protocol revision subcommittee report to ercot technical advisory committee may 8-9, 2003

Protocol Revision SubcommitteeProtocol Revision Subcommittee

Report to ERCOT Technical Advisory CommitteeReport to ERCOT Technical Advisory CommitteeMay 8-9, 2003May 8-9, 2003

Urgent TimelinesUrgent Timelines• PRR 400PRR 400

– Provisional LaaR ApprovalProvisional LaaR Approval• PRR 401PRR 401

– QSE Credit Requirements/Short-PayQSE Credit Requirements/Short-Pay• PRR 403PRR 403

– URC Update for New Smoothing URC Update for New Smoothing AlgorithmAlgorithm

• PRR 406PRR 406– Two-Year CSC & Zone SelectionTwo-Year CSC & Zone Selection

PRR 362 – Load PRR 362 – Load Profiling ID Type Profiling ID Type

CorrectionCorrection• Allows the load profiling ID Allows the load profiling ID

type to be corrected in the type to be corrected in the billing system, not the billing system, not the registration systemregistration system

• No computer system impactNo computer system impact• Effective June 1, 2003Effective June 1, 2003

PRR 385 – DLC PRR 385 – DLC ImplementationImplementation

• Provides clarification to an Provides clarification to an existing Direct Load Control existing Direct Load Control projectproject

• Impacts ERCOT computer Impacts ERCOT computer systemsystem

• Effective upon system Effective upon system implementationimplementation

PRR 386 – Scheduling PRR 386 – Scheduling InformationInformation

• Clarifies Protocol by indicating Clarifies Protocol by indicating that not all services are that not all services are deployed zonally and that deployed zonally and that zonally deployed services are zonally deployed services are reported zonallyreported zonally

• No impact on ERCOT computer No impact on ERCOT computer systemssystems

• Effective June 1, 2003Effective June 1, 2003

PRR 392 – Posting of PRR 392 – Posting of Balancing Energy Balancing Energy

ForecastForecast• Removes the requirement for Removes the requirement for

ERCOT (PIP 138) to post the ERCOT (PIP 138) to post the balancing energy forecastbalancing energy forecast



PRR 393 – Balancing PRR 393 – Balancing Energy Bid Expiration Energy Bid Expiration

TimeTime• Eliminates the expiration time Eliminates the expiration time

for balancing energy bids (PIP for balancing energy bids (PIP 147)147)



PRR 394 – Balancing PRR 394 – Balancing Energy Ramps as Energy Ramps as

Instructed DeviationsInstructed Deviations• Conforms Protocols to ERCOT Conforms Protocols to ERCOT

system treatment of BE ramps system treatment of BE ramps outside of the target intervaloutside of the target interval



PRR 398 – CCGT PRR 398 – CCGT SettlementSettlement

• Clarifies implementation of PRR 398, Clarifies implementation of PRR 398, previously approved as PRR 369, so previously approved as PRR 369, so that system development is not that system development is not delayeddelayed

• Impact on ERCOT computer systems Impact on ERCOT computer systems integrated with PRR 369 ongoing integrated with PRR 369 ongoing workwork

• Priority same as PRR 369Priority same as PRR 369• Effective upon system implementationEffective upon system implementation

PRR 400 – Provisional PRR 400 – Provisional Approval of LaaRsApproval of LaaRs

• Allows LaaRs to obtain provisional Allows LaaRs to obtain provisional approval once telemetry & approval once telemetry & calibration testing are complete – calibration testing are complete – LaaR must still complete actual LaaR must still complete actual interruption testinterruption test

• Impact on ERCOT computer system Impact on ERCOT computer system integrated with PIP 112integrated with PIP 112

• Priority same as PIP 112Priority same as PIP 112• Effective upon system Effective upon system

implementationimplementation

PRR 403 – URC Update PRR 403 – URC Update for New Smoothing for New Smoothing

AlgorithmAlgorithm• Clarifies changes to URC Clarifies changes to URC

calculation related to HVDC tie calculation related to HVDC tie schedules due to PRR 350.schedules due to PRR 350.

