1. RMR Update
November 6, 2002
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2. Standby Payment - Protocol References
Section 22F RMR Agreement
Section Capacity(Standby)Payment
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3. Capacity (Standby) Payment
Hourly “Standby Price” in $/MW
Determine the levelized annual carrying costs of a then current simple-cycle gas turbine generator set – sized to match RMR unit.
Based upon the capital costs of this proxy turbine plus installation costs. ERCOT used a cost estimate developed by GE.
Include fixed O&M. ERCOT used the DOE Energy Information Administration Assumptions to the Annual Energy Outlook.
As specified in Protocols:
15 year life, 70% financing at prime rate, 30% equity with 10%ROE
Hourly Standby Price = 70% of hourly cost of proxy unit
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4. Proxy Turbines w/Standby Price
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5. Use heat rate for contracted unit
Heat Rates
Use heat rate for contracted unit
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6. Estimated Costs
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7. RMR vs. Transmission
Transmission upgrades were not a viable option for the current contracts which expire at the end of December
Projects have been identified that will eliminate many of the current RMR requirements
ERCOT is establishing a stronger capability to adopt and track these projects
ERCOT will use emerging RMR data to evaluate justification for additional transmission
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8. Minimum Take Provision
Minimum take is not addressed in the Protocols
The Frontera unit had environmental requirements which had to be considered
AEP had no similar environmental issues
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9. RMR in 2003
A study of ERCOT’s 2003 RMR requirements is underway and should be completed by the end of November
Other Resource Entities have contacted ERCOT to announce their plans to shut down or “mothball” certain units in the near term – ERCOT has determined that none of those units would warrant RMR contracts through January 1, 2003
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10. Day Ahead Schedule Process
By 0600, QSE sends ERCOT Availability Plan
By 0900, ERCOT sends QSE Initial Delivery Plan
At 1630, ERCOT may update Delivery Plan
At 1830, after RPRS study, ERCOT may update Delivery Plan
Delivery Plan levels may be revised closer to real-time
QSE enters Delivery Plan levels in their Energy Schedule with ISO as Receiver
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11. RMR Energy Pricing and Management
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12. RMR Energy Payments (Protocols 6.8.3.3)
ERMRuiq = -1 * min(Rsiu,Mriu) * ((RMREnergyMultu * GasPrIndxu) + VarCostCompu)
Billable Quantity
Min(RSiu,MRiu)
RS: Resource Scheduled quantity
MR:Metered value for the Resource
Price
RMREnergyMultu
Heat Rate per RMR Agreement
Average of last two years of actual heat rate
GasPrIndxu
Published Gas Index per RMR Agreement
Fuel Index in Houston Ship Channel
Transportation fee
Gas swing service fee
VarCostCompu
Variable Cost per RMR Agreement
The non-fuel variable O&M cost incurred when the unit operates and not recovered by the standby fee
Energy Payments based on Contract Amounts refers to ERCOT purchasing the energy itself.
To determine the payment due, the heat rate (determined by the RMR unit) is multiplied by the gas index (also determined by the RMR unit). The total is added to the variable cost which is a contracted amount. This total is then multiplied by the lesser amount between, either the scheduled quantity or the actual quantity produced.
For example if the RS is 100 and the MR is 90, 90 would be used in the equation.
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13. RMR Cost Uplift Billable Quantity LRS Load Share Ratio
(Protocols )
LARMRiq = -1 * (SUM(ERMRiq) + SUM(SURMRiq) + SUM(SBRMRiq) + SUM(UMRMRiq) + SUM(ERRMRiq) * LRSiq)
Billable Quantity
LRS
Load Share Ratio
Price
ERMRiq
RMR Energy payment to QSE
SURMRiq
RMR Start Up payment to QSE
SBRMRiq
RMR Standby payment to QSE
UMRMRiq
RMR Unexcused Misconduct Fee charged from QSE
ERRMRiq
RMR Energy Rebate Amount
The Settlement Obligation for RMR Service refers to the collection of payments from the QSEs who had load to pay the RMRs providing the service.
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14. Actual RMR Energy Cost RMR Schedule Resource Obligation
100MW (QSE A, South) MW (ERCOT, South)
QSE A gets RMR energy payment
RMR Schedule is the same as no energy schedule but provide 100MW Up Balancing Energy
RMR reduced BENA amount by:
RMR Schedule * MCPESouth
Actual RMR energy cost is equal to:
RMR Energy Payment - RMR Schedule * MCPESouth
The Settlement Obligation for RMR Service refers to the collection of payments from the QSEs who had load to pay the RMRs providing the service.
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