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ERCOT Files Strawman PCM Design Decisions
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ERCOT and E3 have filed with the Texas PUC a Performance Credit Mechanism (PCM) Design Strawman White Paper which reflects ERCOT/E3's recommendations on various design elements
As previously reported, PUC Staff recently filed Staff's recommendation on PCM design, but Staff noted that Staff's recommendation may be updated based on review of the ERCOT/E3 whitepaper
A major difference between the Staff recommendation and the ERCOT/E3 whitepaper is that Staff would implement the PCM net $1 billion cost cap without applying any alleged reduced energy and A/S prices as a result of PCM as an offset to the cost cap. In contrast, the ERCOT/E3 whitepaper would use a counterfactual of energy and A/S prices without PCM to determine the net costs of PCM implementation, and compare such resulting net cost to the cost cap
With regards to other key parameters, the ERCOT/E3 whitepaper uses an Ex-Ante approach for determination of the ERCOT-wide PC (performance credit) requirement
Allocation of the System PC Requirement across LSEs would be based on Load Ratio Share during PC Hours
Forward PCM market participation would not be required for LSEs
An LSE's collateral requirement for PCM would based on expected PC
potential exposure, defined as: (Expected LSE PC demand – PCs procured in forward market) * dynamic expected PC price
LSEs would be required to post collateral "several business days" prior to the
start of each PC season
Project 55000
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August 21, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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