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Texas QSE To Pay $10,000 Under Settlement With Texas PUC Staff

November 11, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Shell Energy North America (US), L.P. (Shell Energy or Shell) would pay $10,000 under a settlement with Staff of the Public Utility Commission of Texas to resolve Shell's alleged failure to adhere to Electric Reliability Council of Texas Nodal Protocols § 4.4.7.1.1(3), relating to Negative Self-Arranged Ancillary Service (AS) Qualities.

To meet its AS obligation, a QSE may direct ERCOT to procure AS quantities in the Day-Ahead Market on its behalf. A QSE may also direct ERCOT to procure AS quantities in addition to its obligation amount to cover any voluntary trades made by the QSE.

ERCOT Nodal Protocols § 4.4.7.1.1(3) precludes a QSE from directing ERCOT to procure AS quantities above and beyond the sum of its obligations and trades.

As a result of ERCOT Nodal Protocols § 4.2.1.2 there is a seven day lag between energy flows (i.e. exports) that give rise to the AS obligations and when ERCOT procures the AS corresponding with those flows.

The settlement states, "From July 21 through July 24, 2018, Shell Energy exported power over the DC Ties, impacting its AS obligations. Shell Energy asserts its operator believed that the process for requesting ERCOT to buy AS obligations is the same as that for AS trades under the ERCOT Nodal Protocols."

The settlement states, "Accordingly, pursuant to ERCOT Nodal Protocols § 4.2.1.2(1), ERCOT assigned Shell Energy certain AS obligations from July 28 through July 31, 2018."

The settlement states, "Shell Energy did not self-arrange these AS obligations, so ERCOT automatically procured Shell Energy's AS obligations for it."

The settlement states, "At the same time, Shell Energy, believing the process for requesting ERCOT to buy AS obligations to be the same as that for AS trades, submitted negative self-arranged AS quantities into the Day-Ahead Market to reflect both the value of its AS trades as well as its AS obligations."

The settlement states, "As a result, Shell Energy unintentionally over-procured AS quantities for four AS (Regulation Up, Regulation Down, Responsive Reserve Service, and Non-Spinning Reserve Service) for 12 one-hour periods."

The settlement states, "The AS over-procurement amount totaled 265.8 MW over the four services over the 12 hours, broken down as follows: a. 15.9 MW of Regulation-Up; b. 14.4 MW of Regulation-Down; c. 150.9 MW of Responsive Reserve Service; d. 79.9 MW of Non-Spinning Reserve Service."

The settlement states, "Shell Energy paid ERCOT less than $550 for the 265.8 MW of over-procured AS. Shell Energy asserts the over-procurement resulted in improved grid reliability at Shell Energy's cost because more AS was procured than needed by ERCOT to meet NERC requirements."

The settlement states, "Shell Energy asserts there were no discernable market impacts related to this over-procurement as this happened at off peak hours when the aggregated available AS offer capacity was much more than the requirement."

The settlement states, "Shell Energy self-reported the unintentional over-procurement to ERCOT's Compliance Group and the Independent Market Monitor on August 6, 2018. Shell Energy self-reported the unintentional over-procurement to the Commission and Texas Reliability Entity on August 9, 2018."

The settlement states, "Shell Energy asserts it has taken steps to prevent future AS over-procurement, including gaining clarity from ERCOT market and settlement subject matter experts as to the application of these provisions."

Docket 50227

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