ERCOT Files Backcast Showing Market Impact of Scarcity Pricing Interim Solution B+

ERCOT has filed its backcast analysis of market prices had the Interim Solution B+ approach to improve the scarcity pricing mechanism been in place in 2011-12.

The Interim Solution B+ is an approximation to a full Real-Time energy and ancillary services cooptimization solution. In this approximation, a price adder for energy is calculated on top of the original energy price which is intended to capture the value of the opportunity cost of reserves.

The backcast analysis of the price adder shows that the energy-weighted average energy price increases over a range of $7/MWh to $26.08/MWh in 2011 and $1.08/MWh to $4.5/MWh in 2012. This range results from different parameter settings that were used in the back cast.

ERCOT's backcast also reviewed the impact on Peaker Net Margin and other metrics

Link to ERCOT Backcast