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Overview of NPRR131 June 10, 2008 TPTF Meeting

Overview of NPRR131 June 10, 2008 TPTF Meeting. Current Functionality in Zonal. Resource entities are allowed to purchase ancillary services from ERCOT. LSEs point to a resource entity and then Resource Entity can point to ERCOT. Current Nodal Functionality.

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Overview of NPRR131 June 10, 2008 TPTF Meeting

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  1. Overview of NPRR131June 10, 2008 TPTF Meeting

  2. Current Functionality in Zonal • Resource entities are allowed to purchase ancillary services from ERCOT. LSEs point to a resource entity and then Resource Entity can point to ERCOT.

  3. Current Nodal Functionality • As currently written, the Nodal Protocols preclude Resource Entities from purchasing Ancillary Services (AS) in the Day-Ahead Market (DAM). • Only QSEs representing Loads have the option of either: 1) self-arranging their AS obligations, or 2) purchasing them through the DAM. • Section 2: Self-Arranged Ancillary Service Quantity: “The portion of its Ancillary Service Obligation that a QSE secures for itself using Resources represented by that QSE and Ancillary Service Trades.” • Section 4.2.1.2 of the nodal protocols. • “ERCOT shall assign part of the A/S Plan quantity, by service, by hour, to each LSE based on Load Ratio Share and shall then aggregate those quantities, by service, by hour to the QSE level. The resulting Ancillary Service quantity for each QSE, by service, by hour, is called its Ancillary Service Obligation….”, and: • “By 0600 of the Day-Ahead, ERCOT shall notify each QSE of its Ancillary Service Obligation for each service and for each hour of the Operating Day.”

  4. Current Nodal Functionality Day Ahead Operations QSE Activity: QSE Activity: Submit DAM Update COP, QSE Activity: Offers & Bids, Submit Capacity Update COP to DRUC Offers Trades & Reflect Awards COP, Self - Arranged Energy Trades AS Quantities Execute Execute DAM DRUC 1430 0600 1000 ERCOT Activity: ERCOT Activity: ERCOT Activity: ERCOT Activity: Publish system Communicate DAM Begin Execution of Begin Execution of conditions, forecasts, Awards, AS Capacity DRUC at 1430 DAM at 1000 AS Obligations, Awards losses & other items

  5. Day Ahead Operations QSE Activity: QSE Activity: Submit DAM Offers and Bids, DRUC Offers, COP, Self-Arranged AS Quantities, A/S Trades with ERCOT Offers & Bids, Update COP, QSE Activity: DRUC Offers Submit Capacity Update COP to COP, Self Arranged Trades & Reflect Awards - AS Quantities, AS Trades With ERCOT Energy Trades Execute Execute DAM DRUC 1430 0600 1000 ERCOT Activity: ERCOT Activity: ERCOT Activity: ERCOT Activity: Publish system Communicate DAM Begin Execution of Begin Execution of conditions, forecasts, Awards, AS Capacity DRUC at 1430 DAM at 1000 AS Obligations, Awards losses & other items Proposed Nodal Functionality

  6. Example: Current Timeline and Flow of DAM Total ERCOT Procures = 500 MW Total AS Trades = 800 MW Total LSE Obligation of RRS at 0600 = 2300 MW Total LSE AS Self Provided by QSE’s Resources = 1000 MW 0600 1000

  7. Example: Proposed Timeline and Flow of DAM ERCOT Procures 500 MW for LSEs Total ERCOT Procures = 900 MW Total AS Trades with ERCOT = 400 MW Total AS Trades = 800 MW Total LSE Obligation of RRS at 0600 = 2300 MW Total LSE AS Self Provided by QSEs = 1000 MW 0600 1000

  8. Example: QSE Level (One hour) QSE1 Needs 25 MW from ERCOT Total ERCOT Procures for QSE 1 and QSE 2 = 25 MW each QSE2 Trade w/ ERCOT = 25 MW Total ERCOT Obligation of RRS at 0600 = 2300 MW QSE1 Share of Total = 100 MW Total AS Trades with QSE2 = 50 MW QSE2 Self Provides 25 MW Total AS Self Provided from QSE1 Units = 25 MW 0600 1000

  9. Options Considered for NPRR131 • Option 1 – Have resource entities capable of entering a “self-imposed A/S obligation” prior to running DAM.  • Could result in procurements above total obligation   • Option 2 – Allow A/S “bids to buy” in DAM (from loads or resources). • Could be a good option, but unsure of software changes. • Option 3 – Allow QSEs to enter a “negative” number for the self-provision of A/S. • Same problem as Option 1. • **Option 4 – Allow A/S trades with ERCOT as the counter-party • Appeared to require the least amount of changes to systems

  10. Conclusions: Benefits • NPRR131 would provide resource entities the same ability as load serving entities to procure A/S in the DAM. • Resource entities can only enter an A/S trade with ERCOT after they have been named in an earlier A/S trade, i.e, after the A/S trade obligation becomes the RE’s responsibility. • This functionality already exists in the zonal market. • Have not at this time included NPRR131 functionality in the SASM - DAM only. • Will improve efficiency in the A/S market • DAM should have more depth than straight bilaterals – provides better shaping of ancillary services for resource providers- optimizing unit commitments

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