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Shadow Price Cap for Non-Competitive Constraints based on PNM

Shadow Price Cap for Non-Competitive Constraints based on PNM. If a Non-Competitive Constraint is at the Shadow Price Caps for more than x (say 5) hours over a rolling 12-month period, then s et the Shadow Price Cap at y% (say 30-40%) of its previous value.

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Shadow Price Cap for Non-Competitive Constraints based on PNM

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  1. Shadow Price Cap for Non-Competitive Constraints based on PNM • If a Non-Competitive Constraint is at the Shadow Price Caps for more than x (say 5) hours over a rolling 12-month period, then set the Shadow Price Cap at y% (say 30-40%) of its previous value. • If the prices at the Resource Node with the greatest impact (i.e. increasing output helps relieve the constraint) on the Non-Competitive Constraint result in Peaker Net Margin calculated for that Resource Node exceeding $175,000/MW in the current calendar year, then set Shadow Price Cap for that constraint at $L/MW/hr (say $500/MW/hr). • At the earlier of the constraint becoming competitive or at the beginning of the next calendar year, reset the Shadow Price Cap at its original value if the constraints becomes competitive or at y% of its original value and repeat 2 and 3.

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