Frame

Meeting Summary - 06/17/24 Reliability and Markets Committee Meeting

Grid Monitor Staff Writer
06/19/2024

1 - Call General Session to Order - Chair <ul> <li style="font-weight: 400;" aria-level="1">Keith Collins, ERCOT's new vice president of commercial operations, was introduced and will be voted on by the Human Resources and Governance Committee to ratify him as an ERCOT officer.</li> </ul> 2 - Notice of Public Comment, if Any - Discussion - Chair <ul> <li style="font-weight: 400;" aria-level="1">Speakers identified for item 5.1: Dr. David Patton, Katie Coleman on behalf of Texas Industrial Energy Consumers, and Ned Bonskowski on behalf of Vistra</li> <li style="font-weight: 400;" aria-level="1">Speaker identified for item 5.2: Eric Goff on behalf of Nextera</li> </ul> 3 - April 22, 2024 General Session Meeting Minutes - Vote - Chair <ul> <li style="font-weight: 400;" aria-level="1">Unanimous approval of meeting minutes</li> </ul> <a href="https://dash3.gridmonitor.com/sharing/?token=f1523cac-4749-40dc-b9fb-75ea9e2086c3" target="_blank" rel="noopener">4</a> - Recommendation regarding Committee Charter - Vote - Chair <ul> <li style="font-weight: 400;" aria-level="1">Amendments correspond to updates to the board policies and procedures and clarify other committee practices</li> <li style="font-weight: 400;" aria-level="1">Motion made to recommend the board approve the R&M committee charter consistent with the red lines</li> <li style="font-weight: 400;" aria-level="1">All in favor, no opposition or abstentions</li> </ul> 5 - TAC Report regarding R&M Committee Charter Revision Requests Recommended for Board Approval - Vote - TAC Chair <a href="https://dash3.gridmonitor.com/sharing/?token=7e75087e-8ed9-4229-a4a5-ecaa2c2e96cd" target="_blank" rel="noopener">5.1</a> - NPRR1224, ECRS Manual Deployment Triggers – URGENT - Vote - TAC Chair <ul> <li style="font-weight: 400;" aria-level="1">NPRR1224 introduces a trigger for ERCOT to manually release ECRS from SCED dispatchable resources when the system power balance constraint is violated by at least 40 MW for ten consecutive minutes</li> <li style="font-weight: 400;" aria-level="1">The NPRR also requires that the energy offer curves for capacity assigned to ECRS be offered at no less than $750 per megawatt hour</li> <li style="font-weight: 400;" aria-level="1">The original proposal for NPRR1224 came from an IMM concept for the release of ECRS at certain amounts of undergeneration.</li> <li style="font-weight: 400;" aria-level="1">Stakeholders arrived at a 40MW threshold instead of the originally proposed 30MW threshold for the trigger.</li> <li style="font-weight: 400;" aria-level="1">The compromise position with the 40 megawatt threshold was voted through TAC.</li> <li style="font-weight: 400;" aria-level="1">The position included a price floor of $750 to mimic the price of the ancillary service demand curve for ECRS.</li> <li style="font-weight: 400;" aria-level="1">Opposing votes focused on supporting the original concept of earlier deployment but disagreed on the price floor, suggesting lower floors such as $250 or $500.</li> <li style="font-weight: 400;" aria-level="1">Concerns were raised about high costs and inefficiencies under the current language of the NPRR.</li> <li style="font-weight: 400;" aria-level="1">Dr. Patton presented concerns about the deployment of ECRS and argued against the $750 offer floor, advocating for improved deployment procedures or a $100 offer floor instead.</li> <li style="font-weight: 400;" aria-level="1">Katie Coleman (TIEC) presented concerns expressing disagreement with the $750 price floor and supporting a $100 price floor to regulate the deployment of ECRS.</li> <li style="font-weight: 400;" aria-level="1">Ned Bonskowski, representing joint commenters, argued in favor of pricing reflecting conservative operations and defended the ancillary demand curve as the basis for setting a floor for ECRS.</li> <li style="font-weight: 400;" aria-level="1">Different stakeholders presented arguments for and against the $750 price floor, with suggestions for alternative price floors and improved deployment procedures.</li> </ul> <a href="https://dash3.gridmonitor.com/sharing/?token=e1e6c8c8-0b02-4d39-93b9-f2eff8d1815b" target="_blank" rel="noopener">5.1.1</a> - ERCOT Comments on NPRR1224 - Discussion - ERCOT Staff <ul> <li style="font-weight: 400;" aria-level="1">ERCOT staff discussed the 2024 ancillary service plan and analyzed the impact of a 500 megawatt shortage on ECRS.</li> <li style="font-weight: 400;" aria-level="1">The price distribution ranged from $284 to $2,750, with the $750 point reflecting average on-peak ancillary service demand curve prices during summer hours.