Frame

Meeting Summary -10/31/24 P-55845 Staff Led Workshop

Grid Monitor AI
11/01/2024

<img src="/storage/docs/2024/11/10312024PUCWorkshopHero.png" />7 -  <h1>Questions and Answers - Stakeholders, ERCOT, IMM</h1> <h2>Q1: Should the Commission direct ERCOT to determine AS procurement quantities based on a criterion that corresponds to maintaining a specified level of reserves less than the amount used in current operating procedures and more than the amount that triggers a Watch?</h2> <h3><a href="/sharing/?token=5883eefe-01b9-43c7-9e31-a404fe516003">1</a> - Jeff Billow, ERCOT, AS Procurement Quantities</h3> <ul> <li style="font-weight: 400;" aria-level="1">Jeff Billow from ERCOT addressed misconceptions about ancillary services, emphasizing their role primarily in addressing unexpected system events rather than capacity shortages.</li> <li style="font-weight: 400;" aria-level="1">Two main scenarios discussed: running out of capacity on extreme weather days and emergencies due to forecast errors or generator trips.</li> <li style="font-weight: 400;" aria-level="1">Ancillary services like Non-spin and ECRS are procured to manage unexpected events, not just capacity shortages.</li> <li style="font-weight: 400;" aria-level="1">The WATCH criteria indicates a state policy directive post-Winter Storm Uri to avoid signaling grid instability unnecessarily.</li> <li style="font-weight: 400;" aria-level="1">Highway analogy used to explain safety margins and reserve levels. Before certain policy revisions (NPRR1105 & NPRR1106), there was a greater buffer between declared emergencies and load shedding.</li> <li style="font-weight: 400;" aria-level="1">Recent changes reduced reserve margins from 2600 MW to 1000 MW between emergency alert (EEA1) and load shedding.</li> <li style="font-weight: 400;" aria-level="1">Debate over criteria for ancillary services procurement focuses on avoiding a WATCH state, with opinions differing on whether to continue current practices or use a different reserve standard.</li> <li style="font-weight: 400;" aria-level="1">Key discussion point: Determining the probability and criteria for entering a WATCH should ERCOT aim for a 1-in-5, 1-in-10, or 1-in-20-year event frequency?</li> <li style="font-weight: 400;" aria-level="1">Stakeholder comments varied on operational criteria, with some supporting ERCOT's approach and others suggesting aligning with a model targeting involuntary load shed.</li> </ul> <h3><a href="/sharing/?token=90eaf0b4-4f11-4081-b5fd-77bdf9f1b709">1</a> - Michele Richmond, TCPA, AS Procurement Quantities</h3> <ul> <li style="font-weight: 400;" aria-level="1">Michele Richmond represented Texas Competitive Power Advocates.</li> <li style="font-weight: 400;" aria-level="1">Emphasized that grid operation standards should determine ancillary service procurement.</li> <li style="font-weight: 400;" aria-level="1">Market activities should reflect control room operations.</li> <li style="font-weight: 400;" aria-level="1">Current demand curves do not reflect post-Uri real-time co-optimization changes.</li> <li style="font-weight: 400;" aria-level="1">Advocates for alignment between ERCOT's operational directives and market design to avoid policy disconnect.</li> <li style="font-weight: 400;" aria-level="1">Stressed the need for ERCOT's market design to align with Commission's decisions.</li> </ul> <h3><a href="/sharing/?token=0ac690c4-a06a-4c73-9b8e-7262182e57b7">1</a> - Blake Holt, LCRA, AS Procurement Quantities</h3> <ul> <li style="font-weight: 400;" aria-level="1">Blake Holt aligns with Michele on the discussed issue and doesn't provide additional justification.</li> <li style="font-weight: 400;" aria-level="1">Concerns raised about a disconnect between ERCOT's operational posture and the AS plan procurement.</li> <li style="font-weight: 400;" aria-level="1">ERCOT plans to fill resource gaps with RUC instructions, which is deemed unacceptable by stakeholders.</li> <li style="font-weight: 400;" aria-level="1">Stakeholders prioritize resource adequacy in conversations.</li> <li style="font-weight: 400;" aria-level="1">Concern that increased RUC commitments might decrease reliability due to wear and tear on older units.</li> <li style="font-weight: 400;" aria-level="1">415 RUC hours were issued from June to September; over 90% affected units were over 50 years old.</li> <li style="font-weight: 400;" aria-level="1">Preference for policies that signal demand needs through pricing rather than out-of-market actions.</li> <li style="font-weight: 400;" aria-level="1">AS plan should align with ERCOT's current operational posture.</li> </ul> <h3><a href="/sharing/?token=28cab75d-3d09-45aa-a3bb-d3f878d79113">1</a> -  Bryan Sams, Calpine, AS Procurement Quantities</h3> <ul> <li style="font-weight: 400;" aria-level="1">Achieving the reliability standard is the primary objective of the market design.</li> <li style="font-weight: 400;" aria-level="1">Ancillary services, LMP, and ECRS are crucial tools in achieving this standard.</li> <li style="font-weight: 400;" aria-level="1">Prospective tools like DRRS and PCM are not well-defined currently.</li> <li style="font-weight: 400;" aria-level="1">Consider changes in standards in context of moving towards or away from the reliability goal.</li> <li style="font-weight: 400;" aria-level="1">Current measurements and tuning of policy dials, such as LMP cap and ancillary services purchasing quantities, lack cohesion.</li> <li style="font-weight: 400;" aria-level="1">Recent reductions in ancillary services quantities for 2026 seen as reducing investment signals.</li> <li style="font-weight: 400;" aria-level="1">Potential for reform in existing resources like ECRS to enhance demand response.</li> <li style="font-weight: 400;" aria-level="1">DRRS and PCM currently hold no value as they are not implemented.</li> <li style="font-weight: 400;" aria-level="1">Calpine's focus is on aligning changes with reliability standard goals.</li> </ul> <h3><a href="/sharing/?token=758fac8c-3883-47cc-8e8a-08008c61d4b2">1</a> - Bill Barnes, NRG, AS Procurement Quantities</h3> <ul> <li style="font-weight: 400;" aria-level="1">ERCOT operated more conservatively after Winter Storm Uri, which initially had some disagreement due to timing and retail market impact.</li> <li style="font-weight: 400;" aria-level="1">Over time, it was acknowledged that conservative operations can lead to more reliable systems, which consumers desire.</li> <li style="font-weight: 400;" aria-level="1">Support for ERCOT's approach in using ancillary services was expressed, but a stable amount of procurement is requested to avoid market disruptions.</li> <li style="font-weight: 400;" aria-level="1">Resource adequacy is a major concern, with upcoming large load growth over the next five years.</li> <li style="font-weight: 400;" aria-level="1">Importance of defining tools for reliability objectives, particularly with ancillary services and demand response resources, DRRS.</li> <li style="font-weight: 400;" aria-level="1">Concerns were raised about what tools remain if certain products are potentially eliminated for resource adequacy.