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NPRR700

Summary

Title Utilizing Actual Fuel Costs in Startup Offer Caps
Next Group
Next Step
Status Approved on 08/11/2015
Effective Dates
06/22/2016

Action

Date Gov Body Action Taken Next Steps
08/11/2015 BOARD Approved
07/30/2015 TAC Recommended for Approval Revision Request Consideration
06/11/2015 PRS Recommended for Approval TAC for consideration.
05/14/2015 PRS Recommended for Approval Impact Analysis Consideration

Voting Record

Date Gov Body Motion Result
08/11/2015 BOARD To approve NPRR700 as recommended by TAC in the 7/30/15 TAC Report. Passed
07/30/2015 TAC To recommend approval of NPRR700 as recommended by PRS in the 6/11/15 PRS Report. Passed
06/11/2015 PRS To endorse and forward to TAC the 5/14/15 PRS Report as amended by the 6/4/15 ERCOT comments and Impact Analysis for NPRR700 with a recommended priority of 2015 and rank of 1340. Passed
05/14/2015 PRS To recommend approval of NPRR700 as submitted. Passed

Background

Status: Approved
Date Posted: Apr 29, 2015
Sponsor: RCWG
Urgent: No
Sections: 2.1, 4.4.9.2, 5.7.1.1
Description: Just before the implementation of the Nodal Market, it was discovered that the Real-Time revenues earned by a Resource while ramping from breaker close to the Lowest Sustained Limit (LSL) were not included in the calculation of Reliability Unit Commitment (RUC) Make-Whole Payments. To mitigate this problem, it was decided to reduce the Startup Costs in RUC guarantee by an amount that approximates the Real-Time revenues (heat rate proxy “H”) to ensure a balanced equation (total cost versus total revenues). The reduction in Startup Costs affects both Day-Ahead Market (DAM) and RUC procurement given that both use the same cost structure in the calculation of Startup Offer caps, even though reducing Startup Costs in DAM by the heat rate proxy “H” is not desirable since it’s a financial market and generators do not earn additional revenues while ramping to the LSL. This Nodal Protocol Revision Request (NPRR) tries to rectify this problem by incorporating the actual fuel costs into the DAM and RUC procurement process and DAM Make-Whole Payment calculation. However, for RUC Make-Whole Payment calculations the Startup Costs should still be reduced by the heat rate proxy “H” to ensure a balanced equation. If approved, this NPRR should be implemented with NPRR 617, Energy Offer Flexibility.
Reason: Addresses current operational issues, Market efficiencies or enhancements

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