Meeting Summary - 04/14/2025 CMWG Meeting

▶️1 - Antitrust Admonition

2 - Agenda Review

▶️3 - CRR LTAS Performance Update

CRR-CMWG_04142025.pdf

• Samantha Findley from ERCOT CRR market operations provided an update on transaction performance.
• Updates were given on LTAS transactions, solution times, and proposed changes to the CRR auction limits table.
• The recently added 2027 2nd6 Seq6 auction showed 123,000 total transactions, taking 203 hours (about 8.5 days) to complete.
• This duration is significantly higher compared to the previous Seq6 auction last fall with fewer transactions but took 157 hours to complete.

▶️4 - NPRR1261 Transaction Table Update

NPRR1261 Transaction Table-CMWG_04142025.pdf

• Proposal to reduce the total transaction limit to 315k, per-TOU limit to 110k, and per account holder limit from 2,700 to 2,500 due to long runtime of the recent auction.
• First LTAS to use the new transaction limit table will be the 2025 2nd6 Seq1 auction.
• The proposed reductions are based on data gathered from monthly LTAS evaluations and are not permanent.
• Root causes of long run times are being examined with the vendor, and improvements will allow for adjusted numbers.
• Discussion on the independent operation of each Time of Use (TOU) and linkage only between months, not between time of uses.
• Quantity of option submissions are believed to contribute to long run times.
• Hardware optimizations and potential cloud solutions are being explored to address performance issues, although there are internal cybersecurity constraints.
• ERCOT is considering the removal of multi-month bidding functionality and the introduction of an option pricing report.
• Changes such as linking time of uses and de-linking months were discussed but would require significant code changes.
• The possibility of hardware upgrades, such as from DDR3 to DDR4 RAM, is being pursued.

▶️5 - High LMPs observed on 2/19 discussion

CMWG-Feb19-Issue-04142025-V2.pdf

• Stakeholders requested further information regarding the high LMPs observed on February 19, during a winter storm.
• An electrical bus associated with the Settlement Point RHESS2_ES1 with a very large helping shift factor on multiple constraints that were violated (at max shadow price), resulted in a very high LMP of over $28,000.
• The LMP calculation (System Lambda – sum(SF*Shadow Price)) was explained, past discussion has focused on system conditions and operational questions.
• Freddy Garcia explained in detail the control room's conditions during the winter storm and the multiple constraints faced, including planned outages in certain areas.
• Freddy mentioned that on February 19, ERCOT's operators dealt with a significant number of constraints, with many exceeding emergency ratings that required additional studies to avoid cascading failures.
• Blake Holt from LCRA inquired about possible solutions to minimize LMP impacts, suggesting the need for shared constraints to prevent excessive pricing.
• Multiple stakeholders discussed optimization and pricing issues, noting similar challenges faced by other ISOs and RTOs.
• Freddy Garcia and others highlighted the need for improved tools and procedures to better manage constraints without overloading operators.
• Some stakeholders suggested reevaluating price and shadow price caps to prevent excessive LMPs or considering additional operational tools.
• For future discussions, further analysis on theoretical pricing, constraints handling, and potential procedural updates was suggested.

▶️6 - Day Ahead Market (DAM) PTP Activity Update

CMWG-PTP-and-PTPLO-Submissions-in-DAM.pdf

• PTP and PTPLO interval records have been identified as difficult for the DAM optimization engine to solve.
• High PTP interval record volumes have increased execution time.
• Past measures to optimize DAM performance include limiting PTP submissions through SCR814, process changes, and hardware updates.
• Ongoing studies focus on the PTP impact on DAM performance, with a proposal for submission fees.
• Performance concerns are reemerging, with late solution postings and DAM reports becoming more likely.
• Current submission limits include a maximum of 10,000 PTP interval submissions per counterparty.
• There are diminishing returns on process and hardware improvements without further volume management.
• A reevaluation of the correlation between unawarded PTPs and execution time is planned.
• The issue of high PTP submissions could lead to operational inefficiencies that impact gas procurement and DAM operations.

▶️7 - Granular Product type for Congestion Revenue Rights Time of Use (CRRTOU)

Vistra-CRR-Solar-vs-Non-solar-TOU-Proposal.pdf

• ERCOT presented a study on implementing more granular CRR TOU blocks to better align with market dynamics influenced by increased renewable energy, particularly solar.
• The main reasons for this proposal include adapting to market changes and reducing auction processing time and computational costs.
• Proposal to split current blocks into solar and non-solar hours based on seasonality, providing a more targeted product.
• Observed increased variability in solar and non-solar hours impacts generation outputs and prices, presenting challenges in hedging positions.
• The introduction of a metric called the Obligation Capture Rate (OCR) to assess the congestion variability.
• Encouragement for market participants to consider obligation instead of option during auctions to improve efficiency.
• Discussion on the feasibility of maintaining current 5x16 blocks while introducing new granular segments.
• Feedback suggests ERCOT ISO products need to reflect the newer generation profiles without hindering traditional generators.
• Clarification that changing from 5x16 to two separate products would not require system changes for years not yet auctioned but would remove existing TOUs.
• Exploration of seasonal variation in TOU hours to accommodate different daylight patterns without complicating the system.

Questions Raised:

• Clarification on whether the current 5x16 would be kept or replaced.
• Consideration of solar hour variability across different seasons and its impact on TOU.
• Potential for keeping 5x16 blocks and adding more granular options.
• Questions around the practicality of tracking variable TOU hours by season or daylight changes.

Next Steps:

• Considering a study on different TOU hours across seasons with possible NPRR submission.
• ERCOT to evaluate impacts and run an internal IA for changes after NPRR submission to PRS.
• Collaboration between ERCOT and stakeholders on NPRR development.

▶️8 - CMWG Approval of Changes to the CRR schedule

• Discussion on whether changes to the CRR schedule need WMS approval or if ERCOT could adjust and update with a market notice.
• Consideration of whether the current process delays the schedule or if adjustment is needed.
• Conversation on the stability of the CRR activity calendar and whether WMS's approval is necessary.
• Clarification that updates to the calendar might still be handled through market notices.
• Proposal to potentially shift to a biannual approval process extending the calendar further out to reduce administrative burden.
• Consensus that the current process mostly works without issues, serving as a formality.

• Agreement that the current CRR calendar approval process is not overly complicated.
• Consideration of extending the calendar approval to a biannual process for efficiency.
• Recognition that current practices don't result in significant feedback or changes requiring alterations.

▶️9 - RENA Update (Questions Only)

• No Questions were raised.

▶️10 - Other Business

• Two action items were identified: NPRR1188 and issues with large LMP from February, both to be detailed in future meetings.
• Discussion on the additional time of use for CRR auction with Vistra and ERCOT to analyze further steps.
• Concerns raised about the running time issues with CRR and day-ahead markets in light of anticipated grid growth and increased demand.
• Responsibilities for CRR time of use and market growth issues to be led by Vistra, with ERCOT providing support.
• Potential introduction of PTP fees in CRR and day-ahead markets to handle runtime and market growth challenges.
• Emphasis on keeping the market updated about CRR developments and ongoing discussions on handling market growth.
• Past issues with day-ahead market delays linked to PTP transactions highlighted, indicating ongoing challenges.
• Commitment to transparency in considering PTP fees for CRR and day-ahead markets.
• Future studies and detailed feedback on time of use to be presented by stakeholders.