</li> <li style="font-weight: 400;" aria-level="1">A suggestion was made for a comprehensive review of demand response programs, utilizing platforms for energy efficiency and demand response in the competitive retail market.</li> <li style="font-weight: 400;" aria-level="1">Possible new product design for different customer classes to aid ERCOT in managing resource adequacy and operational reliability.</li> </ul> <h3><a href="/sharing/?token=12023127-4735-4a49-9245-bff8bedee91b">1</a> - Andy Nguyen, Constellation, AS Procurement Quantities</h3> <ul> <li style="font-weight: 400;" aria-level="1">Andy Nguyen from Constellation agrees with previous commenters, including TCPA.</li> <li style="font-weight: 400;" aria-level="1">Expressed concerns about the reliance on RUC, aligning with LCRA’s comments.</li> <li style="font-weight: 400;" aria-level="1">Emphasized a misalignment between ERCOT's desired operational reserve and the market's signal response.</li> <li style="font-weight: 400;" aria-level="1">Noted a reduction in RUC after the implementation of ECRS.</li> <li style="font-weight: 400;" aria-level="1">Concerned about ERCOT's comment regarding insufficient ancillary services potentially leading back to using RUC.</li> <li style="font-weight: 400;" aria-level="1">Utilizing RUC could be costly for consumers due to make-whole payments.</li> <li style="font-weight: 400;" aria-level="1">Potential negative impact on generators and concerns on aging fleet wear and tear were also mentioned.</li> </ul> <h3><a href="/sharing/?token=bdac6750-f0ea-4b26-bb4d-e83c85b6dd8d">1</a> - Laurie Block, TSPA, AS Procurement Quantities</h3> <ul> <li style="font-weight: 400;" aria-level="1">Laurie Block represents the Texas Solar Power Association.</li> <li style="font-weight: 400;" aria-level="1">Agrees with ERCOT on the role of ancillary services as an operational reliability tool.</li> <li style="font-weight: 400;" aria-level="1">Emphasizes the importance of the energy-only market and maintaining its competitiveness.</li> <li style="font-weight: 400;" aria-level="1">Stresses the need to clearly define the true purpose of ancillary services before determining procurement quantities.</li> <li style="font-weight: 400;" aria-level="1">Acknowledges the conservative operations adopted by ERCOT post-Winter Storm Uri.</li> <li style="font-weight: 400;" aria-level="1">Highlights the importance of focusing on avoiding unintended consequences and preserving investment signals.</li> </ul> <h3><a href="/sharing/?token=ddb24cfd-6d05-472a-9c7b-8d5625f9a6ab">1</a> - Ned Bonskowski, Vistra, AS Procurement Quantities</h3> <ul> <li style="font-weight: 400;" aria-level="1">Ned Bonskowski acknowledged agreement with several previous comments but highlighted a divergence in views related to resource adequacy and operational reliability needs.</li> <li style="font-weight: 400;" aria-level="1">Emphasized the importance of using energy and ancillary services markets to support resource adequacy, due to limitations placed on other tools.</li> <li style="font-weight: 400;" aria-level="1">Discussed the need for conservatism in ancillary service procurement to ensure sufficient resources during extreme events.</li> <li style="font-weight: 400;" aria-level="1">Used an analogy involving roads and rumble strips to explain current market structures and the need for additional capacity to prevent system failures.</li> <li style="font-weight: 400;" aria-level="1">Raised a question regarding whether a commission directive for ERCOT to determine ancillary service protection quantities implies the need for rulemaking, suggesting a potential rulemaking process under HB1500.</li> </ul> <h3><a href="/sharing/?token=9c11765d-842d-4239-9810-2c2201660e62">1</a> - Katie Coleman, TIEC, AS Procurement Quantities</h3> <ul> <li style="font-weight: 400;" aria-level="1">Ancillary services should cover specific operational risks, not additional reserve levels.</li> <li style="font-weight: 400;" aria-level="1">Prefer objective analysis to define risks and ensure transparency in risk assessment.</li> <li style="font-weight: 400;" aria-level="1">Concern with using WATCH criteria as it is subjective, prefer criteria with objective triggers.</li> <li style="font-weight: 400;" aria-level="1">Support market solutions including ancillary services over RUC.</li> <li style="font-weight: 400;" aria-level="1">Disagreement with the notion that no money is put in the market until critical conditions occur.</li> <li style="font-weight: 400;" aria-level="1">Recognition of efforts to price reliability risk earlier and changes to the operating reserve demand curve.</li> <li style="font-weight: 400;" aria-level="1">Future discussions anticipated on ancillary service demand curves and real-time co-optimization.</li> <li style="font-weight: 400;" aria-level="1">The importance of assessing if tools meet the reliability standard rule.</li> <li style="font-weight: 400;" aria-level="1">Encouragement for transparent definitions of risks and levels of coverage.</li> </ul> <h3><a href="/sharing/?token=aa18a1cb-311d-48dd-8640-e90c84af916a">1</a> - Eric Goff, TEBA, AS Procurement Quantities</h3> <ul> <li style="font-weight: 400;" aria-level="1">The reliability standard aims to avoid outages, and ancillary service procurement should align with this standard.</li> <li style="font-weight: 400;" aria-level="1">Transparency in procurement of operating reserves is crucial to meet planning and reliability standards.</li> <li style="font-weight: 400;" aria-level="1">Understanding the quantities and reasons for procurement is essential for addressing uncertainties consistently.</li> <li style="font-weight: 400;" aria-level="1">Demand response can be a larger component of ancillary services, potentially reducing costs if implemented for advance scenarios.</li> <li style="font-weight: 400;" aria-level="1">New products, such as hours or days in advance demand response, could lower overall consumer costs.</li> <li style="font-weight: 400;" aria-level="1">Conversations should focus on specific reasons and risks related to procurement rather than using metaphors or analogies.</li> </ul> <h3><a href="/sharing/?token=80dd0998-486a-4a39-9277-3865388ed531">1</a> - Cyrus Reed, Sierra Club, AS Procurement Quantities</h3> <ul> <li style="font-weight: 400;" aria-level="1">Cyrus Reed from the Sierra Club's Lone Star Chapter presented comments on AS procurement quantities.</li> <li style="font-weight: 400;" aria-level="1">Expressed agreement with previous discussions, opposing the concept of "RUC-ing" due to cost and inefficiency, and potential pollution from older units.</li> <li style="font-weight: 400;" aria-level="1">Noted ERCOT's conservative strategy post-Winter Storm Uri, acknowledging its effectiveness but also its high cost to consumers.</li> <li style="font-weight: 400;" aria-level="1">Suggested that an EEA is clearer than a watch for managing events.</li> <li style="font-weight: 400;" aria-level="1">Advocated for considering demand response as a tool, highlighting opportunities for residential demand response between a watch and an EEA.