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Verifiable Cost Working Group (VCWG) Update

Verifiable Cost Working Group (VCWG) Update. Presentation to the ERCOT Wholesale Market Subcommittee January 20, 2010. VCWG – Chair Elections Chair – Heddie Lookadoo Vice Chair – Ian Davis Options for Filing Verifiable Costs File Verifiable Costs .

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Verifiable Cost Working Group (VCWG) Update

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  1. Verifiable Cost Working Group (VCWG) Update Presentation to the ERCOT Wholesale Market Subcommittee January 20, 2010

  2. VCWG – Chair Elections Chair – Heddie Lookadoo Vice Chair – Ian Davis Options for Filing Verifiable Costs File Verifiable Costs . Once VC are accepted they may not elect for Standard O & M Costs with the exception of those entities that have filed VC prior to implementation of this concept. File with election of Standard O & M Costs by Technology. Standard O & M per Startup by Technology - $ per Start Standard O & M for Energy - $/MWH Will have to provide Actual fuel flows, Heat Rate Curves , emissions rates, ect. VCWG is continuing to review data to come up with a standard O & M in $/Start and $/MWH. VCWG Summary

  3. Proxy Heat Rate • VCWG feels that the current use of daily average of pricing to determine heat rate is sufficient till data can be collected on RUC instructions after Nodal Implementation. • Suggest that a review of commitments in DRUC and HRUC after the first 3 months of Nodal to determine if the Proxy heat rate should be changed from daily average. • NPRR Language for allowing disputes for FOP (Vote) • NPRR language allows for recovery between FOP and Actual cost. • Documentation must reflect purchase of replacement fuel oil with in 7 business days of fuel burn. VCWG Summary

  4. Proxy Offer Curve • The proxy Energy Offer Curve used to calculate the RTAIEC (Real Time Average Incremental Energy Cost) will result in a negative average cost for energy. • AIEC in the RUC formula is designed to allow the Resource to retain the cost incurred to generate above LSL. • A negative cost will increase the Revenue deducted from the RUC Guarantee. • Increasing the Revenue would result in lowering the Make Whole payment and possibly subjecting the QSE to a Clawback Charge VCWG Summary

  5. TWOS Proxy Offer Curve Example • For Interval 14 • TWOS=80 MWs • HSL= 160 MW • LSL=15 MW • For that Operation day • SWCAP=2250 • RTMG for that interval • RTMG=24 • RTMG*4=96 • Inputs • Outcome

  6. Results • RTAIEC = -$183 Proxy Offer Curve and Negative AIECAREA - REVISED

  7. RMR – Startup Offers in DAM • Startup offers only have a Fuel Adjustment with no O & M. • Could result in lower costs than similar units. • LMPS would not reflect the true cost of RMR units struck in the DAM. • Contract price not represented in offer. • ERCOT will be taking to NATF. • Next meeting will be Wednesday February 10, 2010. ?’s VCWG Summary

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