TPTF Presentation Registration of PUN Facilities

1. TPTF PresentationRegistration of PUN Facilities December 19, 2007

2. Registration of PUN FacilitiesOutline of Presentation • Overview of Issues • PUN Example • Problems Caused by Allocation of Net Export • Basis of Proposal • Draft NPRR • Questions?

3. Registration of PUN FacilitiesOverview of Issues • Many Private Use Networks have complex and interdependent electrical and steam operations and frequently consume much or all of their generation behind the fence • These facilities are typically net loads to the ERCOT system and when they do export, the net export is often a small percentage of the gross behind-the-fence generating capability • Operation of these facilities is driven by steam demand at the site and any net export is a function of steam demand, behind-the-fence electrical load, and ambient temperatures • Behind-the-fence electrical load at the facilities cannot be identified with a specific generating unit or configuration of units behind the fence • The net capability of the PUN, as metered, dispatched, and settled at the net tie line to the ERCOT grid (which conforms to the Nodal definition of a “Settlement Point”), is most accurately and operationally efficiently represented as a single Resource for purposes of COP, Energy Offer Curve, Output Schedule, RUC, SCED, and other Nodal Market activities • Allocation of PUN net output to individual generating units or configurations of units does not represent physical PUN operating characteristics and introduces the potential for error in scheduling and settlement of PUN facilities

4. Registration of PUN FacilitiesExample • Example of PUN facility with 10 - 45 MW generating units behind the fence. Total gross capacity = 450 MW. • If facility electrical load = 460 MW, then facility is a net 10 MW load.

5. Registration of PUN FacilitiesExample (cont.) • Example of PUN facility with 10 - 45 MW generating units behind the fence. Total gross capacity = 450 MW. • If facility electrical load = 440 MW, then facility is a net 10 MW export.

6. Registration of PUN FacilitiesExample (cont.) • Example of PUN facility with 10 - 45 MW generating units behind the fence. Total gross capacity = 450 MW. • Trying to model the facility as 10 individual generating units causes allocation of the 10 MW net export to 10 individual 1 MW COPs, Offer Curves, Output Schedules, etc.

7. Registration of PUN FacilitiesProblems Caused by Registration as Individual Units • Registration of these types of PUN facilities as multiple resources rather than as a single resource at the Settlement Point unduly complicates and burdens both ERCOT and PUNs, requiring multiple additional telemetry points and allocation of PUN output to these points by formulas and calculations • Formulaic allocations of Settlement Point (net tie line) export to individual generating units do not represent the physical operation of available Resource capability • Allocation of small net export volumes across numerous individual generating units can result in fractional MWs that cannot be accurately handled by ERCOT systems, introduce error into various systems, and cause potential compliance issues • Nodal Protocol 6.4.2.1(2)(a) provides that: “The Output Schedule for a Qualifying Facility (QF) not submitting an Energy Offer Curve is considered to be equal to the telemetered output of the QF at the time that the SCED runs.” • This protocol provision is most logically applied to the net tie line telemetry at a PUN Settlement Point rather than to allocated formula-derived telemetered values at multiple individual units or configurations of units.

8. Registration of PUN FacilitiesBasis of Proposal • Per the Nodal Protocols: Combined-Cycle Configuration [means] any combination in which a combined-cycle power block can be operated as a separate Resource. Each possible configuration operated as a separate Resource has a distinct set of operating parameters, physical constraints, and Energy Offer Curve. • The interdependent operation of steam and electrical units at these facilities meets the broad definition of a combined-cycle power block, which is not defined in the ERCOT Nodal Protocols. • The operating parameters, physical constraints, and Energy Offer Curve or Output Schedule for these combined cycle PUN facilities are best represented from an operational perspective as a single configuration represented by the net export to the ERCOT grid at each PUN Settlement Point. • Although a logical interpretation of current protocols could encompass the registration of PUNs in the manner suggested, a NPRR will make it explicit and remove ambiguity. • The NPRR will not decrease the amount of telemetry provided to ERCOT and available for system studies, NSA, etc. since the requirement to provide individual PUN generating unit telemetry is not affected by this NPRR.

9. Registration of PUN FacilitiesProposed NPRR • Amend Nodal Protocol Section 6.5.5.2(8)(a) as follows: “Each configuration for a power block of combined-cycle Resources is considered as a single Resource unless multiple generators are connected to the ERCOT Transmission Grid at different voltage levels. A Private Use Network with a single point of interconnection to the ERCOT grid may be registered as a single configuration combined-cycle Resource at the Private Use Network Settlement Point.”

10. Registration of PUN Facilities Questions?