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Enhancing Ancillary Service Payments: A Solution for Unmet Demand Scenarios in ERCOT Watch Situations

This NPRR aims to address scenarios where ERCOT fails to clear necessary ancillary services, leading to potential risks for market participants. It proposes adjustments to compensation mechanisms and operational procedures to mitigate volatility and ensure grid reliability.

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Enhancing Ancillary Service Payments: A Solution for Unmet Demand Scenarios in ERCOT Watch Situations

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  1. NPRR605 Ancillary Service Make-Whole Payments Under a Watch

  2. Scenario • DA market fails to clear needed AS • ERCOT announces a Watch • SASM is announced • SASM fails to clear needed AS • ERCOT would need to RUC units for AS • This process is not new • Operational procedure indicates that uncommitted units would be dispatched first • If there are no uncommitted units, ERCOT will need to assign AS to self-committed units

  3. QSE Expectation Self-commit Resource to provide energy 100MW Load 100MW QSE expectation is that there is no exposure to significant volatility

  4. Why NPRR is needed • Under ORDC: • Ancillary service assignment to an on-line resource would replace energy output with AS output • Compensation for energy is LMP plus adder • Compensation for AS is only the adder

  5. 2014 Summer Self-commit Resource to provide energy 100MW LMP 90MW $9000 Ancillary Service assignment Ps 10MW $2000 (When LMP reaches the SWOC of $7000, the adder should be $2000) Load LMP 100MW $9000

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