</li> <li style="font-weight: 400;" aria-level="1">Pointed out that bringing in ancillary services too quickly might prevent consumers from gaining financial benefits through demand response programs.</li> <li style="font-weight: 400;" aria-level="1">Emphasized a risk versus reward assessment for the market concerning current measures.</li> </ul> <h3><a href="/sharing/?token=c22eb533-8024-45b7-89f5-780f9440bdd4">1</a> - Stephanie Kroger, Hunt Energy, AS Procurement Quantities</h3> <ul> <li style="font-weight: 400;" aria-level="1">Agreement with previous comments, particularly those by Ned.</li> <li style="font-weight: 400;" aria-level="1">Concern that the public is worried about power shortages and doesn't want to operate under such conditions.</li> <li style="font-weight: 400;" aria-level="1">Jeff mentioned two causes for potential power shortages: extreme weather events or insufficient capacity.</li> <li style="font-weight: 400;" aria-level="1">Highlighted the need to address resource adequacy as a critical issue.</li> <li style="font-weight: 400;" aria-level="1">Warning against waiting until 2026 to start analyzing reliability standards.</li> <li style="font-weight: 400;" aria-level="1">DRRS is identified as a key tool that requires further Commission guidance.</li> <li style="font-weight: 400;" aria-level="1">The dual purpose of DRRS should include reliability reserves.</li> </ul> <h3><a href="/sharing/?token=53f8601b-8ca2-4db8-8026-1fead3deab4c">1</a> - Resmi Surendran, Shell Energy, AS Procurement Quantities</h3> <ul> <li style="font-weight: 400;" aria-level="1">Resmi Surendran from Shell Energy discussed a balanced position between load position and generation position.</li> <li style="font-weight: 400;" aria-level="1">Emphasized the importance of combining energy and ancillary services to provide necessary revenue for required resources.</li> <li style="font-weight: 400;" aria-level="1">Highlighted the need for transparent competitive markets to procure reserves.</li> <li style="font-weight: 400;" aria-level="1">Concurred with ERCOT's current operational approach to avoid 'WATCH', advocating for continuation if desired.</li> <li style="font-weight: 400;" aria-level="1">Stressed the significance of transparency in the market for hedging and price reflection to serve as investment signals.</li> <li style="font-weight: 400;" aria-level="1">Discussed the need for evaluation of the ASDC for real-time optimization and appropriate valuation of services.</li> <li style="font-weight: 400;" aria-level="1">Acknowledged the need to quantify and qualify the types of reserves and services needed.</li> <li style="font-weight: 400;" aria-level="1">Noted the significance not only of the quantity but also the valuation of the reserves.</li> <li style="font-weight: 400;" aria-level="1">Called for ERCOT to define the necessary services and ensure correct signaling for resource development.</li> <li style="font-weight: 400;" aria-level="1">Mentioned the IMM wants to replace a filing but did not react further to Iran's filing.</li> </ul> <h3><a href="/sharing/?token=385621f5-c235-443b-b16d-388909372e0c">1</a> - Jeff McDonald, IMM, AS Procurement Quantities</h3> <ul> <li style="font-weight: 400;" aria-level="1">Jeff McDonald emphasized that procurement levels should be based on reliability criteria, specifically the probability of loss of load, rather than watch notifications.</li> <li style="font-weight: 400;" aria-level="1">He argued that using empirical evaluation for AS procurement based on the probability of loss load is more efficient and should be the standard.</li> <li style="font-weight: 400;" aria-level="1">A discussion on AS procurement compared the watch protocol to a rumble strip, highlighting that structuring operations around a probability of loss load covers all conditions, enhancing reliability.</li> <li style="font-weight: 400;" aria-level="1">Jeff clarified that reaching the 3000 megawatt mark in PRC (Physical Response Capability) is when ERCOT enters a watch for low operating reserves, marking it as an objective reliability criteria.</li> <li style="font-weight: 400;" aria-level="1">It was also clarified that ERCOT doesn't prefer to use RUC and would rather rely on market mechanisms to ensure sufficient capacity.</li> <li style="font-weight: 400;" aria-level="1">Support was expressed for increasing demand response within the market to help manage capacity issues.</li> <li style="font-weight: 400;" aria-level="1">A discussion about dynamic procurement suggested setting minimum procurement quantities annually and adjusting them closer to real time to address concerns about hedging practices.</li> </ul> <h2>Q2: Would the following procurement approach provide the appropriate balance amongst reliability, efficiency, and regulatory certainty to Market Participants: a. setting minimum procurement quantities annually based on one criterion, and b. setting final quantities closer to real time (e.g., five days ahead) based on some other, more conservative criterion?</h2> <h3><a href="/sharing/?token=4b06c1b2-cb94-44a6-aa19-b0a091909cbb">2</a> - Eric Goff, TEBA, AS Quantities Determination</h3> <ul> <li style="font-weight: 400;" aria-level="1">Dynamic procurement is beneficial if done consistently and transparently, based on clear criteria.</li> <li style="font-weight: 400;" aria-level="1">Arbitrary or unpredictable methodologies should be avoided to prevent unnecessary expenses and confusion.</li> <li style="font-weight: 400;" aria-level="1">Procurement should not be overly conservative several days in advance; it should consider uncertainties not known during the annual process.</li> <li style="font-weight: 400;" aria-level="1">Decisions on procurement should account for specific conditions such as higher forecast error likelihood in load, wind, solar, or increased outages.</li> <li style="font-weight: 400;" aria-level="1">Avoiding conservative procurement could save costs by not interfering with longer-term procurement plans.</li> <li style="font-weight: 400;" aria-level="1">The ancillary services market is already illiquid; adding complexity through dynamic procurement could be risky.</li> <li style="font-weight: 400;" aria-level="1">Procurement decisions should include consideration of which specific products are necessary, potentially opting for different services based on anticipated conditions.</li> </ul> <h3><a href="/sharing/?token=48e1792d-8852-455e-bc29-c60172dec12d">2</a> - Katie Coleman, TIEC, AS Quantities Determination</h3> <ul> <li style="font-weight: 400;" aria-level="1">The proposal could be workable if the market is given expectations around minimum amounts.</li> <li style="font-weight: 400;" aria-level="1">Factors requiring additional ancillary service needs should be evaluated closer to real time for better assessment.</li> <li style="font-weight: 400;" aria-level="1">Industrial clients generally pay ancillary services directly without much hedging against costs.</li> <li style="font-weight: 400;" aria-level="1">Efficient, dynamic procurement closer to real time is better for industrial clients.</li> <li style="font-weight: 400;" aria-level="1">Small commercial and residential customers face issues with cost prediction by retailers.