1. John Dumas Director, Wholesale Market Operations
Short-Term and Long-Term Action Plan In Response To Certain Market Outcomes Observed After Nodal Go-Live
John Dumas
Director, Wholesale Market Operations
Special WMS meeting
March 17, 2011

2. Overview of presentation
Issues description
Gaps in heuristics for LMP at de-energized Electrical Bus
CRR Offers submitted at de-energized Settlement Points are improperly settled.
Base Point weighting in the calculation of Resource Node SPP results in payout of PTP Obligation awards in Real-Time even when there is NO congestion.
Short-Term Action Plan
2 NPRR(s) for issues 1 & 2.
NPRR 326 for issue 3
Long-Term Action Plan
Option 1: Station Resource Node.
Option 2: Logical Station Settlement Point.
March 17, 2011
Special WMS meeting

3. Gaps in heuristics for LMP at de-energized Electrical Bus
Issues Description
Gaps in heuristics for LMP at de-energized Electrical Bus
Payments to CRR Account Holders in DAM and PTP Obligation Owners in Real-Time are made that are not due to congestion, but due to gaps, under certain specific scenarios, in the heuristic logic to determine LMP at de-energized Electrical Bus(es).
CRR Offers submitted at de-energized Settlement Points are improperly settled.
Currently, CRR Offers submitted at de-energized Settlement Points are NOT modeled in DAM, but are allowed to carry over and are settled in Real-Time.
The correct approach would be to treat these CRR Offers as fully derated and settled in DAM and not be allowed to carry over and be settled in Real-Time.
March 17, 2011
Special WMS meeting

4. Issues Description
Base Point weighting in the calculation of Resource Node SPP results in payment to PTP Obligation Owners in Real-Time even when there is NO congestion.
For example, a quick start resource, that is online for short periods of time, the Base Point weighting could result in consistently higher prices at its Settlement Point relative to other Settlement Points (even if they are in the same station).
PTP Obligations awarded in DAM at zero price could have payouts in Real-Time even when there is no congestion, due to price separation that occurs based on the formula used to calculate Real-Time Resource Node SPP.
March 17, 2011
Special WMS meeting

5. Gaps in heuristics for LMP at de-energized Electrical Bus
Example 1:
This example describes the scenario where, in a station the difference in topology between DAM and Real-Time causes a Resource Node (R2) to be energized in DAM but de-energized in Real-Time.
In Real-Time, R2 is assigned the average LMP as the AVERAGE LMP of (E2, E4, R1, E3, E5, E6, E8, R2, E9, E11, E10, E12, R3, E13, E15, R4, R5)
This LMP is inappropriate as the Electrical Buses (E2, E4, R1, E3, and E5) are electrically separate from the other Electrical Buses that are used in the average LMP calculation. The more appropriate set to use in the average LMP calculation would have been (E8, R2, E9, E11, E10, E12, R3, E13, E15, R4, R5).
March 17, 2011
Special WMS meeting

6. Gaps in heuristics for LMP at de-energized Electrical Bus
Transmission Line
Line
Close Breaker
Energized Electrical Bus or Resource Node
De-energized Electrical Bus or Resource Node
Open Breaker G1 G2 G3 G4 G5 R1 R2 R3 R4 R5 E2 E1 E3 E4 E5 E6 E7 E8 E9
E10
E11
E12
E13
E14
E16
E17
E15
DAM Network Model
Real-Time Network Model
March 17, 2011
Special WMS meeting

7. Gaps in heuristics for LMP at de-energized Electrical Bus
Example 2:
This example describes the scenario where, in a station the difference in topology between DAM and Real-Time causes the whole station to be de-energized in Real-Time.
In Real-Time, R2 assigned LMP equal to System Lambda as the whole station is de-energized.)
This LMP is inappropriate as a more appropriate LMP would be to use the LMP of the energized Electrical Bus (E18) at the terminal of the line going to the other station from E6.
March 17, 2011
Special WMS meeting

8. Gaps in heuristics for LMP at de-energized Electrical Bus
Transmission Line
Line
Close Breaker
Energized Electrical Bus or Resource Node
De-energized Electrical Bus or Resource Node
Open Breaker G2 R2 E6 E7 E8 E9
E18
DAM Network Model
Real-Time Network Model
March 17, 2011
Special WMS meeting

