Texas PUC Shelves Consideration Of Proposed Day-Ahead Market Enhancements Under Real-Time Co-Optimization, To Avoid Delay In RTC Implementation

The Public Utility Commission of Texas has shelved consideration of certain proposed enhancements related to the day-ahead market (DAM) under real-time co-optimization (RTC), in order to avoid a delay in RTC implementation

The PUC's decision follows a notification from ERCOT that including DAM enhancements as part of RTC implementation would delay RTC by two years

ERCOT said that, in the fourth quarter of 2019, ERCOT's Energy Management System (EMS) will undergo an upgrade that is projected to take four (4) years to complete—i.e., through mid-2024. ERCOT's EMS is a system of computer-aided tools used by ERCOT operations to monitor and control generation and transmission on the ERCOT System; it is a core ERCOT IT system upon which many of ERCOT's primary duties under the Public Utilities Regulatory Act (PURA) are executed.

"ERCOT periodically updates the EMS to maintain optimal performance. Accordingly, the prioritization of the upcoming EMS upgrade is of considerable importance. Notably, the last significant upgrade to ERCOT's EMS system was similar in scope to the upcoming upgrade, and successfully executed under a comparable timeline. If RTC is implemented independently of the DAM enhancements recently posed for consideration in this Project, ERCOT expects the implementation of RTC to fall along a timeline similar to the EMS upgrade project -- i.e., a 4-year implementation, with RTC to be deployed in mid-2024. However, if the Commission determines that the implementation of RTC should include DAM enhancements, ERCOT expects RTC's implementation to extend beyond the upcoming EMS upgrade project -- i.e., a 6-year implementation, with RTC to be deployed in mid-2026," ERCOT said

ERCOT said that, "If the implementation of RTC extends beyond deployment of the EMS upgrade, it will need to be paused for EMS-dependent development. During this pause, there will be build-out and testing of new EMS environments, which will thereby preclude concurrent completion of RTC functionality."

"In an attachment to a memorandum filed by Commission staff in this project on June 20, 2019, ERCOT noted that proposed DAM enhancements, as envisioned by the Independent Market Monitor (IMM), would cost approximately $3 to 4 million, and include a 12-month extension to the RTC implementation timeline. In addition to this 12-month extension, there will likely be at least a 12-month delay in the delivery of RTC due to the EMS-dependent development pause -- i.e., likely resulting in the addition of at least 24 months to ERCOT's original RTC implementation timeline," ERCOT said

PUC Chairman DeAnn Walker was not willing to undergo a two-year delay in adopting RTC in order to accommodate DAM changes, and questioned whether any delay would be limited to two years

Walker said that the day-ahead issues have not been thought through enough, and are not appropriate to be included in RTC at this time.

Walker said that she wanted parties to be focused on RTC implementation in the near-term. While Walker said that the DAM issues should be addressed, Walker said that it can be done through the normal stakeholder process, rather than at the Commission as had been contemplated. This will give parties more time to consider the issues, Walker said

As such, the Commission declined to issue questions concerning various DAM policy questions at this time, such as questions concerning a financial versus physical DAM for ancillary services

Commissioner Arthur D'Andrea agreed, emphasizing the value of RTC and the need for RTC to go-live with EMS to remain on schedule

Project 48540