1. Reflecting Losses in DR within ERCOT August 22, 2012
T&D Losses
Reflecting Losses in DR within ERCOT
August 22, 2012

2. [Metered Load * (1/(1-DLF))] * (1/(1-TLF))
Losses Introduction
Loss factors are calculated on a 15 minutes basis to estimate amount of electricity lost in the transmission and distribution system
TDSPs create and assign loss codes (often, although not necessarily, based upon voltage level) to ESIIDs and provide the coefficients used in the calculation of loss factors
[Metered Load * (1/(1-DLF))] * (1/(1-TLF))
 Unaccounted for Energy (UFE) added after losses
Reflecting T & D Losses in DR

3. Losses Introduction (continued)
Losses are forecasted for two days in advance with actual losses calculated the day after flow
QSEs are charged but load typically pays for these losses, although the load never sees that electricity pass through it’s meter
This is not about losses behind the meter, but rather describes the losses between two accepted lines of demarcation – the generation meter and the load meter
Reflecting T & D Losses in DR

4. Concept
The grid impact of 1 MW of metered demand response is not the same as 1 MW of additional generation
1 MW of generation satisfies something less than 1 MW of metered load as electricity due to losses
Conversely, 1 MW of metered load curtailment replaces something more than 1 MW of generation as losses are avoided
Reflecting T & D Losses in DR

5. Losses Illustrated Transmission Level service
1.3% to 2.6%
Distribution Level service – Primary
2.0% to 11%
9.7 MWs
8.9 MWs
Distribution Level service – Secondary
4.0% to 19%
8.1 MWs
30 MWs
Reflecting T & D Losses in DR

6. Suggested Solution
Demand Response that is offered in any ERCOT related program or market should be grossed up to reflect the applicable transmission and distribution losses that would have applied to measured curtailed volumes
Reflecting T & D Losses in DR

7. More equitably compensates DR for grid impact
Benefits
More equitably compensates DR for grid impact
Recognizes true impact on grid including reducing stress on distribution assets
Volumes of offered demand response not curtailed are adjusted for losses by LSE for retail electricity billing
Most beneficial for smaller customers
Untapped (and needed) DR potential
Utilize smart meters
Inline with goals of SB1125
Reflecting T & D Losses in DR

8. Aligns ERCOT with other regions for DR reporting
Benefits (continued)
Aligns ERCOT with other regions for DR reporting
Most other ISOs with a history of successful demand response programs incorporate this concept into their programs, including PJM, ISO-NE, and NYISO
Facilitates LMP – G for Real Time Market dispatch
LMP – G settlement would gross up curtailed volumes to bill customer for G; curtailed volumes should also be grossed up
Should speed implementation of Loads in Real Time Market dispatch as methodologies will be defined
Reflecting T & D Losses in DR

9. Items to be considered: UFE NOIE losses Impacts for LR Impacts to ALR
Issues List
Items to be considered:
UFE
NOIE losses
Impacts for LR
Impacts to ALR
Impacts to CLR
ERS Settlement calculations
ERS Compliance calculations
Reflecting T & D Losses in DR

10. Including UFE will foster consistency.
If participating in Real Time Market, and with the LMP – G concept, an LSE would be charged for the same volume as the DR QSE would be paid
Customers receiving statements would see same volumes
Including UFE will increase uncertainty, making it more difficult for:
Compliance
Reserves procurement in SCED
Budgeting
Recommendation: Do not adjust for UFE
Differences should be small so benefits will be limited
Reflecting T & D Losses in DR

11. NOIEs are not required to provide Distribution Loss Factors to ERCOT
NOIE Losses
NOIEs are not required to provide Distribution Loss Factors to ERCOT
Providing DLFs for use only for demand response opens potential for gaming
Recommendation: All meters behind NOIE territories are grossed up for only the Transmission Loss Factors
Reflecting T & D Losses in DR

12. [Metered Load * (1/(1-DLFForecasted))] * (1/(1-TLFForecasted))
Impacts for LR
QSEs determine volumes to schedule based upon expected load and forecasted losses
Actual loss factors not available until T+1 and therefore cannot give real time awareness
Telemetry provided to ERCOT would be grossed up by the appropriate forecasted loss factors
[Metered Load * (1/(1-DLFForecasted))] * (1/(1-TLFForecasted))
LR settlement is unchanged as it is based upon scheduled volumes
LR compliance is unchanged since telemetry would be grossed up
Reflecting T & D Losses in DR

13. Impacts for LR (continued)
Should the telemetry be grossed up by ERCOT or by the QSE?
Implementation at ERCOT would entail a single change vs. all QSEs making changes
Implementation at QSE would ensure QSE personnel see the values used for meeting their obligations and those used for compliance
If a QSE doesn’t implement, harms only that QSE and their customers
Recommendation: QSEs responsible for grossing up for losses
Would introduce some (likely very small) level of loss forecast risk
Reflecting T & D Losses in DR

14. ERS Compliance Calculation - Alternate
Contract Capacity (CC) offers could be maximized by QSEs based upon expected actual loss factors
Maximum Base Load (MBL) submitted based upon metered value but grossed up for losses by ERCOT for availability and performance calculations
Availability calculation to be based upon CC, grossed up metered volumes and MBL (DLF and TLF)
Performance compares grossed up metered values vs. grossed up MBL
Reflecting T & D Losses in DR

15. ERS Compliance Calculation - Default
CC offers could be maximized by QSEs based upon expected actual loss factors
Availability calculation to be based upon CC and grossed up metered volumes (actual DLF and TLF)
Performance compares grossed up metered values vs. CC
Reflecting T & D Losses in DR

16. ERS Compliance Calculation - Risks
May increase availability risk as actual loss levels will not be known in advance
Difference of submitting grossed up CC and metered MBL is a potential source of confusion
QSEs that offered based upon metered volumes for consistency and to avoid confusion would reduce availability risk and not be affected for performance risk
Reflecting T & D Losses in DR

17. ERS Settlements Calculation - Settlements
Settlements unchanged
Would continue to use the availability and performance metrics to get combined performance factor
Costs allocated based upon load ratio share
Reflecting T & D Losses in DR

18. Identify / resolve outstanding issues: LR ERS ALR CLR
Next Steps
Identify / resolve outstanding issues: LR
ERS
ALR
CLR
LR – change in Operating Guide?
ERS – NPRR with small changes to compliance sections
Reflecting T & D Losses in DR

19. Chair Contact Information
Tim Carter
Reflecting T & D Losses in DR