May 20, 20031 TAC Report to the ERCOT Board May 20, 2003.

May 20, 2003 1

TAC Report to the TAC Report to the ERCOT BoardERCOT Board

May 20, 2003May 20, 2003

May 20, 2003 2

SummarySummary• PRRs 362, PRRs 362, 371, 381371, 381, 385, 386, 392, , 385, 386, 392,

393, 394, 393, 394, 396396, 398, 400, , 398, 400, 401401, 403, , 403, 407407– 381381: Update QSE Designation : Update QSE Designation – 396396: RMR: RMR– 371371: Payment for Min Energy with OOMC: Payment for Min Energy with OOMC– 401401: Partial Payments and Credit: Partial Payments and Credit– 407407: Remove RBS Sunset: Remove RBS Sunset

• 2004 CSCs and zones2004 CSCs and zones• Load Profiling Guides RevisionLoad Profiling Guides Revision

May 20, 2003 3

PRR 362 – Load PRR 362 – Load Profiling ID Type Profiling ID Type

CorrectionCorrection• Allows the load profiling ID type to Allows the load profiling ID type to

be corrected in the billing system, be corrected in the billing system, not the registration systemnot the registration system

• No computer system impactNo computer system impact• Effective June 1, 2003Effective June 1, 2003• Related revisions to the Load Related revisions to the Load

Profiling Guides approved by TAC Profiling Guides approved by TAC

(LPGRR2003-002)(LPGRR2003-002)

May 20, 2003 4

PRR 385 – DLC PRR 385 – DLC ImplementationImplementation

• Provides clarification to an Provides clarification to an existing Direct Load Control existing Direct Load Control projectproject

• Impacts ERCOT computer systemImpacts ERCOT computer system• Effective upon system Effective upon system

implementationimplementation

May 20, 2003 5

PRR 386 – Scheduling PRR 386 – Scheduling InformationInformation

• Clarifies Protocol by indicating Clarifies Protocol by indicating that not all services are deployed that not all services are deployed zonally and that zonally deployed zonally and that zonally deployed services are reported zonallyservices are reported zonally

• No impact on ERCOT computer No impact on ERCOT computer systemssystems

• Effective June 1, 2003Effective June 1, 2003

May 20, 2003 6

PRR 392 – Posting of PRR 392 – Posting of Balancing Energy Balancing Energy

ForecastForecast• Removes the requirement for Removes the requirement for

ERCOT (PIP 138) to post the ERCOT (PIP 138) to post the balancing energy forecastbalancing energy forecast



May 20, 2003 7

PRR 393 – Balancing PRR 393 – Balancing Energy Bid Expiration Energy Bid Expiration

TimeTime• Eliminates the expiration time for Eliminates the expiration time for

balancing energy bids (PIP 147)balancing energy bids (PIP 147)• No impact on ERCOT computer No impact on ERCOT computer

systemssystems• Effective June 1, 2003Effective June 1, 2003

May 20, 2003 8

PRR 394 – Balancing PRR 394 – Balancing Energy Ramps as Energy Ramps as

Instructed DeviationsInstructed Deviations• Conforms Protocols to ERCOT Conforms Protocols to ERCOT

system treatment of BE ramps system treatment of BE ramps outside of the target intervaloutside of the target interval



May 20, 2003 9

PRR 398 – CCGT PRR 398 – CCGT SettlementSettlement

• Clarifies implementation of previously Clarifies implementation of previously approved PRR 369 (combined cycle unit approved PRR 369 (combined cycle unit aggregation for settlement), so that aggregation for settlement), so that system development is not delayedsystem development is not delayed

• Impact on ERCOT computer systems Impact on ERCOT computer systems integrated with PRR 369 ongoing workintegrated with PRR 369 ongoing work

• Priority same as PRR 369Priority same as PRR 369• Effective upon system implementationEffective upon system implementation

May 20, 2003 10

PRR 400 – Provisional PRR 400 – Provisional Approval of LaaRsApproval of LaaRs

• Allows LaaRs to obtain provisional Allows LaaRs to obtain provisional approval once telemetry & calibration approval once telemetry & calibration testing are complete – LaaR must still testing are complete – LaaR must still complete actual interruption testcomplete actual interruption test

• Impact on ERCOT computer system Impact on ERCOT computer system integrated with PIP 112integrated with PIP 112

• Priority same as PIP 112Priority same as PIP 112• Effective upon system implementationEffective upon system implementation

May 20, 2003 11

PRR 403 – URC Update PRR 403 – URC Update for New Smoothing for New Smoothing

AlgorithmAlgorithm• Clarifies changes to URC Clarifies changes to URC

calculation related to HVDC tie calculation related to HVDC tie schedules due to PRR 350.schedules due to PRR 350.

