NOTICE DATE:  May 15, 2013

NOTICE TYPE:  M-A051513-01 Operations

SHORT DESCRIPTION:  Change to HCAP and Power Balance Penalty Curve effective on June 1, 2013

INTENDED AUDIENCE:  ERCOT Market Participants

DAY AFFECTED:  June 1, 2013

LONG DESCRIPTION:  In accordance with Public Utility Commission of Texas (PUCT) Substantive Rule 25.508, High System-Wide Offer Cap in the Electric Reliability Council of Texas Power Region, the High System-Wide Offer Cap (HCAP) will be $5,000 for Energy and Ancillary Services beginning on June 1, 2013.

Along with this change, the Power Balance Penalty Curve used in Security-Constrained Economic Dispatch (SCED) for under-generation conditions is also being updated on June 1, 2013.  The new curve will be set in accordance with the following table:

MW Violation

Price/MWh

≤ 5

$250

5 < to ≤ 10

$300

10 < to ≤ 20

$400

20 < to ≤ 30

$500

30 < to ≤ 40

$1,000

40 < to ≤ 50

$2,250

50 < to ≤ 100

$3,000

100 < to ≤ 150

$3,500

150 < to ≤ 200

$4,000

200 or more

$5,001



Note that offer submittals at the new HCAP take effect only for submissions starting at 00:01 Central Prevailing Time (CPT) on Operating Day June 1, 2013.

The price legend on the LMP Contour Map for the Standard Gradient view, located at www.ercot.com/mktinfo<http://www.ercot.com/mktinfo>, will be updated to reflect the new HCAP during the June on-cycle release, currently scheduled for June 10-13, 2013.

ADDITIONAL INFORMATION:  For further details regarding the HCAP, see the 'System-Wide Offer Cap and Scarcity Pricing Mechanism Methodology' ERCOT Business Practice.  For details on the Power Balance Penalty Curve, see the 'Methodology for Setting Max Shadow Prices' ERCOT Business Practice.  These documents are located in the Other Binding Documents List on ERCOT.com at http://www.ercot.com/mktrules/obd/obdlist.

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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