Transcript Hourly Shortfall NCPC credit

SEPTEMBER 10, 2013 | MARKETS COMMITTEE
NCPC Payments: other credits
Complete summary of NCPC Redesign for Offer
Flexibility conforming changes to other NCPC credit
types. Including design changes since prior
presentations.
Matt Brewster
MARKET DEVELOPMENT
[email protected] | 413.540.4547
Revised presentation guide
This document is a revised presentation of the NCPC Payments
design overview for credit types other than out-of-merit
generation
Changes to these materials (originally presented August 9,
2013) are indicated as:
A new slide
An updated slide
New Slide
Updated
Updated text is shown in red font
Deleted text is shown in light orange with wavy underline font
Some slides from the prior presentation have been deleted
ISO proposes to modify some other types of
NCPC Credit for Offer Flexibility
Credit Type
Proposal
Day-Ahead External Node NCPC (III.F.2.3/III.F.2.4)
No change
Synchronous Condenser NCPC (III.F.2.2)
No change
Real-Time External Transactions (III.F.2.3/III.F.2.4)
Conforming change
Postured DARD Pump (III.F.2.4)
Conforming change
Cancelled Pool-Scheduled Resource (III.F.2.5)
Conforming change
Postured Generation (III.F.2.6)
Conforming change
Hourly Shortfall (III.F.2.1.17)
Conforming change
Minimum Generation Emergency (III.F.2.1.18)
Included in RT Dispatch
NCPC
3
Day-Ahead External Node NCPC is not being
modified
• No proposed changes to this NCPC compensation
• External Transactions, Decrement Bids and Increment Offers
that are cleared out of rate in the day-ahead market at
external nodes are eligible for NCPC for the difference
between the LMP and the transaction price each hour
4
Synchronous Condenser NCPC is not being
modified
• No proposed changes to this NCPC compensation
• Resources committed to operate as a synchronous condenser
receive NCPC credit for the hourly price to condense each
hour and the condensing start-up fee (if applicable) submitted
with their Supply Offer
5
Minor changes are proposed to the Real-Time
External Transactions NCPC
• Hourly evaluation rather than over transaction duration
• Priced transactions with an associated day-ahead cleared
schedule will be:
– Evaluated based on the real-time scheduled quantity exceeding the
day-ahead scheduled quantity
– Evaluated based on the total real-time scheduled quantity for
transactions re-cleared in real-time using a revised offer price
6
Real-Time External Transaction NCPC credit
• Priced external transactions that are cleared out of rate in the
real-time market are eligible for NCPC for the difference
between the LMP and the offer price each hour
• Priced import transaction hourly credit:
Scheduled Quantity x (Transaction Price – Real-Time LMP)
• Priced export transactions hourly credit:
Scheduled Quantity x (Real-Time LMP – Transaction Price)
7
Minor changes are proposed to the
Real-Time DARD Pump NCPC
Updated
9/10/13
• Hourly evaluation rather than over entire day
• DARD Pump with day-ahead cleared demand will be
evaluated based on total real-time consumption rather than
deviations exceeding the day-ahead demand
• Consumption in excess of ISO dispatch instruction will not be
considered
• Bid cost determined with greater of demand bid at time of ISO
posture order or submitted each hour
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Updated
Real-Time DARD Pump NCPC credit
9/10/13
• DARD Pumps are eligible only when an ISO posturing order
causes the resource to consume out of rate
• The greater of hourly demand bids at the time of the
posturing order or submitted for each hour determines the
bid price for NCPC compensation
• DARD Pump hourly credit:
MIN (DDP, Metered Output Consumption) x (Real-Time
LMP – Bid Price)
9
Cancelled Start NCPC compensation is unchanged,
but proposal modifies eligibility requirements
Updated
9/10/13
• Starts scheduled in the day-ahead market are eligible
– Day-ahead schedule compensation for Start-Up fees will not ensure
willingness to incur cost RT are no longer compensated through DA
NCPC so their eligibility is now necessary
• Resources that are cancelled more than two hours after the
scheduled synchronization time are not eligible
• Resources that self-schedule a start within lesser of (i) their
Minimum Down Time or (ii) 10 hours after being cancelled are
not eligible
– Applies when self-schedule is requested after the cancellation order
• Requirement that resources have a Notification Time not
longer than 24 hours remains (no change)
10
Cancelled Start NCPC credit
• Each cancelled pool-scheduled commitment is compensated
when the ISO cancels a start after Notification Time begins
– If cancelled ahead of the Notification Time there is no credit
• Start-Up fee and Notification Time are based upon the offer
information used by ISO to make the commitment decision
• Cancelled Start credit:
Start-Up fee x
percentage of Notification Time completed
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Cancelled Start NCPC examples
Commitment Offer
Start-Up fee
$6,000
Notification Time 1.5 hours
Min Down Time
3 hours
 Cancelled Start credit =
$4,000 (= $6k * 1/1.5)
 Cancelled Start credit
= $0 (cancelled prior
to Notification Time)
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Updated
Cancelled Start NCPC examples (continued)
9/10/13
