Transcript CMWG Update to WMS 12-5-12 Report of Special CMWG Meeting of 11-30-12 Discussion Items • Reviewed Priority Power (PPM) Proposed Changes to Modify Shadow Price.

CMWG Update to WMS
12-5-12
Report of Special CMWG Meeting of
11-30-12
Discussion Items
• Reviewed Priority Power (PPM) Proposed Changes
to Modify Shadow Price Caps in ERCOT Business
Practice—proposed changes*
– When a constraint hits SP Cap, Seek to expand SP cap to
other constraints in area
– Lower value in 3.6.2(F) to $1000
– Add additional tests starting at the accumulation of
revenues that currently link to the Peaker Net margin,
lowering from $95k to $65k and also lowering the Shadow
Price Cap to $1000 or less
*Based on Priority Draft Document posted for Nov 12,
2012 WMS Meeting
Summary of Actions Taken Since
Issue Raised
• Application of holistic solution to specific
constraints, lowering SP caps
• PCAP
• Accelerated construction of projects—see
Oncor October 12, 2012 RPG Presentation
• Some major Oncor projects will be on parallel,
rather than sequential, paths for RPG/ERCOT
and PUCT CCN
Discussion- 1
• Why being proposed? Priority statement that high
prices result in penalty to West Zone
– Discussion that prices were higher than previous years
(including years where multiple hours were prices were
negative)—including Hub to Zone spread
– Noted that had PUCT Project No. 31600 at PUCT
– Discussion that nodal market is working consistent
with design and existing rules
– Discussion that revenues from CRR auctions flow back
to LSEs on LRS—so this appears to be a bilateral issue
Discussion- 2
• How would proposed changes roll off?
– Unclear
• Link between Holistic Solution and rest of
market design
– Participants pointed out need for revenues to
encourage generation to build
– Offer caps and LCAP—proposal is below LCAP
• Walked through Holistic Solution Principles
from 5/23/11 WMS meeting and rest of
market design
Discussion- 3
• Ability for ERCOT to implement--Unclear
• Comments about ERCOT provided market
hedging tools:
– CRRs--Revenues for intrazonal CRRs returned to LSEs
on LRS for Zone (but unclear how LSEs process
revenue)
– Statement that CRRs are insufficient in number/no
supporting dataconversation about counter-flow
CRRs
• Discussed 2013 Auction results: 7x24 West Hub –
Zone cleared < $6
Final Open Issues
• If implemented at lower caps, could result in
additional OOM in West Zone-- which is
assessed as uplift to load market wide
• How involved should ERCOT
Protocols/Procedures be in resolving bilateral
contract issues?
• Would there be a re-do of 2013 annual CRR
auction?