</li> <li style="font-weight: 400;" aria-level="1">Dynamic procurement can be aligned with customer cost prediction if there are clear criteria, transparency, and consistency.</li> <li style="font-weight: 400;" aria-level="1">The goal is to avoid unpredictable, arbitrary determinations.</li> <li style="font-weight: 400;" aria-level="1">Middle ground could be setting a minimum quantity with additional quantities procured closer to real time based on risk assessment.</li> </ul> <h3><a href="/sharing/?token=576691db-757b-4fcd-8b0c-44e3fa3c9ed4">2</a> - Ned Bonskowski, Vistra, AS Quantities Determination</h3> <ul> <li style="font-weight: 400;" aria-level="1">Current practice involves dynamically procuring ancillary services with ERCOT and Commission approval.</li> <li style="font-weight: 400;" aria-level="1">Additional ancillary services may be procured during events like a solar eclipse or other conservative operations.</li> <li style="font-weight: 400;" aria-level="1">Concerns exist regarding changes to ancillary service quantities as it could lead to inefficient trade-offs.</li> <li style="font-weight: 400;" aria-level="1">Consistent and transparent procurement of operating reserves is crucial for planning reserves.</li> <li style="font-weight: 400;" aria-level="1">Dynamic procurement could result in less predictable signals, complicating market predictions.</li> <li style="font-weight: 400;" aria-level="1">Potential market confusion and uncertainty are concerns, especially for retail providers needing to hedge.</li> </ul> <h3><a href="/sharing/?token=befa1f76-2bf9-4073-ad57-9e60c779fed3">2</a> - Laurie Block, TSPA, AS Quantities Determination</h3> <ul> <li style="font-weight: 400;" aria-level="1">Agreement with previous statements regarding the importance of predictable and transparent rules for generator investment decisions.</li> <li style="font-weight: 400;" aria-level="1">Emphasis on the need for clear and identifiable guidelines if the Commission introduces unpredictable elements.</li> <li style="font-weight: 400;" aria-level="1">Discussion on the potential impacts of unpredictability in market fundamentals on investment decisions.</li> <li style="font-weight: 400;" aria-level="1">Importance of details and differences in ancillary services, highlighting that not all services require dynamic procurement.</li> <li style="font-weight: 400;" aria-level="1">Acknowledgement that certain services, such as those countering forecast errors related to weather, might necessitate different approaches.</li> <li style="font-weight: 400;" aria-level="1">Advocacy for clarity and understanding in any new proposals from the Commission.</li> </ul> <h3><a href="/sharing/?token=a1f9d6b5-b21f-493e-a247-56c41b98498e">2</a> - Bryan Sams, Calpine, AS Quantities Determination</h3> <ul> <li style="font-weight: 400;" aria-level="1">Reducing the overall procurement of ancillary services could decrease market revenue for generators, impacting the reliability standard.</li> <li style="font-weight: 400;" aria-level="1">Emphasis on the need to measure the potential impact of reduced procurement on reliability.</li> <li style="font-weight: 400;" aria-level="1">Concerns about hedging incentives for different representatives, and the risk of exposure to price volatility.</li> <li style="font-weight: 400;" aria-level="1">Importance of ensuring sufficient credit to cover potential risks.</li> </ul> <h3><a href="/sharing/?token=40a866b2-826d-47bf-ad9b-0bfb5ce643fb">2</a> - Blake Holt, LCRA, AS Quantities Determination</h3> <ul> <li style="font-weight: 400;" aria-level="1">Blake Holt from LCRA discussed implementation of dynamic procurement coinciding with the go live of RTC.</li> <li style="font-weight: 400;" aria-level="1">He raised concerns about the complexity of adjusting hedging practices during this time.</li> <li style="font-weight: 400;" aria-level="1">Highlighted the importance of having a stable plan to analyze market outcomes post-RTC go live.</li> <li style="font-weight: 400;" aria-level="1">Emphasized that this stability will provide better insight and confidence for necessary incremental adjustments.</li> </ul> <h3><a href="/sharing/?token=64a3057e-621f-43ac-bef0-800870bb0e4c">2</a> - Bill Barnes, NRG, AS Quantities Determination</h3> <ul> <li style="font-weight: 400;" aria-level="1">Support for transitioning to a dynamic procurement process for higher efficiency and flexibility.</li> <li style="font-weight: 400;" aria-level="1">Current energy market is illiquid and difficult to hedge, with North Hub being the most liquid product.</li> <li style="font-weight: 400;" aria-level="1">Ancillary services are even more challenging to hedge with little expected impact from the proposed changes.</li> <li style="font-weight: 400;" aria-level="1">Advocacy for known procurement ranges posted in advance to assist in market adjustments.</li> <li style="font-weight: 400;" aria-level="1">Suggestion for ERCOT to publish minimum and reasonable maximum procurement amounts to aid market stability.</li> <li style="font-weight: 400;" aria-level="1">Recommendation for these ranges to be announced in December for the following year.</li> </ul> <h3><a href="/sharing/?token=0a1c69b7-aa42-48fa-ac7f-ff1bc200957d">2</a> - Stephanie Kroger, Hunt Energy, AS Quantities Determination</h3> <ul> <li style="font-weight: 400;" aria-level="1">Challenges for developers, lenders, and investors seeking regulatory certainty and clarity regarding expected revenues.</li> <li style="font-weight: 400;" aria-level="1">Concerns that dynamic scheduling or procurement may increase these challenges.</li> <li style="font-weight: 400;" aria-level="1">Difficulty in achieving predictability and transparency in market dynamics.</li> <li style="font-weight: 400;" aria-level="1">Agreement with concerns about market confusion and lack of transparency when introducing RTC.</li> <li style="font-weight: 400;" aria-level="1">Suggestion to study dynamic scheduling further after addressing RTC.</li> </ul> <h3> <a href="/sharing/?token=48a91fe4-87a3-445e-91db-62b9417576d7">2</a> - Resmi Surendran, Shell Energy, AS Quantities Determination</h3> <ul> <li style="font-weight: 400;" aria-level="1">Concerns about minimum and maximum quantities in dynamic situations; hedging becomes difficult if variability is large.</li> <li style="font-weight: 400;" aria-level="1">Recommendation to set the minimum to cover at least 90% of scenarios to reduce variation.</li> <li style="font-weight: 400;" aria-level="1">Advocacy for predictability and transparency to enhance comfort in hedging.</li> <li style="font-weight: 400;" aria-level="1">Consideration of different quantities needed during high risk vs. low risk periods.</li> <li style="font-weight: 400;" aria-level="1">Observation that ancillary service value is low during low risk periods, affecting cost differences.</li> <li style="font-weight: 400;" aria-level="1">Evaluation of whether dynamic procurement provides real benefits when there are large cost differences.</li> <li style="font-weight: 400;" aria-level="1">RTC design currently uses a demand curve that dictates ancillary service quantities hour by hour.