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Texas Staff Proposes Commission Ask Stakeholders For Recommended Level Of System-Wide Offer Cap, VOLL Applicable Upon Adoption Of Real-Time Co-Optimization

February 22, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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Staff of the Texas PUC has filed a proposed list of questions for stakeholder comment concerning policy issues related to the implementation of Real-Time Co-Optimization in the ERCOT wholesale electricity market.

Staff proposed that the PUC issue for comment the following questions:

1. Upon implementation of real-time co-optimization (RTC) in the ERCOT region, what value should the commission establish as the system-wide offer cap (SWOC)? Why?

2. Upon implementation of RTC in the ERCOT region, what value should the commission establish as the value of lost load (VOLL)? Why?

3. What parameters, if any, should the commission consider when determining the SWOC and VOLL?

4. Should the values for SWOC and VOLL be codified in the commission's rules, set by commission order, or established through some other method?

5. What set of ancillary services should be used in developing ancillary service demand curves for use in the implementation of RTC? Please consider the implementation of Nodal Protocol Revision Request (NPRR) 863, Creation of ERCOT Contingency Reserve Service and Revisions to Responsive Reserve, in your response.

6. Should the demand curves for each of the ancillary services be developed independently, based on the reliability benefit provided by each service for any given level of available operating reserves? Why or why not?

7. Should the demand curves for each of the ancillary services be developed to approximate current revenues received from the Operating Reserve Demand Curve Price Adder for any given level of available operating reserves? Why or why not?

8. Should offers for the provision of ancillary services in the Day-Ahead Market continue to be physically binding after implementation of RTC, or should the trading of ancillary services in the Day-Ahead Market become financial-only? Why or why not?

9. Which market rules established in the commission's rules and in ERCOT protocols should apply to the offer of ancillary services in the Real-Time Market? Why or why not?

10. Should other market rules specific to ancillary services be established?

11. Should all online capacity be required to have an offer curve for each ancillary service for which a resource is qualified? Why or why not?

12. How should ancillary service performance be monitored following the adoption of RTC?

13. Are there any other policy issues which the commission should decide before the process of RTC implementation may commence? If so, please describe the issue or issues in detail.

Docket 48540

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