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NOTICE DATE:  December 7, 2017

NOTICE TYPE:  W-B120717-01 General

SHORT DESCRIPTION:  Security-Constrained Economic Dispatch (SCED) Parameter for the Creation of Proxy Energy Offer Curves

INTENDED AUDIENCE:  All Market Participants

DAYS AFFECTED:  December 1, 2010 to December 11, 2017

LONG DESCRIPTION:  ERCOT has identified an inconsistency between the ERCOT Protocols and the logic used in SCED for the creation of proxy Energy Offer Curves. Paragraph (4) of Protocols section 6.5.7.3, Security Constrained Economic Dispatch, governs the creation of proxy Energy Offer Curves under various scenarios that are driven by the type of Resource and how that Resource is being offered into the Real-Time Market.  As set forth in tables found in Protocols sections 6.5.7.3(4)(a)-(d), 1 MW must be added or subtracted from certain values to create the proxy Energy Offer Curves.  However, this parameter has been set for SCED to 0.01 MW, rather than the required 1 MW, since December 1, 2010 (Nodal Market Implementation date). 

ERCOT is currently testing the functionality of this parameter to ensure that changing it from 0.01 MW to 1 MW in production systems will result in the proxy Energy Offer Curves being created as described in Protocols sections 6.5.7.3(4)(a)-(d).  ERCOT will implement a change to this parameter from 0.01 MW to 1 MW in the production MMS at 10:00 AM on December 11, 2017.

ERCOT expects that changing this parameter to 1 MW will result in minor differences in proxy Energy Offer Curves for Resources assigned to the following categories:

·         A non-Intermittent Renewable Resource (IRR) for which its Qualified Scheduling Entity (QSE) has submitted an Output Schedule instead of an Energy Offer Curve;

·         A Dynamically Scheduled Resource (DSR) for which its QSE has not submitted Incremental and Decremental Energy Offer Curves;

·         A DSR for which its QSE has submitted Incremental and Decremental Energy Offer Curves;

·         A non-IRR for which its QSE has not submitted a full-range Energy Offer Curve;

·         An IRR for which its QSE has not submitted an Energy Offer Curve; or

·         An IRR for which its QSE has not submitted a full-range Energy Offer Curve.

The impact of the identified inconsistency to the Base Point from the SCED for the above-listed Resources was limited to 0.99 MW.  This could have had minor impacts on the optimal solution of the SCED on some Operating Days.  In some cases, the difference in the Base Point of the above Resources that resulted from setting the affected parameter to 0.01 MW instead of 1 MW may also have had small impacts on Locational Marginal Prices (LMPs) and Base Points of other Resources not in the above-listed categories. 

Although this issue may have affected dispatch as well as prices to some extent, ERCOT is unable to perform a price correction because ERCOT cannot determine prices that are more accurate than the prices already posted.  Any effort to recalculate new prices would require significant assumptions about the operating condition of ERCOT System Resources that would necessarily call into question the accuracy of any recalculated prices. 

ADDITIONAL INFORMATION: ERCOT’s settlement system also refers to section 6.5.7.3(4) for purposes of calculating proxy Energy Offer Curves used in the calculation of Real-Time Average Incremental Energy Costs, which is used in Reliability Unit Commitment (RUC) Make-Whole Payments.  The issue discussed herein is specific to the MMS and does not impact the calculations in the settlement system.

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].

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