</li> <li style="font-weight: 400;" aria-level="1">Question raised on whether dynamic procurement would alter the demand curve hourly, leading to energy and ancillary service price instability.</li> <li style="font-weight: 400;" aria-level="1">Need for careful consideration of several factors before implementing dynamic procurement.</li> </ul> <h3><a href="/sharing/?token=54d804a2-ed07-41da-9667-80dc9698f297">2</a> - Resmi Surendran and Bill Barnes - AS Quantities Determination</h3> <ul> <li style="font-weight: 400;" aria-level="1">Discussion on setting a maximum value for purchasing beyond which additional procurement might be needed during extreme situations.</li> <li style="font-weight: 400;" aria-level="1">Concerns regarding dynamic assessments leading to purchasing requirements above the predefined maximum were expressed.</li> <li style="font-weight: 400;" aria-level="1">Suggestion to categorize standard conditions and extreme situations separately, with different processes for each.</li> <li style="font-weight: 400;" aria-level="1">The importance of having a clear methodology for calculating potential maximum values for better market predictability was emphasized.</li> <li style="font-weight: 400;" aria-level="1">Bill Barnes expressed a preference for predefined maximum limits for predictability, even if based on conservative criteria.</li> <li style="font-weight: 400;" aria-level="1">Discussion on the option to procure long-duration demand response resources as additional reserves needed by ERCOT, separate from ancillary services.</li> </ul> <h3><a href="/sharing/?token=417a7add-8851-4606-be8d-4e2e0778e0e9">2</a> - Mark Walker, Engie North America, AS Quantities Determination</h3> <ul> <li style="font-weight: 400;" aria-level="1">Mark Walker from Engie North America agrees with concerns about reducing revenues in the ancillary service market impacting investment decisions.</li> <li style="font-weight: 400;" aria-level="1">Operational complexities include outage scheduling, maintenance, and fuel procurement, creating uncertainty.</li> <li style="font-weight: 400;" aria-level="1">Walker stresses the importance of understanding obligations as a retail provider, mentioning the need for long-term hedging.</li> <li style="font-weight: 400;" aria-level="1">Retail providers cannot pass hedging costs to customers and face risks from service outages.</li> <li style="font-weight: 400;" aria-level="1">Uncertainty in the market increases hedging costs and creates challenges in modeling.</li> <li style="font-weight: 400;" aria-level="1">The perception of ERCOT saving money by purchasing less ancillary services may not account for the overall market impact.</li> <li style="font-weight: 400;" aria-level="1">Ultimately, increased risk and costs may penalize customers.</li> </ul> <h3><a href="/sharing/?token=015d3caf-e821-42cb-ade9-fb92420f1978">2</a> - Jeff Billow, ERCOT, AS Quantities Determination</h3> <ul> <li style="font-weight: 400;" aria-level="1">Commitment to transparency and providing detailed information to stakeholders before rollout.</li> <li style="font-weight: 400;" aria-level="1">Implementation would occur after RTC, earliest January 2027 if RTC is December 2025.</li> <li style="font-weight: 400;" aria-level="1">Consideration of including minimum and maximum criteria in the process.</li> <li style="font-weight: 400;" aria-level="1">Consistent criteria for both annual and dynamic approaches is preferred.</li> <li style="font-weight: 400;" aria-level="1">Annual calculations may include worst-case scenarios but procurement will be a percentage of that.</li> <li style="font-weight: 400;" aria-level="1">Dynamic procurement involves calculating risk variables to determine daily requirements.</li> <li style="font-weight: 400;" aria-level="1">Discussion on the appropriateness of dynamic procurement for certain AS or risks.</li> </ul> <h2>Q3: Is dynamic procurement more appropriate for some AS or for some risks than for others? If so, which AS or which risks are best managed with a more dynamic procurement of AS?</h2> <h3><a href="/sharing/?token=a95a0eb5-f546-4c48-b97c-4d6213d88c49">3</a> - Katie Coleman, TIEC, Dynamic Procurement</h3> <ul> <li style="font-weight: 400;" aria-level="1">Observation that some ancillary services are based on known risks and are more predictable throughout the year.</li> <li style="font-weight: 400;" aria-level="1">Services like NonSpin or ECRS may vary more throughout the year.</li> <li style="font-weight: 400;" aria-level="1">No strong view from TIEC, but dynamic procurement could be beneficial for ancillary services with day-to-day risk variations.</li> <li style="font-weight: 400;" aria-level="1">Ned Bonskowski agreed with the point that some services have hard constraints, limiting flexibility.</li> </ul> <h3><a href="/sharing/?token=9e956b56-bcd5-4477-8bd4-4dcae21b2514">3</a> - Jeff Billow, ERCOT, Dynamic Procurement</h3> <ul> <li style="font-weight: 400;" aria-level="1">Discussion on ECRS and Non-spin being primarily related to the risk of forecast error.</li> <li style="font-weight: 400;" aria-level="1">Responsive reserve can be considered dynamically, with a focus on inertia as a main variable.</li> <li style="font-weight: 400;" aria-level="1">Need for a methodology to determine inertia a day or two in advance, not ready yet but a potential future development.</li> <li style="font-weight: 400;" aria-level="1">Regulation is influenced by forecast error and variability, could be set dynamically.</li> <li style="font-weight: 400;" aria-level="1">Probabilistic Modeling was widely agreed to be superior to historical statistical approaches.</li> <li style="font-weight: 400;" aria-level="1">Importance of clear and transparent modeling assumptions emphasized.</li> <li style="font-weight: 400;" aria-level="1">Question raised on frequency for Commission review of AS procurement criteria, with participation encouraged.</li> </ul> <h2>Q4: How often should the Commission review AS procurement criteria? </h2> <h3><a href="/sharing/?token=7a8e6bd1-c4e4-47c8-9211-76c1fb7635b4">4</a> - Ned Bonskowski, Vistra, Probabilistic Modeling</h3> <ul> <li style="font-weight: 400;" aria-level="1">Interplay between Questions 4 and 5 regarding ancillary service methodology update.</li> <li style="font-weight: 400;" aria-level="1">Emphasis on probabilistic framework as part of the methodology for procuring ancillary service quantities.</li> </ul> <h3><a href="/sharing/?token=fde18e7c-4d96-4794-827f-3847a493ad64">4</a> - Bill Barnes, NRG, Probabilistic Modeling</h3> <ul> <li style="font-weight: 400;" aria-level="1">Support for the probabilistic approach.</li> <li style="font-weight: 400;" aria-level="1">Request for ERCOT to publish modeling inputs, assumptions, formula, and criteria.</li> </ul> <h3><a href="/sharing/?token=c55e7267-04c1-44aa-9519-508cb63e8e9b">4</a> -  Resmi Surendran, Shell Energy, Probabilistic Modeling</h3> <ul> <li style="font-weight: 400;" aria-level="1">Resmi Surendran representing North America perspective.</li> <li style="font-weight: 400;" aria-level="1">Acknowledges the value of Probabilistic Modeling.</li> <li style="font-weight: 400;" aria-level="1">Expresses concern about the potential variability in outcomes based on different assumptions.