• Impacts ERCOT computer systemsImpacts ERCOT computer systems• Effective upon system Effective upon system

implementationimplementation

May 20, 2003 12

Now it gets Now it gets interesting…..interesting…..

May 20, 2003 13

PRR 381 – Update QSE PRR 381 – Update QSE Designation (The Designation (The

Sequel)Sequel)• Board remanded to TAC to Board remanded to TAC to

reconsider initially approved 30-reconsider initially approved 30-day period from QSE notice to day period from QSE notice to time when scheduling for the time when scheduling for the Resource or LSE endsResource or LSE ends

• TAC recommendation: shorten TAC recommendation: shorten timeframe to 7 days from 30 daystimeframe to 7 days from 30 days

May 20, 2003 14

PRR 381 – Update QSE PRR 381 – Update QSE Designation (The Designation (The

Sequel)Sequel)• Current Default QSE contract does not Current Default QSE contract does not

recognize a transfer of a resource or recognize a transfer of a resource or an LSE without the QSE being in an LSE without the QSE being in default; also does not address the default; also does not address the situation where an LSE fails to choose situation where an LSE fails to choose a new QSEa new QSE

• Effective June 1, 2003Effective June 1, 2003• TAC approved PRS recommendation TAC approved PRS recommendation

by a vote of 23-6by a vote of 23-6

May 20, 2003 15

PRR 396 – Reliability PRR 396 – Reliability Must-Run UnitsMust-Run Units

Incorporates the TAC-approved decision points Incorporates the TAC-approved decision points from Aprilfrom April

• Applicants must attest the unit is Applicants must attest the unit is uneconomic to remain in service uneconomic to remain in service

• Allow rejected applicants to continue Allow rejected applicants to continue market operations; market operations;

• ERCOT staff to develop options for RMR ERCOT staff to develop options for RMR ‘exit strategy’ within 90 days of contract ‘exit strategy’ within 90 days of contract execution; and execution; and

• Provide for multi-year contractsProvide for multi-year contracts

May 20, 2003 16


• Accept both seasonal and annual Accept both seasonal and annual RMR concepts and reflect in RMR concepts and reflect in pricingpricing

• Adopt “cost plus” methodology for Adopt “cost plus” methodology for both and reflect differences in risk both and reflect differences in risk (8%/2% of (8%/2% of eligibleeligible costs) costs)

• Proposed effective date June 1, Proposed effective date June 1, 20032003

May 20, 2003 17


Section 6.8.3 (4)

Eligible costs ... are defined to be costs that would be incurred by the RMR Unit owner to provide the RMR Service, excluding fuel costs, above the costs the RMR Unit would have incurred anyway had it been mothballed or shutdown.

Examples of eligible costs include: labor, materials, supplies and services necessary to operate the RMR Unit.

May 20, 2003 18


Eligible costs: Section 6.8.3 (4) continued

Examples of costs not included as eligible costs are: depreciation expense, return on equity, debt and interest costs, administrative and general expenses, allocated general plant, property taxes and other taxes not attributable to operating the RMR Unit, security costs for the facility, and labor costs associated with other, non-RMR Generation Resources at the same facility and any other costs the Generation Entity would have incurred even if the RMR Unit had been mothballed or shutdown.

May 20, 2003 19


• TAC approved PRS recommendation TAC approved PRS recommendation by a vote of 20-8-1by a vote of 20-8-1

• Outstanding Issues:Outstanding Issues:– How RMRs are selected-- by the How RMRs are selected-- by the

Resource or by ERCOT upon notice of Resource or by ERCOT upon notice of retirement / mothballingretirement / mothballing

– The event where a resource owner The event where a resource owner retires the unit when ERCOT needs the retires the unit when ERCOT needs the unitunit

May 20, 2003 20

PRR 371 – OOMC PRR 371 – OOMC UpdateUpdate

• Review of OOMC completed in order Review of OOMC completed in order to ensure proper economic tradeoff to ensure proper economic tradeoff between RMR and OOM and to between RMR and OOM and to integrate PRR 371’s recognition of integrate PRR 371’s recognition of minimum energyminimum energy

