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MAY 02, 2012 | HOLYOKE, MA

MAY 02, 2012 | HOLYOKE, MA. Matthew Gdula. SENIOR BUSINESS ANALYST MARKET OPERATIONS SUPPORT SERVICE. Compensation and Cost Allocation. Transitional Demand Response. Objectives. At the completion of this training you will know: How payments and charges are determined

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MAY 02, 2012 | HOLYOKE, MA

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  1. MAY 02, 2012 | HOLYOKE, MA Matthew Gdula SENIOR BUSINESS ANALYST MARKET OPERATIONS SUPPORT SERVICE Compensation and Cost Allocation Transitional Demand Response

  2. Objectives • At the completion of this training you will know: • How payments and charges are determined • Settlement changes related to the FCM Market • Cost allocation • Report Changes

  3. Governing Documents • Market Rule 1, Appendix E • Section III.E.9 • Market Rule 1, Section 13 • III.13.7.2.5.3 • III.13.7.2.5.4

  4. TRANSITIONAL DEMAND RESPONSE Payments and Charges

  5. Payments and Charges • Day-Ahead • Paid for any MW cleared • Real-Time • Paid or Charged dependent on Real-Time Conditions

  6. Calculate Asset Day-Ahead Payment • Note • Day-Ahead LMP applicable to the Load Zone the asset is located Day-Ahead Demand Reduction Payment Day-Ahead Demand Reduction Obligation X Day-Ahead LMP Cleared Demand Reduction Offer X ( 1 + Average Avoided Peak Distribution Losses )

  7. Average Avoided Peak Distribution Losses • Section III.E.10 • The average avoided peak transmission and distribution losses used for the associated Capacity Commitment Period in the FCM less The percent average avoided peak transmission system losses • Section III.13.7.1.5.1. • The percent average avoided peak transmission and distribution losses used by the ISO in its calculations of the Installed Capacity Requirement (ICR) for the Forward Capacity Auction immediately preceding the Forward Capacity Auction • The ICR report states the Transmission and Distribution Gross-up as 8% • Average avoided peak transmission system losses • Calculated to be 1.5% • Average Avoided Peak Distribution Losses • 8% - 1.5% = 6.5%

  8. Asset Day-Ahead Offer Example Offer Price + [Curtailment Initiation Price/(Minimum interruption duration x bid amount)]: $30 + [0/(1 x 5)] = $30

  9. Asset Day-Ahead Offer Example Offer Price + [Curtailment Initiation Price/(Minimum interruption duration x bid amount)]: $50 + [400/(1 x 2)] = $250

  10. Asset Day-Ahead Payment Example $320 ≥ $30 5.325 x 320 5 x (1 + 0.065)

  11. Asset Day-Ahead Payment Example $500 ≥ $250 2.13 x 500 2 x (1 + 0.065)

  12. Asset Day-Ahead Payment Example

  13. Asset Real-Time Payments and Charges • An asset is eligible for Real-Time Payments and Charges when • The asset clears in Day-Ahead, or • The hourly provisional Real-Time LMP is greater than or equal to the Demand Reduction Offer price

  14. Calculate Asset Real-Time Payments or Charges Asset clears Day-Ahead Real-Time Payments or Charges ( Real-Time Demand Reduction Obligation - Day-Ahead Demand Reduction Obligation ) Final Real-Time LMP X MIN ( Real-Time demand reduction adjusted for net supply Demand Reduction Offer X 2 ) X ( 1 + Average Avoided Peak Distribution Losses ) , • Note • Real-Time LMP applicable to the Load Zone the asset is located • Exception • Real-Time Demand Reduction Obligation is capped to the Day-Ahead Demand Reduction Obligation when the provisional Real-Time LMP < Demand Response Threshold Price

  15. Calculate Asset Real-Time Payments or Charges Asset does not clear Day-Ahead Real-Time Payments or Charges Real-Time Demand Reduction Obligation X Final Real-Time LMP MIN ( Real-Time demand reduction adjusted for net supply Demand Reduction Offer X 2 ) X ( 1 + Average Avoided Peak Distribution Losses ) , • Note • Real-Time LMP applicable to the Load Zone the asset is located • Exception • Will not be charged if Real-Time demand reduction adjusted for net supply is negative

  16. Asset Real-Time Payment or Charges Example

  17. Asset Real-Time Payment or Charges Example 8 x (1 + 0.065) 8.52 – 5.325 is set to 0

  18. Asset Real-Time Payment or Charges Example -3 x (1 + 0.065) (-3.195 – 2.13) x 24

  19. Asset Real-Time Payment or Charges Example MIN (12, 5 x 2) x (1 +0.065) 10.65 x 35

  20. Asset Real-Time Payment or Charges Example Set to 0 due to DA being 0 0 x 55

  21. Asset Real-Time Payment or Charges Example

  22. Demand Reductions of 5 MW and Above • Assets intending to reduce ≥ 5 MW of load during a 60 minute period must contact the Control Room between 15 to 60 minutes prior to initiating the reduction • When a request to interrupt is denied by the control room • If the asset cleared Day-Ahead, the asset will not be charged for the difference between its Real-Time Demand Reduction Obligation and Day-Ahead Demand Reduction • If the asset did not clear Day-Ahead, the asset will not be paid