</li> </ul> <h3><a href="/sharing/?token=b0a2140b-c1fd-4dc8-88e8-83708a4492c3">4</a> - Jeff Billow, ERCOT, Probabilistic Modeling</h3> <ul> <li style="font-weight: 400;" aria-level="1">Jeff Billow from ERCOT addressed requests from stakeholders.</li> <li style="font-weight: 400;" aria-level="1">Stakeholders are seeking more details and transparency.</li> </ul> <h2>Q5: Should the modeling assumptions be part of the annual AS Methodology update process?</h2> <h3><a href="/sharing/?token=068233d8-61d3-4aed-8e2a-652214555abb">5</a> - Ned Bonskowski, Vistra, Probabilistic Modeling</h3> <ul> <li style="font-weight: 400;" aria-level="1">Discussion of recent changes being approved by the Commission.</li> <li style="font-weight: 400;" aria-level="1">Annual review and approval of the ancillary service methodology.</li> <li style="font-weight: 400;" aria-level="1">Positive alignment of processes with the new changes.</li> </ul> <h3><a href="/sharing/?token=13e41e70-2c2d-45f5-881d-eb3d946d0948">5</a> - Bill Barnes, NRG, Probabilistic Modeling</h3> <ul> <li style="font-weight: 400;" aria-level="1">The speaker appreciates the current annual AS process and looks forward to the discussions.</li> <li style="font-weight: 400;" aria-level="1">Mentions the importance of evaluation due to system changes such as load growth, changes in fuel and supply mix.</li> <li style="font-weight: 400;" aria-level="1">Annual evaluation is supported for effectively addressing these changes.</li> <li style="font-weight: 400;" aria-level="1">Stakeholder process discussions are described as robust and methodologies are thoroughly vetted.</li> <li style="font-weight: 400;" aria-level="1">Encouragement for the Commission to conduct annual reviews due to the impact and frequent changes.</li> </ul> <h3><a href="/sharing/?token=6c5cfc8f-0793-46c0-8894-c4d54ba67e49">5</a> - Resmi Surendran, Shell Energy, Probabilistic Modeling</h3> <ul> <li style="font-weight: 400;" aria-level="1">Frequency of evaluation depends on the specific aspects being evaluated.</li> <li style="font-weight: 400;" aria-level="1">Annual evaluation might be disruptive if only focused on loss of load vs. extra buffer.</li> <li style="font-weight: 400;" aria-level="1">Annual evaluation is sensible for effective load carrying capability of resources.</li> <li style="font-weight: 400;" aria-level="1">Fundamental questions need resolution before proceeding with Probabilistic Modeling.</li> <li style="font-weight: 400;" aria-level="1">Objectives for ancillary services, pricing signals, and resource valuation are critical.</li> <li style="font-weight: 400;" aria-level="1">Important to determine if all resources providing services are being valued and procured.</li> <li style="font-weight: 400;" aria-level="1">Probabilistic model, despite advantages, could be contentious without prior question resolution.</li> <li style="font-weight: 400;" aria-level="1">A hybrid approach of statistical and probabilistic could be more effective.</li> <li style="font-weight: 400;" aria-level="1">Hybrid approach covers potential scenarios not accounted for purely statistically.</li> </ul> <h3><a href="/sharing/?token=19b7e468-6377-4767-b593-2f3b526461a9">5</a> - Jeff Billow, ERCOT, Probabilistic Modeling</h3> <ul> <li style="font-weight: 400;" aria-level="1">Consensus on the need to incorporate Probabilistic Modeling into the annual AS methodology process.</li> <li style="font-weight: 400;" aria-level="1">The model development has already started due to the consensus.</li> <li style="font-weight: 400;" aria-level="1">Plan to present the model to stakeholders early next year for discussions.</li> <li style="font-weight: 400;" aria-level="1">Anticipation of needing a few meetings to finalize details.</li> <li style="font-weight: 400;" aria-level="1">Agenda items 4 and 5 were combined and agreed upon.</li> <li style="font-weight: 400;" aria-level="1">Transition to discuss the procurement and utilization of DRRS capacity without distorting price formation.</li> </ul> <h2>Q6: How can DRRS capacity best be procured and utilized without distorting price formation?</h2> <h3><a href="/sharing/?token=3406db05-1ade-442a-98c5-102a84f0d847">6</a> - Mark Walker, Engie North America, DRRS</h3> <ul> <li style="font-weight: 400;" aria-level="1">Mark Walker, representing Engie North America, addressed comments from NRG about changing the DRRS duration requirement from 4 to 12 hours during winter.</li> <li style="font-weight: 400;" aria-level="1">Engie North America opposes the change from 4 hours, as it is a standard clearly set in the statute.</li> <li style="font-weight: 400;" aria-level="1">ERCOT does have the ability to adjust the duration if needed, but there is no current analysis supporting a shift to 12 hours.</li> <li style="font-weight: 400;" aria-level="1">Any change would require thorough consideration, analysis, stakeholder input, and proper processes.</li> <li style="font-weight: 400;" aria-level="1">Increasing the minimum duration to 12 hours could eliminate many resources currently available for DRRS.</li> <li style="font-weight: 400;" aria-level="1">Shorter durations help incentivize developers to invest in longer-duration batteries, benefiting ERCOT and the market.</li> <li style="font-weight: 400;" aria-level="1">Suggests that discussions on this topic would be more appropriate in the context of ancillary services and real-time call optimization.</li> </ul> <h3><a href="/sharing/?token=7df3333e-4ed7-4d5d-86d5-b93bf56ef137">6</a> - Michele Richmond, TCPA, DRRS</h3> <ul> <li style="font-weight: 400;" aria-level="1">DRRS was designed to provide an incentive for dispatchable gas generation with flexibility for greater duration if needed.</li> <li style="font-weight: 400;" aria-level="1">The need to look at ERCOT's revenue streams holistically to ensure reliability standards and prevent resource retirement.</li> <li style="font-weight: 400;" aria-level="1">Concerns that current discussions aren't adequately considering revenue streams necessary for resource building and maintenance.</li> <li style="font-weight: 400;" aria-level="1">Debate over whether DRRS is for operational flexibility or resource adequacy.</li> <li style="font-weight: 400;" aria-level="1">Awareness that investments are made based on forward markets, not past performance.</li> <li style="font-weight: 400;" aria-level="1">Sending price signals through revenue products is crucial for encouraging investment in needed resources.</li> <li style="font-weight: 400;" aria-level="1">Policy decisions focusing on reducing consumer prices can send negative signals to forward markets, preventing new generation investments.</li> <li style="font-weight: 400;" aria-level="1">Emphasis on the costs associated with achieving greater reliability and the need to consider DRRS and related market tools in this context.</li> </ul> <h3><a href="/sharing/?token=df68f506-4783-4234-9496-b4f5a94331b3">6</a> - Bill Barnes, NRG, DRRS</h3> <ul> <li style="font-weight: 400;" aria-level="1">Recommended clearly defining the reliability objectives for DRRS.