3 - Technical Advisory Committee TAC Update - Eric Blakey
ERCOT and joint commenters instructed to bifurcate NOGRR245 into less controversial NOGRR and a second for equipment requirements. Board priority revision request to be made for February consideration and April implementation.
SAWG had been working on NPRR1219; urgency status requested by ERCOT at PRS meeting. Now passed through PRS and TAC. Protocols indicate WMS and SAWG to oversee these CDR issues.
Commissioners raised concerns regarding ECRS manual deployment triggers (vote 1224), rejecting board recommendation. Workshop scheduled for September 5 to discuss stakeholder process.
3.1 - TAC Assignment re - NPRR1230 Methodology for Setting Transmission Shadow Price Caps for an IROL in SCED
Introduction of TAC assignment regarding NPRR1230 and its potential cost increase.
Request by David Key to monitor the implementation and performance effects by WMS.
Decision to involve both WMS and CMWG initially to determine which group it fits better under.
Suggestion to include cost impact monitoring by IMM in their monthly report.
Agreement to revisit the decision after receiving feedback from the working groups.
4.1 - 2023 State of the Market Recommendations Report - Jeff McDonald
Jeff McDonald, IMM, discussed a small reduction in real-time electricity prices in 2023 (13% compared to 2022), despite a significant 60% drop in natural gas prices.
Natural gas often sets the wholesale electricity price in Texas; thus, a larger decrease in electricity prices was expected.
The administration of ERCOT products in 2023 influenced electricity prices, preventing them from falling as much as natural gas prices.
Price range across different zones was tighter in 2023 compared to 2022, indicating reduced inter-zonal congestion.
Discussions on electricity price impact from ECRS revealed that real-time prices did not follow natural gas prices consistently.
Observed a trend of increasing total load over the past three years, with a peak load of 85.7 GW in 2023.
Supply changes noted included increased wind and solar energy, and about 970 MW of new gas-fired generation.
Jeff explained a potential discrepancy between new entry costs and market signals, with mixed input from consultants and real-world conditions.
Discussion on Cost of New Entry (CONE) and market revenues, reflecting on how financial factors and policy risk influence decisions on new builds.
New generation is impacted by numerous factors including financing, policy risk, market revenues, and supply chain issues.
Presentation on low dispatch limit (LDL) overrides during the solar eclipse on April 8, 2024.
No energy payments for LDL overrides, unlike HDL override energy payments.
ERCOT procured additional Non-Spin ancillary services and committed additional capacity via reliability unit commitments leading up to the event.
LDL overrides were used to pre-position slower ramping resources and increase ramp rates for the expected net load ramp.
ERCOT deployed ~2.4 GW of Non-Spin during the eclipse, Hubbus prices averaged ~$200/MWh without significant binding constraints.
Query about the reliance on coal plants for HDL overrides instead of more flexible gas units.
Coal resources with lower ramp rates were identified as slower ramping units that could benefit from ramping up earlier.
Query about impact on SCED and pricing outcomes if LDL overrides had not been initiated.
Focus on operational standpoint for increased ramping capability; economic impact discussion suggested for market analysis at WMS.
Clarification on values for override intervals and recent updates to the presentation.
Next Steps include a manual report on the large load interconnection, indicating an increase of interconnection capacity from 4,636 MW in the past year.
Request for periodic updates on large load interconnection with detailed load type categories and contractual statuses with Transmission Service Providers (TSPs).
Clarification on the absence of large load projects in specific load zones.
General consensus for monthly updates, with consideration for ERCOT's operational workload.
5 - Congestion Management Working Group - CMWG - Alex Miller
10.2 - VCMRR042, SO2 and NOx Emission Index Prices Used in Verifiable Cost Calculations
Katie Rich
Discussed the need for revisions to address ERCOT comments.
Noted annual prices are flat, but seasonal index prices have value due to opportunity cost.
VCMRR042 ensures ERCOT access to seasonal prices, reflecting market volatility and reduction in allowances.
Emphasized difference in cost between seasonal ($750-$1,200 per short ton) and ERCOT proposed NOx prices ($3 per short ton).
Manual input for prices could be used temporarily if system change is needed.
Outlined language changes in VCMRR042 for using seasonal index prices for NOx and SOx from May through September.
NPRR proposes a user fee to cover ERCOT's subscription fee.
Ino Gonzalez
VCMRR042 removes the manual process for calculating emission prices.
Current process collects prices daily and sets a fixed price for the next month.
System change required to handle seasonal prices.
Subscription fees for annual prices have been increasing without practical value.
