ERCOT To Seek Price Correction For Feb. 15 That Would Raise Price Adder By Up To $1,200 per MWh -- EnergyChoiceMatters.com

ERCOT To Seek Price Correction For Feb. 15 That Would Raise Price Adder By Up To $1,200 per MWh

March 17, 2021

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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ERCOT issued a market notice stating that it would seek board approval for a price "correction" for Feb. 15, with ERCOT stating that the change to the Real-Time On-Line Reliability Deployment Price Adder that results from correcting the "errors" ranges from an increase of $0.01/MWh to an increase of $1,241.68/MWh, with an average increase of $58.36/MWh.

The market notice states, "ERCOT Protocol Section 6.5.7.3.1, Determination of Real-Time On-Line Reliability Deployment Price Adder, provides that deployed Emergency Response Service (ERS) is a component of the Real-Time On-Line Reliability Deployment Price Adder (RTORDPA). During the Energy Emergency Alert (EEA) on Operating Day (OD) February 15, 2021, ERCOT operators deployed all ERS Resources with a deployment obligation. Because of the duration of the EEA, these ERS Resources remained deployed until their deployment obligations were exhausted entirely. ERCOT has discovered that its Market Management System (MMS) software contained programming errors that resulted in an incorrect MW amount being used for the estimated deployed ERS component of the RTORDPA for certain Security-Constrained Economic Dispatch (SCED) intervals on OD February 15, 2021."

"Pursuant to paragraph (6) of ERCOT Protocol Section 6.3, Adjustment Period and Real-Time Operations Timeline, ERCOT may seek review by the ERCOT Board of Directors (Board) if Real-Time Market (RTM) prices are in need of correction, so long as ERCOT notifies Market Participants no later than 30 days after the impacted Operating Day (OD). ERCOT provides this Notice that it will seek Board review of RTM prices for OD February 15, 2021, due to a software programming error that impacted calculation of the Real-Time On-Line Reliability Deployment Price Adder (RTORDPA)," the market notice states

"More specifically regarding the MMS software, the following errors were discovered," the market notice states

"The logic for the RTORDPA calculated ERS-10 and ERS-30 deployments as starting from the time of the XML deployment instruction, rather than from the end of the 10-minute (for ERS-10) or 30-minute (for ERS-30) ramp times. The RTORDPA logic did not reflect actual ERS performance obligations, because paragraph (2) of ERCOT Protocol Section 3.14.3.3, Emergency Response Service Provision and Technical Requirements, states that ERS '[d]eployment obligation time does not include the ramp time.' Because the RTORDPA logic began accounting for deployed ERS MWs too early, it stopped accounting for deployed ERS MWs too soon and didn’t include deployed ERS MWs in the RTORDPA during SCED intervals in which ERS Resources continued to have a deployment obligation. As a result, the RTORDPA calculation for SCED intervals on OD February 15, 2021, that fell at the end of the ERS deployment obligation times under-counted the estimated deployed ERS MWs. This logic error had the most significant impact on the RTORDPA of the programming errors discussed in this Notice," the market notice states

"The RTORDPA logic also improperly treated Weather-Sensitive (WS) ERS as having the same deployment obligation time as Non-Weather-Sensitive (NWS) ERS. However, per paragraph (3) of ERCOT Protocol Section 3.14.3.3, WS ERS has a shorter maximum obligation time in a single event (3 hours for WS ERS versus 12 hours for NWS ERS). As a result, WS ERS MWs were included in the RTORDPA calculation for SCED intervals in which there was no WS ERS deployment obligation," the market notice states

"The RTORDPA logic for determining when an ERS deployment obligation has exhausted also did not properly account for the fact that some ERS resources may have an obligation for only a subset of the time periods within the overall ERS deployment timeframe," the market notice states

"Finally, the logic used to estimate restoration of ERS after a deployment obligation ends was found to contain a numeral conversion error; however, this had only a minimal impact on the RTORDPA calculation," the market notice states

"ERCOT has conducted an initial analysis and determined these software errors impacted calculation of the RTORDPA for 79 SCED intervals between 09:45 and 20:35 on OD February 15, 2021. The change to the RTORDPA that results from correcting the errors ranges from an increase of $0.01/MWh to an increase of $1,241.68/MWh, with an average increase of $58.36/MWh," the market notice states

"ERCOT has also reviewed whether the programming error described here impacted prices on ODs February 16 and 17, 2021. Because prices for those ODs were already at the price cap pursuant to an Order of the Public Utility Commission of Texas, this software error did not impact prices for those ODs," the market notice states

"While ERCOT is able to perform a study to determine accurate prices for the impacted SCED intervals, software fixes to address all the noted issues in ERCOT's production systems are still being developed," the market notice states

"Finally, ERCOT notes that Nodal Protocol Revision Request (NPRR) 1024, Determination of Significance with Respect to Price Corrections, was approved by the Board on February 12, 2021. NPRR1024 will require ERCOT to seek Board review of RTM prices if, within 30 days of the impacted OD, ERCOT determines that correcting an error would result in an absolute value impact to any single Counter-Party, based on the sum of all original RTM Settlement Statement amounts of Market Participants assigned to the Counter-Party, of either: (1) 2% and also greater than $20,000; or (2) 20% and also greater than $2,000. Although analysis is on-going and NPRR1024 is not yet in effect, the current estimate is that the price correction at issue meets the criteria established in the NPRR for ERCOT Board review. The expected implementation date for NPRR1024 is April 1, 2021," the market notice states

"ERCOT intends to seek review of this potential price correction at the next Board meeting, currently scheduled for April 13, 2021," the market notice states

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