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ERCOT Wholesale Settlement

ERCOT Wholesale Settlement. Module 3. Introduction. Can you tell these apart? . BENA iq = -1 * (Σ (RI iz + LI iz + URC iz + MISD iz + MISR iz ) z + TCRPAY Bei + Σ CSC Bei ) * LRS iq. Topics. Definitions Settlement Overview Settlement Calculations.

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ERCOT Wholesale Settlement

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  1. ERCOT Wholesale Settlement Module 3

  2. Introduction Can you tell these apart? BENAiq= -1 * (Σ (RIiz + LIiz + URCiz+ MISDiz+ MISRiz)z + TCRPAYBei + Σ CSCBei ) * LRSiq

  3. Topics • Definitions • Settlement Overview • Settlement Calculations

  4. Key Definitions

  5. Definitions • Operating Day - Date of power flow • Settlements-Process used to resolve financial obligations; Assess administrative and miscellaneous fees; Provide transmission-billing determinants • Settlement Statement- A statement issued by ERCOT reflecting a breakdown of market charges • Settlement Invoice- A notice for payment or credit due rendered by ERCOT

  6. Definitions • Initial Statement- Posted 10 days after Operating Day • Final Statement- Posted 59 days after Operating Day • True Up Statement- Posted 6 months after Operating Day • Resettlement Statement- Ad Hoc; posted as needed

  7. Definitions • Charge Type- Line item on settlement statement • Settlement Interval- A period of time for which market services are settled • Bill Determinants- Variables used to calculate a Charge Type

  8. Definitions • Recorder - A sequence of alpha-numeric values to identify data Example: NMLEIOL_H04_99_MYRESOURCEID,1 • Channel - Indicates the iteration of the settlement run (Initial, Final, True-Up, Resettlement)

  9. Overview

  10. Electricity sellers Electricity buyers Load Bilateral Resources Serving transactions Entities Bilateral QSEs QSEs transactions Overview $ $ ERCOT SETTLEMENTS

  11. Overview “VISA Bill” Rule All cash flow defined from ERCOT perspective: NEGATIVE amounts • ERCOT pays Market Participant POSITIVE amounts • Market Participant pays ERCOT

  12. Overview Market Participants’ Roles • QSE: • Daily review of Settlement Statements • Download of Data Extracts • Shadow Settlement and Validation • Research Discrepancies • Register Disputes • Weekly review of Invoices • Settle with ERCOT

  13. Overview Market Participants’ Roles • LSE / Resources: • Download of Data Extracts • Research Discrepancies • Settle with QSE

  14. Overview ERCOT's Roles • ERCOT’s Daily Settlement Procedures: • Validate Settlement Statements for publishing • Create and publish Invoices (Weekly) • Facilitate Invoice Payment Processes (Weekly) • Participate in UFE Analysis • Dispute Research and Resolution • Provide Settlement information (ERCOT, PUCT, Market Participants)

  15. Questions

  16. Settlement Calculations

  17. Settlement Calculations ERCOT MUST REMAIN REVENUE NEUTRAL!

  18. Settlement Calculations Revenue Neutrality • All payments for Market Services will have a corresponding cost allocation. • Common forms of cost allocation • Obligation • Direct Assignment • Load Allocation • BENA • Charge types are grouped into payments and cost recovery for market services.

  19. Settlement Calculations Settlement of What? ERCOT settles for services procured to manage the Texas power grid. Capacity Settlement Energy Settlement

  20. Capacity Settlement

  21. Capacity Settlement Learning Objectives: • Ancillary Services • Replacement Reserve • OOMC

  22. Capacity Settlement Ancillary Services • QSE’s AS obligation quantity based on its Load Ratio Share (LRS) • QSE’s have opportunity to self-arrange their obligation • ERCOT will procure at Market Clearing Price all AS obligations not self-arranged.

  23. Capacity Settlement Ancillary Services Emergency Short Supply Capacity Obligation per Load Ratio Share E R C O T $ $ $ Ancillary Services Capacity Self Arrangement (reduces obligation)

  24. Capacity Settlement Ancillary Service Example Calculation

  25. Capacity Settlement Procured Ancillary Service Capacity PCASqi = -1 * (CASqi * MCPCASi ) Terms PC : Ancillary Service Capacity Payment C: Capacity Procured MCPC: Market Clearing Price for Capacity Subscripts i: Interval q: QSE Protocol 6.8.1.2 Translation: The payment for Ancillary Service Capacity is equal to the Amount of Capacity procured times the Clearing price for that Service.

  26. Capacity Settlement Ancillary Service Cost Allocation LAASqi = ASPi * NTOASqi Terms LA: Load Allocated Ancillary Service Charge ASP: Ancillary Service Price NTO: Ancillary Service Net Obligation per QSE Subscripts i: Interval q: QSE Protocol 6.9.1 Translation: The Load Allocation Charge for an ancillary service is equal to the Ancillary Service Price times the Net Obligation for the QSE.

