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TAC Report to the ERCOT Board

TAC Report to the ERCOT Board

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TAC Report to the ERCOT Board

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  1. TAC Report to the ERCOT Board April 15, 2003

  2. Summary • PRRs 377, 379, 381, 383 and 387 - vote • RMR update • 2003 Test Flight Dates • OGRRs • WMS work on PUCT #26376 - Market Design questions • Future Items

  3. PRR 377 – Canceled RMR Unit Start • Allows for partial compensation of RMR units if start ordered, then cancelled • If cancelled, ERCOT to post cost • No computer system impact; manual process • May 1, 2003 Effective Date • Approved by TAC with a 28-2 vote.

  4. PRR 379 – BLT Waiver • Allows ERCOT to grant a waiver for Block Load Transfer point resources that, but for BLT events, do not operate in ERCOT • Applies to submission of resource application and execution of Resource Agreement • No computer impact • May 1, 2003 Effective Date

  5. PRR 381 – Update QSE Designation • Clarifies the process by which a QSE terminates its designation for an LSE or Resource entity • No computer impact • May 1, 2003 Effective Date • Approved by TAC with a 25-3-2 vote.

  6. PRR 383 – RMR Resource Maintenance Outage Approval • Provides a timeline for the approval of RMR unit outage requests • No computer impact • May 1, 2003 Effective Date

  7. PRR 387 – Mismatched Inter-QSE Schedule Statements • Clarifies the settlement of Mis-matched Inter-QSE energy schedules • Facilitates automation • Approved priority – 1.2 (already on project list) • Effective upon system implementation

  8. Six RMR Issues to be Resolved I. Criteria/Process II. RMR Categories III. Compensation Level IV. Cost Allocation - Set aside, for now V. Transmission Planning Process - Resolved VI. Economic Trade-Offs - Still working

  9. Process • RMR TF provided options for the six concerns to PRS • PRS reviewed and made recommendations • TAC considered PRS recommendations and decided on high level options for the open issues (Decision Points) • TAC decisions guide language finalization • PRR returns for TAC/BOD approval in May

  10. II. RMR Categories • Decision Point • Short-term RMR Need (180 days during off-peak season only) • Annual RMR Need • TAC Decision • Accept both seasonal and annual RMR concepts and reflect in pricing

  11. III. Compensation Level • Decision Point – Short-Term Contract • Owner compensated for costs avoided by seasonal mothballing • Owner provides cost information to ERCOT • TAC Decision • Adopt short-term pricing at cost

  12. III. Compensation Level • Decision Point – Annual Contract • Proxy Price • Uses existing structure with lower payment components (Standby Price at 55% of SCGT; Change in fuel heat rate calculation) • “Cost Plus”

  13. “Cost Plus” • Initial monthly payments based on estimate of eligible costs then adjusted to actual • Incentive Factor (x% or flat rate?) applied to non-fuel eligible costs • Eligible Costs include labor, materials and supplies to operate the unit • Eligible Costs do not include return on equity, G&A, allocated general plant, taxes, interest expense, etc. • Fuel also based on estimate of cost with true-up • Eliminates start-up payment • TAC Decision • Adopt “cost plus” methodology

  14. I. Criteria / Process • Allows for multi-year contracts if significant capital expenditures required • CCGTs treated as a single unit unless separate operation possible • Qualification for RMR Applicant • Applicant attestation that resource is uneconomic to remain in service • Unavailable at least 180 days

  15. I. Criteria/Process • RMR Replacement Options • ERCOT to report on cost-effective replacement options 90 days after execution • If a cost-effective replacement option exists, ERCOT will establish an implementation timeline

  16. I. Criteria/Process • Treatment of RMR Applicant • Non-selected applicant prohibited from future use unless reinstated during suspension period • ERCOT not accept schedules or bids during suspension period • ERCOT may reinstate under certain circumstances • Owner may petition PUC for reinstatement

  17. PRS Recommendation • TAC Decision • Non-selected RMR applicant would not be prohibited from operating in the market after ERCOT rejects the application • Fits with the “Cost Plus” methodology • Accept other provisions

  18. Test Plan Flight Dates • RMS approves the dates for future testing flights. This enables new market entries, TDSPs and ERCOT to plan when key deliverables are required and the key testing dates. • Failure to supply required documentation for a new test flight can result in a market participant being delayed until the next test flight before entering the retail market.

  19. New 2003 Test Plan FlightsAffirmed by TAC • Flight 0703 for New Market Participants testing under TX SET Version 1.5 • Flight will begin pre-test activities on April 8, 2003 • Deadline to Join Flight May 22, 2003 • First transactions July 14, 2003 • Flight Scheduled to End September 5, 2003 • Flight 1003 for New Market Participants testing under TX SET Version 1.5 and Possible Transaction Changes from COMET WG • Flight will begin pre-test activities on July 23, 2003 • Deadline to Join Flight September 4, 2003 • First transactions October 13, 2003 • Flight Scheduled to End December 5, 2003 • Another Flight is possible because of anticipated functionality changes from MIMO task force.

  20. Operating Guides • TAC approved OGRRs - 127 and 128 • OGRR127 keeps Operating Guides language consistent with Protocols • OGRR128 amends the change control process to allow Protocol / OG consistency changes to be handled administratively

  21. Advance Notice • WMS has accelerated the process to determine 2004 CSCs and resulting zonal definitions. • Recommendation to the Board for approval in June. • ROS finalizing work on new Reactive Power Standard