NOTICE DATE:  July 30, 2010
NOTICE TYPE:  M-B073010-01 Settlements
SHORT DESCRIPTION:  Price Correction of MCPEs for Settlement Intervals during the Nodal 8-hour LFC Test for Operating Day June 17, 2010
INTENDED AUDIENCE:  QSE Settlement Personnel
DAY AFFECTED:  June 17, 2010
LONG DESCRIPTION:  ERCOT is correcting the zonal Market Clearing Prices for Energy (MCPEs) for the Settlement Intervals ending 1015-1400 on Operating Day June 17, 2010. These Settlement Intervals occurred during the Nodal 8-hour Load Frequency Control (LFC) Test when Commercially Significant Constraints (CSCs) in zonal were seen as active.

For the 8-hour LFC Test, the Key-Document titled "Market Trials Phase 5 LFC Testing (fka, EDS 3 R6.3 LFC Testing)" indicated the following: "Zonal congestion management techniques (OC1) will not be used in the two hour period leading up to the test and during the test." Thus, pursuant to the applicable LFC testing procedure, all congestion would be addressed locally and there would be no price separation between zones for the relevant intervals.
However, as described at Technical Advisory Committee (TAC) and Nodal Advisory Task Force (NATF) meetings held earlier this month, the West to North Operational Congestion 1 (OC1) for stability was not completely de-activated in zonal. This resulted in zonal price separation. To comply with the above referenced Key-Document, ERCOT is correcting the prices (as attached) for the relevant intervals to reflect the zonal market solution (MCPEs) with the OC1 deactivated. This correction results in a single system-wide price for these Settlement Intervals.

On July 16, 2010, ERCOT updated the Key-Document to implement the following practice for future LFC Tests: "Zonal congestion management techniques (OC1) will be used during the transition period in moving from zonal and total nodal control and vice versa, but will not be used during the testing period when all resources are under full nodal control." As such, OC1 constraints may be active for LFC test transitional Settlement Intervals. During full Nodal system control, ERCOT will not activate the OC1/CSCs. During the LFC Test, ERCOT will actively manage system constraints at the local level to ensure reliable operations. Accordingly, during LFC testing periods there will be no zonal price separation and there will be a single system wide price.
ADDITIONAL INFORMATION:  Protocol Section 9.2.5, Resettlement Statement, directs ERCOT to resettle an Operating Day "when the total of all significant errors in data results in an impact greater than two-percent (2%) of the ERCOT Operating Day market transaction dollars, excluding bilateral transactions." The price corrections for Operating Day June 17, 2010 result in an impact greater than 2% of the total dollars transacted. The resettlement of Operating Day June 17, 2010, is tentatively scheduled to post on Monday, August 2, 2010. Pursuant to Protocol Section 9.2.5.1, Notice of Resettlement, details of the resettlement will be provided in a subsequent Notice on the resettlement date.

Please see the attached Price correction report for price details.

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]<blocked::mailto:[log in to unmask]>.

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