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Future Ancillary Services Cost Benefit Analysis - Additional Runs and Analysis

This report presents the findings from additional runs and analysis conducted on the cost-benefit analysis of future ancillary services. It compares the benefits of PFR reduction and real-time opportunity cost savings to the implementation costs. The analysis includes different gas prices and the impact of new IFRO and NSRS requirements.

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Future Ancillary Services Cost Benefit Analysis - Additional Runs and Analysis

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  1. Future Ancillary ServicesCost Benefit Analysis - Additional Runs and Analysis Julie Jin March 10, PRS

  2. Additional Runs and Analysis • 2016 with Gas Price @ $2.36/MMBtu vs. $4.35/MMBtu • 2016 with Gas Price @ $2.36/MMBtu and New IFRO (@1143 MW vs. 1240 MW) • 2016 with Gas Price @ $2.36/MMBtu, IFRO @1143 MW and New NSRS Requirements approved by Board in December 2015.

  3. CBA Findings (Brattle Slide 7)

  4. Additional Runs and Analysis

  5. CBA Findings (Quantified Annual Benefits) (Brattle Slide 10) • In 2016, PFR reduction provides high DA production cost savings (DA PCS) per MWh because it enables greater coal dispatch. 2024 has higher net load, so coal is more fully baseloaded. • Real-time opportunity cost savings (RT OCS) analyzed through historical AS bids. • Compare these annual benefits to ERCOT’s one-time implementation cost of $12-15m.

  6. Additional Runs (Quantified Annual Benefits) • In Case 2016 w/ gas price @ $2.36/MMBtu, the day-ahead production cost saving is M$ 3.33 ($4.88/MWh). • In Case 2016 w/ gas price @ $2.36/MMBtu and new IFRO, the day-ahead production cost saving is M$ 3.31 ($2.22/MWh) • Real-time opportunity cost savings (RT OCS) for both PFR and NS/CR are calculated based on the average RT OC on Brattle Slide 10.

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