Meeting Summary - 02/07/2025 RTCBTF Meeting

▶️1 - Antitrust Admonition Matt Mereness - 9 30 a.m.

▶️2 - RTCBTF Updates and Issues Matt Mereness

2_RTCBTF_Update_02072025.pdf

• Target to enter market trials in May, focusing on getting systems tested and workable.
• Three main policy issues to address: proxy offers, ramp sharing for reg up and energy, ASDCs for RUC.
• Consideration of reshaping the AS demand curve based on IMM's proposal.
• Removal of automatic qualification flag and NPRR clean-up in December to prevent automatic non-spin and ECRS qualifications.
• Need for NPRR evaluation on state of charge and two/four-hour AS durations.
• Emphasis on market readiness, training seminars, and educating participants.
• Phase 1 of market trials (market submissions and telemetry checkout) is complete; work on next phases underway.
• Available sandbox in March for testing RTC submissions and EMS environment setup for telemetry.
• Plan to discuss NPRRs (1268, 1269, 1270) and related policy issues, with an aim to flag as urgent for the March 12 PRS meeting.
• Efforts on revisions and developments include AS demand curve changes and challenging proxy offers implementation.
• Special meeting proposed for March 7 to progress towards consensus and voting.
• Focus on ESR naming conventions and training modules for load resources and qualification clarifications.

▶️3 - Discussion of NPRR1268- IMM Modifications to ASDCs IMM Staff

1268NPRR-03 IMM Comments 020525.pdf

• Highlighting issues with ERCOT's demand curves for ancillary services and SCED's ability to make trade-offs between products.
• Discussion on hierarchical pricing tiers and the need to potentially use higher value products over slow-ramping products.
• Methodology for disaggregating the AORDC, including two components: fitting product amounts in the flat portion and sloping the remaining down the demand curve.
• Figures presented to clarify methodology and discussions on price caps.
• Explains equations used for disaggregating ORDC in simpler terms.
• Explanation of distribution of products in non-linear portions of AORDC, written in technical language with additional commentary for clarity.
• Preparation to review comments from Shams and others, highlighting a need to revisit uplift questions and price cap issues.

▶️3.1 - Hunt Energy Network (HEN) Comments

HENCommentsonNPRR1268-AORDC.pdf

• Shams Siddiqi with Crescent Power, representing HEN,  discussed the interpretation of ERCOT's AORDC protocols based on February's presentation.
• Clarified the distinction between ORDC adders and ancillary service demand curves (ASDCs).
• Explained the concept of adders added to energy prices to reflect the opportunity cost of providing ancillary services without real-time co-optimization.
• Discussed ERCOT's method of fitting the AORDC using regression on adder values, not the MCPC, potentially undervaluing the demand curve.
• Highlighted that the current protocols lack clarity on the equation for curve fitting the AORDC and contain inaccuracies.
• Advocated using the unaltered ORDC for the sloping portion of the AORDC to reflect accurate demand during scarcity.
• Emphasized the necessity to fix the protocols and clarify the AORDC curve while considering HEN recommendations.
• Concerns were raised about the impact of the implementation of RTC and the market price suppression effect.
• Discussed discrepancies in historical data used for mu and sigma in the AORDC calculation.
• ERCOT mentioned the flexibility in the protocols for fitting different regression models, but emphasized project timeline risks.
• Former discussions indicate there's no uplift for capped prices at $5000, aligning with past NPRR decisions.
• ERCOT's operations showed preference for a blended approach with adjusted prices that preserve necessary ancillary services.

▶️3.2 - Potential ERCOT comments to remove 100 point requirement on ASDC

• ERCOT is considering removing the 100-point requirement for linear approximation of ancillary service demand curves to reduce complexity and improve accuracy.
• The current requirement may create complexities in IT design, especially given the increased slope in the curves for ancillary services.
• The proposal suggests utilizing more than 100 points for a more accurate representation of the curve shapes.
• Discussion on capping MCPCs (Market Clearing Price for Capacity) for the day-ahead market, considering different max prices on the curves and no explicit capping for energy prices.
• Question raised about potential need for capping in day-ahead market due to disparity in max prices on the curves, ensuring MCPCs do not exceed certain limits.
• Discussion about maintaining or changing cap for system lambda and consideration of energy pricing strategies in the day-ahead market.
• Clarification that the real-time ancillary service price cannot exceed $5,000.
• Suggestions to tweak NPRR with minor adjustments and terminology updates, replacing ORDC with AORDC segments.
• Plans to file comments incorporating these discussions and suggested updates to the protocols.

