Hi Everyone, It was only a casual mention by ERCOT that we already have Ancillary Service Demand Curves or differentiated penalty functions of $20k/MW/hr for NSRS, $30k/MW/hr for RRS, $50k/MW/hr for RUS and $5k/MW/hr for RDS in the RUC optimization and other penalties for power balance and transmission constraints that ERCOT will be providing us soon. I could not find these in any document and in my opinion these should be specified in the OBD on Max Shadow Prices. ERCOT's description of its own KP3 proposal states: "RUC will not use the RTM Ancillary Service Demand Curves (ASDCs) in RTM. Rather, RUC will attempt to solve for a Resource commitment that meets the Load forecast and AS Plan considering Resources' COPs and using a defined constant penalty value. This is similar to the current process, except in the current process the aggregate AS Plan capacity is within a Resource's' Current Operating Plans (COPs)." This description is not consistent with the differentiated multiple values for AS penalties mentioned by ERCOT and these values should be part of KP3 document since they are important design elements. The DAM uses at least $1,000,000/MW/hr penalty for AS - which is more like a hard constraint which is what I assumed RUC was using. I look forward to getting all the shadow price caps used in RUC for our consideration. So, the real difference between what I'm proposing for RUC ASDCs and ERCOT's proposed ASDCs is the demand curve prices and shapes and any scaling or offer floors. ERCOT's proposal can also result in RUC not ensuring full AS Plan amounts will be available although at a much higher price than the SCED ASDCs. My proposal is that the same ASDCs should be used in RUC and SCED. If ASDCs truly represent the willingness of the market to pay or forgo those AS quantities, then they should be used in both. A unit with a $10,000 startup cost should not be started for a 1 MW shortage of NSRS - which is what a $20,000/MW/hr NSRS demand curve may do. Of course, this huge cost would not set market prices since it's a RUC commitment. On the contrary, it would have the impact of suppressing both the AS prices and energy prices (assuming non-zero LSL) and resulting is possible uplift. I would suggest that we ensure greater transparency in what is currently being done and what is in ERCOT's proposal since these are important market design elements that require careful consideration. Many stakeholders are still catching up with the basics of RTC and may require more time and discussion to understand the implications of their decisions. So, I would recommend that we initially take more time before taking to TAC non-consensus issues. Regards, Shams Siddiqi, PhD President, Crescent Power, Inc. 11412 Bee Caves Rd, Suite 202 Austin, Texas 78738 Tel. +1.512.619.3532 Email: <mailto:[log in to unmask]> [log in to unmask] <http://www.crescentpower.net> www.crescentpower.net From: [log in to unmask] <[log in to unmask]> Sent: Tuesday, June 18, 2019 12:16 PM To: 'Maggio, Dave' <[log in to unmask]>; [log in to unmask] <[log in to unmask]> Subject: RE: Key Principle Templates Hi Everyone, I'm not sure if we're supposed to provide comments on these documents prior to Friday's meeting - so, I'm providing comments just in case. For KP3, based on feedback at the last meeting, I've introduced language to truncate the ASDCs at the corresponding AS Plan amount - so, RUC will not procure AS greater than minimum AS Plan amounts. E.g. if Non-Spin ASDC goes from say $1800/MW to $200/MW for AS Plan amount of 1000MW - then RUC will use this truncated ASDC. I also require that RUC apply a floor to Startup Cost (TBD), Min Energy Cost (TBD) and EOC. EOC Floor would be the current $1,500/MWh. This would imply that if there is scarcity, RUC would at most procure the first 100-200MW of Non-Spin (if any) since the ASDC does not justify the cost once offer floors are applied. For KP1.5, I've clarified that Regulation Service deployments will always be Resource Specific under both alternatives - the only difference is whether the Resource Specific amounts are based on optional normalized Participation Factors (PFs). There is no obligation to use Participation Factors and the default would be as specified in Alternative 1. The concern raised at the last meeting that normalized PFs may take time to compute within the 4-second LFC cycle is addressed by having normalized PFs being provided to LFC for each SCED interval. Again, maintaining PFs does not alter the economic efficiency of RTC and can increase efficiency by QSEs providing deployed energy in an economic manner taking into account storage levels in its portfolio of storage and controllable load assets. There was also a good suggestion that we introduce Energy Storage Group (similar to IRR Group) that can be utilized by a group of Energy Storage assets for GREDP and Base Point Deviation purposes. I've added a paragraph to incorporate this suggestion. Regards, Shams Siddiqi, PhD President, Crescent Power, Inc. 11412 Bee Caves Rd, Suite 202 Austin, Texas 78738 Tel. +1.512.619.3532 Email: [log in to unmask] <mailto:[log in to unmask]> www.crescentpower.net <http://www.crescentpower.net> From: Maggio, Dave <[log in to unmask] <mailto:[log in to unmask]> > Sent: Thursday, June 13, 2019 7:47 AM To: [log in to unmask] <mailto:[log in to unmask]> Subject: Key Principle Templates ***** EXTERNAL email. Please be cautious and evaluate before you click on links, open attachments, or provide credentials. ***** Good morning everyone, I wanted to quickly let folks know that the key principle documents in the updated template format have been posted on the 6/21/19 RTCTF meeting page <http://www.ercot.com/calendar/2019/6/21/180300-RTCTF> . We plan to have the full agenda posted tomorrow and these documents will be discussed as part of that agenda. Additional material for the meeting will likely be posted next week. We look forward to seeing you all on the 21st. <http://www.ercot.com/> Dave Maggio Sr. Manager, Market Analysis & Validation 2705 West Lake Drive | Taylor, TX 76574 O: 512-248-6998 | M: 773-458-3215 Confidentiality Notice: The information contained in this email message and any attached documents may be privileged and confidential and is intended for the addressee only. 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