guidelines, copies are available at the Client Relations desk. Please remember your ongoing obligation to comply with all applicable laws, including the antitrust laws. DISCLAIMER All presentations and materials submitted by Market Participants or any other Entity to ERCOT staff for this meeting are received and posted with the acknowledgement that the information will be considered public in accordance with the ERCOT Websites Content Management Operating Procedure. http://nodal.ercot.com 2

  3. Full Market Trials Agenda • General Updates and Reminders • Market Facing Test Update • Nodal Cutover Update • Question and Answers / General Discussion ERCOT asks that Market Participants log into the WebEx session using their company name and then their name. This will allow ERCOT to take roll-call offline http://nodal.ercot.com 3

  4. General Updates / Reminders http://nodal.ercot.com 4

  5. Day-to-day operations summary: Planned / Unplanned Outages • Unplanned Outages • 11/18/2010 9:20 A.M. - 11/18/2010 10:15 A.M.Extended latencies were noted in delivery of asynchronous bidset notifications via the external web services interface . Root cause analysis in currently underway to address the issue.ERCOT development has identified a configuration change (no code change) for this issue and are working to get that into the Nodal Production environment in the next couple of daysNext update on the Monday Market Call • Network Model Loads • 11/17/2010 – Completed as scheduled • 11/24/2010 – Last update prior to Go-Live http://nodal.ercot.com 5

  6. General Updates and Reminders • ERCOT has released several new user public displays on www.ercot.com for both Day-Ahead Market and Real-Time prices. • On the Nodal Real-Time Market page at http://www.ercot.com/mktinfo/rtm/,  you’ll find three new displays: • Real-Time LMPs for Latest SCED Run Display – shows the LMPs at the Resource Nodes, Load Zones, and Trading Hubs with the most recent SCED timestamp • Real-Time LMPs for Load Zones and Trading Hubs Display  – shows just the LMPs at the Load Zones and Trading Hubs with the most recent SCED timestamp • Real-Time Settlement Point Prices Display  –  keeps a running tally of the RT SPPs for the Operating Day (yesterday and today are available) • On the Nodal Day-Ahead Market page at http://www.ercot.com/mktinfo/dam/,  you’ll find two new displays: • DAM Clearing Prices for Capacity Display – MCPCs for yesterday, today, and tomorrow • DAM Settlement Point Prices Display  - DAM SPPs for yesterday, today, and tomorrow http://nodal.ercot.com 6

  7. General Updates and Reminders • Monday Market Call for 11/22/2010 will occur as scheduled at 10 AM • Reminder: Soft Launch continues through next week • Submissions should reflect realistic values • Twice Daily Market Calls begin on 11/23/2010 • 10:30 AM Market Call on 11/24 will cover topics typically covered in the Friday Market calls due to the holiday • No Market Calls on 11/25 and 11/26 • Twice daily Market Calls begin again on Saturday 11/27 • November 24 Hour LFC test GREDP results have been distributed to the QSEs with Resource’s project managers • Note that this is last GREDP that will be sent manually by ERCOT • In the future, MPs can retrieve this information from the MIS http://nodal.ercot.com 7

  8. http://nodal.ercot.com 8

  9. http://nodal.ercot.com 9

  10. Day Ahead Market / Reliability Unit Commitment http://nodal.ercot.com 10

  11. DAM testing this week • On average, 70 QSEs participated in DAM over this period http://nodal.ercot.com 11

  12. Submission Overview for Monday Nov 15 DAM submission overview • 61 QSEs participated for Op Day 11/16 • Energy Bids totaled 9,983 to 15,562 MW per hr • Cleared 8,735 to 13,641 MW energy bids per hr • Cleared 16,119 to 21,053 MW net energy transactions per hr - 59% to 71% of the forecasted load • Cleared 10,150 to 11,398 PTP bids per hr • Four major Load Zone prices ranged from $23.51 to $42.76 http://nodal.ercot.com 12

  13. Submission Overview for Tuesday Nov 16 DAM submission overview • 68 QSEs participated for Op Day 11/17 • Energy Bids totaled 8,139 to 10,912 MW per hr • Cleared 7,620 to 10,250 MW energy bids per hr • Cleared 20,001 to 21,894 MW net energy transactions per hr - 63% to 83% of the forecasted load • Cleared 15,975 to 18,610 PTP bids per hr • Four major Load Zone prices ranged from $17.52 to $28.78 http://nodal.ercot.com 13