</li> <li style="font-weight: 400;" aria-level="1">Suggested that DRRS could serve a resource adequacy purpose and that should be clearly stated.</li> <li style="font-weight: 400;" aria-level="1">Pointed out DRRS aims to reduce RUC, which they support having a competitive product for.</li> <li style="font-weight: 400;" aria-level="1">Proposed using historical RUC procurements to determine DRRS procurement amounts, focusing on different seasons.</li> <li style="font-weight: 400;" aria-level="1">Recommended designating a portion of DRRS for longer duration assets, similar to how responsive reserves have different components.</li> <li style="font-weight: 400;" aria-level="1">Suggested allocating 50% of DRRS for longer duration (8-14 hours) resources while maintaining a minimum for other portions.</li> </ul> <h3><a href="/sharing/?token=0732778b-2ad9-4990-843a-b8c4d44e26b5">6</a> - Stephanie Kroger, Hunt Energy, DRRS</h3> <ul> <li style="font-weight: 400;" aria-level="1">Stephanie Kroger from Hunt Energy Network concurs with previous speakers and emphasizes the need to define the purpose of DRRS clearly.</li> <li style="font-weight: 400;" aria-level="1">She references statute requirements, particularly PURA § 35.004.G2, stressing that the need for additional services for reliability and adequate incentives for dispatchable generation has not been fully addressed in the draft report.</li> <li style="font-weight: 400;" aria-level="1">There is an opportunity for the Commission to clarify the purpose of DRRS and fulfill statutory requirements, especially those under PURA § 39.159b.</li> <li style="font-weight: 400;" aria-level="1">Stephanie Kroger suggests that DRRS should not be part of the RTC construct and should be treated as a separate ancillary service.</li> <li style="font-weight: 400;" aria-level="1">The distinctiveness of DRRS lies in its separate operational requirements regarding online timing and duration.</li> <li style="font-weight: 400;" aria-level="1">She highlights that proper price formation discussions should occur only after the clearer definition of DRRS's purpose and structure.</li> </ul> <h3><a href="/sharing/?token=b5de9b15-8467-44fa-8f51-0ba8cddb124b">6</a> - Laurie Block, TSPA, DRRS</h3> <ul> <li style="font-weight: 400;" aria-level="1">Laurie Block spoke on behalf of TSPA, highlighting the necessity to understand the purpose of DRRS which is to address market uncertainty.</li> <li style="font-weight: 400;" aria-level="1">The IMM first introduced the concept of the requirement for an uncertainty product in the State of the Market report.</li> <li style="font-weight: 400;" aria-level="1">The legislature explicitly stated that DRRS is for market uncertainty in its language.</li> <li style="font-weight: 400;" aria-level="1">Operational tools like DRRS should focus on issues such as unit trips, weather, and load forecast errors.</li> <li style="font-weight: 400;" aria-level="1">There's a timing issue in addressing these concerns ahead of the commission process laid out for evaluating reliability standards.</li> <li style="font-weight: 400;" aria-level="1">DRRS is distinct from resource adequacy products outlined in legislation, like PCM.</li> <li style="font-weight: 400;" aria-level="1">The Commission has previously stated that it would decide on necessary products after a comprehensive analysis by ERCOT.</li> <li style="font-weight: 400;" aria-level="1">Recent changes to price adders and the creation of a successful firm fuel product are part of addressing reliability concerns.</li> <li style="font-weight: 400;" aria-level="1">DRRS should be treated like other ancillary services and not isolated, as isolation could impact the energy market.</li> <li style="font-weight: 400;" aria-level="1">Questions raised about treating DRRS like a resource adequacy product require clarity on associated guardrails.</li> </ul> <h3><a href="/sharing/?token=9e131831-c609-42bc-88ce-836a2befa5db">6</a> - Ned Bonskowski, Vistra, DRRS</h3> <ul> <li style="font-weight: 400;" aria-level="1"> PCM is preferred for resource adequacy, but ancillary services are necessary due to existing decisions and stakeholder advocacy.</li> <li style="font-weight: 400;" aria-level="1"> DRRS is closely tied to the reliability standard and PURA § 39.159, which mandates reliability requirements for ERCOT.</li> <li style="font-weight: 400;" aria-level="1">The TEF aids investment but is not a market design. The discussion around fund timing is crucial as initial distributions must occur by 2025, necessitating clarity on market design.</li> <li style="font-weight: 400;" aria-level="1">Concerns exist over how DRRS capacity can be procured without distorting prices. Suggestions include adjusting the demand curve and extending its range.</li> <li style="font-weight: 400;" aria-level="1"> ERCOT is authorized to determine DRRS duration, especially for thermal generation. Proper release and deployment strategies, including offer floors, are needed to prevent price distortion.</li> <li style="font-weight: 400;" aria-level="1">Reliability Deployment Price Adder ensures the market signals additional needs without reducing prices during reliability service utilization. </li> </ul> <h3><a href="/sharing/?token=edb0a235-bd21-4716-8f49-ed8e12becc9a">6</a> - Katie Coleman, TIEC, DRRS</h3> <ul> <li style="font-weight: 400;" aria-level="1">TIEC advocated for the DRRS, emphasizing it's meant to address market uncertainty, including intermittency and forced outage rates.</li> <li style="font-weight: 400;" aria-level="1">DRRS is not meant as a resource adequacy or revenue sufficiency tool, as per legislative and commission interpretations.</li> <li style="font-weight: 400;" aria-level="1">DRRS provides additional revenue for dispatchable generation but is not a revenue sufficiency tool.</li> <li style="font-weight: 400;" aria-level="1">Concerns about DRRS causing price distortions were addressed; it's seen as a tool to improve market predictability and replace RUC.</li> <li style="font-weight: 400;" aria-level="1">TIEC supports the ancillary service demand curve proposal and highlights the need for an efficient allocation of resources.</li> <li style="font-weight: 400;" aria-level="1">There was discussion on whether DRRS should be co-optimized, noting ERCOT's current proposal does not include co-optimization.</li> <li style="font-weight: 400;" aria-level="1">Long term, efficiency could be improved by allowing online resources to provide DRRS and considering co-optimization.</li> <li style="font-weight: 400;" aria-level="1">Initial implementation is acceptable without co-optimization, but future steps should explore it.</li> </ul> <h3><a href="/sharing/?token=7a41db7e-5545-4a8b-b2e5-15875ecc7b3e">6</a> - Eric Goff, TEBA, DRRS</h3> <ul> <li style="font-weight: 400;" aria-level="1">Eric Goff represents the Texas Energy Buyers Alliance.</li> <li style="font-weight: 400;" aria-level="1">Stresses the unnecessary need for a separate resource adequacy mechanism if correct operational reserves are purchased.</li> <li style="font-weight: 400;" aria-level="1">Highlights that inadequate revenue implies a failure in price signaling from the operational reserve energy market.