• Likely to impact ERCOT computer Likely to impact ERCOT computer systemssystems

• Effective with system implementationEffective with system implementation

May 20, 2003 21

PRR 371 – OOMC: PRR 371 – OOMC: Addition of Resource Addition of Resource

CategoriesCategories• Combined Cycle, the largest CT in the Combined Cycle, the largest CT in the

train is:train is:– Less than 90 MWLess than 90 MW– Greater than or equal to 90 MWGreater than or equal to 90 MW

• Gas SteamGas Steam– Supercritical boilerSupercritical boiler– Reheat boilerReheat boiler– Non-reheat or boiler without air pre-heaterNon-reheat or boiler without air pre-heater

• Simple CycleSimple Cycle– Less than 90 MWLess than 90 MW– Greater than or equal to 90 MWGreater than or equal to 90 MW

May 20, 2003 22

PRR 371 – OOMC:PRR 371 – OOMC:Modified/Added/Deleted Modified/Added/Deleted Costs for Some Resource Costs for Some Resource

CategoriesCategories• Resource Category Generic Fuel CostsResource Category Generic Fuel Costs

– Upward instructionsUpward instructions– Downward instructionsDownward instructions

• Resource Category Generic Startup Resource Category Generic Startup CostsCosts

• Resource Category Generic Minimum Resource Category Generic Minimum Energy Costs – Added Energy Costs – Added

• Resource Category Generic Operational Resource Category Generic Operational Costs – DeletedCosts – Deleted

May 20, 2003 23

PRR 371 – OOMC:PRR 371 – OOMC:Generic OOMC PaymentGeneric OOMC Payment

OOMC Payment = OOMC Payment = • Price for unit start, provided the Price for unit start, provided the

unit is not connected to the gridunit is not connected to the gridPLUSPLUS

• Price for operating a unit to Price for operating a unit to provide “minimum” energy at its provide “minimum” energy at its Low Sustainable LimitLow Sustainable Limit

May 20, 2003 24

PRR 371 – OOMC:PRR 371 – OOMC:Generic OOMC Startup CostGeneric OOMC Startup Cost

• Each Resource Category has an Each Resource Category has an associated startup cost which includes:associated startup cost which includes:– Startup fuel costStartup fuel cost– Ramp fuel cost (for Combined Cycle only)Ramp fuel cost (for Combined Cycle only)– These fuel costs are based on the These fuel costs are based on the

Resource’s capacityResource’s capacity

• MPCE paid/charged for ramp energy is MPCE paid/charged for ramp energy is credited back to ERCOT via the formula credited back to ERCOT via the formula for startup costfor startup cost

May 20, 2003 25

PRR 371 – OOMC:PRR 371 – OOMC:Generic OOMC Min Energy Generic OOMC Min Energy

CostCost• Each Resource Category has an Each Resource Category has an

associated minimum energy cost per associated minimum energy cost per MWMW

• During the instruction interval:During the instruction interval:– The cost per MW is multiplied by the lesser The cost per MW is multiplied by the lesser

of the Low Sustainable Limit or the of the Low Sustainable Limit or the metered output of the Resourcemetered output of the Resource

– MPCE paid/charged for the minimum MPCE paid/charged for the minimum energy is credited back to ERCOT via the energy is credited back to ERCOT via the formula for minimum energy costformula for minimum energy cost

May 20, 2003 26

PRR 371 – OOMC:PRR 371 – OOMC:OOMC Instruction –OOMC Instruction –

ClarificationClarification• ERCOT will not issue an OOME Up ERCOT will not issue an OOME Up

instruction for energy associated with instruction for energy associated with the Low Sustainable Limitthe Low Sustainable Limit

• The QSE may maintain a Balanced The QSE may maintain a Balanced Schedule during instruction interval Schedule during instruction interval by:by:– Scheduling energyScheduling energy– Being selected to provide Balancing Being selected to provide Balancing

Energy ServiceEnergy Service

May 20, 2003 27

PRR 371 – OOMC:PRR 371 – OOMC:OOMC Instruction –OOMC Instruction –

ClarificationClarification• Issue: How to treat the energy provided Issue: How to treat the energy provided

when complying with an OOMC instruction.when complying with an OOMC instruction.– QSE cannot maintain a Balanced Schedule if QSE cannot maintain a Balanced Schedule if

OOMC instruction received less than 1.5 to 2 OOMC instruction received less than 1.5 to 2 hours in advance of instruction intervalhours in advance of instruction interval

• TAC revision: Actions to comply with OOMC TAC revision: Actions to comply with OOMC instruction won’t result in URC.instruction won’t result in URC.

• ERCOT staff proposal: Actions to comply with ERCOT staff proposal: Actions to comply with OOMC instruction given within 30 minutes of OOMC instruction given within 30 minutes of operating period won’t result in URC.operating period won’t result in URC.

