1 TAC Report to the ERCOT Board October 18, 2005.

11

TAC Report to the ERCOT TAC Report to the ERCOT BoardBoard

October 18, 2005October 18, 2005

22

TAC SummaryTAC Summary

• 4 Unanimous PRRS 4 Unanimous PRRS • 1 System Change Request1 System Change Request• Designation of Closely Related Elements & Designation of Closely Related Elements &

Boundary GeneratorsBoundary Generators• 2005 Prioritization Review2005 Prioritization Review• Improvements to Cost Benefit AnalysisImprovements to Cost Benefit Analysis• Outstanding PRR System Change ReviewOutstanding PRR System Change Review• Update Regarding Nodal Transition PlanUpdate Regarding Nodal Transition Plan

33

PRR 593 – Behind the “Fence” Reporting PRR 593 – Behind the “Fence” Reporting of Loadof Load

• PRR submitted by CenterPoint (IOU) on behalf PRR submitted by CenterPoint (IOU) on behalf of GATF addressing generation adequacyof GATF addressing generation adequacy

• This PRR provides information that is This PRR provides information that is necessary for ERCOT and TDSPs to determine necessary for ERCOT and TDSPs to determine generation adequacygeneration adequacy

• PRS reviewed TIEC’s proposed language PRS reviewed TIEC’s proposed language requiring reporting of net generationrequiring reporting of net generation

• TAC unanimously recommends approvalTAC unanimously recommends approval• All market segments were presentAll market segments were present• Effective November 1, 2005Effective November 1, 2005

44

PRR 593 – Behind the “Fence” Reporting PRR 593 – Behind the “Fence” Reporting of Loadof Load

Impact AnalysisImpact Analysis

Item ReviewedItem Reviewed DescriptionDescriptionNoNoImpactImpact

Credit Monitoring/LiabilityCredit Monitoring/Liability

BudgetBudget

StaffingStaffing

Computer SystemsComputer Systems

Business FunctionsBusiness Functions

Grid OperationsGrid Operations

ImpactImpact

55

PRR 599 – Notification of Mismatched PRR 599 – Notification of Mismatched Inter-QSE Energy ScheduleInter-QSE Energy Schedule

• PRR submitted by TXU (IOU)PRR submitted by TXU (IOU)• PRR requires mismatch communication be given to PRR requires mismatch communication be given to

both QSEs if ERCOT remedies the mismatch according both QSEs if ERCOT remedies the mismatch according to PRR 548, Settlement for Mismatched Inter-QSE to PRR 548, Settlement for Mismatched Inter-QSE Energy Schedules Energy Schedules

• Benefit: Provides shadow settlement information to Benefit: Provides shadow settlement information to QSEsQSEs

• BOD remanded to TAC for development of Cost Benefit BOD remanded to TAC for development of Cost Benefit Analysis (CBA)Analysis (CBA)

• Commercial Operations Subcommittee developed CBACommercial Operations Subcommittee developed CBA• PRS incorporated the benefits of PRR 613, PRS incorporated the benefits of PRR 613,

Replacement Reserve Under Scheduled Capacity Replacement Reserve Under Scheduled Capacity Delineation into CBA because extracts are linkedDelineation into CBA because extracts are linked

66

PRR 599 – Notification of Mismatched Inter-PRR 599 – Notification of Mismatched Inter-QSE Energy Schedule (cont.)QSE Energy Schedule (cont.)

• In October, TAC reviewed combined CBA for In October, TAC reviewed combined CBA for PRR 599 and PRR 613PRR 599 and PRR 613

• TAC unanimously recommends approvalTAC unanimously recommends approval• All market segments were presentAll market segments were present• Effective upon implementation of PRR 548Effective upon implementation of PRR 548

77

PRR 599 – Notification of Mismatched PRR 599 – Notification of Mismatched Inter-QSE Energy ScheduleInter-QSE Energy Schedule




BudgetBudget

StaffingStaffing




ImpactImpact

Change settlement process

< $100K

Minor Lodestar coding

88

PRR 613 – Replacement Reserve Under PRR 613 – Replacement Reserve Under Scheduled Capacity DelineationScheduled Capacity Delineation

• Submitted by ERCOTSubmitted by ERCOT• PRS approved “URGENT” statusPRS approved “URGENT” status• Updates calculation of RPRS obligation for under-Updates calculation of RPRS obligation for under-

scheduled capacity, including mismatched schedulesscheduled capacity, including mismatched schedules• Benefit: Accuracy of Protocols and clarify RPRS cost Benefit: Accuracy of Protocols and clarify RPRS cost

assignmentassignment• TAC reviewed combined CBA for 599 and 613TAC reviewed combined CBA for 599 and 613• TAC unanimously recommends approvalTAC unanimously recommends approval• All market segments were presentAll market segments were present• Effective upon Board approvalEffective upon Board approval• Priority 1.0; Rank 0.87 (Same as PRR 599 – PRR 613 & Priority 1.0; Rank 0.87 (Same as PRR 599 – PRR 613 &

