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Proposed CMSC Amendments - Imports & Exports

Proposed CMSC Amendments - Imports & Exports. Intertie Trading Sub-committee November 24, 2003. PUBLIC. Proposed Rule Amendments. Background - MSP consultation Negative Price Offers for Imports Constrained Off Imports / Exports. Background - MSP Consultation.

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Proposed CMSC Amendments - Imports & Exports

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  1. Proposed CMSC Amendments- Imports & Exports Intertie Trading Sub-committee November 24, 2003 PUBLIC

  2. Proposed Rule Amendments • Background - MSP consultation • Negative Price Offers for Imports • Constrained Off Imports / Exports

  3. Background - MSP Consultation • Longstanding MSP concern about constrained-off payments • Consultation began with discussion paper, in February 2003 • MSP report presented to IMO Board on July 3 • One conclusion and six recommendations

  4. Summary of MSP Recommendations • Three CMSC related recommendations • Negative offers should not be used to calculate constrained-off payments. • Imports that cannot be scheduled should be removed from stack so they do not receive CMSC payments. • Self-induced constrained-off payments to generators or loads should not be made or should be fully recovered. • Other recommendations included working groups • to look at the Niagara 25 Hz sub-system • to look at transmission planning issues in Ontario

  5. Endorsements from Board • The IMO Board endorsed the recommendations • authorized IMO to take actions necessary to implement them. • At the same time Board approved an Urgent Rule amendment • related to negative offer prices for generators • Other rules have been brought to the Technical Panel

  6. Negative Price Offers for Imports • Issue - Potentially large CMSC without efficiency rationale (e.g.) • If 50 MW constrained off at -$2000 offer & zonal price $100 CMSC = [50 * 100 -(-$2000)] = $105,000 per hour. • Compared with 50 * $100 = $5000 per hourif offer were successfully scheduled. • Rationale for Recommendation: • If payment of zonal price is sufficient for producing energy, it should be sufficient for not producing. • Large negative prices are not indicative of costs incurred

  7. Negative Price Offers - Proposal • Proposed rule to limit CMSC payments to imports • when offer prices are below zero. • CMSC calculated assuming a lower price limit • limit is zero $/MWh • unless zonal price is less than zero, then limit is zonal price • for fairness / symmetry, applies to positive and negative CMSC, constrained on and constrained off situations • Interim application: after-the-fact adjustment • for subset: positive CMSC, > 1 MW constrained off • identical to urgent rule applied to generators

  8. Negative Price Offers - Examples Generic Case: Import Constrained off from 50 MW (MS) to 0 MW Case 1: Zonal Price > 0 Price $/MWh Zonal Price Proposed CMSC 0 Applied Limit Proposed CMSC not paid Offer Price

  9. Negative Price Offers - Examples Generic Case: Import Constrained off from 50 MW (MS) to 0 MW Case 2 Case 2: Zonal Price < 0 Price $/MWh 0 Applied Limit Zonal Price CMSC not paid Zonal Price = Applied limit Proposed CMSC = $0

  10. Negative Price Offers - Examples Generic Case: Import Constrained off from 50 MW (MS) to 0 MW Case 3: Zonal Price < Offer Price < 0 Price $/MWh 0 Offer Price CMSC < 0 No Change Potential Limit, below offer; no change IOG will be positive IOG + CMSC ~ zero

  11. Constrained Off Imports / Exports - Current Procedure • After 2 hour ahead IMO pre-dispatch • IMO notifies NYISO of successful constrained schedule imports and exports • NYISO applies these as upper limits • in their hour ahead market. • Going into 1 hour ahead IMO pre-dispatch • IMO applies limit for the constrained run only • allows the unconstrained market schedule to float • Could be further adjustments • for failures during checkout or new TLRs

  12. Proposed Limits on Schedules • Proposed rules to recognize such limits • generic: possible changes with New York or others • Planned implementation for New York • CS1 CS2 [ CS = constrained predispatch schedule] • 2 hr ahead constrained pre-dispatch is upper limit on 1 hour ahead (current procedure) • MS1 max (MS2, CS2)[ MS = predispatch market schedule] • 1 hour ahead unconstrained market schedule limited • 2 hour ahead constrained value is the physical limit • a larger 2 hour ahead MS implies schedule was being constrained off (MS >CS) • CMSC payment deserved since this is part of congestion management

  13. Limits on Schedules with NYISO - Examples

  14. Implications of Scheduling Limits • Market Schedules may change (be lower) • constrained schedules not affected • CMSC can be smaller quantities (positive or negative) • depending on circumstances • may be corresponding IOG reductions • MCP in any interval can increase, decrease or remain unchanged depending on • whether import or export, • whether replaced by another intertie transaction

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