  14. Submission Overview for Wednesday Nov 17 DAM submission overview • 74 QSEs participated for Op Day 11/18 • Energy Bids totaled 10,916 to 14,278 MW per hr • Cleared 9,358 to 11,966 MW energy bids per hr • Cleared 18,469 to 21,074 MW net energy transactions per hr - 61% to 78% of the forecasted load • Cleared 11,843 to 13,282 PTP bids per hr • Four major Load Zone prices ranged from $23.71 to $35.68 http://nodal.ercot.com 14

  15. Submission Overview for Thursday Nov 18 DAM submission overview • 78 QSEs participated for Op Day 11/19 • Energy Bids totaled 10,308 to 15,766 MW per hr • Cleared 9,216 to 12,877 MW energy bids per hr • Cleared 17,975 to 21,572 MW net energy transactions per hr - 61% to 72% of the forecasted load • Cleared 12,777 to 14,608 PTP bids per hr • Four major Load Zone prices ranged from $22.20 to $34.00 http://nodal.ercot.com 15

  16. Binding Constraints in DAM http://nodal.ercot.com 16

  17. RUC testing this week http://nodal.ercot.com 17

  18. Real Time Market / LFC http://nodal.ercot.com 18

  19. Real Time Market Update • 11/13 – 11/18 System Lambda at $180 offer cap for 325 intervals • 11/13 – 11/18 System Lambda above $180 for 63 intervals; Max penalty price for power balance constraint changed from $3001 to $2251 on 11/16 • 11/13 – 11/18 Four constraints; only W_TO_N was ever binding for a short period of time on 11/17 • BASE CASE - N_TO_H • BASE CASE - W_TO_N • DSNG_TB5 - SNGTHW98_A • XHHG58 H - HGT_T2H http://nodal.ercot.com 19

  20. Real Time Market Update • SCED intervals not at offer cap or higher typically between $20 and $40 http://nodal.ercot.com 20

  21. November Full System Reliability and Market Test Results • Generation Resource Energy Deployment Performance (GREDP) • Measure of how well resources follow dispatch instructions • Non-Wind, Non-DSR Generators and DSR Portfolios must have a GREDP less than 8%or 8 MWfor 85% of the intervals in which GREDP was scored Non-WGRs/ Non-DSRs DSRs http://nodal.ercot.com 21

  22. November Full System Reliability and Market Test Results • Generation Resource Energy Deployment Performance (GREDP) • Measure of how well resources follow dispatch instructions • Wind Generators must have a GREDP less than 10% or the output must be less than their expected output for 95% of the intervals in which GREDP was scored • Wind Generators are only scored during curtailment WGRs http://nodal.ercot.com 22

  23. Final Full-System Market and Reliability Test(Nov 28 – 30) http://nodal.ercot.com 23

  24. Final Full-System Test: Timeline • Final Full-System Test: • ERCOT will conduct the final Full-System Testing activities Nov 28 to Dec 1 • Market WebEx call will be open from 11:00 to 17:00 on Nov 28 • Call will re-open at 06:00 on Nov 29 • Call will remain open through 23:59 PM on Dec 1 • From Nov 28 to Dec 1, issues will be fielded by testing support staff and through the Market WebEx • After Dec 1, issues will be fielded through the issues management process and during the twice daily market calls • Additional notices will be sent during the week of Nov 22 to confirm the testing window • Operational Scenarios: • No Operational scenarios are planned • Non-Spin and Emergency Base Points will be deployed as needed http://nodal.ercot.com 24

  25. Final Full-System Test: Tuning Windows • If you plan to be ONTEST for unit testing: • Confirm this intention with ERCOT by 4:00 pm the day prior to the Operating Day wherein ONTEST will be used • Note: The Request for Unit Testing can be found at http://www.ercot.com/mktrules/guides/procedures/index http://nodal.ercot.com 25