9. Short-Term Action Plan
NPRR for issues 1 & 2.
Section (9) and 6.6.1
(a) Use, an appropriate LMP predetermined by ERCOT as applicable to a specific Electrical Bus, OR, if not so specified,
(b) Use the following rules in order:
(i) Use average LMP for Electrical Buses within the same station having the same voltage level as the de-energized Electrical Bus, if any exist.
(ii) Use average LMP for all Electrical Buses within the same station, if any exist.
Use system lambda.
Section (4)
(4) If either the source or the sink Settlement Point identified in the CRR Offer is de-energized in the base case for a given hour in the DAM, then the PTP Option or PTP Option with Refund declared in the CRR Offer is settled in the DAM and is not carried to Real-Time.
March 17, 2011
Special WMS meeting

10. Short-Term Action Plan
NPRR to disallow intra-station “A-to-A” CRR bids in the CRR Auction and PTP Obligation Bids in DAM.
“A-to-A” defined as Resource Node to Resource Node in the same station and also at same KV level.
“A-to-A” defined as Resource Node to Resource Node in the same station and mapped to same power flow bus in the network model.
“A-to-A” defined as Resource Node to Resource Node.
NPRR 326 for issue 3.
Section
ERCOT has submitted NPRR 326 which is currently under consideration for approval. NPRR 326 removes the Base Point weighting from the RT Resource Node SPP calculation.
March 17, 2011
Special WMS meeting

11. Option 1: Station Resource Node Settlement Point Concept
Long-Term Action Plan
Option 1: Station Resource Node Settlement Point Concept
The pre-requisite for this option is to have the Short-Term Action Plan implemented.
The Station Resource Node Settlement Point borrows from the concept of PUN Resource Nodes.
Using the Procedure for Identifying Resource Nodes add “Station Resource Nodes” (borrowing from the concept of “PUN Resource Nodes) at Point of Interconnections (POIs) in each generation substation if a Resource Node does NOT already exist at that POI.
Added Station Resource Nodes will be located at an existing EPS meter location. If Resource Nodes already located at an EPS meter location, then Station Resource Node is not added.
Change what transactions are allowed at Settlement Points – see table.
March 17, 2011
Special WMS meeting

12. Station Resource Node Settlement Point Concept
ACTIVITIES
Settlement Points
3PO
AS Offer
DAM Energy Only Offers
DAM Energy Bid
CRR Offers and Bids
QSE to QSE Transaction
Self Schedules
Resource Node (Not at Substation POI)
Yes No
Resource Node (At Substation POI)
Station Resource Node / PUN Resource Node
CCU Resource Node
CCP Logical Resource Node
Hubs
Load Zones
March 17, 2011
Special WMS meeting

13. Option 2: Logical Station Settlement Point Concept
Long-Term Action Plan
Option 2: Logical Station Settlement Point Concept
The pre-requisite for this option is to have the Short-Term Action Plan implemented.
The Logical Station Settlement Point borrows from the concept of Logical Resource Node for Combined Cycles.
Defined as a set of boundary Electrical Bus(es) in the generating station which are at the terminals of branches coming in/out of this station at the same KV level.
A station may have more than one Logical Station Settlement Point – either due to multiple KV level of the boundary Electrical Bus(es) or due to Normal Status of Transmission Breakers within that station that normally cause electrically separate sections even if they are at same KV level.
Change what transactions are allowed at Settlement Points – see table.
March 17, 2011
Special WMS meeting

14. Logical Station Settlement Point Concept
ACTIVITIES
Settlement Points
3PO
AS Offer
DAM Energy Only Offers
DAM Energy Bid
CRR Offers and Bids
QSE to QSE Transaction
Self Schedules
Resource Node at a station where Logical Station Settlement Point defined
Yes No
Resource Node at a station where Logical Station Settlement Point NOT defined
Logical Station Settlement Point/PUN Resource Node
CCU Resource Node
CCP Logical Resource Node
Hubs
Load Zones
March 17, 2011
Special WMS meeting

15. Logical Station Settlement Point Concept
THE REST OF SYSTEM
STATION G1 G2 G4 G3
CRR
Bids/Offers EO
EB1
EB2
EB3
Logical Settlement Point
Line2
March 17, 2011
Special WMS meeting