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Texas Staff Propose Comment, Workshop Process To Consider Real-Time Co-Optimization, Marginal Losses; Suggest Questions

August 1, 2018

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Staff of the Public Utility Commission of Texas have proposed a process for the Commission to consider real-time co-optimization of energy and ancillary services in ERCOT ("RTC") and to consider including marginal losses in security-constrained economic dispatch

"Staff believes that the quality of comment on the policy issues surrounding these proposals will be improved if sufficient time is allowed for stakeholders to develop a thorough understanding of the ERCOT and IMM studies and the implications of the study results for the ERCOT market. Accordingly, Staff recommends that the Commission allow 45 days for response to published questions for comment. Following receipt of stakeholder Comments, staff suggests that the commission convene a workshop on each proposal, perhaps in the late September to early October time frame," Staff said.

Staff also proposes a series of questions for stakeholder comment on each issue. Notable proposed questions are below.

Staff also noted that earlier proposals to adjust the Loss of Load Probability (LOLP) used in the Operating Reserve Demand Curve (ORDC) calculation and to consider changes to Reliability Unit Commitment (RUC) pricing rules were deferred by the Commission until after the 2018 summer peak demand season. Staff said that these proposals may appropriately be considered in newly opened Project No. 48551 (Review of Summer 2018 ERCOT Market Performance), following evaluation of the performance of the market this summer.

Proposed Questions:

Real-Time Co-Optimization (Project No. 48540)

• How would a decision to implement RTC affect investment in new generation resources in ERCOT over the next five years? Over the next 10 years and beyond?

• Please explain the nature and extent of changes to market participants settlement-related systems that are required to implement RTC. Are other systems affected?

• What is the appropriate funding mechanism for the ERCOT implementation costs associated with RTC? How should these costs be recovered?

• What are the effects of implementing both RTC and marginal losses on reliability and price formation? Are there any synergies that may result from contemporaneous adoption of both RTC and marginal losses?

Marginal Losses (Project No. 48539)

• What are the effects to ratepayers and the retail market on the implementation of RTC and marginal losses?

• Assuming implementation of marginal losses, what are the key issues related to determining the appropriate treatment and allocation of the marginal loss surplus?

• Are the benefits identified in response to Question 1 sufficient to justify the near term costs to the market as a whole? Please consider individual stakeholder implementation costs, as well as the costs to ERCOT identified in its study.

• How would a decision to implement marginal losses affect investment in new generation resources in ERCOT over the next five years and the makeup of the generation fleet in ERCOT? Over the next 10 years and beyond?

• Please explain the nature and the extent of changes to market participants settlement-related systems that are required to implement marginal losses. Are other systems affected?

• What costs would be incurred by market participants if marginal losses were included in Security-Constrained Economic Dispatch in the ERCOT market? Please provide an estimate of the costs that would be incurred by your company or companies or customers represented by your organization.

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