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Texas Nodal Team Kickoff Meeting

Texas Nodal Team Kickoff Meeting. Trip Doggett, Vikki Gates Cuddy, Jim Galvin TNT Meeting August 27, 2003. Agenda. Introduction of Facilitation Team Approach Deliverables Overview of Market Design Rule Discussion of Concept Groups Other Issues/Wrap-up. Facilitation Team.

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Texas Nodal Team Kickoff Meeting

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  1. Texas Nodal Team Kickoff Meeting Trip Doggett, Vikki Gates Cuddy, Jim Galvin TNT Meeting August 27, 2003

  2. Agenda • Introduction of Facilitation Team • Approach • Deliverables • Overview of Market Design Rule • Discussion of Concept Groups • Other Issues/Wrap-up

  3. Facilitation Team Facilitation Team • Trip Doggett Benchmark Power Consulting, Inc. tdoggett@ercot.com (512) 626-0275 • Vikki Gates Cuddy The Structure Group vikki.cuddy@scgo.com (512) 350-4020 • Jim Galvin ERCOT jgalvin@ercot.com (512) 248-3870 • Develop & Maintain Work Plan • Maintain Meeting Schedule • Provide TAC & Board Progress Reports • Respond to stakeholder and PUCT information requests • Record votes and attendance • Post agendas and meeting minutes • Involve Economists, Technical Experts

  4. Team Objectives • Facilitate collaborative and informed decision-making to design a nodal market that adheres to the directives of Order 26376 • Communicate status, issues and upcoming events through • Adequate meeting notice • Thorough issue identification • Reasonable opportunity for comment • Open forums for inclusive and diverse involvement • Representative voting structure • Documentation of majority and minority positions • Standardized presentation format • Meet the timelines for design and protocol development • Escalate issues to the Board for resolution • Engage third party resources as necessary to educate, evaluate, or administrate

  5. Approach -Process Overview MOD Advice / Updates PUCT Oversight, Direction & Protocol Approval Request Approval Remand Board of Directors Timely Compliance with PUCT Order Unresolved Positions Request Approval Remand MOD Guidance TAC Independent Facilitator (Trip) Independent Coordinator (Vikki) ERCOT Coordinator (Jim) Economic Experts Unresolved Positions • Implement Board Directives • Stakeholder vetting • Member voting CBA Consultants ERCOT Staff Support Stakeholders

  6. Approach -Communication

  7. Approach -Communication

  8. Approach –Communication Status: Email

  9. Approach –Communication Status: Website

  10. Approach –Communication Status: In-person meetings

  11. Approach –Communication Status: Web-based meetings

  12. Future Meeting Proposal • TNT Meetings • Every other Wednesday • Rulemaking Workshops • CRR & Day-Ahead • PUCT Open Meetings • TAC • First Thursday every month • ERCOT Board • Third Wednesday every month 5 4 10 18 16 24 9 8 23 22 21 29 No TNT meetings (subgroup or otherwise) during week of November 24 – 28 or December 22 - 26

  13. Approach – Meeting Setup Proposal Screen Screen • “Classroom” Style Setup • Grouped by Segments • Rotating Segment Locations • Microphones available • Voting occurs at the primary TNT meetings • Setup allows opportunity to caucus among Segment • Expedites documentation of proxy and fractional voting Facilitation Team Municipals Independent Generators Electric Cooperatives IOUs Consumers Independent Marketers Independent REPs PUCT/ ERCOT Staff Overflow & Non-Members

  14. Approach –Informed Decision Making • Education – Key to Success • Solicit feedback on educational needs • Nodal Pricing • Congestion Hedging • Options and Obligations • Comparative Market Analysis

  15. Approach -Timeline P-28226: Congestion Rights under a Nodal Market (anticipated Q4 ’03) P-24255: Planning Reserve Margin Requirements (anticipated Q4 ’04) P-26376: Wholesale Market Redesign (adopted 8/21/03) Protocol Filed (Nov 04) Cost-Benefit Analysis Conceptual and Detailed Design Process Develop Protocols 2003 2004 DA-CRR Strawman (Oct 1 ‘03) P-27678: Forward Market Structure (Day Ahead) (anticipated Q4 ’03) Load Zones and Aggregation Methods defined (Nov 04) P-27917: Pricing Safeguards (Market Mitigation) (anticipated Q2 ’04) PUCT TNT Deadlines Third Party

  16. Deliverables • Day-Ahead and CRR Strawman • Should ERCOT run a day-ahead energy market with security-constrained, economic dispatch (i.e., that reflects congestion)? • Types of CRRs, Distribution of CRRs, CRR Deratability • Target date: October 1, 2003 • Design Document • Conceptual market attributes, description of timing of implementation, and comparison to current state. • Summary of white paper concepts, relationship modeling • Detailed specificity to adequately describe design elements • Example: number of set points, terminology –inc/dec vs. bid/offer) • Target date: April 2004 • Draft Protocols • End to end rules for Texas Nodal market operations • Firm date: October 31, 2004

