1 Reliability Deployment Task Force (RDTF Meeting) December 20 th 2011 December 20, 2011.

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Reliability Deployment Task Force (RDTF Meeting)

December 20th 2011

December 20, 2011

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Updates

• Status Update: Resource Adequacy • Increase RRS by 500 MWs and Decrease NSRS by 500

MWs• Offer Floor for RUC Commitments for Capacity

Insufficiency• Impact of New Power Balance Penalty Curve on PNM

December 20, 2011

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Status Update: Resource Adequacy

Category Item CompletedIn

Progress Future Notes

1

Online Non-Spin standing deployment & offer floor    

• NPRRs 426 /428 • ERCOT Board approved 12/13/11 • Implementation: 1/5/12

Offline Non-Spin offer floor    

• NPRR 428• ERCOT Board approved 12/13/11• Implementation: 1/5/12

Responsive Reserve & Regulation Up offer floor    

• NPRR 427 • ERCOT Board approved 12/13/11• Implementation: 1/5/12

Institutionalize the process to recall units for capacity 

• NPRR 432• Urgency determination: PRS 12/15/11

2

Expansion of Responsive Reserve with a corresponding reduction in Non-Spin  

Draft Ancillary Service Methodology at Reliability Deployment Task Force 12/20/11

The proper price for RUC units deployed for capacity 

  Draft NPRR at RDTF 12/20/11

The proper magnitude and slope of the Power Balance Penalty Curve  

• Analysis of potential impact underway• No system software changes necessary.

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Status Update: Resource Adequacy

Category Item CompletedIn

Progress Future Notes

3

Raising System Wide Offer Cap      

Low Sustainable Limit problem for units RUCed online for capacity

Compensation for RUC commitments for reliability reasons

Review Peaker Net Margin Cap      

ERCOT (Summer

Items)

Proposed EILS Rule Change  

 •  PUC Project No. 39948: Proposal for Publication 12/15/11

Potential 30-minute emergency response product    •  ERCOT staff exploring options

Implement aggregated Controllable Load Resources   

•  ERCOT staff developing concept in conjunction with Market Participants

Posting non-binding near real-time forward prices

•NPRR 351• Phase I of Look-Ahead SCED•ERCOT Board approved 12/13/11• Implementation: 6/20/12

5

Updates

• Status Update: Resource Adequacy • Increase RRS by 500 MWs and Decrease NSRS by

500 MWs• Offer Floor for RUC Commitments for Capacity

Insufficiency• Impact of New Power Balance Penalty Curve on PNM

December 20, 2011

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Increase RRS by 500 MWs and Decrease NSRS by 500 MWs

• ERCOT has a draft version of the ERCOT Methodologies for Determining Ancillary Service Requirements document

• The proposed changes are:

– The minimum RRS requirement will change from 2300 MW to 2800 MW and will no longer be tied to the forecasted Reserve Discount Factor

– The NSRS calculation:

Base NSRS Req. = 95th Percentile of Net-Load Forecast Error – Avg. Reg. Up Req.

becomes

Base NSRS Req. = 95th Percentile of Net-Load Forecast Error – Avg. Reg. Up Req. – 500MW of RRS

– The cap for NSRS will decrease from 2000 MW to 1500 MW

– The floor of 1375 MW across peak hours (7-22) will still be applied

December 20, 2011

7

Updates

• Status Update: Resource Adequacy • Increase RRS by 500 MWs and Decrease NSRS by 500

MWs• Offer Floor for RUC Commitments for Capacity

Insufficiency• Impact of New Power Balance Penalty Curve on PNM

December 20, 2011

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NPRR

6.4.3.1 Energy Offer Curve for RUC-Committed Resources

• (1) Prior to the end of the Adjustment Period for an Operating Hour during which a Generation Resource has been committed by ERCOT as part of a Reliability Unit Commitment (RUC) process, the QSE shall ensure that an Energy Offer Curve that prices all energy from LSL to HSL at or above $XXX/MWh for the Operating Hours in the RUC commitment period, has been submitted and accepted by ERCOT.

• (2) If the QSE receives a RUC Dispatch Instruction from ERCOT for its Generation Resource during the Operating Period that includes a RUC-Committed Hour, then the QSE shall be exempt from the submission timeline requirement specified in paragraph (1) above and shall instead submit the required Energy Offer Curve as soon as reasonably practicable after receipt of the RUC Dispatch Instruction.

• (3) The requirement in paragraph (1) above is not applicable for Weekly Reliability Unit Commitment (WRUC)-instructed hours during which the Resource was Day-Ahead Market (DAM)-committed or QSE self-committed.

