NPRR 511 and QSGR MOC

ERCOT Settlements Meeting Title: WMSDate: March 13, 2013

QSGR Settlement

QSE Received a Manual Override?

QSGR Received BP > 0 prior to Override?

Should Minimum Energy Cost

be included in the MOC used in settlement?

Brought on with Override – Settle through Emergency

Energy

Brought on by Non-Spin - No additional settlement

needed(likely no startup compensation)

Brought on by RUC VDI - Settle as RUC

(likely no startup compensation)

No(SCED failure,Capacity Test)

Yes

Yes(QSGR

previouslyStarted up)

What is appropriate compensation for a QSGR brought on by an operator action?

No (QSGR not yet started up)

MOC includes Min Energy + Startup Fuel +

Fuel Adder + Start Costs

Settlement via Emergency Energy

Payment NPRR487: payment until

decommit decision and/or manual override received

Settlement via Emergency Energy

Payment

PRS Approved NPRR511 MOC:MOC does not include Min

Energy + Startup Fuel + Fuel Adder + Start Costs

No

Luminant NPRR511 Comments MOC:

MOC includes Min Energy + Fuel Adder

Yes

Should MOCinclude Min Energy +

Startup Fuel + Fuel Adder +

Start Costs?

Which hours should be

excluded from the amortization

process?

Yes

End

No

DECISION

Modify VC Manual Variable O&M Startup

Amortization Methodology accordingly

Purpose of amortization:- Right-size the number of hours for which the QSGR MOC (potentially LMP) is increased by the QSGR startup cost

Impact of amortization on settlement:- When determining the price to be used for QSGR compensation via emergency energy settlement, the MOC is used to cap the energy offer curve.

Current Verifiable Cost Manual process for amortizing startup cost in MOC:Variable O&M used in settlement is adjusted to include startup cost which is amortized by higher of:- RARF Min Online time; - 2 hours; or - avg actual on time per 20 d. prior to effective month

Proposed Verifiable Cost Manual process for amortizing startup cost in MOC:Exclude online hours when QSGR was not compensated for a startup:à RCWG suggested edits indicate that deployed Non-Spin hours should be excluded à ERCOT offers that the decision requested regarding how to bring the QSGR online and appropriate compensation methodology will inform the appropriate decision for exclusion of hours from the amortization process

QSGR Settlement Amortization of Startup Costs in Mitigated Offer CAP

QSGR brought on by SCEDPR 6.6.9 (3)

QSGR controlled byERCOT Operator Action

QSGR: Decision on ME & Fuel Adder

• NPRR485 allowed for all resources to submit for verification actual fuel purchases to be included as a “fuel adder” to the MOC; however, this language was grey boxed until system implementation.

• NPRR485 changed the “Variable O&M” for QSGRs to include a minimum energy component and the “fuel adder” based on verified fuel by resource. Because ERCOT manually updates the MOC for the QSGR, the stakeholders decided ERCOT should include the “fuel adder” for QSGR.

• ERCOT requests a decision from stakeholders:

What should be included in the MOC for the QSGR that is online with base points and receives a manual Override from the ERCOT operator to hold to an output level for reliability?

Option 1: IHR + O&M (like non QSGR resources)

Option 2: IHR + O&M + Min energy + fuel adder (proposed)

QSGR: Decision on Override

• NPRR511 proposed that QSGR under ERCOT operator control be compensated under 6.6.9 with the variable O&M removed. The stakeholders approved this at PRS

• In reviewing ERCOT Operator desk procedures it was discovered that if the Operator needs a QSGR that is not receiving base points to come online for solving a contingency or voltage support, they are Overriding LDL to a level greater than or equal to LSL.

• ERCOT requests a decision from stakeholders:

How should ERCOT compensate the QSGR that is not online with base points and is needed online at LSL by the ERCOT operator for reliability?

Option 1: Manual Override (Emergency Energy payment)Option 2: Deploy Non-Spin (not Emergency Energy payment)Option 3: RUC VDI (RUC)

QSGR: Decision on Amortization

• The Verifiable Cost manual currently amortizes the Variable O&M into the QSGR IHR (MOC) each month based on the higher of Minimum online time per RARF; or, 2 hours; or, the average actual online time of the QSGR per 20 days in the month prior to the effective month.

• Proposed VC Manual change requests that the average actual online time be reduced by any hours that the QSGR has a manual override or is deployed for Non Spin. (This will increase the MOC)

• ERCOT requests a decision from stakeholders:Should ERCOT reduce the online hours used in the amortization of the variable O&M for any hours that the QSGR is online with a manual override or due to Non-Spin deployment?

Option 1: No change continue with all online hoursOption 2: Remove hours when online due to manual override

and no base pointsOption 3: Remove hours when deployed for Non-spinOption 4: Remove hours for Option 2 & 3