  26. Credit Update http://nodal.ercot.com 26

  27. Soft Start • CMM Soft Start – Key Dates • November 15th - Initial CMM reports generated and published • November 16th – First DAM run with credit constraints • November 18th – ERCOT is now using CMM as the system of record for Zonal credit requirements • CMM Soft Start - General • Total Potential Exposure (TPE) will use a) Zonal data and b) binding Nodal data. • No non-binding Nodal data (e.g. practice DAM runs) will be included in the soft start TPE calculations. Collateral included will be actual collateral held. • Some Zonal data will be included at a summary level only (e.g. AIL) or as adjustments (e.g. payment of Zonal invoices) • CPs participating in the DAM during the soft start are operating with a “real” ACL • Since the data used in the soft start TPE calculations is binding, ERCOT will use CMM exposures published beginning November 18th as the bases for binding Zonal collateral requirements as well as Nodal “soft start” • ERCOT will produce Credit Reports and ACLs on non-business days during soft start Note: Please validate your Credit Reports this week. Please send questions to markettrials@ercot.com with a cc: to ercotcredit@ercot.com . http://nodal.ercot.com 27

  28. Soft Start As CPs validate Credit Reports, please consider: • Highest ADTE • Reflects the highest ADTE of the last six (now seven) weeks - will continue to increase weekly to nine weeks • AIL • Zonal data is included at a summary level only • “Mismatched” volume is not displayed in the AIL report although imbalance dollars and imbalance volumes are correct (display difference only) • OUT – Adjusted for TCR revenues • Initially reflected the same adjustment as in most recent Zonal report • As of Thursday, reflects an estimate of TCR Revenues for November and 90% CRR Revenues for December based on load ratio share from October disbursement • OIA – Adjusted to reflect payments made on zonal invoices prior to due date (e.g. prepayments) • CRR invoices and inventory are included in the Credit Reports • CRR invoice payments are being posted as received • payments received before 12:00 noon will be included for the ACL available for the next day’s DAM (e.g. received by noon Monday will be reflected in Tuesday’s DAM ACL) • payments received after 12:00 noon will be included for the next day’s Credit Reports and the following day’s ACL (e.g. received after noon Monday will be reflected in Wednesday’s DAM ACL) http://nodal.ercot.com 28

  29. Soft Launch • Treasury • CRR invoice payments are being posted as received • CRR invoices are due today (Friday, November 19th) • If an invoice is due and a payment has not been received, ERCOT will send out an e-mail reminder to • CRRAH authorized rep and back up • CP authorized rep and back up • Credit contact and back up Note: Please be sure that ERCOT has updated contact information for your company – notices will be an automated process and will use the information in ERCOTs Registration system. http://nodal.ercot.com 29

  30. Soft Launch DAM • DAM credit parameters are set for Soft Start as they will be set for Go Live • DAM is currently using the 90th percentile for both the “uth” parameter and the RT DA spread (as approved by the BOD on Tuesday) • DAM historical values used for credit constraints – see next slide • “e” factors were reset to 1/0/1 on Friday, November 5th • Will be effective through Soft Start and through operating day -December 14th • Notices went out by two methods • E-mail to CP authorized rep and back up and CP Credit contact and back up is the primary communication tool • Written notices went out by regular mail • CPs desiring “favorable treatment” should complete and return the Request for Change in “e” Factor Treatment Form to ercotcredit@ercot.com http://nodal.ercot.com 30

  31. Historical prices used for credit exposure in DAM • Proxy prices to be used for purposes of calculating DAM credit exposure for go-live is covered in Protocol Section 4.4.10(8) • Implementation: • All nodal settlement points have been mapped to 2010 congestion management zones • Spreadsheet with the mapping is posted as item 11 at http://www.ercot.com/calendar/2010/11/20101102-NATF) • DAM historical settlement point prices • Import hourly average of zonal MCPEs over the last 30 days as a proxy • SCED historical settlement point prices • Import 110% of zonal MCPEs over the last 30 days as a proxy for Real-Time SPPs (this ensures the 10% Day-Ahead/Real-Time price difference called out in 4.4.10(8)(b)). • Ancillary Services historical prices • Import zonal MCPCs as a proxy for nodal MCPCs • As nodal data is created, the zonal data will roll off, so that 30 days after go-live, all prices used for credit exposure calculations will be nodal prices. • Imported zonal prices will be trued-up with any price corrections the next business day (timeline of zonal price correction posting). • Note that this process will be used during the soft start • On Nov 15, had 15 days of (zonal) data loaded, not full 30 days • By go-live, as a daily automated process runs to import the zonal data, there will be a full 30 days of historical zonal pricing data available http://nodal.ercot.com 31