December 20, 2011

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RUC Committed Resources Dispatched for Capacity (12/01/2010 to 10/31/2011)

8640 Effective RUC Unit Hours– 1787 hrs (20.7%) were dispatched above LSL for capacity

(LMP<=System Lambda and BP>=LSL+2)

• 1560 hrs(18.1%) with prices below $100• 71 hrs(0.8%) with prices between $100 and $200• 33 hrs(0.38%) with prices between $200 and $300• 16 hrs(0.19%) with prices between $300 and $400• 8 hrs (0.09%) with prices between $400 and $500• 38hrs (0.4%) with prices between $500 and $3000• 61hrs (0.7%) with prices greater than or equal to $3000

‘Effective RUC Unit Hours’ considers multiple units committed for the same hour as different unit hours while ‘Effective RUC hours’ considers it as single hour.

December 20, 2011

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RUC Committed Resources Dispatched for Capacity (12/01/2010 to 10/31/2011)

• 8640 Effective RUC Unit Hours– LMP<=System Lambda+2 and BP>=LSL+2 to determine dispatch

for capacity• 2107 hrs (24.4%) were dispatched above LSL for capacity

– 2008 hrs (23.2%) with prices below $500– 38 hrs (0.4%) with prices between $500 and $3000– 61 hrs (0.7%) with prices greater than or equal to $3000

December 20, 2011

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RUC Committed Resources (12/01/2010 to 10/31/2011)

December 20, 2011

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RUC Committed Resources (12/01/2010 to 10/31/2011)

December 20, 2011

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0 to LSL Energy from ONRUC

• 8640 Effective RUC Unit Hours• Average ONRUC LSL is 82 MW , BP is 99.6 MW, HSL is 207 MW

– 5741 hrs (66.4%) are at or below LSL (BP-LSL<2MW)• Average ONRUC LSL is 85MW

– 2899 intervals (33.6%) are above LSL for transmission or capacity• Average ONRUC LSL is 75.5MW

• 3071 Effective Hours with at least one resource on ONRUC status• Average system total ONRUC capacity

– LSL is 230.5 MW; – HSL is 581.8MW; – BP is 279.9MW

Effective RUC Unit Hours’ is SCED duration, summed up to hour level, for each RUC committed resource when it was online. ‘Effective RUC Unit Hours’ considers multiple units committed for the same hour as different unit hours while ‘Effective RUC hours’ considers it as single hour.

December 20, 2011

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Updates

• Status Update: Resource Adequacy • Increase RRS by 500 MWs and Decrease NSRS by 500

MWs• Offer Floor for RUC Commitments for Capacity

Insufficiency• Impact of New Power Balance Penalty Curve on

PNM

December 20, 2011

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Impact of New Power Balance Penalty Curve on PNM

December 20, 2011

PB Violation MW Current Original CPS Proposal New CPS Proposal IMM Proposal0 200 200 200 2001 200 200 200 2001 250 250 250 2505 250 250 250 2505 300 300 300 300

10 300 300 300 30010 400 500 350 40020 400 500 350 40020 500 750 400 50030 500 750 400 50030 1000 1000 500 100040 1000 1000 500 100040 2250 2250 1000 225050 2250 2250 1000 225050 3001 3001 2000 400075 3001 3001 2000 400075 3001 3400 3400 4000

150 3001 3400 3400 4000150 3001 3600 3600 4000250 3001 3600 3600 4000250 3001 3800 3800 4000400 3001 3800 3800 4000400 3001 4000 4000 4000500 3001 4000 4000 4000500 3001 4000 4000 4000

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Impact of New Power Balance Penalty Curve on PNM

December 20, 2011

1. Original CPS Proposal (Submitted to RTDF) : Same as existing curve between 1-10 MW and 30-75. Penalty cost higher between 10-30 and above 75 MW under-generation.

2. New CPS Proposal (Submitted to PUCT) : Same as existing curve between 1-10 MW. Lower penalty between 10-75 MW, while finishing higher for 75 MW and up.

3. IMM Proposal : Same as existing curve except for after 50 MW under-generation, the penalty increase from existing $3001/MWh to $4000/MWh

4. All at $3001

PNM addition is calculated as the sum of time weighted difference between new penalty and old penalty for each level of Power Balance violation. For the first 3 cases, the assumption is that Power Balance Violation amount is not changing when the curve changed. For the last one since the new penalty is above SWCAP, all offers will be used before violating Power Balance and hence only intervals were the rampable room in SCED offered below SWCAP is less than Power Balance violation were considered. i.e. the effect of increase in prices when the rampable room in SCED offered below SWCAP is greater than Power Balance violation due to clearing more from the offer stack was not considered.

Proposed Curve PNM changeExcluding intervals GTBD

>66,195 MWOriginal CPS 14,427 11,339

New CPS 8,082 6,032IMM 22,474 17,740

All at 3001 14,700 12,830

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Apendix

December 20, 2011

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RUC Committed Resources (12/01/2010 to 10/31/2011)

December 20, 2011

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RUC Committed Resources (12/01/2010 to 10/31/2011)

December 20, 2011

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RUC Committed Resources (12/01/2010 to 10/31/2011)

December 20, 2011

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RUC Committed Resources (12/01/2010 to 10/31/2011)

December 20, 2011

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RUC Committed Resources

December 20, 2011