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Saying More Data Needed, PUCT Directs ERCOT to Study Various Non-Spin Proposals
September 1, 2011
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The PUCT will allow ERCOT and stakeholders to move forward with several consensus changes meant to address the energy market pricing impact from deployment of certain ancillaries, but said that it needed more analysis before adjudicating more substantive changes, including whether to adopt the so-called Morgan Stanley proposal (8/22) or the compromise Lower Colorado River Authority proposal (8/19) to add offer floors for online and offline Non-Spinning Reserve Service (NSRS) and Reliability Unit Commitment (RUC).
The main difference between the two proposals is the level of the offer floor, which, in turn, results from different views of when scarcity conditions begin.
The Commission, finding that it did not have sufficiently robust information, directed ERCOT to study various issues implicated by both offer floor proposals and to report back by October 31. The Commission would then intend to adopt changes in the beginning of December, with implementation following as soon as possible.
The Commission identified several consensus issues, and ERCOT will proceed with their implementation. These include:
- Pricing Responsive Reserve Service and Up Regulation used for capacity (system conditions) at the System Wide Offer Cap
- Pricing will be at the System Wide Offer Cap for deployments of Load Acting as a Resource and Emergency Interruptible Load Service, though there will need to be some "fine tuning" to address pricing when system conditions are restored. PUCT Chair Donna Nelson said that this may also need to be adjusted if the Power Balance Penalty Curve is later adjusted.
- ERCOT will deploy Non-Spin in increments smaller than 1,000 MW, which ERCOT is already doing, and will continue to examine even more granular deployments
ERCOT will also look at having Reliability Unit Commitment used for system capacity being offered in a manner similar to the offering of the recently un-mothballed Reliability Must-Run units returned to service.
Additionally, Commissioner Kenneth Anderson, in discussing offer levels, said that greater clarity is needed regarding how the Commission calculates market shares for its "small fish swim fee" rule, under which sellers with less than 5% of capacity are presumed to not have market power (and thus may bid freely at the cap). Specifically, Anderson suggested that Staff should make the denominator used in Staff's calculation available frequently (e.g. total capacity), so that sellers may be confident whether or not they qualify for the "small fish swim fee" rule.
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