  17. Overview of Wholesale Market Design Rule Eric S. Schubert, Ph.D. Senior Market Economist Market Oversight Division Public Utility Commission of Texas (512) 936-7398

  18. Key Elements of Rule • Direct Assignment of Congestion Rents • Resource-Specific Bid Curves • Day-Ahead Energy Market • Stable Load Zone Boundaries • Proper Pricing for ERCOT Auctions • Cost-Benefit Analysis on Texas Nodal

  19. Components of 26376 Order • Principles • Bilateral ENE and AS Schedules • Day Ahead ENE Market • Resource Specific ENE & AS Bid Curves • Directly Assign all congestion rents • Nodal ENE Prices for Resources • Information for ENE Trading Hubs • Aggregation of Nodal to Zonal ENE Prices for Loads

  20. Components of 26376 Order (cont.) • Congestion Revenue Rights (CRRs) • Pricing Safeguards • Simultaneous Optimization of AS • Multi-Settlement System for Procuring ENE and AS • Stakeholder Process to Implement with Independent Cost/Benefit Analysis

  21. Cost-Benefit Analysis • Filed with Protocols in Nov. 2004 • Elements • Independent third-party analysis • All options evaluated comply with rule • Market design must have net benefit • Enough detail to modify or delete items • Cost Impact Study • By region • By market segment

  22. PUCT RulemakingsIssues • Day-Ahead Energy Market • Congestion Revenue Rights (CRRs) • Flowgates, point-to-point rights • Pre-assigned CRRs • Deratable CRRs • Pricing Safeguards • Planning Reserve Margin

  23. PUCT RulemakingsTimelines and Tradeoff • Timeline • DA Market and CRRs: 2004 Q1 (?) • September 5th workshop • October 1st filing of strawman • Pricing Safeguards: 2004 Q2 • Planning Reserve: 2004 Q4 • Rule Language vs. Protocols Language

  24. Hopes for Stakeholder Process • Creativity and Evolution for ERCOT • LMP is not PJM • Start with current bilateral market • Awareness of What Has Gone Before • SB7: Reviewed other markets first • Other ISOs have debated issues • Selection of individual elements or bundles from other markets

  25. Questions?

  26. Concept Groups- Today’s Goals • Identify the necessary Concept Groups for development and implementation issues • Establish a comprehensive, yet manageable process and schedule

  27. Relationship of Concept Group to Facilitation Team • A Concept Group will • Champion education, resolution and definition of its respective issue, action or strawman • Accept assignments to draft whitepapers, conceptual diagrams or other materials as requested by the Facilitation Team • Will report developments in each TNT Facilitation meeting • Facilitation Team will rotate attendance within Concept Group meetings

  28. Concept Groups: Proposal for Discussion • Propose to address various nodal configurations in “Concept Groups” • Provide an open forum for participation of all stakeholders in Concept Groups • Support collaborative development between stakeholders and ERCOT staff

  29. Concept Group – Congestion: Management and Rights Scope For Discussion Purposes

  30. Concept Group- Congestion: Management and Rights Timing Leadership Candidates Education Needs Deliverables For Discussion Purposes

  31. Concept Group: Market Implementation • Energy scheduling, bidding and deployment • Nodal Pricing concepts and pricing for Load Nodes • AS Markets, schedules and dispatch (simultaneous optimization of AS services) • Other operational issues including but not limited to SCE issues, RMR, Capacity Auction, Combined Cycle resources and site aggregation. • Market roll-out including market test plan, communication protocols and systems integration Scope For Discussion Purposes

  32. Concept Group: Market Implementation Timing Leadership Candidates Education Needs Deliverables For Discussion Purposes

  33. Concept Group: Commercial Model Scope For Discussion Purposes

  34. Concept Group - Commercial Model Timing Leadership Candidates Education Needs Deliverables For Discussion Purposes

  35. Concept Group: Day Ahead and Forward Market Scope For Discussion Purposes

  36. Concept Group: Day Ahead and Forward Market Timing Leadership Candidates Education Needs Deliverables For Discussion Purposes

  37. Concept Group: Market Mitigation Scope For Discussion Purposes

  38. Concept Group: Market Mitigation Timing Leadership Candidates Training Needs Deliverables For Discussion Purposes

  39. SWAT Team • Concept Team will be assigned to specific topics that may not be included in other Concept Groups • Issues may include Losses, Demand side participation, RMR, Voltage Support For Discussion Purposes

  40. Open Items • Concept Group meeting schedule • Concept Group Leadership

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