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Protocol Revision Subcommittee Report to ERCOT Technical Advisory Committee May 8-9, 2003

Protocol Revision Subcommittee Report to ERCOT Technical Advisory Committee May 8-9, 2003. Urgent Timelines. PRR 400 Provisional LaaR Approval PRR 401 QSE Credit Requirements/Short-Pay PRR 403 URC Update for New Smoothing Algorithm PRR 406 Two-Year CSC & Zone Selection.

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Protocol Revision Subcommittee Report to ERCOT Technical Advisory Committee May 8-9, 2003

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  1. Protocol Revision Subcommittee Report to ERCOT Technical Advisory Committee May 8-9, 2003

  2. Urgent Timelines • PRR 400 • Provisional LaaR Approval • PRR 401 • QSE Credit Requirements/Short-Pay • PRR 403 • URC Update for New Smoothing Algorithm • PRR 406 • Two-Year CSC & Zone Selection

  3. PRR 362 – Load Profiling ID Type Correction • Allows the load profiling ID type to be corrected in the billing system, not the registration system • No computer system impact • Effective June 1, 2003

  4. PRR 385 – DLC Implementation • Provides clarification to an existing Direct Load Control project • Impacts ERCOT computer system • Effective upon system implementation

  5. PRR 386 – Scheduling Information • Clarifies Protocol by indicating that not all services are deployed zonally and that zonally deployed services are reported zonally • No impact on ERCOT computer systems • Effective June 1, 2003

  6. PRR 392 – Posting of Balancing Energy Forecast • Removes the requirement for ERCOT (PIP 138) to post the balancing energy forecast • No impact on ERCOT computer systems • Effective June 1, 2003

  7. PRR 393 – Balancing Energy Bid Expiration Time • Eliminates the expiration time for balancing energy bids (PIP 147) • No impact on ERCOT computer systems • Effective June 1, 2003

  8. PRR 394 – Balancing Energy Ramps as Instructed Deviations • Conforms Protocols to ERCOT system treatment of BE ramps outside of the target interval • No impact on ERCOT computer systems • Effective June 1, 2003

  9. PRR 398 – CCGT Settlement • Clarifies implementation of PRR 398, previously approved as PRR 369, so that system development is not delayed • Impact on ERCOT computer systems integrated with PRR 369 ongoing work • Priority same as PRR 369 • Effective upon system implementation

  10. PRR 400 – Provisional Approval of LaaRs • Allows LaaRs to obtain provisional approval once telemetry & calibration testing are complete – LaaR must still complete actual interruption test • Impact on ERCOT computer system integrated with PIP 112 • Priority same as PIP 112 • Effective upon system implementation

  11. PRR 403 – URC Update for New Smoothing Algorithm • Clarifies changes to URC calculation related to HVDC tie schedules due to PRR 350. • Impacts ERCOT computer systems • Effective upon system implementation

  12. PRR 384 – Code of Conduct • PROVIDED FOR INFORMATION ONLY • Provides a Preamble for Wholesale Code of Conduct in Protocols • Describes expected and prohibited behaviors • Developed by WMS Subcommittee & PRS review

  13. PRR 384 – Code of Conduct • Market Participants to conduct business with integrity, accurately disclose information and provide documentation, have management systems in place to ensure meeting Preamble objectives • Describes intent of Protocols and market participant responsibilities

  14. PRR 384 – Code of Conduct • Prohibited behaviors include no creation of artificial congestion, no unlawful withholding, no “wash” trades, no non-performance reliability transactions and no misrepresentative trading • Comments due prior to May 22 PRS meeting – see website for deadlines

  15. PRR 382 – Settlement Statement Suspension • Originally rejected by PRS but appealed by ERCOT with remand to PRS to reconsider. • PRS recommends approval of the modified language • No impact on ERCOT computer systems • Effective June 1, 2003

  16. PRR 381 – Update QSE Designation (The Sequel) • TAC approved process for QSE notice to ERCOT that it will no longer schedule for a Resource or LSE • Board remanded to TAC to reconsider initially approved 30-day period from QSE notice to time when scheduling for the resource or LSE ends

  17. PRR 381 – Update QSE Designation (The Sequel) • PRS recommends shortened timeframe to 7 days from 30 days • PRS notes that the current Default QSE contract does not recognize a transfer of a resource or an LSE without the QSE being in default; also does not address the situation where an LSE fails to choose a new LSE • Effective June 1, 2003

  18. PRR 396 – Reliability Must-Run Units • PRS incorporated the TAC-approved decision points from April into the RMR text • PRS requests RMR TF to examine the issue of how RMRs are selected-by the resource or by ERCOT upon notice of retirement/mothballing

  19. PRR 396 – Reliability Must-Run Units • RMR TF should also consider the event where a resource owner retires the unit when ERCOT needs the unit • RMR TF will meet on these and other issues raised related to OOMC

  20. PRR 396 – Reliability Must-Run Units • Allow rejected applicants to continue market operations; applicants must still attest; exit strategy development and provide for multi-year contracts • Accept both seasonal and annual RMR concepts and reflect in pricing • Adopt “cost plus” methodology for both and reflect differences in risk (8%/2%)

  21. PRR 396 – Reliability Must-Run Units • AEP Comments • Change annual incentive factor to 10% from 8% • Modify eligible costs to specifically include labor associated expense and maintenance expense • Include specific criteria describing budgeting categories: Base Cost, Outage Maintenance, Non-Outage Maintenance, and Other. Concept is to give ERCOT options that determine RMR availability • Documentation criteria • RMR Units paid second to ERCOT in partial payment situations

  22. PRR 396 – Reliability Must-Run Units • RMR TF Comments • Section 6.8.3.1(7) & (8) should include the following sentence: “Incentive Factor payments shall be prorated over the Agreement term based on the expected ERCOT RMR usage pattern for each month.”