</li> <li style="font-weight: 400;" aria-level="1">They emphasized the importance of preventing price reversal when ERCOT is short on ancillary services, aiming to emulate real-time co-optimization outcomes.</li> <li style="font-weight: 400;" aria-level="1">ERCOT reported that the TAC report effectively addresses these concerns, striking a reasonable middle ground.</li> </ul> <a href="https://dash3.gridmonitor.com/sharing/?token=c8e70ff3-9d97-4d25-b01b-d6d6b3fcf3f9" target="_blank" rel="noopener">5.1.2</a> - Other Comments on NPRR1224, if any - Discussion - Commenters <ul> <li style="font-weight: 400;" aria-level="1">There was a debate on the price floor for RUC units, with concerns raised about the lack of backing for the chosen price and the potential economic implications. </li> <li style="font-weight: 400;" aria-level="1">Questions were raised about the impact on consumers and the need for more clarity and data-driven decisions.</li> <li style="font-weight: 400;" aria-level="1">The committee ultimately approved the TAC recommended version with a price floor of $750, with some opposition, and emphasized the urgency of moving forward with NPRR1224, then applying continued lessons learned into NPRR1232.</li> </ul> <a href="https://dash3.gridmonitor.com/sharing/?token=3104f24b-59af-4873-a736-e0ce9e931714" target="_blank" rel="noopener">5.2</a> - NOGRR245, Inverter-Based Resource - IBR - Ride-Through Requirements – URGENT - Vote - TAC Chair <ul> <li style="font-weight: 400;" aria-level="1">The approved version reflects an August 1, 2024 effective date for new requirements, with existing IBRs not being indefinitely grandfathered.</li> <li style="font-weight: 400;" aria-level="1">Hardware changes up to a 40% cost threshold were gray boxed and would not apply until March 1, 2025.</li> <li style="font-weight: 400;" aria-level="1">There were opposing votes in the retail segment and several opposition comments filed after the TAC decision.</li> <li style="font-weight: 400;" aria-level="1">ERCOT's 6/16 comments indicated potential negotiations with joint commenters, leading to the need for clarity on the impact to the TAC process going forward.</li> </ul> <a href="https://dash3.gridmonitor.com/sharing/?token=062db644-f2b0-49fb-9c63-71c417686d92" target="_blank" rel="noopener">5.2.1</a> - ERCOT Comments on NOGRR245 - Discussion - ERCOT Staff <ul> <li style="font-weight: 400;" aria-level="1">ERCOT comments submitted recommend tabling NOGRR245 to work on changes to the bifurcation process. </li> <li style="font-weight: 400;" aria-level="1">The presentation is based on the TAC approved version. The issue revolves around the exemptions and extension process for legacy assets unable to meet legacy ride through requirements. </li> <li style="font-weight: 400;" aria-level="1">Joint commenters object to the process and might appeal to the PUCT</li> <li style="font-weight: 400;" aria-level="1"> ERCOT submitted comments to streamline the issue and separate the exemption and extension process into two phases. This is to achieve the same result as TAC's recommendation and still address joint commenters' concerns. </li> <li style="font-weight: 400;" aria-level="1">The current version of NOGRR245 is not satisfactory to joint commenters. ERCOT recommends tabling the NOGRR and working with joint commenters to address their concerns.</li> <li style="font-weight: 400;" aria-level="1">The second phase would proceed through the normal stakeholder process. The committee approved the recommendation to table NOGRR245.</li> </ul> <a href="https://dash3.gridmonitor.com/sharing/?token=bb041acc-b142-4d25-a97f-c15531cb8b99" target="_blank" rel="noopener">6</a> - Recommendation regarding Oncor West Texas 345-kV Infrastructure Rebuild Regional Planning Group - RPG - Project - Vote - Kristi Hobbs <ul> <li style="font-weight: 400;" aria-level="1">The project is over $100 million, requiring board review and endorsement.</li> <li style="font-weight: 400;" aria-level="1">ERCOT staff and TAC unanimously endorse the project based on NERC and ERCOT planning criteria.</li> <li style="font-weight: 400;" aria-level="1">Project aims to address contingency needs and relieve potential grid failures.</li> <li style="font-weight: 400;" aria-level="1">Project cost is $1.12 billion with an estimated completion target of summer 2028.</li> <li style="font-weight: 400;" aria-level="1">Committee moves to recommend endorsement of the project to the board, which is approved unanimously.