Transcript CMSC Amendments Slides (Item 5)

Proposed CMSC Amendments
- Imports & Exports
Intertie Trading Sub-committee
November 24, 2003
PUBLIC
Proposed Rule Amendments
• Background - MSP consultation
• Negative Price Offers for Imports
• Constrained Off Imports / Exports
Background - MSP Consultation
• Longstanding MSP concern about constrained-off
payments
• Consultation began with discussion paper, in
February 2003
• MSP report presented to IMO Board on July 3
• One conclusion and six recommendations
Summary of MSP Recommendations
• Three CMSC related recommendations
– Negative offers should not be used to calculate
constrained-off payments.
– Imports that cannot be scheduled should be removed
from stack so they do not receive CMSC payments.
– Self-induced constrained-off payments to generators or
loads should not be made or should be fully recovered.
• Other recommendations included working groups
– to look at the Niagara 25 Hz sub-system
– to look at transmission planning issues in Ontario
Endorsements from Board
• The IMO Board endorsed the recommendations
– authorized IMO to take actions necessary to implement
them.
• At the same time Board approved an Urgent Rule
amendment
– related to negative offer prices for generators
• Other rules have been brought to the Technical
Panel
Negative Price Offers for Imports
• Issue - Potentially large CMSC without efficiency
rationale (e.g.)
• If 50 MW constrained off at -$2000 offer & zonal price $100
CMSC = [50 * 100 -(-$2000)] = $105,000 per hour.
– Compared with 50 * $100 = $5000 per hour
if offer were successfully scheduled.
• Rationale for Recommendation:
– If payment of zonal price is sufficient for producing
energy, it should be sufficient for not producing.
• Large negative prices are not indicative of costs incurred
Negative Price Offers - Proposal
• Proposed rule to limit CMSC payments to imports
– when offer prices are below zero.
• CMSC calculated assuming a lower price limit
– limit is zero $/MWh
• unless zonal price is less than zero, then limit is zonal price
– for fairness / symmetry, applies to positive and negative
CMSC, constrained on and constrained off situations
• Interim application: after-the-fact adjustment
– for subset: positive CMSC, > 1 MW constrained off
• identical to urgent rule applied to generators
Negative Price Offers - Examples
Generic Case: Import Constrained off from 50 MW (MS) to 0 MW
Case 1:
Price
$/MWh
Proposed
CMSC
Zonal Price > 0
Zonal
Price
0
Applied Limit
Proposed
CMSC
not paid
Offer
Price
Negative Price Offers - Examples
Generic Case: Import Constrained off from 50 MW (MS) to 0 MW
Price
Case 2:
2
$/MWh
Zonal Price < 0
0
Applied Limit
CMSC
not paid
Zonal
Price
Zonal Price = Applied limit
Proposed CMSC = $0
Negative Price Offers - Examples
Generic Case: Import Constrained off from 50 MW (MS) to 0 MW
Price
Case 3:
$/MWh
Zonal Price
< Offer Price
<0
0
CMSC < 0
No Change
Offer
Price
Potential Limit,
below offer;
no change
IOG will be positive
IOG + CMSC ~ zero
Constrained Off Imports / Exports Current Procedure
• After 2 hour ahead IMO pre-dispatch
– IMO notifies NYISO of successful constrained
schedule imports and exports
• NYISO applies these as upper limits
– in their hour ahead market.
• Going into 1 hour ahead IMO pre-dispatch
– IMO applies limit for the constrained run only
– allows the unconstrained market schedule to float
• Could be further adjustments
– for failures during checkout or new TLRs
Proposed Limits on Schedules
• Proposed rules to recognize such limits
– generic: possible changes with New York or others
• Planned implementation for New York
– CS1  CS2
[ CS = constrained predispatch schedule]
• 2 hr ahead constrained pre-dispatch is upper limit on 1 hour
ahead (current procedure)
– MS1  max (MS2, CS2) [ MS = predispatch
market schedule]
• 1 hour ahead unconstrained market schedule limited
– 2 hour ahead constrained value is the physical limit
– a larger 2 hour ahead MS implies schedule was being
constrained off (MS >CS)
» CMSC payment deserved since this is part of
congestion management
Limits on Schedules with NYISO Examples
2 Hour Ahead
1 Hour Ahead
CS2
MS2
0
100
100
0
0
100
0
100
CS1
CS1 = CS2
0
100
100
0
100
200
100
CS1 < CS2
100
100
100
100
0
200
50
50
50
MS1  max (MS2,CS2 )
MS1
Constrained Case
0
 100
 100
 100
 200
None
None
Constrained On
Constrained Off
Constrained Off
 100
 100
 200
None
Constrained On
Constrained Off
Implications of Scheduling Limits
• Market Schedules may change (be lower)
– constrained schedules not affected
• CMSC can be smaller quantities (positive or
negative)
– depending on circumstances
– may be corresponding IOG reductions
• MCP in any interval can increase, decrease or
remain unchanged depending on
– whether import or export,
– whether replaced by another intertie transaction