Meeting Summary - 05/05/2025 WMWG Meeting

This meeting was interrupted due to technical difficulties. Below is a summary for the duration of the meeting that was recorded.

3 - RUC Policy

▶️3.1 - Overview

RUC-Analysis_WMWG-05052025.pdf

• Presented data shows the effective resource hours through the RUC process for all days in 2025, highlighting RUC activity for congestion, particularly in February and March.
• From January 1 to April 23 there were 220 HRUC commitments for congestion, mainly in South Texas GTCs (72%), and the Valley Export (9%).
• 71% of HRUC commitments for congestion occurred when the high ancillary service margin (HASL margin) was negative.
• Negative HASL margin indicates not enough system-wide capacity to meet load forecasts, resulting in RUC recommendations to resolve capacity shortages.
• RUC decisions often address both capacity and network constraint violations simultaneously, using an optimization model to select the lowest cost solutions.
• The need for real-time co-optimization with the RUC engine was discussed, suggesting improvements in recommendations and unit commitments.
• Proposed scenarios illustrate cost evaluations in RUC decision-making, with choices influenced by both power balance and network constraints.
• Shift factors, both single reference and load distributed, play a critical role in RUC decision-making processes, influencing how constraints are managed.
• Behavior of the RUC engine in managing South Texas export constraints was discussed, highlighting the complexity and frequency of RUC operations.
• Stakeholder inquiries addressed factors such as negative HASL margins, specific RUC incidents, and the impacts of congestion on capacity decisions.
• Clarification on RUC's simultaneous handling of power balance and congestion, using full SCED schedule to optimize resource commitments.
• No shift factor cutoff is utilized in the RUC process, and RUC does not prioritize constraints in the same manner SCED does.
• Discussions on potential improvements with real-time co-optimization and SOC (State of Charge) impacts on ancillary services procurement.

▶️3.2 - Improving Self-Commitment

Improve-Self-Commitment-within-RUC-Opt-Out-Window_WMWG_May-2025.pdf

• Discussion on improving the self-commitment process in relation to RUC by identifying a misalignment in opt-out timelines.
• Current rules require opting out of RUC two hours prior to the unit startup time, which does not align with operational practices as most RUC instructions are issued with a lead time of two hours or less.
• The February RUC report indicates that 83% of RUCs are initiated close to the RUC window, limiting resources' ability to opt out.
• A suggested revision is to allow resources to opt out up to the moment they need to start their unit, increasing flexibility for self-commitment.
• Discussion on the history and rationale behind the current two-hour cushion for opting out, with a focus on stakeholder compromise to improve alignment with QSE decision making.
• Questions raised about the impact of removing the two-hour cushion on operators' actions and its potential effects on the economics and efficiency of the market.
• Feedback from stakeholders suggests that the current opt-out window affects both generation and consumer load, with a preference for more dynamic market conditions to ensure better alignment with real-time market movements.
• Consensus that allowing more flexibility in opting out would benefit both resources and consumers by freeing up capacity that is otherwise restricted by RUC commitments.
• The group is considering proposing a modification to remove the two-hour opt-out buffer, with plans to submit an NPRR if there are no significant concerns from stakeholders.

▶️4 - MDRPOC

ERCOT_MDRPOC_Discussion_WMWG_May_2025.pdf

• Decision to proceed directly to the slide deck as the group has prior background knowledge from a WMS meeting.

▶️4.1 - Overview

• The current focus is on moving from a deterministic approach to a risk-based approach for MDRPOC.
• Objective: Provide sufficient outage capacity at a minimum based on historical outage levels.
• Regular updates to MDRPOC to include new system changes, planned resources, and updated forecasts.
• Near-term proposal for 2025-2026: Calculate MDRPOC at a selected risk level.
• Target: Provide at least the equivalent of 2024's actual planned outages, including extensions.
• Long-term outlook (3-5 years): Maintain adequate outage levels despite higher uncertainty.
• MDRPOC will not be a one-time calculation; regular updates are expected with new information.
• Feedback indicates that 2024 had higher-than-average outages; updates consider recent long-term forecasts.
• Risk-based MDRPOC shows improvement for near-term, offering more outage capacity.
• Feedback requested more consistency in MDRPOC to allow smoother scheduling of outages.
• Stakeholders appreciated ERCOT's consideration of feedback to enhance MDRPOC processes.
• A new proposal suggests ensuring minimum outage levels during summer and winter for future planning.

▶️4.2 - Recommended Improvements

TCPA-Recs-on-MDRPOC-May-2025-WMWG_050225.pdf

• Presentation on planned outage capacity limits in the MDRPOC by TCPA.
• The discussion centered around SB3, passed after the winter storm Uri, granting ERCOT broad discretion to review and approve or deny planned outage requests.
• The need for a flexible process allowing ERCOT to manage planned outages with less forced outages, enhancing reliability.
• Real-time price signals and competitive market principles should guide the scheduling and movement of planned outages.
• Challenges in resource availability, skilled labor shortages, and the adverse impacts of restricting outage periods too narrowly.
• Recommendations included transforming MDRPOC as an informational tool, earlier approvals for longer outages, prioritizing major turbine inspections, including ESR capacity, and allowing outage capacity transfers within a QSE.
• Debate over the lack of certainty in scheduling outages affecting maintenance requirements and the possibility to spread risk through setting minimum amounts during shoulder seasons.
• Discussion emphasized long-term reliability concerns, with the need for maintenance on increasingly aging dispatchable fleet facilities.
• Several stakeholders acknowledged the importance of market signals in prompting timely rescheduling of outages.
• Fred Huang from ERCOT provided insights into the MDRPOC process and the potential for some methodological changes, with future notices and NPRRs addressing exemptions for TEF units.
• Concluded with suggestions on the next steps and a continued dialogue on implementing changes to the MDRPOC process.

▶️5 - Price Correction Methodology

Enhanced-Emergency-Settlement-Methodology_050525.pdf

• Magie Shanks presented on improved methodology for enhanced emergency settlement during price correction events.
• The recent analysis of price corrections from August 12 to September 11 showed higher payments through emergency settlement.
• The current methodology was found to have room for enhancement, specifically in identifying eligible resources for make-whole payments during price correction events.
• The methodology change impacts only resources eligible for the emergency settlement payment.
• The previous method assessed all generation resources for emergency operations settlement without determining actual dispatch impact during price correction.
• New step added: Resources whose base points remained unchanged between actual SCED and recalculated optimization identified as price takers and ineligible for emergency settlements.
• An example provided of a resource with ‘ONTEST’ status, which would not qualify for emergency payments under new methodology due to unchanged base points.
• A market notice was sent out regarding a past price correction error where two operating days originally considered for resettlement no longer qualify.
• Participants acknowledged the clarification of protocols and discussions on enhancing language clarity in protocol to prevent misunderstandings.

▶️6 - Other Business

• No new items or issues were raised by the membership.

▶️7 - Adjourn