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ERCOT RMR Basics

ERCOT RMR Basics. Ino González Supervisor, S&B Market Analysis. Topic Outline. Why ERCOT deploys RMR units How ERCOT Contracts RMR Units Eligible RMR Costs Non-Eligible RMR Costs Settlement of RMR Units Deployment of RMR Units in the Adjustment Period Next steps. Need for RMR Units.

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ERCOT RMR Basics

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  1. ERCOT RMR Basics Ino González Supervisor, S&B Market Analysis

  2. Topic Outline • Why ERCOT deploys RMR units • How ERCOT Contracts RMR Units • Eligible RMR Costs • Non-Eligible RMR Costs • Settlement of RMR Units • Deployment of RMR Units in the Adjustment Period • Next steps

  3. Need for RMR Units • Why ERCOT deploys RMR units • To solve local reliability constraints • To provide voltage support • To acquire additional system capacity under special conditions (possibly using a currently undefined type of Load Resource- LR)

  4. RMR Contract Basis II. How ERCOT Contracts RMR Units • ERCOT performs analysis of needs for system capacity, or • Resource submits Notice of Suspension Form • ERCOT request RMR owner to submit estimated costs to run the units • ERCOT evaluates costs and reliability needs and makes final procurement assessment

  5. RMR Contract Basis III. Eligible RMR Costs (Per protocol 3.14.1.10 Eligible Cost) • Labor and services • Materials and supplies • Maintenance • Fuel • Property Taxes • All variable costs

  6. RMR Contract Basis (con.) IV. Non-Eligible RMR Costs (Per protocol 3.14.1.10 Eligible Cost) • Depreciation expenses • Return on Equity • Fixed property taxes • Income taxes of property owner • Labor costs not associated with RMR operation • Any costs the RMR owner would have incurred even if the unit had been mothballed or shutdown

  7. RMR settlement Basis V. Settlement of RMR Units • Initial Settlement • Capacity payment ($/h) based on eligible costs plus 10% • Energy Payment (based on estimated fuel) • True-up Settlement • Capacity payment ($/h) based on actual costs plus 10% • Energy Payment (based on actual fuel)

  8. Deployment of RMR Units in the Adjustment Period VI. Deployment of RMR units in the Adjustment Period • ERCOT discovers need for RMR units in the Adjustment period • If RMR unit needed for capacity service, submit an OS • SCED deploys RMR based on EOC and system need at SWC

  9. Loads Providing RMR-Like Services VII. Next Steps Need to: • Define the type of capacity (RMR-Like) service an LR • types of loads • allow aggregation or not • minimum MW levels • Develop RMR-Like contracting procedures • Establish deployment guidelines • Specific payment and settlement rules and • M&V

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