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Alignment of CSC Shadow Price Caps with New System-wide Offer Caps

Alignment of CSC Shadow Price Caps with New System-wide Offer Caps. ERCOT WMS Meeting January 16, 2008. Background. CSC shadow price cap of $2,500/MW implemented via SCR 747 on 12/07/2006

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Alignment of CSC Shadow Price Caps with New System-wide Offer Caps

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  1. Alignment of CSC Shadow Price Caps with New System-wide Offer Caps ERCOT WMS Meeting January 16, 2008

  2. Background • CSC shadow price cap of $2,500/MW implemented via SCR 747 on 12/07/2006 • The $2,500/MW shadow price cap was developed based on an offer cap of $1,000/MWh and an offer floor of ($1,000)/MWh • Typical shift factor difference between most effective zones approximately 0.40 • $2,500 x 0.40 = $1,000

  3. Background • System-wide offer cap changed to $1,500/MWh on March 1, 2007 • System-wide offer cap will change to $2,250/MWh on March 1, 2008 • Offer floor remains at ($1,000)/MWh (Protocols Section 6.11.1) • When there is zonal congestion, with the current CSC Shadow Price cap of $2,500: • Offers > ~$1,000/MWh will be ignored • Zonal prices will be limited to approximately $1,000/MWh, even if all available energy is exhausted in the most effective zones

  4. Changes • Increase the CSC Shadow Price cap to $5,600/MW • Offer cap increase from $1,000 to $2,250 (2.25x) • Shadow price cap increase from $2,500 to $5,600 (~2.25x) • Apply price administration to limit any negative zonal price to a minimum of ($1,000)/MWh • Automated and ex ante ultimately • May be manual and ex post initially • CSC shadow price will also be re-determined administratively and ex post if this price administration occurs

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