ERCOT disagrees with the user fee proposal in NPRR1242, citing it goes against board policy.
Eric Goff
Emphasized importance of including all fuel costs in real-time prices.
Expressed sympathy for avoiding ongoing fees with little practical value.
Suggested user fee makes sense if board policy is changed.
Recommended reviewing manual workarounds or system changes before making final decision.
Blake Holt
Agreed with Eric's and Katie’s points on maintaining the subscription for seasonal values.
Supported moving forward with VCMRR042 and NPRR1242.
Highlighted the importance of systematic implementation through the IA process.
Katherine Gross
Explained background check fee ($350 per principal) often meets the million-dollar threshold due to multiple principals per entity.
Motion
Motion to table VCMRR042 and refer to RCWG added to combo ballot
10.4 - NPRR1242, Related to VCMRR042 SO2 and NOx Emission Index Prices Used in Verifiable Cost Calculations - Possible Vote
Clarification made that NPRR1242 is not officially before the committee; it has not gone to PRS yet. Recommendations can still be made.
Bill Barnes emphasizes the importance of incorporating accurate information into prices and support for the direction of the proposal.
Concerns noted regarding the subscription fee of $50,000 per year.
Ian Haley from Morgan Stanley supports accurate market prices and voices concern over potential difficulty in recovering costs if the proposal is delayed.
Eric Goff raises two concerns: the annual subscription's value versus seasonal impact and the specific calculation methods.
Potential need to table VCMRR042 for revisions and reject VCMRR041 to avoid redundancy.
Consensus leans towards wanting VCMRR042 but acknowledges it needs more work before approval.
Discussion on costs of emissions allowances and the need for policy discussion on adopting a fixed summer price.
General agreement about keeping the $50,000 subscription, emphasizing market stability and benefits.
Addresses multiple opinions on the practicality of user fees versus keeping costs within the administrative fee.
Motion to request PRS table NPRR1242 for further discussion by RCWG considering user fees as an option for covering the subscription cost added to combo ballot
11 - WMS Revision Requests Tabled at WMS - Possible Vote - Eric Blakey
11.1 - SMOGRR028, Add Series Reactor Compensation Factors - MWG
No updates on the item.
11.2 - VCMRR041, SO2 and NOX Emission Prices Used in Verifiable Cost Calculations - RCWG
VCMRR041 aims to eliminate the current index price subscription for NOx and SO2, which has remained stagnant over the last five years.
VCMRR041 proposes to hard code emission prices into verifiable cost formulas.
Luminant presented a draft NPRR and VCMRR and expressed the desire to retain the index price subscription for flexibility in rapidly changing emission rules.
NPRR proposes a new ERCOT fee for emission cost subscription, allocated to resource entities based on megawatt capacity ratio.
Verifiable cost manual revision includes flexible calculations for seasonal index pricing (May-September) and annual index pricing (October-April).
Board policies prevent the creation of a new user fee unless it generates at least $1 million in annual revenue, which the proposed fee does not.
Motion to reject VCMRR041 added to combo ballot
12 - NPRR1238, Voluntary Registration of Loads with Curtailable Load Capabilities
Discussion is ongoing for NPRR1238; it was referred to WMS and ROS.
Golden Spread is addressing compliance issues related to load shed allocation, particularly due to large loads significantly exceeding their native load.
Golden Spread seeks voluntary registration for curtailable loads to prevent non-compliance during EA events.
The initiative aims to exclude large, curtailable loads from load shed obligations, focusing only on native loads.
Originally urgent, the proposal faces alignment needs with other ERCOT issues, preventing immediate urgency.
PRS voted to refer the issue to WMS and WMWG for further discussion.
Concerns include broader price formation issues and ORDC impacts.
System changes and interconnection requirements for large loads may be needed.
Market-related and systemic issues will be discussed to ensure comprehensive solutions.
Request for PRS to continue to table NPRR1238 for further review by WMWG added to combo ballot
13 - Revision Requests Tabled at PRS and Referred to WMS - Possible Vote - Eric Blakey
Discussion on maintaining most revision requests tabled based on prior discussions.
13.4 - NPRR1214, Reliability Deployment Price Adder Fix to Provide Locational Price Signals, Reduce Uplift and Risk - CMWG
Request for more analysis and data faced challenges in data retrieval.
Qualitative discussion highlighted the need for locational price signals.
General agreement on the philosophy and need for proper incentivizing of generation.
Impacts of the change still unclear without specific historical data.
Discussion to continue next month with or without additional historical data.
Request for update on SCR819 implementation and its impacts on GTC limits.
