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Cold Snap Task Force Working Groups

Cold Snap Task Force Working Groups. Update on Straw Proposals NEPOOL Reliability Committee May 4, 2004. Straw Proposal #1 Adjust Market Timelines. Current electric market timeline results in generator schedules published at 1600 for the DA Market and 2200 for the RT Market

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Cold Snap Task Force Working Groups

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  1. Cold Snap Task Force Working Groups Update on Straw Proposals NEPOOL Reliability Committee May 4, 2004

  2. Straw Proposal #1Adjust Market Timelines • Current electric market timeline results in generator schedules published at 1600 for the DA Market and 2200 for the RT Market • Natural gas scheduling process requires day ahead (timely) nominations to be finalized by 1230 • Advantages: Gas price known when generator offers are submitted to the market • Disadvantages: On days with tight natural gas supplies, generator schedules are issued too late for natural gas scheduling effectiveness.

  3. Straw Proposal #1Adjust Market Timelines Possible Alternatives • Move up the “Market Process” by 12 hours • Event Driven (parameters to be determined) • DAM Offers in by midnight vs. noon • DAM clears 0400 • Re-offer window 0400-0600 • RAA completed by 1000

  4. Straw Proposal #1Adjust Market Timelines • Advantages: • Generator schedules known in advance of timely natural gas nomination requirements • Stakeholders are fully informed of forecast “abnormal” system conditions • Makes use of existing Market Rules and structure • Minimal disruption to current business practices (ISO and Market Participants)

  5. Straw Proposal #1Adjust Market Timelines • Disadvantages: • Natural gas prices are less evident at the time electric market offers are submitted • Current Market Rules do not result in “financially firm” schedules for RT market commitments, leaving certain market risks with gas-fired generators in a constrained natural gas market • No guarantees that generators will operate as scheduled

  6. Straw Proposal #1Adjust Market Timelines Possible Alternatives • Merge DA market and RT market commitment for a single, financially binding solution, completed by 1000 (event driven) • DA solution would become a physical vs. financial commitment • ISO load forecast replaces Participant load bids • Eliminate virtual transactions

  7. Straw Proposal #1Adjust Market Timelines • Advantages: • Generator schedules known in advance of timely natural gas scheduling requirements • Stakeholders are fully informed of forecast “abnormal” system conditions • Using the DA market platform will yield financially firm commitments for all resources, including natural gas units

  8. Straw Proposal #1Adjust Market Timelines • Disadvantages: • Natural gas prices are less evident at the time electric market offers are submitted • Potential exists for significant market rule changes prior to implementation, including possible cost allocation issues • De-listed units not obligated to offer into DA market • Moves away from multi-settlement design

  9. Straw Proposal #2Generator Availability Assumptions Possible Alternatives • Daily MWH above schedules provided in advance of natural gas scheduling deadlines assumed to be not available (ISO prefers generator to report any restrictions via a timely re-declaration) • Use Limited Energy Generator (LEG) functionality to manage operation above generator schedules provided by the natural gas scheduling deadline

  10. Straw Proposal #2AGenerator Availability Assumptions Possible Alternatives • Should we consider a new reliability service not currently provided in the electric market?

  11. Open Issues • Do we have the proper incentives for: • Load to support reliability requirements during “abnormal” situation on the power grid • Generators satisfying market schedules • Generator platform to arbitrage fuel still exists • Scheduling replacement capacity as real-time approaches still problematic for gas-units • Increasing real-time gas-fired generation for post-contingency recovery still questionable

  12. Upcoming Working Group Activities • Continue to develop details on the market timeline straw proposal • Define how to trigger an abnormal natural gas event • Parameters for defining an event • Process to initiate the event – communication plan • Process to exit back to normal conditions

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