Meeting Summary - 08/07/24 WMS Meeting
Grid Monitor AI | Posted 08/07/2024
1 - Antitrust Admonition - Eric Blakey
2 - Agenda Review - Eric Blakey
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 - ERCOT Operations and Market Items
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.
4.2 - 2024 Q2 Settlement Stability Report - Judy Luu
- Discussed price correction changes affecting a few days in January and February 2024.
- Mentioned CRR balancing account resettlement due to DN resettlements.
- Reviewed resettlements due to non-price errors for November 2022 operating days.
- Addressed quarter disputes for Q1 and Q2, all resolved timely.
- Highlighted percent changes from previous real-time settlements and displayed data for changes from initial to final and final to true-up.
- Identified a spike in November due to an issue in the calculation of ERS contract period from June 1 to September 30, 2023.
- Presented real-time market average prices and DAM total charges from 2011 to 2024.
- Provided data on load volume availability percentage and ESI ID account availability percentage.
- Discussed net allocation to load over a 13-month period and its breakdown by congestion management zones.
- Covered information on securitization default charge and security authorization uplift charge for the period from June 2023 to June 2024.
4.3 - 2024 Q2 Unregistered Distribution Generation - DG - Report - Dan Mantena
- Total DG was over 2600 MW with 67 MW from DG battery energy storage.
- This is the first update excluding DG battery storage units from the main reporting table.
- DG battery storage units are not required to be reported based on protocol language.
- Started seeing voluntary submissions of DG battery systems.
- Current report excludes DG battery systems from main table and lists them as a footnote for transparency.
- There was an aggregate 35 MW increase in Q2 with a decrease from DG storage units removed from the main table.
- No current plans for a new category for DG energy storage due to required protocol changes. Current method is reporting as a footnote.
- Suggestion for continued reporting and tracking DG battery systems with breakdown below and above 50 kW.
- Clarification on 'other non-renewable' category provided in chat, confirming some classifications under renewable and others under non-renewable.
- Potential protocol revision mentioned for classification consistency.
4.4 - Auction Revenue Distribution - CARD - and CRR Balancing Account - CRRBA - Randy Roberts
- Multiple options for auction revenue distribution were initially presented, with a new fourth option added:
- Monthly load ratio share previously discussed.
- Daily load ratio share based on 15 mins peak interval.
- Combination of monthly and daily load ratio share with weighting percentage.
- New option using eight peak hours per day for all days of the month.
- Discussion on whether additional options needed to be considered from Market Participants (MPs) and IMM (Independent Market Monitor).
- IMM favors proposals more directly connected to hourly congestion rent but acknowledges potential high implementation cost and delays.
- Ken Lindbergh suggested using the previous year's 4CP calculation for setting ratios.
- ERCOT and IMM opposed linking CARD allocation directly to 4CP, citing different objectives.
- Shams Siddiqi highlighted that sunk cost allocation should not distort market prices, criticized 4CP for potential inefficiency.
- Various participants voiced concerns about shifting costs between residential and industrial users.
- Alternative ideas included billing card based on eight peak hours of the peak day of the month or using top ten peak hours of the month.
- Discussion on whether to strike certain options like alternate option one and two, maintaining focus on more viable options.
- Emphasis on achieving balance in objectives, minimizing perverse incentives and maintaining particular distribution among load classes.
4.5 - HDL-LDL Override Report - Cory Carswell
- 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
- Topic: CRR long term auction solution time and transaction limits
- Enforcement of 400,000 transaction limit has been lifted after implementing software changes on 6/28
- Considering solutions: increasing point-to-point option bid price, charging bid fees on uncleared bids, removing the multi-month bid functionality.
- 44% of bids currently use multi-month functionality.
- ERCOT performing more testing on removing the multi-month product and increasing bid limits.
- Topic: Load zone analysis update
- Load zone definitions unchanged since 2003.
- Using k-means clustering to propose new load zones based on latest LMP data.
- Concerns about impact on planning studies, congestion management efficiency, protocol changes, and data continuity.
- Bill Barnes raised concerns about the impact on retail market; increased complexity and risk premium for retail products.
- Discussion about practical need for change, considering impacts on smaller retailers, potential benefits of discrete nodal prices.
- Topic: Mitigation for Electricity Storage Resources - ESRs
- ERCOT staff introduced NPRR draft with just-in-time framework.
- Considerations included high system lambda prices and handling of multiple constraints.
- Stakeholders concerned about over-mitigation and maintaining as obligations.
- CMWG releasing NPRR for formal stakeholder process.
6 - Demand Side Working Group - DSWG - Nathaniel Mancha
- Request for WMS to endorse NPRR1226
- Needs for more transparency on demand response data.
- 4CP discussion and the need for clarification.
- Comparison between WSL and ESR calculations.
- Release of ERCOT notice on equivalent numbers.
- Difficulty in backing ESR charging numbers.
- Market asks for clarification to avoid manual calculations.
- Issues around forecasting and energy storage impacts.
- Desire for better visibility into the market for load participants.
- Clarification needed on data published post-month end from WMS.
