Contingency Processing in CRR, DAM and SCED

1. Contingency Processing in CRR, DAM and SCED Shams Siddiqi, Ph.D. Crescent Power, Inc. (512) 619-3532 shams@crescentpower.net QMWG Meeting June 5, 2017

2. Decision Points • G-1 not modeling in CRR and DAM but is modeled in SCED • Optimization Shift Factor (SF) for G in G-1 different from Settlement SF • May lead to oversold CRRs, uplift and discrepancy between EOC and Base Point • However, modeling G-1 in CRR/DAM raises many issues – so this approach better • Unclear if T-1 with islanding of G or L is intentional or unintended • T-1 with islanding may be unintended result of transmission outages • Need to find out about logic/software design used to develop contingencies • If T-1 with islanding is unintended, then change contingency screen • Only change to contingency processing tool required to eliminate such contingencies • No change to CRR and DAM engine required – PTP issue is automatically resolved • If T-1 with islanding is intended, then we must decide between • (A) Modified ERCOT proposal of modeling such contingencies in CRR/DAM with Generation Distribution Factors (GDF) based on AGC resource headroom – requires ERCOT to post GDFs and market to model these contingencies • (B) Treat similar to G-1; i.e. do not model in CRR/DAM but model in SCED – no change to CRR/DAM engines required but change contingency processing tool

3. If Islanding Intended: Pros & Cons • Modified ERCOT approach: Pros: • Contingency modeled similarly in CRR, DAM and SCED Cons: • Differences in GDFs in CRR/DAM/SCED will result in some uplift • Electrically similar nodes may have significantly different prices – restrictions on activities in electrically similar nodes may mitigate some manipulation potential • Extensive changes in CRR and DAM engines required • GDFs need to be posted and these new type of contingencies need to be modeled by stakeholders to forecast congestion • May need to modify how L-1 is modeled in CRR/DAM/SCED with negative GDFs • Treat Similar to G-1 approach: Pros: • Consistent treatment for exactly same outcomes when topology not changed • Expensive change to CRR/DAM engine not required – only contingency screen • No need for GDF posting and modeling by market for forecasting congestion • No need for L-1 modeling Cons: • Similar to G-1 – likely to result in some uplift

4. Ex. Similar Nodes – Different Prices • The pricing and dispatch outcome from T-1 with islanding is quite unpredictable, depends on QSE behavior and can be manipulated: • If there were another unit G1' similarly connected in a separate node (even the same node for G-1 contingencies) owned by the same QSE as G1, then if the QSE commits both G1 and G1' with exactly the same total generation, there is no congestion and prices are $10/MWh everywhere. By committing only one of those units or keeping G1' at LSL of say 10MW, the QSE gets paid $50/MWh for the 10MW at G1' and $40/MW for each CRR from Node 1-3. This is much more profitable than getting $10/MWh for all its generation and $0 for its CRRs. Thus prices throughout the market are impacted by how this QSE decides to commit and dispatch its units and it's perfectly reasonable for the QSE to commit only G1 since Load is low.

5. Next Steps • Investigate logic/approach behind contingency selection • If T-1 with islanding is unintended, eliminate such contingencies • If T-1 with islanding is intentional, decided between modified ERCOT proposal and treating such contingencies same as G-1