Base Point Deviation – Overview of Issue

QSE Managers Working GroupOctober 12, 2010Base Point Deviation Issues – Short Term and Long Term SolutionsNodal Settlement & Billing Group

Overview • Proposal for Interim Solution • Proposed options for Post Go-Live Base Point Deviation – Overview of Issue

During the Market Trials phase of the ERCOT Nodal Market, Market Participants and ERCOT personnel became aware that when SCED runs at shorter intervals than every five (5) minutes, it is possible for Resources to receive Base Point Deviation charges, although the Resource may have followed their instructed Base Points based on the Normal Ramp Rate. • Settlement issue only (not an operational issue / no change required to operations) • Within settlements, the protocol-defined AABP calculation assumes that every SCED Base Point is achievable and makes no accommodations for a shortened SCED interval. • The result is an AABP value that is skewed high, which can result in Base Pont Deviation penalties for under-generation. Base Point Deviation – Overview of Issue

Base Point Deviation – Example of Short SCED intervals

Interim solution for Base Point Deviation (non IRR) – include an exemption for shortened SCED intervals. Settlements would implement by setting the FQDEVFLAG to 3 in intervals with shortened SCED intervals which would exempt all resources. The question becomes: How short is too short? Two options: A defined percentage – if we find a SCED interval that has a duration of less than x% of 5 minutes in the 15-minute settlement interval, then the exemption would apply. A defined number – if the 15-minute settlement interval contains greater than x number of complete SCED intervals, then the exemption would apply. (Not including partial SCED intervals) Base Point Deviation –Proposed Interim Solution

Proposal A: The first alternative modifies the AABP calculation by incorporating a methodology to derive what the Base Point should have been for a shortened SCED interval. The derived Base Point is utilized in the AABP calculation rather than the 5-minute based SCED Base Point. Proposal B: The second alternative modifies the AABP calculation by using the data inputs calculated for the GREDP calculations. The GREDP data inputs are on a 5-minute clock basis and would not require the time-weighting and averaging that is currently part of the AABP calculation. Therefore, use of the GREDP data avoids the issue of shortened SCED intervals. Both options require system change for settlements. Base Point Deviation – Long Term Solutions

AABP = [(BPSETy- TELGEN (y-1)) / 300* TLMPy] + TWAR BPSETy= TELGENy-1 + ((BPy - TELGENy-1)/300 * TLMPy) Where: TWAR = ((ARI y * TLMP y) / (TLMP y) {no proposedchange} TELGENy-1 = Telemetered Generation during the prior SCED interval TELGENy= Telemetered Generation during the current SCED interval TLMP= Duration of SCED interval in seconds (BPy - TELGENy-1) / 300 = Using SCED data (which is based on the Normal Ramp Rate for the Resource) this derives a MW/second ramp rate. This value is applied against the number of seconds in the shortened SCED interval to determine the “achievable” change in generation for that shortened SCED interval. Base Point Deviation – Proposal A: Derived Base Point Inputs

Once you alter the input AABP, the remainder of the formula is the same. TWTG becomes the incremental difference between the starting and ending Generation in the settlement interval. Over Generation: BPDAMT q, r, p= Max (0, RTSPP p) * Max [0, (TWTG q, r, p – ¼ * Max (((1 + K1) * AABP q, r, p), (AABP q, r, p + Q1)))] Where: TWTG = ( (TELGENy- TELGEN(y-1) )) / 4 K1 = 5 % Q1 = 5 MW Under Generation: BPDAMT q, r, p= Max (0, RTSPP p) * Min (1, KP) * Max {0, {Min [((1 – K2) * ¼( AABP q, r, p)) , ¼( AABP q, r, p – Q2 )] – TWTG q, r, p}} Where: TWTG q, r, p = ( (TELGENy, q, r, p - TELGEN(y-1) q, r, p)) /4 K2 = 5 % Q2 = 5 MW Base Point Deviation – Proposal A: Derived Base Point

Base Point Deviation – Proposal A: Derived Base Point

This option utilizes the following data which are inputs into GREDP : • AVGBP_5M • AVG_REG_INST_5M • AVG_REGUP_5M • AVG_REGDN_5M • AVGMW_5M Base Point Deviation – Proposal B: GREDP Inputs

AABP q, r, p, i = AVGBP q, r, p, i + TWAR q, r, p, i • Where: • AVGBP q, r, p, i = (AVGBP y + AVGBP y-1 + AVGBP y-2)/3 • TWAR q, r, p, i = (AVGREG y + AVGREG y-1 + AVGREG y-2)/3 • y = 5-minute clock interval • i = 15-minute settlement interval • Formula Variables to GREDP translation: • AVGBP = AVGBP_5M • AVGREG = AVG_REG_INST_5M = AVG_REGUP_5M - AVG_REGDN_5M Base Point Deviation – Proposal B: GREDP Inputs

Once you alter the input AABP, the remainder of the formula is the same. TWTG becomes the average telemetered generation for each 5-minute clock interval in the settlement interval. • Over Generation: • BPDAMT q, r, p= Max (0, RTSPP p) * Max [0, (TWTG q, r, p – ¼ * Max (((1 + K1) * AABP q, r, p), (AABP q, r, p + Q1)))] • Where: • TWTG = ( ( AVGTG q, r, p, i)/3)) * ¼ • K1 = 5 % • Q1 = 5 MW • Under Generation: • BPDAMT q, r, p= Max (0, RTSPP p) * Min (1, KP) * Max {0, {Min [((1 – K2) * ¼( AABP q, r, p)) , ¼( AABP q, r, p – Q2 )] – TWTG q, r, p}} • Where: • TWTG q, r, p = (( AVGTG q, r, p, i)/3)) * ¼ • K2 = 5 % • Q2 = 5 MW • Formula Variables to GREDP translation: • AVGTG = AVGMW_5M Base Point Deviation – Proposal B: GREDP Inputs

Base Point Deviation – Proposal B: GREDP Inputs 364.67 = Average BP + Average Regulation Instruction / 3 335.97 = Average MW output / 3

Base Point Deviation – Overview of Issue