• Impacts ERCOT computer Impacts ERCOT computer systemssystems

• Effective upon system Effective upon system implementationimplementation

PRR 384 – Code of PRR 384 – Code of ConductConduct

• PROVIDED FOR INFORMATION PROVIDED FOR INFORMATION ONLYONLY

• Provides a Preamble for Provides a Preamble for Wholesale Code of Conduct in Wholesale Code of Conduct in ProtocolsProtocols

• Describes expected and Describes expected and prohibited behaviorsprohibited behaviors

• Developed by WMS Developed by WMS Subcommittee & PRS reviewSubcommittee & PRS review


• Market Participants to conduct Market Participants to conduct business with integrity, accurately business with integrity, accurately disclose information and provide disclose information and provide documentation, have management documentation, have management systems in place to ensure meeting systems in place to ensure meeting Preamble objectivesPreamble objectives

• Describes intent of Protocols and Describes intent of Protocols and market participant responsibilitiesmarket participant responsibilities


• Prohibited behaviors include no Prohibited behaviors include no creation of artificial congestion, no creation of artificial congestion, no unlawful withholding, no “wash” unlawful withholding, no “wash” trades, no non-performance trades, no non-performance reliability transactions and no reliability transactions and no misrepresentative tradingmisrepresentative trading

• Comments due prior to May 22 Comments due prior to May 22 PRS meeting – see website for PRS meeting – see website for deadlinesdeadlines

PRR 382 – Settlement PRR 382 – Settlement Statement SuspensionStatement Suspension

• Originally rejected by PRS but Originally rejected by PRS but appealed by ERCOT with appealed by ERCOT with remand to PRS to reconsider.remand to PRS to reconsider.

• PRS recommends approval of PRS recommends approval of the modified languagethe modified language



PRR 381 – Update QSE PRR 381 – Update QSE Designation (The Designation (The

Sequel)Sequel)• TAC approved process for QSE TAC approved process for QSE

notice to ERCOT that it will no notice to ERCOT that it will no longer schedule for a Resource or longer schedule for a Resource or LSELSE

• Board remanded to TAC to Board remanded to TAC to reconsider initially approved 30-reconsider initially approved 30-day period from QSE notice to day period from QSE notice to time when scheduling for the time when scheduling for the resource or LSE endsresource or LSE ends

PRR 381 – Update QSE PRR 381 – Update QSE Designation (The Designation (The

Sequel)Sequel)• PRS recommends shortened PRS recommends shortened

timeframe to 7 days from 30 daystimeframe to 7 days from 30 days• PRS notes that the current PRS notes that the current

Default QSE contract does not Default QSE contract does not recognize a transfer of a resource recognize a transfer of a resource or an LSE without the QSE being or an LSE without the QSE being in default; also does not address in default; also does not address the situation where an LSE fails the situation where an LSE fails to choose a new LSEto choose a new LSE


PRR 396 – Reliability PRR 396 – Reliability Must-Run UnitsMust-Run Units

• PRS incorporated the TAC-PRS incorporated the TAC-approved decision points from approved decision points from April into the RMR textApril into the RMR text

• PRS requests RMR TF to PRS requests RMR TF to examine the issue of how RMRs examine the issue of how RMRs are selected-by the resource or are selected-by the resource or by ERCOT upon notice of by ERCOT upon notice of retirement/mothballingretirement/mothballing


• RMR TF should also consider RMR TF should also consider the event where a resource the event where a resource owner retires the unit when owner retires the unit when ERCOT needs the unitERCOT needs the unit

• RMR TF will meet on these and RMR TF will meet on these and other issues raised related to other issues raised related to OOMCOOMC


• Allow rejected applicants to Allow rejected applicants to continue market operations; continue market operations; applicants must still attest; exit applicants must still attest; exit strategy development and provide strategy development and provide for multi-year contractsfor multi-year contracts

• Accept both seasonal and annual Accept both seasonal and annual RMR concepts and reflect in RMR concepts and reflect in pricingpricing

• Adopt “cost plus” methodology for Adopt “cost plus” methodology for both and reflect differences in risk both and reflect differences in risk (8%/2%)(8%/2%)


• AEP CommentsAEP Comments– Change annual incentive factor to 10% from 8%Change annual incentive factor to 10% from 8%– Modify eligible costs to specifically include labor Modify eligible costs to specifically include labor

associated expense and maintenance expenseassociated expense and maintenance expense– Include specific criteria describing budgeting Include specific criteria describing budgeting

categories: Base Cost, Outage Maintenance, categories: Base Cost, Outage Maintenance, Non-Outage Maintenance, and Other. Concept Non-Outage Maintenance, and Other. Concept is to give ERCOT options that determine RMR is to give ERCOT options that determine RMR availabilityavailability

– Documentation criteriaDocumentation criteria– RMR Units paid second to ERCOT in partial RMR Units paid second to ERCOT in partial

payment situationspayment situations


• RMR TF CommentsRMR TF Comments– Section 6.8.3.1(7) & (8) should Section 6.8.3.1(7) & (8) should

include the following sentence:include the following sentence:

““Incentive Factor payments shall be prorated Incentive Factor payments shall be prorated over the Agreement term based on the over the Agreement term based on the expected ERCOT RMR usage pattern for each expected ERCOT RMR usage pattern for each month.”month.”