599 are linked to PRR548)599 are linked to PRR548)

99

PRR 613 – Replacement Reserve Under PRR 613 – Replacement Reserve Under Scheduled Capacity DelineationScheduled Capacity Delineation




BudgetBudget

StaffingStaffing




ImpactImpact

Less than 100K

Additional workload for settlement

Minor impact to EMMS & Lodestar

Identify appropriate mismatch

1010

Cost Benefit Analysis for PRR 599 and 613Cost Benefit Analysis for PRR 599 and 613

• Cost Benefit Analysis (PRRs 599/613)Cost Benefit Analysis (PRRs 599/613)• Benefits -- $540KBenefits -- $540K• Implementation Cost -- $140KImplementation Cost -- $140K• CB Ratio – 3.79 CB Ratio – 3.79 • Benefits include reduced overall market credit Benefits include reduced overall market credit

exposure by reducing settlement amounts and exposure by reducing settlement amounts and potential to reduce number of settlement disputespotential to reduce number of settlement disputes

1111

PRR 612 – Replacement Reserve PRR 612 – Replacement Reserve Service Bid CapService Bid Cap

• PRR submitted by Tenaska (IPM) on behalf of PRR submitted by Tenaska (IPM) on behalf of the QSEMWGthe QSEMWG

• Allows for the update of AS bids after notice Allows for the update of AS bids after notice of ERCOT’s intent to procure AS in the of ERCOT’s intent to procure AS in the adjustment periodadjustment period

• Benefit: AS stack likely to be more sufficientBenefit: AS stack likely to be more sufficient• Amended by ERCOTAmended by ERCOT• TAC unanimously recommends approvalTAC unanimously recommends approval• All market segments were presentAll market segments were present• Effective November 1, 2005Effective November 1, 2005

1212

PRR 612 – Replacement Reserve PRR 612 – Replacement Reserve Service Bid CapService Bid Cap




BudgetBudget

StaffingStaffing




ImpactImpact

Revises procedures/training

1313

Recommended Board ActionsRecommended Board Actions

• ApprovalApproval• PRR 593 – Reporting of Net Generation & Load PRR 593 – Reporting of Net Generation & Load

(unanimous)(unanimous)• PRR 599 – Notification for Mismatched Inter-QSE PRR 599 – Notification for Mismatched Inter-QSE

Energy Schedules (unanimous)Energy Schedules (unanimous)• PRR 612 – AS Procurement During the PRR 612 – AS Procurement During the

Adjustment Period (unanimous)Adjustment Period (unanimous)• Urgent PRR 613 – Replacement Reserve Under Urgent PRR 613 – Replacement Reserve Under

Scheduled Capacity Delineation (unanimous)Scheduled Capacity Delineation (unanimous)

1414

SCR 745SCR 745Recommended Solutions for ERCOT Unplanned System Outages Recommended Solutions for ERCOT Unplanned System Outages

and Failures to the Retail Market Systemand Failures to the Retail Market System

• SCR 745 will allow ERCOT to implement a high-availability solution to retail market outages that provides active system fail-over and redundancy. In the event of system outages, retail systems would continue to operate and data integrity would be maintained.

• ERCOT IT performed a full system evaluation to determine the root causes for unplanned retail system outages.

• Based on this evaluation, ERCOT IT recommended solution options to address single points of failure within the ERCOT Retail Market infrastructure.

• TAC recommends approval with one opposing vote from IOU segment and 8 abstentions from the Municipal (2), Consumer (4) and Independent Power Products (2)

• All market segments were present

• Effective upon system implementation

• Priority 1.1/Rank 30

1515

PROXIES

OUTBOUND

Solaris

SCR 745SCR 745

Paperfree Process Servers

Key:

INTERNET NAESB

TCH

EAI

TCH Database

Single Retail Database Server(Multiple Oracle Databases )

PAPERFREE

SIEBEL

Bi-Directional Data Flow

Siebel DatabaseNAESB Database Paperfree DatabaseOutbound Data Flow

Inbound Data Flow

INBOUND

Paperfree File Server

FIREWALL

W2K

W2K

HP

W2K

W2K

HP

IN/OUT

DMZ

SWITCH

Single Point of Failure

ERCOT Retail System ArchitectureSingle Points of Failure

1616

Cost Benefit Analysis for SCR 745Cost Benefit Analysis for SCR 745• Cost Benefit Analysis Cost Benefit Analysis