</li> </ul> 6.1 - Break 7 - Committee Briefs - Discussion - Staff <a href="https://dash3.gridmonitor.com/sharing/?token=4ca90f7c-1a77-4a13-8d1b-215d4f46d742" target="_blank" rel="noopener">7.1</a> - System Planning and Weatherization Update - Discussion - Kristi Hobbs <ul> <li style="font-weight: 400;" aria-level="1">Summer preparedness activities for weather inspections and new tool for collecting weather preparedness declarations</li> <li style="font-weight: 400;" aria-level="1">High attendance at training sessions and successful response rates from market participants</li> <li style="font-weight: 400;" aria-level="1">Anticipation of 300+ site visits for transmission weatherization program</li> <li style="font-weight: 400;" aria-level="1">Development of new tools for better situational awareness of battery state of charges</li> <li style="font-weight: 400;" aria-level="1">Discussion on August monthly operation and resource adequacy report</li> <li style="font-weight: 400;" aria-level="1">Update on network operations model and downstream production changes</li> <li style="font-weight: 400;" aria-level="1">Planning for substantial new transmission needs to accommodate increased distance between generation and load</li> <li style="font-weight: 400;" aria-level="1">Ahead of schedule on Permian Basin reliability study with significant transmission needs anticipated</li> <li style="font-weight: 400;" aria-level="1">Updates on generation interconnection queue and formalized process for large load interconnection</li> <li style="font-weight: 400;" aria-level="1">Update on reliability standard, value of loss load and cost of new entry study</li> <li style="font-weight: 400;" aria-level="1">May 2024 summer capacity, demand, and reserves report and discussion on marketplace behavior shift in response to monthly reports</li> </ul> <a href="https://dash3.gridmonitor.com/sharing/?token=c19ad982-a257-4819-98bc-1940347a3746" target="_blank" rel="noopener">7.2</a> - System Operations Update - Discussion - Dan Woodfin <ul> <li style="font-weight: 400;" aria-level="1">In March, there was a new renewable penetration record of over 75%, with nearly 76% of the energy consumed being produced by renewables. This emphasizes the importance of combined renewables rather than separate wind and solar penetration.</li> <li style="font-weight: 400;" aria-level="1">Curtailment of wind and solar was observed, indicating that if there was no curtailment, the amount of wind and solar would have exceeded the load.</li> <li style="font-weight: 400;" aria-level="1">The discussion highlighted that inertia issues can arise with high levels of renewables, but during the specific high renewable period mentioned, there were no problems with inertia due to the presence of synchronous generation.</li> <li style="font-weight: 400;" aria-level="1">Planned and forced generation outages were discussed, comparing this year to last year. The forced generation outages during the spring outage season were higher than last year, with potential reasons being extensions of planned outages or limitations in the MDRPOC.</li> <li style="font-weight: 400;" aria-level="1">Projections of demand response for avoiding transmission charges were presented, with an emphasis on the need to extend outages or curtailment beyond the hours strictly needed to avoid 4CP.</li> <li style="font-weight: 400;" aria-level="1">There was a discussion on the changing dynamics of demand and price due to solar, as well as the impact of MDRPOC numbers on the occurrence of forced outages.</li> <li style="font-weight: 400;" aria-level="1">Revisiting the MDRPOC numbers and resource adequacy were mentioned as ongoing processes to address the issue of forced outages.</li> <li style="font-weight: 400;" aria-level="1">Additionally, the potential future use of reliability standards as part of MDRPOC calculation was suggested.</li> </ul> <a href="https://dash3.gridmonitor.com/sharing/?token=064a8062-0b11-4d04-870c-4ee2582ff486" target="_blank" rel="noopener">7.3</a> - Commercial Markets Update - Discussion - Gordon Drake <ul> <li style="font-weight: 400;" aria-level="1">Observations showed an increase in the frequency of negative or zero dollar megawatt hour prices, particularly in shoulder months, and the relationship between higher outage levels in the spring and resulting market outcomes.</li> <li style="font-weight: 400;" aria-level="1">The dispatchable reliability reserve service was a topic of stakeholder discussion involving resource eligibility and settlement outcomes, with a focus on offline resources only.</li> <li style="font-weight: 400;" aria-level="1">Additional discussions on energy storage resources and inclusion in the DRRS were expected to be active over the summer.