Texas PUC Staff Seek Comment On Day-Ahead Market Policy Questions (Financial Only) Under Real-Time Co-Optimization

Staff of the Public Utility Commission of Texas have sought stakeholder comment on a series of questions related to the Day-Ahead Market (DAM) upon implementation of real-time co-optimization (RTC) of energy and ancillary services in the ERCOT Real-Time Market.

Staff issued the following questions for comment:

1. What design components for ancillary service transactions should be part of the DAM upon implementation of RTC?

2. Should ERCOT continue to be the only buyer of ancillary services in the DAM for load? In the alternative, should ERCOT restrict meeting ancillary services procurement for load to the Real-Time Market, allowing market participants to transact for ancillary services in the DAM?

3. Should ancillary services offers in the DAM be physically binding (i.e., backed by the ability of the seller to physically deliver, either through its own resources or through contractually bound capacity, the ancillary service sold), or should financial-only transactions be permitted?

4. In its April 15, 2019 comments, the Independent Market Monitor (IMM) recommended that the DAM be financial-only for both ancillary services and energy. ERCOT noted in its June 20, 2019 letter to Commission Staff that implementing the IMM's recommendation to change the DAM to permit financial-only transactions of ancillary services would likely add cost and time to the RTC project. ERCOT estimated additional costs of $3 to $4 million and a one year delay to accommodate the IMM' s recommendation.

a. Should inclusion of a financial-only DAM be implemented the same time as RTC?

b. Should the inclusion of a financial-only DAM be delayed until after RTC implementation is complete?

5. Changing the DAM to permit financial-only transactions of ancillary services creates additional uncertainty when analyzing ERCOT's ability to meet reliability needs leading up to real-time. If the DAM is changed to permit financial-only transactions of ancillary services, what attributes or processes should be included in the RTC design to mitigate any resulting grid reliability impacts?

Project 48540