  27. Capacity Settlement Learning Objectives: • Ancillary Services • Replacement Reserve • OOMC

  28. Capacity Settlement Providers of Replacement Reserve (RPRS) are paid for three distinct types of service: • Capacity Insufficiency • Zonal Congestion • Local Congestion Section 6.8.1.10 and 6.8.1.11

  29. Capacity Settlement Units selected for Capacity Insufficiency or Zonal Replacement are paid: • the higher of their bid or, • the highest MCPC for all Replacement Reserve procured during the procurement processes. Section 6.8.1.10 and 6.8.1.11

  30. Capacity Settlement Units selected for Local Replacement are paid: • Resource Category Generic Startup Cost for starting • Resource Category Minimum Energy Cost minus MCPE for operating at the LSL. Section 6.8.1.10 and 6.8.1.11

  31. Capacity Settlement Payment from the Market is collected through the following charges: • RPRS Zonal Congestion Charge • RPRS Uplift Charge Section 6.9.2.1.1

  32. Capacity Settlement RPRS Zonal Congestion Charge • RPRS Zonal Congestion costs will be directly allocated to QSEs whose schedules have an impact on a congested Commercially Significant Constraint • Note that clearing RPRS for Zonal Congestion creates shadow prices for capacity and triggers corresponding TCR payments. Section 7.3.4.2

  33. Capacity Settlement RPRS Uplift Charge • ERCOT nets: • The total payments for Zonal, Local and Capacity Insufficiency RPRS and • The direct assigned Congestion impact and TCR Payments • The difference is uplifted at Load Ratio Share to all QSEs. Section 6.9.2.1.2

  34. Capacity Settlement Zonal Replacement Zonal Congestion Impact RPRS Uplift Charge TCR Payments Capacity Insufficiency Local Replacement Section 6.9.2.1.2

  35. Capacity Settlement RPRS Uplift Charge UCRP = -1 * [ Σ ( PCRP + LPCRP ) + TCRPAYRP +Σ CSCRP ]* LRS Variables UC = RPRS Uplift Charge PC = Cost of Capacity for Zonal Congestion and Capacity Insufficiency LPC = Cost of RPRS for Local Congestion US = RPRS Under Scheduled Charge TRCRPAY = TCR Payment per Hour CSC = RPRS CSC Impact Capacity Charge LRS = Load Ratio Share Subscripts RP = Replacement Reserve Section 6.9.2.1.2

  36. Capacity Settlement Learning Objectives: • Ancillary Services • Replacement Reserve • OOMC

  37. Capacity Settlement OOMC What is OOMC? • Replacement Reserve procured out of merit order • Looks a lot like Local Replacement Reserve • ERCOT-wide cost is uplifted to QSEs (LRS)

  38. Capacity Settlement • Units selected for OOMC are paid: • Resource Category Generic Startup Cost minus energy revenue during ramp (back 12 intervals), plus • Resource Category Minimum Energy Cost minus MCPE for operating at the LSL or • Replacement Bid, if cheaper. Section 6.8.1.10 and 6.8.1.11

  39. Energy Settlement

  40. Energy Settlement Learning Objectives: • Balancing Energy • Resource Imbalance • Load Imbalance • OOME • Uninstructed Resource Charge • Congestion • Mismatched Schedules • BENA

  41. Energy Settlement Balancing Energy • Represents the increase or decrease in energy dispatched by Settlement Interval in Real Time to ensure the balancing needs of ERCOT. • The energy is supplied by ERCOT through acquisition of resources (generating units and interruptible demands) to meet load variations not covered by Regulation Service.

  42. Energy Settlement Balancing Energy • Zonal Instructed Deviation (up/down) from ERCOT to QSE • Used to solve power balance and/or congestion • Settled at zonal MCPE How is this paid?

  43. Energy Settlement Learning Objectives: • Balancing Energy • Resource Imbalance • Load Imbalance • OOME • Uninstructed Resource Charge • Congestion • Mismatched Schedules • BENA

  44. Energy Settlement Resource Imbalance • Scheduled Generation - Metered Generation • Paid/charged at MCPE • Why an imbalance? • Instructed Deviations • Uninstructed Deviations (may be subject to URC) Protocol 6.8.1.13 Do all Resource Imbalances result in payments to the QSE?

  45. SQSE Energy Settlement Resource Imbalance Example Situation: SQSE has scheduled to generate at 208 MW from their resource in the South Zone for IE 1630. Conditions: The Resource actually generates at 220MW. The Market Clearing Price for Energy, South CM Zone is $17.09/MWh

  46. SQSE Energy Settlement Resource Imbalance Example 220MW Actual Generation 208MW Scheduled Generation 55MWh 52MWh 0

  47. SQSE Energy Settlement Resource Imbalance Example For a given interval and zone, RI= (Scheduled Generation –Actual Generation) * MCPE Therefore, for interval 1630, SQSE’s Resource Imbalance in the South Zone is RI = (52MWh - 55MWh) * $17.09/MWh = - $51.57

  48. Energy Settlement Resource Imbalance RIizq = (QRSizq - MRizq) * MCPEiz Terms RI : Resource Imbalance Amount QRS: Scheduled Resource MR: Metered Resource MCPE: Market Clearing Price for Energy Subscripts i: Interval z: Zone q: QSE Protocol 6.8.1.13 Translation: Resource Imbalance is the difference between the Scheduled and Actual Resource output times the Clearing Price for Energy.

  49. Energy Settlement Learning Objectives: • Balancing Energy • Resource Imbalance • Load Imbalance • OOME • Uninstructed Resource Charge • Congestion • Mismatched Schedules • BENA

  50. Energy Settlement Load Imbalance • Scheduled Load - Adjusted Metered Load • Paid/charged at MCPE • Why an Imbalance? • UFE • Forecast Inaccuracies • Relaxed Balanced Schedule (section 4.3.1) • LaaR’s Protocol 6.9.5.2

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