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SCR731

Summary

Title Automate the Implementation of MCSM
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Next Step
Status Approved

Action

Date Gov Body Action Taken Next Steps
No updates have been made to this issue.

Voting Record

Date Gov Body Motion Result
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Background

Status: Approved
Date Posted: Nov 17, 2003
Sponsor: Reliant Resources
Urgent:
Sections:
Description: Automate the process for adjusting the Market Clearing Price of Energy as directed in Section 6.9.5.1, Balancing Energy Clearing Price, item (2) and subject the adjusted clearing price to the same requirements as any unadjusted clearing price (i.e. post the adjusted price pursuant to Section 4.6, Operating Period Process, item (5) and Section 6.7.1.1, Creation of the Balancing Energy Bid Stack, item (5))
Reason: The Commission ordered the implementation of the MCSM in Docket No. 24770. PRR 420, which implemented the Commission™s order, requires ERCOT to adjust the MCPE when the BES bid stack has been exhausted and there is no zonal congestion. In order to immediately implement MCSM, ERCOT offered to calculate this adjustment manually. As a result of the manual process, the adjusted MCPE is not known during the affected Settlement Interval and the unadjusted MCPE is published by ERCOT. Upon seeing the higher unadjusted MCPE, loads that respond to price signals will potentially be reimbursed at prices below their actual cost. Loads are discouraged from responding to the current price signals because the risk of not receiving the posted price is greater than the benefit of responding, especially given that the most likely time that an adjustment will be made is when the MCPE is posted at a high level. The manual implementation of adjusting the MCPE has had the unintended effect of removing passive Voluntary Load Response as a feature of the market design. In order to encourage load participation when it is needed most and in accordance with the PRR 420 (now Section 6.9.5.1 (2)), which only allows a manual process for calculating the incremental amount paid above the adjusted MCPE, the adjusted price should be automatically calculated and posted in accordance with the Protocols for any unadjusted MCPE.

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