May 20, 2003 28

PRR 371 – OOMC:PRR 371 – OOMC:DisclosureDisclosure

• TAC recommendation to postTAC recommendation to post– Units receiving an OOMC instructionUnits receiving an OOMC instruction– Intervals for which a unit received an Intervals for which a unit received an

OOMC instructionOOMC instruction– Intervals and energy requested from Intervals and energy requested from

each unit receiving an OOMC each unit receiving an OOMC instructioninstruction

May 20, 2003 29

PRR 371 – OOMC:PRR 371 – OOMC:Verifiable Incremental Verifiable Incremental

CostsCosts• Deleted requirement that ERCOT Deleted requirement that ERCOT

BOD review and approve BOD review and approve compensation for cost types compensation for cost types except for fuelexcept for fuel

• Future Action Item: Describe Future Action Item: Describe other verifiable cost types and other verifiable cost types and documentation required documentation required

May 20, 2003 30

PRR 371 – OOMC:PRR 371 – OOMC:Fallout for RMR Task ForceFallout for RMR Task Force

• Verifiable incremental costs – Section Verifiable incremental costs – Section 6.8.2.2(5)(b)6.8.2.2(5)(b)

• Optimization of OOMC instructionsOptimization of OOMC instructions– Economic optimizationEconomic optimization– Honor physical characteristics of OOM Honor physical characteristics of OOM

ResourceResource

• QSE Resource Plan – Section 4.4.15QSE Resource Plan – Section 4.4.15– Need to require additional data in planNeed to require additional data in plan

• Review definition of Low Sustainable LimitReview definition of Low Sustainable Limit• Determine other verifiable Determine other verifiable

costs/documentationcosts/documentation

May 20, 2003 31

PRR 401 – Partial PRR 401 – Partial Payments & QSE Credit Payments & QSE Credit

RequirementsRequirements• Partial payments (short pays) uplifted Partial payments (short pays) uplifted

to loads on LRS basis if not collected to loads on LRS basis if not collected within 120 days and the QSE is not in within 120 days and the QSE is not in compliance with payment plancompliance with payment plan

• Modifies Estimated Aggregate Modifies Estimated Aggregate Liability (EAL) calculationLiability (EAL) calculation

• Allows ERCOT to offset against Allows ERCOT to offset against amounts owed by short-pay QSEamounts owed by short-pay QSE

May 20, 2003 32


RequirementsRequirements• Proposed EAL CalculationProposed EAL Calculation

– Reduces EAL ratchet from 90 days to Reduces EAL ratchet from 90 days to 60 days60 days

– Uses average of 2 initial invoices to Uses average of 2 initial invoices to calculate ADT – smooths collateral calculate ADT – smooths collateral spikesspikes

– Includes TCR credits for ownership Includes TCR credits for ownership and auction revenuesand auction revenues

– Formalizes terms of “early pay”Formalizes terms of “early pay”

May 20, 2003 33



– Changes calculation to include OUTChanges calculation to include OUT• Outstanding invoices plus estimated unbilled Outstanding invoices plus estimated unbilled

itemsitems

– Allows ERCOT to make downward Allows ERCOT to make downward adjustments in EAL outside ratchet adjustments in EAL outside ratchet periodperiod

– Fixes SAF at factor of 1 until ERCOT Fixes SAF at factor of 1 until ERCOT gains more history on seasonal credit gains more history on seasonal credit requirementsrequirements

May 20, 2003 34



– Allows estimation of balancing Allows estimation of balancing energy and ancillary service usageenergy and ancillary service usage

– Estimation of finals and true-ups Estimation of finals and true-ups based on three week averagebased on three week average• Mulitply final average by 9 weeksMulitply final average by 9 weeks• Multiply true-up average by 48 weeksMultiply true-up average by 48 weeks

May 20, 2003 35


RequirementsRequirements• No impact on ERCOT computer No impact on ERCOT computer

systems; manual processessystems; manual processes• Effective June 1, 2003Effective June 1, 2003• TAC approved PRS TAC approved PRS

recommendation by a vote of 25-1-recommendation by a vote of 25-1-44

May 20, 2003 36

PRR 407 – Removal of PRR 407 – Removal of RBS Sunset DateRBS Sunset Date

• PRR submitted to delete sentence:PRR submitted to delete sentence:– ERCOT will not initiate limitation or ERCOT will not initiate limitation or

suspension of relaxed Balanced suspension of relaxed Balanced Schedules after May 1, 2003.Schedules after May 1, 2003.