▶️4 - Discussion of NPRR1269 - ERCOT 3 Parameter Policy Issue ERCOT Staff

▶️4.1 - AS Proxy Offer Floor

• Current proxy offer formulation does not align with the true price of providing services.
• Suggestion to use a methodology similar to the verifiable cost method for energy.
• Technology-specific offer prices could be employed; however, this might involve complications such as including opportunity costs, especially for batteries.
• Discussion on whether there should be penalties for failing to submit complete offers.
• Consideration of implementing an explicit 'must offer' requirement, which is not typical for ERCOT as it doesn't have a capacity market.
• The proxy offer level should reflect the service cost more accurately.
• Suggestion of using a fixed price per ancillary service to simplify the process.
• Concerns over high max price numbers potentially encouraging incomplete offers.
• Discussion on involving different cost components for different resources, e.g., wear and tear for turbines, opportunity costs for batteries.
• Concerns about zero-priced reserve capacity being reduced through NPRR1270.
• Discussion about maintaining appropriate revenue streams for older resources to prevent them from leaving the ERCOT market.
• Mention of the need to consider the cost structure of older power plants when determining proxy offers.

▶️4.1.1 - Potential IMM addition of must offer and compliance language

• Acknowledgment of differences between a ‘must offer’ requirement and a capacity market construct, and the overlap with self-commitment.
• Concerns about the need for transparency and the potential for arbitrary shortages if static values are implemented.
• Importance of complete and accurate information submission from market participants to avoid penalties.
• Clarification that ‘must offer’ is implied, but not explicitly mandated in real-time scenarios unless proxies are created.
• Discussion on the challenges of setting proxy offers, especially for resources with higher maintenance costs.
• Consideration of the 95th percentile as a baseline for offer values and the need for flexibility and transparency in adjustments.
• Concerns about applying uniform thresholds across different services, particularly non-spin services.
• Need for potential minimum values for certain services like non-spin to prevent them from being too low when plans are small.

▶️4.2 - RUC ASDC

RUCASDCsRTCBF020725.pdf

• Recap on ASDCs approach for RUC and eligibility for non-spin and ECRS in RUC.
• NPRR1260 captures implementation plan for RUC optimization with modifications.
• ASDC for non-spin will not exceed AS plan, with a floor price implemented.
• Challenges in performing simulation due to absence of RUC simulator, leading to use of vendor RUC engine.
• RUC optimization to ensure sufficient capacity by adjusting penalty of shortage vs. commitment cost with floor price.
• Test cases using different load forecasts and floor price impact on RUC results.
• Floor price affects RUC commitments, adjusting which units are committed without changing total capacity significantly.
• Current testing indicates $50 floor price might be higher than necessary, leading to further testing to refine this.
• Plans to conduct additional sensitivity analysis to determine optimal ASDC floor price.
• Discussion on potential application of floor prices across services, capturing ideas for December NPRR updates.
• Some concerns raised about non-spin plan being inflated, advocating for separate discussions around the AS plan.

▶️4.2.1 - ERCOT to share analysis

• There is an ongoing effort to review the procurement plans under typical circumstances.
• Analysis aims to find ways to utilize offline resources for non-spin services during tight conditions.
• Non-spin services are mostly coming from offline resources that can start quickly.
• The discussion included the feasibility of meeting the plan amongst available units.
• Concerns raised about optimization during periods when the plan is less demanding.
• Next discussion scheduled for February 19.
• There is a proposal to have an extra meeting scheduled before PRS, possibly March 4.
• Considerations discussed for scheduling meetings in March before Spring Break.
• Discussion about potential scheduling conflict with existing RMS meeting on March 4.

▶️5 - Discussion of NPRR1270 Clarification and AS Qualification Nitika Mago

• Discussion on verification checks and telemetry for AS capability.
• Clarification requested on language regarding the qualification process and telemetry requirements.
• Automatic qualification removal to ensure readiness and capability of resources in real-time.
• Discussion on requirements for resources to sustain services, including potential duration requirements.
• Concerns raised about intermittent renewable resources qualifying for AS due to automatic qualification removal.
• Examination of qualifications for hybrid resources like batteries and how they are modeled in single resource frameworks.
• Emission of ERCOT's capability to validate telemetry to confirm resource's real-time capability.
• Discussion on deliverability issues, with limitations acknowledged in current RTC implementations.
• Policy interpretation of PURA Section 39.159 regarding AS and reliability service coming from dispatchable resources.
• Potential disparities in language and requirements for qualification and real-time capabilities being examined.

