Discussion of previous meeting feedback and unresolved filing issues. Hoping to incorporate feedback for filing soon.
Explanation of proposed changes: removing language around 100-point linear approximation for ASDCs to adapt to complex curve dynamics. Allowance for flexibility in approximations.
Proposal to cap MCPCs beyond values of lost load (5000 or 2000) in certain market conditions, aligning day-ahead MCPC capping with real-time processes.
Detailed conversation on pricing caps between energy and ancillary services with varying perspectives shared.
Clarification sought around the number of PQ pairs concerning approximations, not limited to a specific figure.
Addressed potential outcomes of pricing mechanisms affecting day-ahead market operations.
Questions raised about MCPC capping in DAM and logical approach explained.
Debate over the requirement of using consistent curves across different market times (DAM, real-time).
Reflective on existing ancillary service demand cap conditions post-Uri, remaining consistent with real-time capping mechanisms.
Confirmation sought on the alignment of DAM and real-time pricing under existing and proposed mechanisms.
Discussion proposed a need for capping extensions in DAM aligning more closely with real-time experiences.
Emphasis placed on ensuring consistency in DAM with real-time for accurate market conditions reflection.
HEN proposes to use unaltered ORDC as the AORDC is a correction to make Protocols consistent with stakeholder intent, stating that using unaltered ORDC avoids unintended additional price suppression with RTC implementation.
ERCOT is considering using a 95th percentile for ancillary services to avoid deep shortages despite the availability of resources.
The IMM expresses concerns over the $2,000 proxy offer floor and proposes a $0 proxy offer to ensure competitive markets.
A discussion ensues about setting proxy offers to $2,000 vs. 0$ per megawatt per hour, with concerns from IMM about market manipulation and operational risks.
There is a consensus to proceed with ERCOT's current proposal but a commitment to monitor and review market behavior post-implementation.
Participants discuss market trial handbooks and the importance of setting thresholds and training to avoid reliance on proxy offers.
The IMM raises concerns about implementing RUC price floors in real-time and day-ahead markets.
The meeting proceeds with discussions on the RUC analysis and the concept of a RUC floor value.
Discussion on the standing item regarding ASDC for RUC study as proposed in NPRR1269.
Recap of proposed NPRR1269: using the same AS demand curves for RUC as those for day-ahead and real-time markets.
Two proposed modifications: ASDC for Non-Spin should not extend beyond the AS plan, and a floor price should ensure sufficient capacity procurement.
Analysis from past meetings showed a need for a floor price to resolve small Non-Spin shortages under tighter conditions.
Presented sensitivity analysis using a vendor tool to simulate cases with different load forecasts.
Initial base case showed no AS shortage with a 50,000 MW load forecast; increasing load to 70,000 MW showed a small Non-Spin shortage.
Proposed a $50 ASDC floor to resolve shortages, but further analysis showed lower floors like $10 or $15 may suffice.
Observed that applying a floor allows RUC to make different commitment decisions without significantly increasing overall capacity.
Highlight on the process variation within RUC's decision-making due to non-convex optimization and limited iterations.
Additional analysis showed floor prices of $10, $15, and $20 effectively resolved Non-Spin shortages.
Complexity arises as the RUC optimization affects commitments differently based on unit costs and transmission impacts.
RUC makes recommendations, but the operator may or may not take action based on its own assessments.
Discussion on aligning RUC ASDCs with real-time SCED expectations and potential operator interventions for reliability.
Consideration for future work including additional data analysis and testing in different scenarios.
Acknowledgment that scarcity signals in real time could drive future generation investment despite current limitations in resolving Non-Spin shortages in real-time markets.
Key Discussions
Proposed Modifications: Adjusted ASDC for Non-Spin to not exceed AS plan and introduced a floor price to ensure sufficient AS procurement.
Analysis and Results: Analysis under different scenarios showed that a floor price, around $10 to $20, could effectively resolve Non-Spin shortages without significantly changing overall commitment.
Complex System Dynamics: Commitment decisions vary daily based on unit availability and cost, impacting offline Non-Spin awards and overall system reliability.
Market Signal Interpretation: Discussion on using floor prices to align RUC and real-time market decisions to potentially reduce manual operator commitments.
Future Steps: Plan to provide further data, validate initial findings, and offer a recommendation to address NPRR1269 with stakeholder input.
Stakeholder Inputs
Blake Holt (LCRA): Clarified understanding of RUC commitment process and operator decisions.
Ian Haley (Morgan Stanley): Raised historical market reliance on scarcity prices to drive investment.
Andrew Reimers (IMM): Clarified impact of RUC floor on commitment decisions and ancillary service awards.
Ned Bonskowski: (Vistra) Suggested consideration for a real-time ASDC floor to align with RUC assumptions.
4.3 - Not Discussed
▶️ 5 - Discussion of NPRR1270 Clarification and AS Qualification
NPRR1270 involves changes related to load resources and their real-time participation and qualification for ancillary services.
Edits proposed due to load resources interacting differently with the real-time market; changes needed to better accommodate this interaction.
Discussion on qualification testing for ECRS and Non-Spin resources; new resources not already qualified must undergo testing.
Concerns raised about removing the three-hour restoration timeline for NCLRs, suggesting a need for a solution that doesn't hinder progress.
Explanation provided that the day-ahead position is more financial, not physical, so the three-hour requirement may not be necessary.
Discussion on language and criteria in qualification tests, focused on duration requirements for sustaining power by qualified resources.
Consensus to harmonize language around qualification criteria for duration between different sections and types of services.
Agreement to hold on certain language changes until a broader agreement on duration is achieved, to avoid multiple edits.
Introduction to the Market Trials Handbook with a framework setup for market trials plan.
Objectives include the evolution of market submissions into open loop SCED where SCED runs continuously.
SCED will support quasi-parallel production telemetry, and market submissions creating nonbinding RTC energy and AS awards/dispatch.
QSEs can change offers and telemetry to test systems during specific timeframes.
Discussion on the timing and nature of tests (scripted vs. unscripted).
Importance highlighted of systems testing and readiness for ERCOT and QSEs.
Regular meetings scheduled from 10:10 to 10:30 every Monday morning.
Market participants have discretion in activities during non-monitored operating days.
Telemetry and real-time offers must align reasonably to production during monitored operating days.
Market submissions to SCED required from QSEs include supply offers, ESR energy bid offer curves, real-time energy bids, AS offers, and telemetry data.
ERCOT will secure transmission constraints into SCED, ensuring consistent operation.
Three reports to be published:
SCED prices and transmission constraints.
LMPs by Resource Nodes, Load Zones and Trading Hubs.
ORDC and Reliability Deployment Price Adders.
Consideration of different operating schedules for July and August to prepare for go-live.
Discussion encouraged on longer-term operational plans and the cost-benefit for participant companies.
Open call for feedback and initial suggestions favoring a mid-week focused run.