• PRS recommended rejectionPRS recommended rejection• TAC recommends deleting entire TAC recommends deleting entire

paragraph by a vote of 27-1-1.paragraph by a vote of 27-1-1.

May 20, 2003 37

PRR 407 – Removal of PRR 407 – Removal of RBS Sunset DateRBS Sunset Date

Section 4.3.5Section 4.3.5With 24-hour notice before opening the next Day Aheadmarket, ERCOT may direct all QSEs to limit or suspendthe use of relaxed Balanced Schedules for that andsubsequent markets if reliability is adversely affected bythe implementation of relaxed Balanced Schedules. If amarket suspension has occurred, ERCOT will work withMarket Participants to develop the necessary changesto the Protocols to be able to re-open the market usingRelaxed Balanced Schedules. ERCOT must provide andpost written justification within twenty-four (24) hours ofMarket notification, in the event it takes that action andsuch action is subject to review and reversal by theERCOT Board of Directors. ERCOT will not initiatelimitation or suspension of relaxed Balanced Schedulesafter May 1, 2003.

May 20, 2003 38

2004 CSCs and zones2004 CSCs and zones• Same CSCs as 2003Same CSCs as 2003

– STP - Dow (Velasco)STP - Dow (Velasco)– Sandow - TempleSandow - Temple– Graham - Parker /Graham - BenbrookGraham - Parker /Graham - Benbrook

• Resulting 4 zonesResulting 4 zones– North2004North2004– South2004South2004– West2004West2004– Houston2004Houston2004

May 20, 2003 39

PARI S SSVALLEY

AN N A SS

MO SES

MO SES-T

SULSP SS

SH AMBRGR

VEN US NJ O H N SS

GRAH AM

W.D EN T B

MARTI N LK

STRYKER

BI GBRN

TRI N D AD 2

T H O USE

FO R GRO V

LAKE CRK

J EWETT S

J EWETT N

GI BCRK B

TWI N O AK

LUFKN SS

N ACO G SE

ALLI AN CE

CMCH E SS

TEMP SS

TEMPSSLT

KI LL SS

SAN D O W

AUSTRO 34

GARFI E34

LYTTO N

MARI O N 34

FPPYD 134

H O LMAN

KEN D AL34

H I LL CTY

CAGN O N

SAN MI GEL

CO LETO 6MI GUEL 5

SO TEX 5

RI O H N D 6

ED N BRG 6

LAPALM 6

FI SH RD SS

O KLAEH V7

N O RTH D C7

SWEETWTR

MRGN CRK

FS CO GEN

MI D L E T

MI D LN D E

MO SS

SARED CK7

ZO RN 34

MT EN TRP

LI MEST 5

TO MBAL 5

KUYD AL 5

TN P O N E

CED ARP 5

RO AN S PR

D O W345 5

O BRI EN 5

AD I CKS 5

W_A_P_ 5

AUSTRO P

LO STPN 34

D EC T

FPPYD 234

CO N CO RD

H AYSN 34

WH I TEPT

D CEAST

LAMARPWR

MELP N

MELP56N O

MELP S

BO SQ UESW

46 MW

0 MVR

N U C O R

B O W M A N

C O M P E A K

L H E D M

L H E D L

L H R H M

L H R H L

F A R M S W

R I C H L N D 1

R I C H L N D 2

W L F H O L

K U Y D A L 5

E N R O N I P P

P A W N E S W 6

S O U T H

CRLSPG34RI O N O 34

M A H A 3 4

C O L L I N S S

K I O W A

K P P

Final Recommended ERCOT 2004 Final Recommended ERCOT 2004 Congestion Management ZonesCongestion Management Zones

WEST

HOUSTON

SOUTH

NORTH

May 20, 2003 40

Recommended Recommended ExceptionsExceptions

• STEC requested 3 busses (2 with STEC requested 3 busses (2 with total load ~11 MW) be designated in total load ~11 MW) be designated in the South zone, rather than the the South zone, rather than the clustering resulted Houston zone.clustering resulted Houston zone.

• Bryan Texas Utilities requested the Bryan Texas Utilities requested the Dansby generator (110MW) be Dansby generator (110MW) be designated in the North zone, rather designated in the North zone, rather that the clustering resulted Houston that the clustering resulted Houston zone.zone.

May 20, 2003 41

May 20, 20031 TAC Report to the ERCOT Board May 20, 2003.

Documents

Transcript of May 20, 20031 TAC Report to the ERCOT Board May 20, 2003.