NOTICE DATE:  March 28, 2013

NOTICE TYPE:  M-A032813-01 Operations

SHORT DESCRIPTION:  Clarification of Fast-Responding Regulation Service (FRRS) Pilot Project Commitment Practices

INTENDED AUDIENCE:  ERCOT Market Participants

DAY AFFECTED:  February 19, 2013, to August 23, 2013

LONG DESCRIPTION:  Since the commencement of the FRRS Pilot Project on February 19, 2013, ERCOT has conducted a weekly procurement of FRRS-Up and FRRS-Down in accordance with the Governing Document for Fast-Responding Regulation Service Pilot Project ("Governing Document").  This process requires each participating QSE representing a Pilot Resource to identify each Tuesday its available capacity for each hour in the upcoming Saturday-through-Friday period.  ERCOT notifies each QSE of its capacity awards on Thursday each week.

To date, ERCOT has also followed the practice of allowing each QSE to reduce its FRRS weekly award amount no later than the day before the day of the FRRS responsibility.  This Day-Ahead reduction is not expressly required by the Governing Document, but ERCOT believes this practice is necessary to ensure consistency with its Ancillary Services procurement process under the ERCOT Protocols, which allows each Resource to limit its potential responsibility through its offers in the Day-Ahead Market.  Holding Pilot Resources to the weekly award amounts would also create an artificial constraint on participation in the pilot project by requiring accurate predictions of capability 4 to 10 days in advance without providing ERCOT any useful information germane to the purposes of the pilot.  By contrast, allowing Day-Ahead adjustment gives ERCOT a more accurate indicator of the performance capabilities of Pilot Resources, which furthers the informative purposes of the pilot.  Also, because participating QSEs are only permitted to reduce (but not increase) their Resources' obligations in the Day-Ahead, any adjustment to capacity commitments will only result in a lower potential payment to the QSE.

ERCOT provides this Notice to ensure that all Market Participants and any future Pilot Resources understand ERCOT's FRRS commitment practices.

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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