</li> </ul> <a href="https://dash3.gridmonitor.com/sharing/?token=0531c260-ca0c-44de-a7c1-971c40e7c211" target="_blank" rel="noopener">7.3.1</a> - Real-Time Co-optimization Update - Discussion - Matt Mereness <ul> <li style="font-weight: 400;" aria-level="1">Moving from business requirements at ERCOT to the implementation side</li> <li style="font-weight: 400;" aria-level="1">Received first drop of vendor delivery code</li> <li style="font-weight: 400;" aria-level="1">Transitioning into integration and market interface changes</li> <li style="font-weight: 400;" aria-level="1">Having off-cycle workshops to prepare market participants and vendors</li> <li style="font-weight: 400;" aria-level="1">Ongoing issues to address before go-live</li> <li style="font-weight: 400;" aria-level="1">Planning market trials, analysis of market outcomes, parameter values, and deconstructing the ORDC curve into AS demand curves</li> <li style="font-weight: 400;" aria-level="1">Key delivery date for vendor set for May 2025</li> <li style="font-weight: 400;" aria-level="1">Potential start of market trials in May 2025</li> <li style="font-weight: 400;" aria-level="1">QSE attestation needed for market readiness</li> <li style="font-weight: 400;" aria-level="1">Testing and frequency control test planned for September 2025</li> <li style="font-weight: 400;" aria-level="1">Formal project plan for go-live date to be delivered by September 2021</li> </ul> <a href="https://dash3.gridmonitor.com/sharing/?token=57644bbe-ae29-4efe-a1e9-7aca2bde5e45" target="_blank" rel="noopener">7.4</a> - Market Credit Update - Discussion - Austin Rosel <ul> <li style="font-weight: 400;" aria-level="1">No defaults to report since the last update</li> <li style="font-weight: 400;" aria-level="1">Credit exposure for shoulder months (March and April) was $1.3 to $1.5 billion, now up to around $2 billion for summer</li> <li style="font-weight: 400;" aria-level="1">NPRR1165 required market participants to provide an independent amount of $200,000 or $500,000, resulting in a jump in exposure of $133 million</li> <li style="font-weight: 400;" aria-level="1">Slight decrease in discretionary collateral from $4.4 to $4.1 billion as a result of increased exposure</li> <li style="font-weight: 400;" aria-level="1">NPRR1205, approved by PUC, will start implementation next month, dealing with concentration limits for banks issuing letters of credit and surety bonds</li> <li style="font-weight: 400;" aria-level="1">Plans to phase in changes and start shutting down banks that don't meet credit qualifications after summer</li> <li style="font-weight: 400;" aria-level="1">NPRR1215 is a clarification NPRR to more accurately match credit checks in the day ahead market</li> <li style="font-weight: 400;" aria-level="1">No focus on preventing price corrections</li> </ul> <a href="https://dash3.gridmonitor.com/sharing/?token=dcd2a476-948b-47da-9595-90ecffa476d1" target="_blank" rel="noopener">7.5</a> - Revision Request Status Update - Discussion - Jonathan Levine <ul> <li style="font-weight: 400;" aria-level="1">The number of revision requests in June and new requests in April are consistent, indicating a steady flow</li> <li style="font-weight: 400;" aria-level="1">Some progress made in moving requests from the aging list</li> </ul> <a href="https://dash3.gridmonitor.com/sharing/?token=5baaf19c-5700-4270-812f-f8f72d8d4be4" target="_blank" rel="noopener">8</a> - Future Agenda Items - Discussion - Woody Rickerson <ul> <li style="font-weight: 400;" aria-level="1">Suggested adding row nine: Large transmission studies for remaining three board meetings</li> <li style="font-weight: 400;" aria-level="1">Mentioned several large Permian basin extra high voltage studies upcoming</li> <li style="font-weight: 400;" aria-level="1">Proposed adding row twelve: Discussion of reliability standard, maybe in an earlier month</li> <li style="font-weight: 400;" aria-level="1">Transmission projects primarily looking at 345kV or higher</li> <li style="font-weight: 400;" aria-level="1">Will conduct Permian basin study with 345kV build out and comparable 765kV or 500kV build out</li> <li style="font-weight: 400;" aria-level="1">System-wide extra high voltage study will look at new voltage component</li> <li style="font-weight: 400;" aria-level="1">Proposed agenda items for the future meetings: Large transmission studies and discussion of reliability standard.</li> </ul> 9 - Other Business Discussion - Chair <ul> <li style="font-weight: 400;" aria-level="1">No other business</li> </ul> 11 - Adjournment - Chair