</li> <li style="font-weight: 400;" aria-level="1">Advocates fixing ancillary service procurement related to operational needs rather than creating additional revenue streams.</li> <li style="font-weight: 400;" aria-level="1">Expresses concern that DRRS might lead to inefficiently higher prices.</li> <li style="font-weight: 400;" aria-level="1">Warns that generators with market power could manipulate the market by offering DRRS at low prices to avoid generating, mimicking withholding.</li> <li style="font-weight: 400;" aria-level="1">Emphasizes the importance of the demand curve in preventing market manipulation through DRRS.</li> </ul> <h3><a href="/sharing/?token=c104958a-5991-4c0c-87b3-ad214f1d4a7d">6</a> - Cyrus Reed, Sierra Club, DRRS</h3> <ul> <li style="font-weight: 400;" aria-level="1">Cyrus Reed represented the Sierra Club's viewpoint on the DRRS.</li> <li style="font-weight: 400;" aria-level="1">There was some confusion about interpreting PURA §39.159 regarding ancillary and reliability services.</li> <li style="font-weight: 400;" aria-level="1">The interpretation is that DRRS is an ancillary service intended to handle market uncertainties, not primarily a reliability service.</li> <li style="font-weight: 400;" aria-level="1">Resources eligible for DRRS should include those meeting certain characteristics, possibly including longer duration storage.</li> <li style="font-weight: 400;" aria-level="1">There's no issue with ERCOT requiring more than four hours of resource availability, especially in winter.</li> <li style="font-weight: 400;" aria-level="1">Including online resources and co-optimization could benefit the market and consumers.</li> <li style="font-weight: 400;" aria-level="1">Incentives should be provided to both storage and traditional generation that is currently online.</li> <li style="font-weight: 400;" aria-level="1">The transition to including online resources could occur in a second phase if necessary.</li> </ul> <h3><a href="/sharing/?token=7eaf4992-2fcd-4666-b4c6-d951392e916e">6</a> - Resmi Surendran, Shell Energy, DRRS</h3> <ul> <li style="font-weight: 400;" aria-level="1">Resmi Surendran emphasizes that energy and ancillary services together should drive resource adequacy, not a single ancillary service.</li> <li style="font-weight: 400;" aria-level="1">Supports the idea that operational reserves can meet long-term planning reserves.</li> <li style="font-weight: 400;" aria-level="1">Highlights the importance of appropriately valuing reserves to signal investment in necessary resources.</li> <li style="font-weight: 400;" aria-level="1">Stresses the need for clear criteria and quality standards for the ancillary services being procured.</li> <li style="font-weight: 400;" aria-level="1">Mentions the implementation of real-time co-optimization and its impact on ancillary service values.</li> <li style="font-weight: 400;" aria-level="1">Questions the logic of dynamic procurement if it introduces uncertainty and disruptions without changing net quantities.</li> <li style="font-weight: 400;" aria-level="1">Advocates for ensuring that the services procured truly align with ERCOT’s intentions to meet reliability needs.</li> </ul> <h3><a href="/sharing/?token=f0f5a142-d4e5-4d4a-addc-cb8cefa2de90">6</a> - Keith Collins, ERCOT, DRRS</h3> <ul> <li style="font-weight: 400;" aria-level="1">Stakeholder process is underway for NPRR1235.</li> <li style="font-weight: 400;" aria-level="1">Ongoing discussions with stakeholders are heavily considered.</li> <li style="font-weight: 400;" aria-level="1">Focus on real-time procurement, which is crucial but not initially covered in drafts.</li> <li style="font-weight: 400;" aria-level="1">Comments about duration and forecast hours are being reconsidered.</li> <li style="font-weight: 400;" aria-level="1">Discussions are recognized as valuable for developing a robust reserve product.</li> <li style="font-weight: 400;" aria-level="1">Appreciation for continued stakeholder engagement and input.</li> </ul> <h3><a href="/sharing/?token=c4a8ee3d-3345-4add-9fcb-f54911c60e1f">6</a> - Andrew Reimers, Potomac Economics, DRRS</h3> <ul> <li style="font-weight: 400;" aria-level="1">Andrew Reimers of Potomac Economics commented on operational reliability versus resource adequacy.</li> <li style="font-weight: 400;" aria-level="1">He agreed that it's conceptually flawed to procure an ancillary service to create future revenue sufficiency.</li> <li style="font-weight: 400;" aria-level="1">Addressed over-reliance on reliability unit commitment and suggested DRRS as a better fit for reducing this reliance.</li> <li style="font-weight: 400;" aria-level="1">Clarified initial study comments that Non-spin is not suited for procuring excess reserve capacity.</li> <li style="font-weight: 400;" aria-level="1">Advocated for the design of DRRS as a more appropriate product.</li> <li style="font-weight: 400;" aria-level="1">Emphasized co-optimization of DRRS in real time to manage price formation effectively.</li> <li style="font-weight: 400;" aria-level="1">Highlighted importance of avoiding price suppression and allowing provision from online units.</li> <li style="font-weight: 400;" aria-level="1">Reaffirmed involvement in the stakeholder process and suggested more information is available at the Supply Analysis Working Group page.</li> <li style="font-weight: 400;" aria-level="1">Clarified that the IMM does not support more RUC.</li> </ul> <h1>Next Steps - Commission Staff</h1> <h3><a href="/sharing/?token=8bbc3dee-c314-4f2c-891b-0adcd109f4e8">7</a> - Next Steps - Commission Staff</h3> <ul> <li style="font-weight: 400;" aria-level="1">No additional comments were made on the previous agenda item number six.</li> <li style="font-weight: 400;" aria-level="1">The discussion and comments have been valuable to the meeting participants, including the speaker and staff.</li> <li style="font-weight: 400;" aria-level="1">Harika was invited to make concluding remarks.</li> </ul> <h3><a href="/sharing/?token=acc0041a-a138-489c-8731-9e75011ee377">7</a> - Harika Basaran - Commission Staff</h3> <ul> <li style="font-weight: 400;" aria-level="1">The team expressed appreciation for participation and emphasized that all comments are reviewed and considered.</li> <li style="font-weight: 400;" aria-level="1">The primary goal is to comply with PURA and the scope of the report, ensuring a comprehensive outcome.</li> <li style="font-weight: 400;" aria-level="1">If questions were not addressed during the workshop, they will be covered in the report.</li> <li style="font-weight: 400;" aria-level="1">A holistic and complete picture will be provided to the commissioners for further action.</li> <li style="font-weight: 400;" aria-level="1">There will be no additional comment period after the staff files their recommendations due to time constraints.</li> <li style="font-weight: 400;" aria-level="1">The process will follow typical rulemaking procedures, with discussions set for three open meetings with the commissioners.</li> <li style="font-weight: 400;" aria-level="1">The team expressed gratitude towards participants and colleagues involved in the process.</li> </ul>