Current Issues in CEDI TF on Market Solution

•Dispatch based on bid, payment based on OOME generic cost

•No “non-bid” mechanism (bidding high premium to avoid deployments)

•PRR 440 Sunset Date - 12/31/2003

Current Deployment/Settlement

• Unit 1 • .5 S.F. • $1000.00 Bid• Cost looks like 2,000• 10 MW Constraint

Unit 1 should have moved 20

Would have cost 20 * Generic cost

• Unit 2• .05 S.F.• $5.00 Bid• Cost looks like 100.00

10 MW Constraint

Unit 2 moved 200MW

Gets paid 200* Generic cost

Today Bidding Change

Fix Market Solution

Bid Technology Specific

ex ante bid mitigation

Solution to Align Dispatch & Payment for Local Deployments

Phase 1 2 3 4 5

Impacts •Reverse null bid premium

•QSEs use published bid limits•ERCOT manually checks & publishes non-compliant QSEs

•Automatic checking of bids with limits•Substitute bids if outside of limits•Method to prevent bid overlap

•Eliminate non-bid units from market solution logic

•Pre-determine competitive local constraints•Ex-ante mitigation for non-competitive local constraints•Ex-post mitigation for settlement

Actions •Modify system to accept null bid as (+/-) 99999

•Develop technology type bid parameters

•Develop method to prevent bid overlap•Modify system to automate process

•Modify system •Develop method to determine competitive local constraints•Modify System

Fixes •“Non-bid” mechanism

•Deployment related to tamed bid, pay generic

•Deployment related to permissible bid, pay generic

•Reintroduce market solution (PRR 440) using bid-in units

•Allow for relaxed bidding on competitive local constraints

Dispatch Inconsistent with Payment

Automate Bidding Change

Will only Evaluate Bid-in Units for Mkt Soln

Eliminates manual intervention

Reverse treatment of

null bid

Allows for “non-bid” units

Pre-determination of competitive local

constraints