  23. TRANSITIONAL DEMAND RESPONSE FCM Conforming Changes

  24. FCM Conforming Changes • Energy Compensation at the Final Real-Time LMP for • Real-Time Demand Response (“RTDR”) resource with a Capacity Supply Obligation • Real-Time Emergency Generation (“RTEG”) resource with a Capacity Supply Obligation • Energy Compensation at the Final Real-Time LMP during • ISO Dispatch for OP4 • ISO Dispatch for an Audit

  25. Calculate Asset Energy Payments or Charges - FCM Event RTDR Asset that cleared Day-Ahead Real-Time Payments or Charges – FCM Event Average Avoided Peak Distribution Losses ( Real-Time demand reduction adjusted for net supply - Day-Ahead Demand Reduction Obligation ) X Final Real-Time LMP X ( 1 + ) • Note • No cap on Real-Time demand reduction adjusted for net supply • Final Real-Time LMP applicable to the Load Zone the asset is located • Average Distribution Losses has been estimated to be 6.5% 26

  26. Calculate Asset Energy Payments or Charges - FCM Event RTDR and RTEG Assets - Real-Time only Real-Time Payments or Charges – FCM Event Average Avoided Peak Distribution Losses Real-Time demand reduction adjusted for net supply X Final Real-Time LMP X ( 1 + ) • Note • No cap on Real-Time demand reduction adjusted for net supply • Final Real-Time LMP applicable to the Load Zone the asset is located • Average Distribution Losses has been estimated to be 6.5% 27

  27. Demand Response Performance in FCM Events • When Interrupted MW are calculated for the FCM Settlement only intervals that are part of the FCM Event in the hour are used • When Demand Reduction MWh are calculated for the Energy Settlement all intervals in the hour are used

  28. Demand Response Performance in FCM Events • Performance for FCM Settlement • 10 MW • Performance for Energy Settlement • 2.5 MWh

  29. Asset Energy Payments or Charges - FCM Event No Cap: 15 x (1 + 0.065) (15.975 – 5.325) x 500

  30. Asset Energy Payments or Charges - FCM Event -0.5325 x 500

  31. Asset Energy Payments or Charges - FCM Event

  32. TRANSITIONAL DEMAND RESPONSE Cost Allocation

  33. Cost Allocation • Payments and charges will be allocated proportionally on an hourly basis to system-wide Real-Time Load Obligation (RTLO), excluding RTLO at external nodes and RTLO incurred by Dispatchable Asset Related Demand Postured by the ISO. Monthly Demand Reduction Cost Allocation SUM [ Hourly Pool Payment ( Customer Real-Time Load Obligation / Pool Real-Time Load Obligation ) ] X

  34. TRANSITIONAL DEMAND RESPONSE Reports and Billing

  35. New Reports • Demand Response Settlement Detail Report • SD_DRSTLDETAIL • Hourly values for Real-Time Demand Response Assets and Real-Time Emergency Generation Assets for the specified month. • RTDR Asset Tab:

  36. New Reports • Demand Response Settlement Detail Report • SD_DRSTLDETAIL • Hourly values for Real-Time Demand Response Assets and Real-Time Emergency Generation Assets for the specified month. • RTEG Asset Tab:

  37. New Reports • Demand Response Settlement Charges Report • SD_DRCHGDETAIL • Hourly cost allocation of the Demand Response settlement for the specified month. • Hourly Tab:

  38. New Reports • Demand Response Settlement Summary Report • SR_DRSTLSUM • Hourly summary of Pool and Customer payments of the Demand Response settlement for the specified month. • Monthly summary of Pool payments and Customer payments and charges of the Demand Response settlement for the specified month. • Hourly Tab:

  39. New Reports • Demand Response Settlement Summary Report • SR_DRSTLSUM • Hourly summary of Pool and Customer payments of the Demand Response settlement for the specified month. • Monthly summary of Pool payments and Customer payments and charges of the Demand Response settlement for the specified month. • Monthly Tab:

  40. Updated Reports • Daily Financial Position Report • BL_DAILYPOSITION • Transitional Demand Response line item added. • FERC Electric Quarterly Reporting • Transitional Demand Response line item added. • Load Cost Report • Transitional Demand Response column added

  41. Billing • New Line Item • Transitional Demand Response • Two Line Items on July 16, 2012 Bill • Current Demand Response Programs are allocated to Regional Network Load which causes a month lag (May 2012) • Transitional Demand Response Cost allocated to Real-Time Load Obligation (June 2012) • Data Reconciliation Process (DRP) resettlement billing will not have the same overlap as the July 2012 bill • May 2012 DRP will be included in bill issued on October 15, 2012 • June 2012 DRP will be included in bill issued on November 13, 2012

  42. TRANSITIONAL DEMAND RESPONSE Appendix

  43. Possible Clearing Scenarios *Capped = 200% Enforced

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