- Discussion about the equivalence of numbers in WMS.
- Transparency and understanding of reports for market participants.
- Importance of real-time combination of data for market participants.
- Need for further ERCOT guidance on making data changes real-time.
- Exploration of data availability and meeting market needs.
- Acknowledgment of the need for additional tools beyond current dashboards.
- Some data available via ICCP points but needs internal discussion.
7 - Meter Working Group - MWG - Michael Blum
- Proposal to consolidate the naming convention to 'Meter Working Group' across all documents and website.
7.1 - Procedure Update - Vote
- Consolidated name to meter working group.
- Motion to endorse MWG procedures as submitted added to combo ballot.
8 - Resource Cost Working Group - RCWG - Blake Holt
- See items 10 and 11.
9 - Wholesale Market Working Group - WMWG - Blake Holt
- ERCOT presented initial analysis on 2025 AS methodology. Data not final; updates due in August.
- No changes to 2024 methodology for RRS Non-Spin and ECRS. Values pending NERC’s updated IFRO number.
- Changes include using net load ramp, historical regulation deployment, and SCED net load forecast error.
- Stakeholder questions on ERCOT's inertia data; ERCOT refreshing 2016 inertia white paper in the context of PUC study.
- ERCOT's state of charge monitoring analysis in line with NPRR1149 using mock data. Production data refresh expected for August 30 meeting.
- Proposes calculating state of charge shortfall based on each resource's state of charge expectation; reporting at system level.
- Feedback on inadequate ESRs responses discussed; feedback being incorporated by ERCOT.
- Skipped discussion on NPRR1232; update to be provided later in the meeting.
10 - WMS Revision Requests
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.
13.5 - NPRR1226, Demand Response Monitor DSWG
- Suggestion to table the discussion for another month to allow further consideration.
- Mark Smith confirmed consensus at the DSWG meeting and received favorable feedback elsewhere.
- Floyd Treffney provided clarification on the nature of the demand response monitor.
- Concerns from ERCOT regarding the mandate for specific dashboard content and format.
- Historical context provided by Floyd Treffney on protocol language changes.
- General support for NPRR1226 but recognition of the need for further discussion and potential edits.
- Motion to endorse NPRR1226 as submitted added to combo ballot.
13.6 - NPRR1229, Real-Time Constraint Management Plan Energy Payment - WMWG
- Discussion on NPRR1229 related to payments due to congestion management plan actions.
- Author of NPRR1229 explained its purpose: to allow compensation when ERCOT takes a manual action impacting a resource.
- ERCOT operations presented congestion management plan and issues with NPRR1229 language.
- Settlement issues and policy questions needing answers were highlighted.
- Participants were requested to provide feedback before the August meeting.
- Updates were given on design defects with NPRR1149 and NPRR1058.
- NPRR1058 update: backward compatibility added for reason code in offer curves.
- Discussion on NPRR1235 and legislative priority to move it forward.
- Concerns on how DRRS and RUC interact, and the impact on market design.
- Feedback on potentially allowing self-commitment for DRRS resources.
- Operational perspective discussed: DRRS resources to be prioritized for commitments.
- Concerns raised about behavioral impacts of DRRS on other resources.
- Confirmation that NPRR1235 implementation timeline aligns post-RTC.
13.7 - NPRR1235, Dispatchable Reliability Reserve Service as a Stand-Alone Ancillary Service - SAWG and WMWG
- No action items, strictly a discussion
- TSPA and joint commenters presented filed comments on NPRR1235
- Encouragement for inclusion of Energy Storage Resources (ESRs) into DRRS
- ERCOT explained reasons for excluding ESRs in initial proposal with agreement to consider future integration
- Placeholder to discuss NPRR1235 in the next month's meeting
14 - Combo Ballot - Vote - Eric Blakey
- Combo ballot passed unanimously.
15 - Other Business - Eric Blakey
15.1 - Withdrawn – NPRR1232, Standing Deployment of ECRS in the Operating Hour for a Portion of ECRS that is Provided from SCED-Dispatchable Resources
- NPRR1232 was withdrawn following the board vote on NPRR1224.
15.2 - Review Open Action Items - Jim Lee
- The previously discussed item was withdrawn under open action items.
- New assignment was discussed and assigned to WMS and congestion management working group.
- Reminder for WMWG and SAWG about their EPA item assignments.
- Request for WMWG and SAWG to keep the council informed through their meetings about any pertinent updates.
15.3 - 2025 Block Calendar - Pamela Hanson
- Highlighted the change of the October meeting from Monday to Friday the 3rd.
- Suggestion to move the October meeting to Thursday the 9th, considering potential conflicts with PUC open meetings.
- Acknowledgement that PRS will meet on Wednesdays and WMS on Tuesdays, except for one month.
15.7 - Adjourn
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ERCOT - WMWG Meeting - Webex Only07/07 - 9:30 AM
ERCOT - RTCB Market Trials Weekly Webex07/07 - 10:00 AM
ERCOT - WMS Meeting07/09 - 9:30 AM
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