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NPRR174

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

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

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.

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