• Benefits -- $28,649,493Benefits -- $28,649,493• Implementation Cost -- $3,479,489Implementation Cost -- $3,479,489• CB Ratio – 8.23CB Ratio – 8.23

Benefit – Improve market performance and reliability

1717

Recommended Board ActionsRecommended Board Actions

• ApprovalApproval• SCR 745 – Retail Market Outage Evaluation SCR 745 – Retail Market Outage Evaluation

and Resolutionand Resolution

1818

Designation of Closely Related Elements (CRE) Designation of Closely Related Elements (CRE) & Boundary Generators& Boundary Generators

• Protocol Section 7.2.3, requires that, for each year, ERCOT Staff Protocol Section 7.2.3, requires that, for each year, ERCOT Staff identify potential CREsidentify potential CREs

• CREs are defined as “ those transmission facilities that have shift CREs are defined as “ those transmission facilities that have shift factor impacts similar to those associated with a particular factor impacts similar to those associated with a particular Commercially Significant Constraint, and for which there exists a Commercially Significant Constraint, and for which there exists a limited amount of Boundary Generation Resources between it and limited amount of Boundary Generation Resources between it and the particular CSC, so that the zonal deployment of Balancing the particular CSC, so that the zonal deployment of Balancing Energy Service is effective in mitigating Zonal Congestion.”Energy Service is effective in mitigating Zonal Congestion.”

• When facility outages prevent the normal method for monitoring When facility outages prevent the normal method for monitoring CSCs for Zonal Congestion, CREs are used as the reference CSCs for Zonal Congestion, CREs are used as the reference transmission facilitiestransmission facilities

• The WMS and TAC support the CREs identified by ERCOT Staff The WMS and TAC support the CREs identified by ERCOT Staff • Most of the 2005 CREs are recommended as 2006 CREs, with Most of the 2005 CREs are recommended as 2006 CREs, with

several transmission elements added to the 2006 recommendationseveral transmission elements added to the 2006 recommendation

1919

2005 Prioritization Process Review2005 Prioritization Process Review• Reviewed 2005 project prioritization process and Reviewed 2005 project prioritization process and

reached the following conclusions/action items:reached the following conclusions/action items:• Need to initiate process earlier to ensure adequate time to review Need to initiate process earlier to ensure adequate time to review

ERCOT projects, including background project explanationsERCOT projects, including background project explanations• Need to revisit/revise priority definitions (e.g., 1.1, 1.2, etc.)Need to revisit/revise priority definitions (e.g., 1.1, 1.2, etc.)• Unclear how PUCT projects are incorporated onto the project list Unclear how PUCT projects are incorporated onto the project list

(i.e., who approves putting projects on list and who reviews (i.e., who approves putting projects on list and who reviews priority)priority)

• Need to work on process to ensure necessary commercial projects Need to work on process to ensure necessary commercial projects (e.g., extracts) are done when compared to reliability-related (e.g., extracts) are done when compared to reliability-related projectsprojects

• Need posting of CBAs showing primary benefit driver assumptionsNeed posting of CBAs showing primary benefit driver assumptions• Need to incorporate CBAs into protocol revision request processNeed to incorporate CBAs into protocol revision request process• Should use significant digits in CBA reportingShould use significant digits in CBA reporting• Acknowledgement that CBA process and overall prioritization Acknowledgement that CBA process and overall prioritization

process is evolutionaryprocess is evolutionary

2020

PRR Submission Requirement PRR Submission Requirement ChangesChanges

• PRR Submission Form is being changed to reflect PRR Submission Form is being changed to reflect existence of nodal protocols and greater emphasis existence of nodal protocols and greater emphasis on CBAon CBA• Does PRR apply to nodal protocols? If so, what sections?Does PRR apply to nodal protocols? If so, what sections?• Provide sponsor’s estimate of market cost and benefitsProvide sponsor’s estimate of market cost and benefits

• ERCOT will begin building CBA based on the submitted dataERCOT will begin building CBA based on the submitted data• Market Participants may comment on CBA estimates from Market Participants may comment on CBA estimates from

sponsorsponsor• PRS will discuss comments to sponsor’s CBA estimate and PRS will discuss comments to sponsor’s CBA estimate and

adjust as neededadjust as needed

• PRR sponsor must fill out all portions of the formPRR sponsor must fill out all portions of the form• ERCOT will reject PRR submission if items left blank are not ERCOT will reject PRR submission if items left blank are not

cured after ERCOT notice to submitter of deficiencycured after ERCOT notice to submitter of deficiency

2121

2005/2006 System Project Status2005/2006 System Project Status

• 2005/2006 Project Priority List now available2005/2006 Project Priority List now available• Priority 1.0aPriority 1.0a

