Tie-Breaker SCED Logic & QSGRs

1. Tie-Breaker SCED Logic & QSGRs ERCOT Wholesale Market Committee March 13, 2013

2. Background • SCED “tie-breaker” logic occasionally adds a small amount of MW to the basepoints of MANY on-line units • This effect is transient – it typically adds MWs only very infrequently, and then typically for a short period of time • Normally, quick-start generation resources (QSGRs) are physically off-line, but they are logically on-line since they are available for immediate dispatch by SCED • A QSGR is obligated to follow all basepoints and is required to physically start when it receives a basepoint above zero. • This tie-breaker logic causes unintentional QSGR starts

3. Problem • The existing tie-breaker logic can start QSGRs and place hundreds of megawatts on-line unintentionally • Most QSGRs have LSLs much higher than the MW added by the tie-breaker logic • After receiving a non-zero basepoint and starting, a QSGR must at least generate at LSL • The tie-breaker logic on QSGRs can frequently cause the QSGRs to be brought on-line at LSL when SCED may be telling each QSGR to go to a basepoint of 1 MW for a few SCED runs. • The tie-breaker logic impacts all units, but impacts QSGRs the most because of the resulting commitment trigger • These unintentional starts also causes the resource owners to incur startup costs (O&M wear/tear and fuel) unnecessarily

4. SCED Mitigation and Tie Breaker Logic • The tie-breaker logic impacts QSGRs when: • Typically there is at least one active non-competitive constraint • The Step 1 SCED reference price is above a portion of a unit’s mitigated cost curve • SCED sets the all units’ Step 2 mitigated offer curve to not go below the SCED 1 reference price • SCED publishes a basepoint to a each unit that solves the following:

5. Short-term solution • Normally, we show one QSGR at each site (we have 3 sites with multiple units) to be available for SCED dispatch - the resource status code (RST) is ON. We keep the RST for all other QSGRs at the site set to show an OFF status • This step minimizes the impact of tie-breaker logic on unintentional commitment of QSGRs and over-generation at LSL • We switch another QSGR to ON when there is only a small amount of dispatch room left on any physically on-line QSGRs. • This step ensures that SCED has enough generation available to it to manage local congestion • We switch all of the QSGRs at a site to ON when the LMP is close to reaching a QSGR’s EOC or when LMPs go some amount above the NSRS floor, whichever is lower. • This step ensures that SCED will have the QSGR capacity shown in our COP available for dispatch when needed • This step also results in an increase in the Up Capacity Available to SCED because of real-time RST codes changing from OFF/OFFNS to ON

6. Long-term solution • ERCOT proposed NPRR 520 last month “to implement the changes necessary to address SCED over-mitigation issues raised by the IMM” • NPRR 520 addresses the QSGR problem in two ways: • “Only those Resources that have a significant contribution in getting the Entity with decision making authority considered for mitigation for a Non-Competitive Constraint will have mitigation applied in SCED” • The formula for mitigating energy offers in SCED is changed to include a small adder to the reference price from SCED Step 1 in order to minimize issues caused by the tie breaking logic