Meeting Summary - 07/15/24 CMWG Meeting

1 - Antitrust Admonition - Chenyan Guo

2 - Agenda Review - Chenyan Guo

3 - CRR LTAS Update / Transaction Limits - Samantha Findley

• Optimization software changes were implemented on June 28 for the 2025.2nd6.Annual Auction.Seq3.
• Reconfigurations of IT resources have improved efficiency in solution times.
• These changes have allowed ERCOT to lift the 400,000 transaction limit.
• Future transactions might still need adjustment periods if constraints persist.
• Possible solutions and changes discussed include:
• Increasing the minimum point-to-point option bid price,
• Implementing bid fees on uncleared bids,
• Removing multi-month bid functionality from LTAs auctions.
• Statistics on bids show 56% single-month and 44% multi-month.
• Ian Haley mentioned the need for long-term, larger-scale solutions for grid reliability.
• Concerns about the effect of removing multi-month bids on the market participants' transaction submission limits.
• Recommendation to test the removal of multi-month bid functionality and analyze its impact on transaction limits.
• Potential for future testing to confirm these changes and their impacts.

Participants Feedback:

• Eric Goff suggested eliminating multi-month optionality to ease constraints on the long-term auction.
• Seth Cochran and Brian Koz emphasized on validating current system capabilities and looking into increasing the system’s capacity without removing functionalities.
• Mark Price and Ian Haley supported testing the removal of multi-month bid functionality, considering any negative impacts on market participants.

Next Steps:

• ERCOT to perform more testing on the removal of multi-month bids to determine the actual limits and impacts.
• Look into the possibility of increasing bid limits if removing multi-month functionality negatively impacts participants.
• Report findings in future CMWG meetings.

Conclusion: ERCOT will continue testing and work on proposed solutions to optimize transaction limits and improve system efficiency.

4 - IMM Load Zone Analysis - Neelima Bezwada

• Load zone definitions have not changed since 2003; recommended reevaluation since 2020.
• Updated analysis includes electrical bus LMP data from 2021 to April 2024.
• Used k-means clustering to group substations into new load zones.
• Comparison of load zone prices for current and new zones highlighted significant differences.
• Intra-zonal congestion has reduced significantly with new load zone formations.
• Considered GTC-based load zone formations; similar results to price-based clustering.
• Request for feedback on additional analysis and further steps from group.
• Discussion about the impact of potential infrastructure requirements.
• Clarification that the analysis does not propose new infrastructure but is based on past data.
• Addressed how changes might influence planning studies and transmission project approvals.
• Explored the impact on congestion management efficiency and protocol changes needed for implementation.

5 - Mitigation for ESRs - Ryan King

• Introduction of the ESR mitigation framework concept, highlighting previous discussions and updates.
• Discussion on the proposed just-in-time mitigation framework as a refinement of NPRR826.
• Introduction of two refinements: consideration of high system Lambda prices and handling multiple constraints.
• Proposed reference system Lambda derived from step one of SCED for calculating mitigated offer caps.
• Proposal to use the lowest absolute constraint contribution when multiple constraints apply.
• Demonstration of the adjustments to the mitigated offer cap including system Lambda and constraint contributions.
• Presentation of analysis on the frequency and impact of mitigation applying the new framework.
• Evaluation of statistical data from 2023 on unique SCED intervals and resources.
• Case study analysis showing the application of the refined mitigated offer cap and dispatch impacts.
• Feedback from stakeholders and additional commentary on ensuring minimal over-mitigation.
• Discussion on maintaining ancillary service obligations amidst the mitigation framework.
• Next steps include formal introduction of the refined NPRR and continued stakeholder engagement.

6 - NPRR1214 Reliability Deployment Price Adder Fix to Provide Locational Price Signals, Reduce Uplift and Risk - Shams Siddiqi

Summary:

• Shams Siddiqi explains NPRR1214 is designed to make the Reliability Deployment Price Adder (RDPA) consistent with its definition, reversing the price suppression effect of ERCOT reliability actions.
• NPRR1214 assesses the market impact of ERCOT reliability actions and undoes price suppression, keeping resources indifferent to the price differences between RDPA and dispatch runs.
• A major issue discussed was the absence of indifference in payment between dispatch run and pricing run under Real-Time Co-Optimization (RTC).
• ERCOT has difficulty calculating load zone and hub prices due to the lack of suitable data storage formats, making manual data extraction very time-consuming.
• The inconsistency in current RDPA calculations, especially the 60-minute relaxation method, results in less accurate price signals. Switching to a five-minute redispatch approach would provide more consistent price signals.
• Ryan King from ERCOT confirms the data constraints and how challenging it is to extract the needed data.
• Discussion on historical data (e.g., January 2021, February 2022) showcases the inefficacy of the current RDPA mechanism during high reliability unit commitment (RUC) days.
• NPRR1214 changes aim to provide accurate price signals and reduce costs by only giving indifference payments to impacted resources, unlike the current blanket payments.
• Questions from Steven Havemann (Austin Energy) about the influence of increased storage resources on NPRR1214 suggest the need for the fixes even with more storage. The necessity for the NPRR persists due to fundamental design gaps.
• Shams Siddiqi notes that nodal pricing should be accurate, as system-wide RDPA for flexible loads distorts market efficiency, especially with the influx of renewable energy sources.
• Despite the challenge in determining load zone price impacts, the importance of accurate price signals for market behavior is emphasized, regardless of the average price shift.
• The suggestion is made to present this NPRR at the next meeting if ERCOT cannot provide the needed load zone prices, to proceed based on the NPRR's merits and ERCOT's specific studies.
• The team agrees to revisit NPRR1214 in the next meeting, with a possible presentation by Shams Siddiqi.

7 - RENA Update Questions Only - ERCOT

• No questions were posted on the working group page.
• Courtney confirmed there were no questions in the queue.

8 - Other Business - Chenyan Guo

• Request made for an update on NPRR1111 for the next month.
• No comments or questions from the working group.
• Next meeting scheduled for August 16.
• Meeting adjourned.