Simultaneous RTDR-RTEG Resource Audits

1. Simultaneous RTDR-RTEG Resource Audits November 13, 2013

2. Market Rules • Market Rule 1, III.13.6.1.5.4.1 (c) • General Auditing Requirements for Demand Resources Excluding Demand Response Capacity Resources • An audit of a Real-Time Emergency Generation Resource must be performed simultaneously with the audit of any Real-Time Demand Response Resources containing Real-Time Demand Response Assets that are located behind the same end-use customer meter as the Real-Time Emergency Generation Assets mapped to the Real-Time Emergency Generation Resource. • Market Rule 1, III.13.6.1.5.4.2 (c) • General Auditing Requirements for Demand Response Capacity Resources • An audit of a Real-Time Emergency Generation Resource must be performed simultaneously with the audit of any Demand Response Resources containing Demand Response Assets that are located behind the same Retail Delivery Point as the Real-Time Emergency Generation Assets mapped to the Real-Time Emergency Generation Resource. When the output of the Real-Time Emergency Generation Asset is greater than the Demand Response Baseline, adjusted pursuant to Section 8B.5, of the Demand Response Asset located at the same Retail Delivery Point and Net Supply is produced, the Net Supply is reduced by the difference between the Real-Time Emergency Generation Asset’s output and the adjusted Demand Response Baseline of the Demand Response Asset. (emphasis added) Presentation Title

3. Why is Simultaneous Auditing Required? • The simultaneous auditing requirement prevents over-crediting the capacity of a Real-Time Emergency Generation (RTEG) Asset that is located at the same facility as an Real-Time Demand Response (RTDR) Asset • For example: • Assume a facility with a 500 kW load and an RTEG with 300 kW of capacity • The RTEG (like most emergency generators) cannot push energy into the grid • If the facility interrupts 400 kW of load during an audit, the RTDR at the facility gets 400 kW of capacity credit • If the RTEG produces 300 kW during a separate audit, it gets 300 kW of capacity credit • Total capacity credit between the two assets is 700 kW, but the facility could only reduce 500 kW of load and the RTEG could not deliver energy to the grid • In this example, the facility would receive 200 kW of excess capacity credit • By auditing both assets simultaneously, and if the facility load decreased by 400 kW during the audit, the RTDR would show 400 kW of performance and the remaining 100 kW of load would be picked up by the RTEG, resulting in 500 kW of performance among both assets Presentation Title

4. What is the Problem with the Simultaneous Audit Approach? • The simultaneous auditing requirement could result in dispatching or auditing the same facility multiple times in a season in order to establish capacity values for the RTDR and RTEG Assets at a single facility • Other RTDR Assets (even those with no RTEG at the facility) that are part of the same resource as an asset with both RTDR and RTEG at the same facility would also be dispatched during a simultaneous audit • For example: • If the RTDR at the facility as in the previous example was dispatched during OP-4, Action 2, but the RTEG was not dispatched (because OP-4, Action 6 was not declared), the same RTDR would have to dispatch/audit again at another time to establish an audit value for the RTEG Asset • Further, the entire RTDR Resource, which may be an aggregation of dozens of assets, would also have to dispatch/audit to establish the capacity of the single RTEG Asset • The need to audit a resource, even though its performance has already been demonstrated in an event, in order to establish audit values for a few RTEG Assets has generated a number of questions and complaints from customers Presentation Title

5. Request • An alternative approach to simultaneous auditing of RTDR-RTEG resources should be developed that avoids over-crediting the capacity of a RTEG Asset that is located at the same facility as an RTDR Asset while reducing the number of audits • We ask the Markets Committee to refer the simultaneous RTDR-RTEG audit issue to the Demand Resources Working Group to develop an alternative auditing approach for Markets Committee consideration • Attendees of the Demand Resources Working Group agreed at its 11/6/13 meeting that this is an issue worth resolving and are willing to spend time to develop recommendations for Markets Committee consideration Presentation Title