  32. Go Live • CMM Go Live – Key Dates • Monday, November 29th - Send ACL for initial binding DAM (afternoon) (TPE excludes zonal invoice published on November 29th ) • Tuesday, November 30th - Initial binding DAM - “e” factors set at 1/0/1 - Credit Report include zonal invoice published on Nov 29th • Wednesday, December 1st – “Go Live” • CMM Go Live – General • See Appendix for detail of how exposure components will be addressed. Updates are in red. • December 1-3 - “ramp up" for DALE - multiply the UDAA by a factor of five (5) each day until the first DAM invoice is published. • December 4-5 (Sat/Sun) - discount DALE by 25% since the first DALE is calculated on a weekend. DALE will be calculated at 100% beginning with Credit Reports posted Monday, December 6, 2010 and ACLs sent Monday evening for Tuesday, December 7, 2010. • See slide on expected impact of ACP on FMM in FCE calculation • If a Counter-Party believes that their Zonal ADTE is not representative of their anticipated Nodal RT activity, they can provide an estimate of anticipated RT activity and ERCOT will consider revising their ADTE. http://nodal.ercot.com 32

  33. Cutover Update http://nodal.ercot.com 33

  34. Cut-Over Monthly Outlook – November May June July Aug Sept Oct Nov Dec Key Cut-Over Activities for November 2010 • (11/8/2010 12:00pm) Credit: Collateral Posting Deadline (Dec Auction) • (11/8/2010 5:00pm) CRR: Credit Lock for Dec CRR Auction • (11/9/2010 – 11/11/2010) CRR: December CRR Auction Bid Open/Close • (11/12/2010) CRR: December CRR Auction Executes • (11/15/2010) CRR: December CRR Auction Results published • (11/16/2010) Settlements: December CRR Auction Invoice published • (11/16/2010) Disputes: Dispute submitted to ERCOT for CRR Invoice • (11/19/2010) Credit: Payment Due for December CRR Auction Invoices • (11/22/2010) Settlements: Payments to CRRAH (Dec Auction) • (11/24/2010) Market Submission Opens (Remaining Protocol Go-Live) • (11/24/2010) Model: Network Model Load • (11/29/2010) Credit: ERCOT to Publish ACL for the initial Day-Ahead Market execution by ERCOT • Functional Area • Settlements • Credit • Congestion Revenue Rights • Disputes • Market Management • MP Activities / Impacts • Available Credit Limit is locked for CRRAHs • CRRAHs can submit disputes against CRR Auction Invoice via the API or MIS • CRRAHs can receive postings on MIS • QSEs can begin DAM Bid submission (15 submission items) • Market checkpoint calls begin to facilitate issues and readiness • Daily Market Conference Bridge starts 11/23 http://nodal.ercot.com 34

  35. Questions http://nodal.ercot.com 35

  36. Appendix http://nodal.ercot.com 36

  37. Approach for establishing the initial exposure in CMM http://nodal.ercot.com 37 http://nodal.ercot.com 37

  38. Approach for establishing the initial exposure in CMM http://nodal.ercot.com 38

  39. Approach for establishing the initial exposure in CMM http://nodal.ercot.com 39

  40. Go Live – FMM calculation http://nodal.ercot.com 40

  41. Cut-Over Update – Go-Live Sequence of Events http://nodal.ercot.com 41

  42. Cut-Over Update – Go-Live Sequence of Events (11/30/2010) http://nodal.ercot.com 42

  43. Cut-Over Monthly Outlook – Go-Live Sequence of Events • Key Zonal Notes for 11/30/2010 and 12/01/2010 • QSEs will maintain: • Balancing Energy Offers through Operating Day 12/01/2010 • Submitted on 11/30 for OD 12/1 • Resource Plans through Operating Day 12/01/2010 • Maintained continuously through 12/01 to reflect actual Resource Plan • Zonal Outages effective on Operating Day 12/01/2010 • Examples: Actual Start / End, Forced Outages, etc • On 11/30/2010 ERCOT will run: • Zonal Ancillary Service Market • Zonal awards will be published • Zonal RPRS • Run as a study only • Zonal commitments will not be published • Zonal prices will not be generated for 12/01/2010 • No Zonal Submissions or Markets for Operating Day 12/02/2010 or later • Note that all Zonal systems (ERCOT and MP) must remain in place until 1/1/2011 http://nodal.ercot.com 43

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