PRR 371 – OOMC PRR 371 – OOMC UpdateUpdate

• Review of OOMC completed in Review of OOMC completed in order to ensure proper economic order to ensure proper economic tradeoff between RMR and OOM tradeoff between RMR and OOM and to integrate PRR 371’s and to integrate PRR 371’s recognition of minimum energyrecognition of minimum energy

• Likely to impact ERCOT Likely to impact ERCOT computer systemscomputer systems

• Effective with system Effective with system implementationimplementation

PRR 371 – OOMC: PRR 371 – OOMC: Addition of Resource Addition of Resource

CategoriesCategories• Combined Cycle, the largest CT in the Combined Cycle, the largest CT in the

train is:train is:– Less than 90 MWLess than 90 MW– Greater than or equal to 90 MWGreater than or equal to 90 MW

• Gas SteamGas Steam– Supercritical boilerSupercritical boiler– Reheat boilerReheat boiler– Non-reheat or boiler without air pre-heaterNon-reheat or boiler without air pre-heater

• Simple CycleSimple Cycle– Less than 90 MWLess than 90 MW– Greater than or equal to 90 MWGreater than or equal to 90 MW

PRR 371 – OOMC:PRR 371 – OOMC:Modified/Added/Deleted Modified/Added/Deleted Costs for Some Resource Costs for Some Resource

CategoriesCategories• Resource Category Generic Fuel CostsResource Category Generic Fuel Costs

– Upward instructionsUpward instructions– Downward instructionsDownward instructions

• Resource Category Generic Startup Resource Category Generic Startup CostsCosts

• Resource Category Generic Minimum Resource Category Generic Minimum Energy Costs – Added Energy Costs – Added

• Resource Category Generic Resource Category Generic Operational Costs – DeletedOperational Costs – Deleted

PRR 371 – OOMC:PRR 371 – OOMC:Generic OOMC PaymentGeneric OOMC Payment

• OOMC Payment = OOMC Payment = Price for unit start, provided the Price for unit start, provided the

unit is not connected to the gridunit is not connected to the grid

PLUSPLUSPrice for operating a unit to Price for operating a unit to

provide “minimum” energy at its provide “minimum” energy at its Low Sustainable LimitLow Sustainable Limit

PRR 371 – OOMC:PRR 371 – OOMC:Generic OOMC Startup Generic OOMC Startup

CostCost• Each Resource Category has an Each Resource Category has an

associated startup cost which includes:associated startup cost which includes:– Startup fuel costStartup fuel cost– Ramp fuel cost (for Combined Cycle only)Ramp fuel cost (for Combined Cycle only)– These fuel costs are based on the These fuel costs are based on the

Resource’s capacityResource’s capacity

• MPCE paid/charged for ramp energy is MPCE paid/charged for ramp energy is credited back to ERCOT via the credited back to ERCOT via the formula for startup costformula for startup cost

PRR 371 – OOMC:PRR 371 – OOMC:Generic OOMC Min Generic OOMC Min

Energy CostEnergy Cost• Each Resource Category has an Each Resource Category has an

associated minimum energy cost associated minimum energy cost per MWper MW

• During the instruction interval:During the instruction interval:– The cost per MW is multiplied by the The cost per MW is multiplied by the

lesser of the Low Sustainable Limit or lesser of the Low Sustainable Limit or the metered output of the Resourcethe metered output of the Resource

– MPCE paid/charged for the minimum MPCE paid/charged for the minimum energy is credited back to ERCOT via energy is credited back to ERCOT via the formula for minimum energy costthe formula for minimum energy cost

PRR 371 – OOMC:PRR 371 – OOMC:OOMC Instruction –OOMC Instruction –

ClarificationClarification• ERCOT will not issue an OOME Up ERCOT will not issue an OOME Up

instruction for energy associated with the instruction for energy associated with the Low Sustainable LimitLow Sustainable Limit