Commitment Offer
Start-Up fee
$6,000
Notification Time 1.5 hours
Min Down Time
3 hours
 Cancelled Start credit =
$6,000 (if cancelled after
2 hour limit no credit)
 Cancelled Start credit =
$0 (self-scheduled start
within lesser of Min
Down time and 10 hrs)
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Generator Posturing NCPC Credits
proposal is being re-evaluated
New Slide
9/10/13
• ISO proposal discussed at the August Markets Committee
meeting is being re-evaluated to better address opportunity
cost for generators the ISO manually operates outside markets
• The generator posturing NCPC proposal will be discussed at
the September 24 MC meeting
• Only generator resources that are postured by the ISO are
eligible for Posturing NCPC credit
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Hourly Shortfall NCPC is being modified to
accommodate re-offers
Updated
9/10/13
• A lost opportunity cost calculation will be used rather than
the current approach which evaluates the difference between
the day-ahead and real-time LMPs
– Allows resources that have re-offered in RT to be included Eliminates
the exclusion of resources that re-offer in real-time
• ISO will not propose an hourly shortfall credit for nondispatchable resources ISO is also evaluating applying the
existing hourly shortfall calculation to non-dispatchable
resources
15
Hourly Shortfall NCPC modifications
(continued)
New Slide
9/10/13
• Estimated Economic Dispatch for energy will be determined
using resource’s physical parameters (e.g., EcoMax, Available
Energy) and Supply Offer and the real-time LMPs
– Non-Fast Start generator Supply Offer price parameters will be based
on greater of (DA offer, offer when decommitted, offer each hour)
• Start-up fee (when applicable) and No Load fee will be
included in estimated cost calculations
• Actual reserve credits and estimated reserve credits will be
included in the revenue calculations
• Fast Start generators will be evaluated hourly and non-Fast
Start generators over period of decommitment
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Updated
Hourly Shortfall NCPC credit (continued)
9/10/13
• Resources that cleared are pool-scheduled in the Day-Ahead
Market, are offline and available, are not postured, but are
decommitted or not economically dispatched by the ISO in
real-time are eligible for this compensation
• Resources will be evaluated for hourly shortfall credit during
hours of the DA schedule
– Fast Start generator credit will be determined by individual hour
– Non-Fast Start generator credit will be determined over the
contiguous hours of the decommitted DA schedule
• Hourly Shortfall NCPC is calculated using the same approach
as postured, non-limited energy generator resource
17
New Slide
Hourly Shortfall NCPC credit (continued)
9/10/13
• Hourly Shortfall NCPC credit is calculated as:
MAX(0, Estimated Margin – Actual Margin)
• Estimated Margin is the difference between Estimated
Revenue and Estimated Offered Cost where:
Estimated Revenue = Real-Time LMP x Economic Dispatch
Point + Estimated RT Reserve Credits
Estimated Offered Cost = Start-Up + No Load +
Energy Cost @ Economic Dispatch Point
• Actual Margin is the resource’s RT reserve credits for TMSR,
TMNSR and TMOR
18
Hourly Shortfall NCPC credit example
(Fast Start generator)
New Slide
9/10/13
• NCPC credit is: MAX[0, Estimated Margin – Actual Margin] each hour
– Estimated margin = Estimated Revenue – Estimated Cost
– Actual margin = Actual Revenue
• Fast Start credit is determined for each hour offline
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Hourly Shortfall NCPC credit example
(non-Fast Start generator)
New Slide
9/10/13
• NCPC credit is: MAX[0, Sum(Estimated Margin) – Sum(Actual Margin)]
– Estimated margin = Estimated Revenue – Estimated Cost
– Actual margin = Actual Revenue
– Summation is over contiguous hours decommitted
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Minimum Generation Emergency credit is
replaced by RT Dispatch NCPC
• RT Dispatch NCPC credit replaces need for a special credit
during Minimum Generation Emergency
– Compensates out of rate energy dispatch during normal system
operation and Min Gen
• Hourly No Load fee compensated by RT Commitment NCPC
• During Min Gen the RT Dispatch NCPC cost will be allocated to
Real-Time Generation Obligation (III.F.3.1)
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New Slide
Cost allocation for these NCPC credit types
Credit Type
9/10/13
Cost Allocation
Day-Ahead External Node NCPC
(a) Purchase & Increment (b) Sales & Decrement bids:
offers: DA load obligations DA generation obligations
at the node [III.F.3.2.4]
at the node [III.F.3.2.4]
Synchronous Condenser NCPC
RT deviations (same as 1st Contingency) [III.F.3.1]
Real-Time External Transactions
RT deviations (same as 1st Contingency) [III.F.3.1]
Postured DARD Pump
RT load obligations (Network Load if for VAR) [III.F.3.1]
Cancelled Pool-Scheduled
Resource
RT allocator for commitment reason [III.F.2.5, III.F.3.2]
Postured Generation
RT load obligations (Network Load if for VAR) [III.F.3.1]
Hourly Shortfall
RT allocator for commitment reason [III.F.2.1,17, III.F.3.2]
Minimum Generation Emergency RT generation obligations [III.F.3.1]
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