  23. PRR 371 – OOMC Update • Review of OOMC completed in order to ensure proper economic tradeoff between RMR and OOM and to integrate PRR 371’s recognition of minimum energy • Likely to impact ERCOT computer systems • Effective with system implementation

  24. PRR 371 – OOMC: Addition of Resource Categories • Combined Cycle, the largest CT in the train is: • Less than 90 MW • Greater than or equal to 90 MW • Gas Steam • Supercritical boiler • Reheat boiler • Non-reheat or boiler without air pre-heater • Simple Cycle • Less than 90 MW • Greater than or equal to 90 MW

  25. PRR 371 – OOMC:Modified/Added/Deleted Costs for Some Resource Categories • Resource Category Generic Fuel Costs • Upward instructions • Downward instructions • Resource Category Generic Startup Costs • Resource Category Generic Minimum Energy Costs – Added • Resource Category Generic Operational Costs – Deleted

  26. PRR 371 – OOMC:Generic OOMC Payment • OOMC Payment = • Price for unit start, provided the unit is not connected to the grid PLUS • Price for operating a unit to provide “minimum” energy at its Low Sustainable Limit

  27. PRR 371 – OOMC:Generic OOMC Startup Cost • Each Resource Category has an associated startup cost which includes: • Startup fuel cost • Ramp fuel cost (for Combined Cycle only) • These fuel costs are based on the Resource’s capacity • MPCE paid/charged for ramp energy is credited back to ERCOT via the formula for startup cost

  28. PRR 371 – OOMC:Generic OOMC Min Energy Cost • Each Resource Category has an associated minimum energy cost per MW • During the instruction interval: • The cost per MW is multiplied by the lesser of the Low Sustainable Limit or the metered output of the Resource • MPCE paid/charged for the minimum energy is credited back to ERCOT via the formula for minimum energy cost

  29. PRR 371 – OOMC:OOMC Instruction –Clarification • ERCOT will not issue an OOME Up instruction for energy associated with the Low Sustainable Limit • The QSE may maintain a Balanced Schedule during instruction interval by: • Scheduling energy • Being selected to provide Balancing Energy Service • Issue: QSE cannot maintain a Balanced Schedule if OOMC instruction received less than 1.5 to 2 hours in advance of instruction interval

  30. PRR 371 – OOMC:Verifiable Incremental Costs • Deleted requirement that ERCOT BOD review and approve compensation for cost types except for fuel • Future Action Item: Describe other verifiable cost types and documentation required

  31. PRR 371 – OOMC:Fallout for RMR Task Force • Disclosure of unit specific OOMC data • Verifiable incremental costs – Section 6.8.2.2(5)(b) • Optimization of OOMC instructions • Economic optimization • Honor physical characteristics of OOM Resource • QSE Resource Plan – Section 4.4.15 • Need to require additional data in plan • Review definition of Low Sustainable Limit • Determine other verifiable costs/documentation

  32. PRR 401 – Partial Payments & QSE Credit Requirements • Addresses timing of the uplift to loads where there is a partial payment (short-pay) that is not collected • Uplifted to loads on LRS basis if not collected within 120 days and the QSE is not in compliance with payment plan • Modifies Estimated Aggregate Liability (EAL) calculation • Allows ERCOT to offset against amounts owed by short-pay QSE

  33. PRR 401 – Partial Payments & QSE Credit Requirements • Proposed EAL Calculation • Reduces EAL ratchet from 90 days to 60 days • Uses average of 2 initial invoices to calculate ADT – smooths collateral spikes • Includes TCR credits for ownership and auction revenues • Formalizes terms of “early pay”

  34. PRR 401 – Partial Payments & QSE Credit Requirements • Proposed EAL Calculation • Changes calculation to include OUT • Outstanding invoices plus estimated unbilled items • Allows ERCOT to make downward adjustments in EAL outside ratchet period • Fixes SAF at factor of 1 until ERCOT gains more history on seasonal credit requirements

  35. PRR 401 – Partial Payments & QSE Credit Requirements • Proposed EAL Calculation • Allows estimation of balancing energy and ancillary service usage • Estimation of finals and true-ups based on three week average • Mulitply final average by 9 weeks • Multiply true-up average by 48 weeks

  36. PRR 401 – Partial Payments & QSE Credit Requirements • No impact on ERCOT computer systems; manual processes • Effective June 1, 2003

  37. Rejected PRRs • PRR 390 – Transmission Interconnection Requirement • PRR 407 – Removal of RBS Sunset Date

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