• The QSE may maintain a Balanced The QSE may maintain a Balanced Schedule during instruction interval by:Schedule during instruction interval by:– Scheduling energyScheduling energy– Being selected to provide Balancing Energy Being selected to provide Balancing Energy

ServiceService• Issue: QSE cannot maintain a Balanced Issue: QSE cannot maintain a Balanced

Schedule if OOMC instruction received Schedule if OOMC instruction received less than 1.5 to 2 hours in advance of less than 1.5 to 2 hours in advance of instruction intervalinstruction interval

PRR 371 – OOMC:PRR 371 – OOMC:Verifiable Incremental Verifiable Incremental

CostsCosts• Deleted requirement that Deleted requirement that

ERCOT BOD review and ERCOT BOD review and approve compensation for cost approve compensation for cost types except for fueltypes except for fuel

• Future Action Item: Describe Future Action Item: Describe other verifiable cost types and other verifiable cost types and documentation required documentation required

PRR 371 – OOMC:PRR 371 – OOMC:Fallout for RMR Task Fallout for RMR Task

ForceForce• Disclosure of unit specific OOMC dataDisclosure of unit specific OOMC data• Verifiable incremental costs – Section Verifiable incremental costs – Section

6.8.2.2(5)(b)6.8.2.2(5)(b)• Optimization of OOMC instructionsOptimization of OOMC instructions

– Economic optimizationEconomic optimization– Honor physical characteristics of OOM ResourceHonor physical characteristics of OOM Resource

• QSE Resource Plan – Section 4.4.15QSE Resource Plan – Section 4.4.15– Need to require additional data in planNeed to require additional data in plan

• Review definition of Low Sustainable LimitReview definition of Low Sustainable Limit• Determine other verifiable Determine other verifiable

costs/documentationcosts/documentation

PRR 401 – Partial PRR 401 – Partial Payments & QSE Credit Payments & QSE Credit

RequirementsRequirements• Addresses timing of the uplift to Addresses timing of the uplift to

loads where there is a partial loads where there is a partial payment (short-pay) that is not payment (short-pay) that is not collectedcollected– Uplifted to loads on LRS basis if not Uplifted to loads on LRS basis if not

collected within 120 days and the QSE is collected within 120 days and the QSE is not in compliance with payment plannot in compliance with payment plan

• Modifies Estimated Aggregate Modifies Estimated Aggregate Liability (EAL) calculationLiability (EAL) calculation

• Allows ERCOT to offset against Allows ERCOT to offset against amounts owed by short-pay QSEamounts owed by short-pay QSE


RequirementsRequirements• Proposed EAL CalculationProposed EAL Calculation

– Reduces EAL ratchet from 90 days Reduces EAL ratchet from 90 days to 60 daysto 60 days

– Uses average of 2 initial invoices Uses average of 2 initial invoices to calculate ADT – smooths to calculate ADT – smooths collateral spikescollateral spikes

– Includes TCR credits for Includes TCR credits for ownership and auction revenuesownership and auction revenues

– Formalizes terms of “early pay”Formalizes terms of “early pay”



– Changes calculation to include OUTChanges calculation to include OUT•Outstanding invoices plus estimated Outstanding invoices plus estimated

unbilled itemsunbilled items

– Allows ERCOT to make downward Allows ERCOT to make downward adjustments in EAL outside ratchet adjustments in EAL outside ratchet periodperiod

– Fixes SAF at factor of 1 until Fixes SAF at factor of 1 until ERCOT gains more history on ERCOT gains more history on seasonal credit requirementsseasonal credit requirements



– Allows estimation of balancing Allows estimation of balancing energy and ancillary service energy and ancillary service usageusage

– Estimation of finals and true-ups Estimation of finals and true-ups based on three week averagebased on three week average•Mulitply final average by 9 weeksMulitply final average by 9 weeks•Multiply true-up average by 48 weeksMultiply true-up average by 48 weeks


RequirementsRequirements• No impact on ERCOT computer No impact on ERCOT computer

systems; manual processessystems; manual processes• Effective June 1, 2003Effective June 1, 2003

Rejected PRRsRejected PRRs

• PRR 390 – Transmission PRR 390 – Transmission Interconnection RequirementInterconnection Requirement

• PRR 407 – Removal of RBS PRR 407 – Removal of RBS Sunset DateSunset Date

protocol revision subcommittee report to ercot technical advisory committee may 8-9, 2003

Documents

ercot pip

ercot system treatment

system implementationprr

system development

billing system

balancing energy ramps

balancing energy bids

urc update