▶️6 - Update on State of Charge and AS Duration next steps Nitika Mago

• Nitika Mago has not yet completed the analysis related to the duration of ancillary services and is working through various analyses.
• The focus is on the duration needed for manual interventions and understanding system downtimes.
• Analysis includes forecast error, exposure to consecutive under forecasts, and examining system event durations.
• The RTC simulator is being used to evaluate the impact of duration changes on market outcomes.
• There is no rush to fast-track the decision to the April meeting, allowing more time for consideration and discussion.
• Discussion around how longer duration requirements may influence the distribution of energy awards, particularly with batteries.
• Consideration is being given to whether longer or shorter duration requirements make more operational and economic sense.
• Stakeholders are engaged in technical discussions surrounding the economic implications of duration requirements.
• The ongoing analysis and simulation results will be compiled and shared for further discussion.

▶️7 - Market readiness ERCOT Staff

▶️7.1 - ESR Model naming convention and post spreadsheet

SingleModelESRNames2-5-251605.pdf

• Discussion on sending out a list of names for single models related to battery and energy storage resources (ESRs).
• Introduction of a new naming convention for market trials, effective with RTC+B.
• The new name format involves 'ESR' followed by a number, ensuring uniqueness at each site.
• Concatenation of site code with ESR number for the new name.
• Plan to issue a market notice with location for access to the new naming spreadsheet.
• Commitment to update the sheet as more batteries come on, enabling visibility of existing combo models.
• The goal is to move towards a unified model with clear naming conventions.

▶️7.2 - DAM ESR Offers

7b.ESRsinDM.pdf

• Discussion on specific scenarios with Day-Ahead Market (DAM) Energy Storage Resources (ESR) offers, including High Sustained Limit (HSL) and Low Sustained Limit (LSL).
• Explanation that because proxy offers are not created like in real time, a specific approach is required to ensure the DAM solution is feasible.
• Processes for handling ESR offers are similar to self-committed resources but include new considerations such as negative LSLs.
• Details on how ESRs offer into DAM with potentially negative and positive megawatt ranges.
• Clarification that submission of an ESR energy bid off curve is considered online and self-committed in DAM.
• Protocols outline treating self-committed generators by ignoring resource constraints other than HSL.
• Explanation of a two-step process for generator treatment: setting LSL to zero if greater than zero, and extending the energy offer curve to zero.
• Necessity of these steps to allow DAM flexibility without causing infeasible solutions.
• How ancillary services are handled alongside this process.
• Adjustments for ESRs include handling negative LSL/HSL values.
• Examples shown of normal scenarios where Energy Bid/Offer Curve (EB/OC)  includes zero megawatts and scenarios requiring adjustment.
• Q&A session addressing clarifications and practical examples related to these processes.
• Discussing the strategy of ensuring ESRs can be dispatched from zero megawatts to prevent DAM infeasibility.
• Addressing the possibility of future improvements for transparency in the process.

▶️7.3 - IT updates from TWG 1/30/25 RTC Digital Certs and ICCP requests

7c.ercot-twg-2025-01-30-rtcb-digital-certificate-plan-update(3).pdf

7c.ercot-twg-2025-01-30-rtcb-iccp-telemetry-points-modeling.pdf

• Sruthi Hariharan provided updates on digital certificates needed for market trials starting in May.
• Vendors will start submitting against the new system in March or April.
• Transition from MOTE certificates to production certificates as the process goes live.
• Market notices will communicate specific cutover dates.
• Public key update will be required for external API submissions.
• Telemetry point modeling requires submission for integration into the ERCOT model by May 2025.
• ICCP points and telemetry requirements discussed for different resources like energy storage.
• ERCOT plans to establish a centralized mailbox for RTC+B-related communication.
• ERCOT informs no current blackout period for resource registration before RTC+B go-live.
• Upcoming meetings and workshops to address detailed questions and system setups.
• Drafts of handbook 3 and 4 are to be presented at the next meeting.
• Discussion on NPRRs related to DAM caps and RUC procedures, looking for updates and comments.

▶️8 - Extra meeting placeholders Feb & March Matt Mereness

• Confirmation of existing meetings on February 19 and the possibility of a meeting on March 7.
• Next PRS meeting scheduled for March 12.
• Emphasis on ensuring key personnel like Dave Maggio are present for the meetings.
• Confirmation of ongoing work on a load resource specific or NCLR specific RTC training module.
• The training module is progressing but not ready for February 19; expected completion by March.
• Operator training seminar is also targeted for March, indicating a focus on operational training.

▶️9 - Adjourn

• Next meeting scheduled for February 19.