Message-ID: <31860827.1075852397227.JavaMail.evans@thyme> Date: Wed, 17 Oct 2001 10:13:00 -0700 (PDT) From: thane.twiggs@enron.com To: doug.gilbert-smith@enron.com, larry.jester@enron.com, mike.curry@enron.com, joseph.wagner@enron.com, david.portz@enron.com, preston.ochsner@enron.com, m..forney@enron.com, l..day@enron.com, rogers.herndon@enron.com, terrell.benke@enron.com Subject: ERCOT Update Cc: l..nicolay@enron.com, jean.ryall@enron.com, d..steffes@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable Bcc: l..nicolay@enron.com, jean.ryall@enron.com, d..steffes@enron.com X-From: Twiggs, Thane X-To: Gilbert-smith, Doug , Jester, Larry , Curry, Mike , Wagner, Joseph , Portz, David , Ochsner, Preston , Forney, John M. , Day, Smith L. , Herndon, Rogers , Benke, Terrell X-cc: Nicolay, Christi L. , Ryall, Jean , Steffes, James D. X-bcc: X-Folder: \JFORNEY (Non-Privileged)\Forney, John M.\Inbox X-Origin: FORNEY-J X-FileName: JFORNEY (Non-Privileged).pst The ERCOT Board approved the congestion zones for next year, 2001. The ERCO= T Board accepted the 3 CSC 4 CM Zone model for use in commercial congestion= management for 2002. Effective date is January 1, 2002. The three CSC's = are Graham-Parker 345 kV DCKT, Sandow-Temple 345 kV DCKT and STP-DOW 345 kV= DCKT. The four CM Zones are West02, North02, South02 and Houston02. A po= wer point presentation along with a map is available at ftp://ftp.ercot.com= /CSCDATA/csc.htm. =20 Current Congestion Cost and Outlook. The congestion charges that have been= incurred are 55.6 million or 137 million depending on the methodology used= to calculate the charge. If you look purely at the scheduled MWs then it i= s 137 MM based upon the ERCOT protocols. The actual cost to redispatch and = clear congestion as of Sept. 22, 2001 was 55.6 MM. Both obviously are very = high considering it is for one month of operation.=20 When the 20 MM trigger was hit August 14, 2001, ERCOT has 6 month by Protoc= ol and reaffirmed in the commission order to implement the full zonal model= . This means that there will no longer be an uplift of interzonal congestio= n, rather a direct assignment of the charge. The charge may be partially of= fset by the TCR that will be auctioned. The PUCT has indicated an interest = to move to direct assignment prior to the development and implementation of= a TCR instrument as a hedge. I am chairing the congestion management work= ing group that is deciding the TCR issue and will be dealing with the local= congestion issues when that trigger has been hit. I will attach a copy of= the current draft of the TCR white paper. In short, the TCR is a financia= l option that can be purchased as hedge against zonal congestion. There is= no physical requirement for the TCR in that you do not have to physically = schedule to receive the benefit of the TCR. There will be an auction on or= about the 4th of February, 2002 and the full zonal implementation will tak= e place February 15, 2002. The tentative schedule is as follows: ?=0910/5/01 - Distribute draft TCR White Paper ?=0910/22/01 - Review and edit draft TCR White Paper ?=0910/30/01 - Distribute TCR White Paper to WMS ?=0911/1/01 - WMS Meeting; vote on PRR ?=0911/8/01 - TAC Meeting ?=0911/19/01 - Board Meeting ?=0912/4/01 - ERCOT issues notice of TCR Auction ?=092/15/02 - First effective date of TCRs and direct assignment of CSC Con= gestion Costs =20 Capacity Auction. The capacity auction workshops have begun to rework that= capacity rule and problems experienced with the last round. There was an = initial discussion on the problems that were experienced with credit and ho= w the standard was one-way and the buyers of capacity were left without rec= ourse. There was a subsequent conference call with the credit professional= s to discuss the issues ( I did not participate) and there will be an addit= ional meeting on the 19th. The purpose of the short-term meeting are to re= ctify issues such as credit and documents prior to the March and July 2002 = auctions. Substantive issues such as the actual products, zone determinati= on and the auction process will be part of a rulemaking prior to the Septem= ber 2002 auction which includes annual products.=20 Protocol Implementation. ERCOT is in the process of determining what shoul= d be included in the Phase II design which will begin January 2001. There = is a priority list that is currently under review by ERCOT vendors to deter= mine lead times of Phase II items in an attempt to deliver Phase II items A= SAP. Parviz Adib from MOD stressed that there are certain issues that the = PUCT expects to be addressed in Phase II. Issues that do not require major= system changes might still be doable in Phase II if the PRR Process is sta= rted immediately. There is a placeholder in the Protocols related to BULs = and loads acting as resources. Mechanism for Simultaneous Procurement of Ancillary Services. The PUCT ha= s expressed concern that there could be price reversals associated with the= ancillary services market (if it is assumed that the various ancillary ser= vices have different levels of value to the market). The Board had approve= d a contingency plan to allow price modifications in the early markets, how= ever the plan has not been implemented. The WMS discussed, at length, the = issue of simultaneously clearing all three markets - non-spinning, regulati= on, and responsive reserve. A task force was formed to initially identify = the principles for developing a mechanism for simultaneous procurement of a= ncillary services issue. It was suggested that a consultant be hired to de= velop Protocol language once the principles are identified. The first task= force meeting was cancelled and has not been rescheduled. =20 Demand-Side Task Force. Jay Zarnikau reported on activities of the Demand-= Side Task Force that is addressing Balancing Up Load (BUL) Market Issues an= d other demand-side issues. The PUCT expects the full functionality to be = in place on January 1, 2002. The DSTF met last on October 1st (third meeti= ng). The DSTF completed a draft status report on Demand-Side Resources and= Demand Responsiveness. It was noted that the work of the DSTF is not comp= lete and has not been approved by any ERCOT Committee or the Board. Howeve= r, ERCOT was required to file a report on these issues in the STF Report. = The report reviews the policy considerations that have prompted interest in= the demand side of ERCOT's market, reviews the PUCT's directive, reviews t= he role of demand-side resources in ERCOT's markets, and identifies the iss= ues and impediments that the DSTF is presently addressing. It also summari= zes the options discussed by the DSTF to date. The PUCT staff has suggeste= d that ERCOT hire a consultant, such as Eric Hirsch, to provide more resour= ces for this effort. The group expects to wrap up BUL issues and address d= irect load control issues at its next meeting. Unit Specific Deployments. At the next WMS meeting October 24, 2001, there= will be a discussion regarding unit specific deployments and ERCOT will di= scuss the issues and the difficult that participants are having to meet the= ramp rates of the deployments. The WMS will develop a list of issues and = case studies for ERCOT to discuss. The WMS also briefly discussed PRR 282 = related to defining OOME as an Instructed Deviation.