• Projects that had been planned to run past 10/31/05Projects that had been planned to run past 10/31/05

• Priority 1.0bPriority 1.0b• Projects that were not planned to run past 10/31/05Projects that were not planned to run past 10/31/05

• Priority 1.1aPriority 1.1a• Projects ranked above the projected 2006 cut-lineProjects ranked above the projected 2006 cut-line

• Priority 1.1bPriority 1.1b• Projects ranked below the projected 2006 cut-lineProjects ranked below the projected 2006 cut-line

• Project accelerations due to mid-year cash flow Project accelerations due to mid-year cash flow analysis also shown analysis also shown

2222


ERCOTERCOT$12.4 MM$12.4 MM

MarketMarket$5.3 MM$5.3 MM

CarryoversCarryovers$5.3 MM$5.3 MM

PUCTPUCT$2.6 MM$2.6 MM

Projected 2006 Cut-Line -- $25.6 MMProjected 2006 Cut-Line -- $25.6 MM

2323


• Projects immediately above the projected 2006 cut-Projects immediately above the projected 2006 cut-line accomplish the following:line accomplish the following:• Improve State Estimator accuracyImprove State Estimator accuracy• Improve accuracy of congestion management solutions by Improve accuracy of congestion management solutions by

reducing the delay in updating the network topologyreducing the delay in updating the network topology• Upgrade ERCOT Digital Certificate technologyUpgrade ERCOT Digital Certificate technology• Expand Taylor Data Center to maintain necessary Expand Taylor Data Center to maintain necessary

redundancy and increased storage capabilityredundancy and increased storage capability• Automate manual processes for DC-tie schedulingAutomate manual processes for DC-tie scheduling• Continue IT service oriented architecture improvement Continue IT service oriented architecture improvement

using TIBCO using TIBCO

2424

Outstanding PRR System Change Outstanding PRR System Change ReviewReview

• PRS initiating review of outstanding PRRs PRS initiating review of outstanding PRRs awaiting system implementationawaiting system implementation• Special PRS meeting held on October 7, 2005Special PRS meeting held on October 7, 2005

• GoalsGoals• Develop criteria to apply to current market design Develop criteria to apply to current market design

system change proposals for appropriate system change proposals for appropriate prioritizationprioritization

• Apply criteria to existing protocols on the project Apply criteria to existing protocols on the project list and determine if priority is appropriatelist and determine if priority is appropriate

2525

Outstanding PRR System Change Review Outstanding PRR System Change Review (cont.)(cont.)

• Prioritization CriteriaPrioritization Criteria• 1.1. Projects required by Statute, PUCT order, NERC compliance, or Projects required by Statute, PUCT order, NERC compliance, or critical critical

reliability of grid operations, IT infrastructure, or commercial settlementreliability of grid operations, IT infrastructure, or commercial settlement• 2.2. High "value" to all market segmentsHigh "value" to all market segments• 3.3. High "value" to one or two segments, or ERCOTHigh "value" to one or two segments, or ERCOT• 4.4. Medium "value" for all segmentsMedium "value" for all segments• 5.5. Medium "value" for only one segment or ERCOTMedium "value" for only one segment or ERCOT• "value" as determined by CBA, longevity (e.g. modification is long term or short term), "value" as determined by CBA, longevity (e.g. modification is long term or short term),

and qualitative considerations as shown below:and qualitative considerations as shown below: Potential to conflict with ERCOT resources devoted to other projectsPotential to conflict with ERCOT resources devoted to other projects Subcategory (IT infrastructure, grid operations, commercial settlement) and Subcategory (IT infrastructure, grid operations, commercial settlement) and

level of criticality (critical/high/medium/low) for reliability projects level of criticality (critical/high/medium/low) for reliability projects Straw vote information on priorityStraw vote information on priority Direct benefit to CustomersDirect benefit to Customers Impact on existing approved and prioritized projectsImpact on existing approved and prioritized projects Risk exposure as defined by risk management programRisk exposure as defined by risk management program

2626

Nodal Transition PlanNodal Transition Plan

TAC continued discussions regarding Nodal TAC continued discussions regarding Nodal Transition Plan at October TAC MeetingTransition Plan at October TAC Meeting

TAC and ERCOT will continue to discuss Nodal TAC and ERCOT will continue to discuss Nodal Transition PlanTransition Plan

Goal is for TAC to approve Nodal Transition Goal is for TAC to approve Nodal Transition Plan at November TAC Meeting Plan at November TAC Meeting

1 TAC Report to the ERCOT Board October 18, 2005.

Documents

Transcript of 1 TAC Report to the ERCOT Board October 18, 2005.