NOTICE DATE:  July 31, 2015
NOTICE TYPE:  W-C073115-01 General
SHORT DESCRIPTION:  Energy Management System Coding Change for Shift Factors
INTENDED AUDIENCE:  All Market Participants
DAY AFFECTED:  December 1, 2010 to July 8, 2015 (certain SCED intervals)
LONG DESCRIPTION: While investigating an inquiry received on June 22, 2015 from a Market Participant, ERCOT identified a case where the Shift Factor (SF) of a 138 kV radial transmission line was calculated in error due to a software coding issue in the calculation of SFs in its Energy Management System (EMS) - failure to zero out Resistance (R) in the calculation.  On July 8, 2015 at 10:35AM, ERCOT implemented an emergency fix to zero out the Resistance (R) value.
ERCOT conducted a root cause analysis and determined that the EMS coding issue affected SFs used in the Security Constrained Economic Dispatch (SCED) solution for congestion management from December 1, 2010 (Texas Nodal Market Implementation date) until the production release of the fix on July 8, 2015.  Overall, 51.88% of the SCED intervals from December 1, 2010 had binding and/or violated transmission constraints.  Dispatch and corresponding prices in some of these intervals may have been impacted by the use of the incorrect SFs.  The impact of the incorrect SFs is proportional to the square of the Resistance/Reactance (R/X) ratio of transmission constraints.  The impact of the EMS coding issue was relatively low due to the low R/X ratios for the majority of the transmission constraints active in SCED since December 1, 2010.  Based on preliminary analysis, ERCOT believes that the transmission constraints that were resolved by SCED would have likely converged to the same Base Points and Locational Marginal Prices (LMPs) had the correct SFs been utilized in SCED, assuming that the impacts from other system changes (generation to be dispatched (GTBD), system topology, offers, not following Base Points, regulation, etc.) are minimal.
At no time was reliability of the ERCOT System affected.  SCED is designed to account for errors in estimation of flow and has built-in controls that keep outcomes within acceptable boundaries.  As such, ERCOT was able to manage system reliability and congestion at all times.
Although the EMS coding issue affected the dispatch as well as prices to some extent, ERCOT is unfortunately unable to perform a price correction.  ERCOT Protocol Section 6.3(4) says that ERCOT shall correct prices under certain circumstances "unless accurate prices cannot be determined."  In this case, ERCOT is unable to determine more "accurate prices" than prices already posted.  Any effort to recalculate a new set of prices would require significant assumptions about the operating condition of ERCOT System Resources that would necessarily call into question the accuracy of the recalculated prices.  At best, ERCOT could only calculate approximate prices using methods that are not part of the ERCOT Protocols and those pricing outcomes could be higher than, lower than or equal to the posted prices depending upon the selected methodology, but not more accurate.

On July 30, 2015, ERCOT discussed this EMS coding issue at the Technical Advisory Committee (TAC) meeting.  At the TAC meeting, stakeholders requested information on how to calculate what the correct SFs would have been with the current production fix in place.  Based on the posted Shift Factors (SFs) which are located on the Market Information System (MIS) Secure Area at https://mis.ercot.com/pps/tibco/mis/Pages/Reports/Reports,stakeholders can determine the correct SFs by multiplying the posted SFs with (1 + R^2/X^2) where R and X are the Resistance and Reactance of the constrained transmission element.


TAC further requested that ERCOT present additional information at the August 5, 2015 Wholesale Market Subcommittee (WMS) meeting<http://www.ercot.com/calendar/2015/8/5/31892-WMS>.  Currently, the matter will be discussed at WMS under Agenda 5, "ERCOT Operations and Market Items."  ERCOT will discuss in more detail its root cause analysis, potential pricing impacts, why it cannot correct the prices to "accurate prices" and answer questions from stakeholders.
CONTACT:  If you have any questions, please contact your ERCOT Account Manager. You may also call the general ERCOT Client Services phone number at (512) 248-3900 or contact ERCOT Client Services via email at [log in to unmask]<mailto:[log in to unmask]>.
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