Issues

NPRR174

Summary
Action
Voting Record
Background
Key Documents

Summary

Title	FIP Modifications in Verifiable Startup and Minimum Energy Cost and Recovery of Exceptional Fuel Costs During RUC Intervals
Next Group
Next Step
Status	Approved on 10/20/2009
Effective Dates	12/01/2010 or per the Nodal Protocol Transition Plan http://www.ercot.com/mktrules/protocols (11/01/09 Nodal Protocols Library)

Action

Date	Gov Body	Action Taken	Next Steps
04/23/2009	PRS	Referred	WMS review of NPRR174
10/20/2009	BOARD	Approved
08/06/2009	TAC	Deferred/Tabled	TAC consideration of NPRR174
07/23/2009	PRS	Recommended for Approval	TAC consideration of NPRR174
06/18/2009	PRS	Recommended for Approval	PRS Impact Analysis review
10/01/2009	TAC	Recommended for Approval	ERCOT Board consideration of NPRR174
09/03/2009	TAC	Deferred/Tabled	TAC consideration of NPRR174

Date

Gov Body

Action Taken

Next Steps

04/23/2009

PRS

Referred

WMS review of NPRR174

10/20/2009

BOARD

Approved

08/06/2009

TAC

Deferred/Tabled

TAC consideration of NPRR174

07/23/2009

PRS

Recommended for Approval

TAC consideration of NPRR174

06/18/2009

PRS

Recommended for Approval

PRS Impact Analysis review

10/01/2009

TAC

Recommended for Approval

ERCOT Board consideration of NPRR174

09/03/2009

TAC

Deferred/Tabled

TAC consideration of NPRR174

Voting Record

Date	Gov Body	Motion	Result
04/23/2009	PRS	To refer NPRR174 to the Wholesale Market Subcommittee (WMS) for further discussion on how to settle the disputed charges.	Passed
10/20/2009	BOARD	To approve NPRR174 as recommended by TAC in the 10/1/09 TAC Recommendation Report.	Passed
08/06/2009	TAC	To table NPRR174.	Passed
07/23/2009	PRS	To endorse and forward the PRS Recommendation Report and Impact Analysis for NPRR174 to TAC.	Passed
06/18/2009	PRS	To recommend approval of NPRR174 as submitted.	Passed
10/01/2009	TAC	To recommend approval of NPRR174 as amended by the 9/2/09 NRG Texas Power and City of Eastland comments.	Passed
09/03/2009	TAC	To table NPRR174 for one month.	Passed

Date

Gov Body

Motion

Result

04/23/2009

PRS

To refer NPRR174 to the Wholesale Market Subcommittee (WMS) for further discussion on how to settle the disputed charges.

Passed

10/20/2009

BOARD

To approve NPRR174 as recommended by TAC in the 10/1/09 TAC Recommendation Report.

Passed

08/06/2009

TAC

To table NPRR174.

Passed

07/23/2009

PRS

To endorse and forward the PRS Recommendation Report and Impact Analysis for NPRR174 to TAC.

Passed

06/18/2009

PRS

To recommend approval of NPRR174 as submitted.

Passed

10/01/2009

TAC

To recommend approval of NPRR174 as amended by the 9/2/09 NRG Texas Power and City of Eastland comments.

Passed

09/03/2009

TAC

To table NPRR174 for one month.

Passed

Background

Status:	Approved
Date Posted:	Apr 14, 2009
Sponsor:	WMS
Urgent:	No
Sections:	5.6.1.1, 5.6.1.2, 9.14.7
Description:	This Nodal Protocol Revision Request (NPRR) modifies the verifiable Startup Cost and verifiable minimum energy cost calculation to include a $.50 adder for the Fuel Index Price (FIP). This NPRR also allows through the dispute process for the recovery of the difference between the Reliability Unit Commitment (RUC) Guarantee based on the actual price paid for delivered natural gas and a fuel price of FIP*1.X. In lieu of system changes, ERCOT may implement this NPRR by making appropriate adjustments to the verifiable cost procedures to accommodate the $.50 adder. These procedures will be described in the Verifiable Cost Manual.
Reason:	When submitting verifiable costs, current Nodal Protocol language only allows for gas fuel recovery at the FIP. FIP alone seldom covers all natural gas costs incurred by Qualified Scheduling Entities (QSEs). Fuel transport costs, swing contract costs, and imbalance fees are examples of typical costs that are added to the underlying commodity price. These additional costs can be especially significant when resource owners are forced to buy intra-day gas in order to meet a RUC deployment instruction. The impact of FIP plus $.50 in the verifiable cost process is primarily twofold: 1) Ensures a closer alignment of cost recovery to actual gas costs for RUC-deployed units that are, by design, committed after the gas markets close, and 2) Modifies Startup Offer caps and Minimum-Energy Offer caps by ten percent since verifiable costs replace generic caps once verifiable costs are submitted. This NPRR also allows a QSE to file a settlement dispute for a Resource’s RUC Make-Whole Payment if the actual price paid for delivered natural gas for a specific Resource during a RUC instruction interval is greater than FIP * 1.X. The maximum amount that may be recovered through this dispute process is the difference between the RUC Guarantee based on the actual price paid and a fuel price of FIP*1.X.