Frequency Control Task Force Presentation to the ERCOT Technical Advisory Committee June 1, 2006

Frequency ControlFrequency ControlTask ForceTask Force

Presentation to the Presentation to the ERCOT Technical Advisory ERCOT Technical Advisory

CommitteeCommitteeJune 1, 2006June 1, 2006

Presentation OverviewPresentation Overview• Frequency Control Issue BackgroundFrequency Control Issue Background

• Schedule Control Error (SCE) as a Schedule Control Error (SCE) as a component of the frequency issuecomponent of the frequency issue

• Work of the Frequency Control Task Work of the Frequency Control Task ForceForce• PRRs 661 and 662PRRs 661 and 662

Frequency Issue Frequency Issue BackgroundBackground

The ERCOT system has experienced The ERCOT system has experienced primary frequency control problems primary frequency control problems since the beginning of Single Control since the beginning of Single Control Area operations in 2001Area operations in 2001

ERCOT’s frequency performance is ERCOT’s frequency performance is monitored by NERC Control monitored by NERC Control Performance Standard 1 (CPS1) Performance Standard 1 (CPS1)

ERCOT CPS1 AverageERCOT CPS1 Average

100

110

120

130

140

150

160

170

Aug-01

Oct-01

Dec-01

Feb-02A

pr-02Jun-02A

ug-02O

ct-02D

ec-02Feb-03A

pr-03Jun-03A

ug-03O

ct-03D

ec-03Feb-04A

pr-04Jun-04A

ug-04O

ct-04D

ec-04Feb-05A

pr-05Jun-05A

ug-05O

ct-05D

ec-05Feb-06A

pr-06

CPS

1 A

vera

ge

100

110

120

130

140

150

160

170

Monthly Avg 12 Mo Rolling Avg Trend (12 Mo Rolling Avg)


Main tools for maintaining primary Main tools for maintaining primary frequency control are governor response frequency control are governor response and Regulation Service (RGS)and Regulation Service (RGS) PDCWG has observed poor governor PDCWG has observed poor governor

responseresponse Online units with governors are required to Online units with governors are required to

place governors in service at specified droopplace governors in service at specified droop ERCOT does not procure governor response, ERCOT does not procure governor response,

generators are not paid to provide it, and generators are not paid to provide it, and there is no govenor response performance there is no govenor response performance measuremeasure


FCTF continues to work on creation of a FCTF continues to work on creation of a Governor Response Service and Governor Response Service and corresponding performance measurecorresponding performance measure

Patton and others have postulated ERCOT Patton and others have postulated ERCOT procures excessive amounts of RGSprocures excessive amounts of RGS

Generator Schedule Control Error (SCE) Generator Schedule Control Error (SCE) assumed to impact overall primary assumed to impact overall primary system frequency control and the system frequency control and the quantity of RGS procured and deployedquantity of RGS procured and deployed

Schedule Control ErrorSchedule Control Error SCE-based solutions to frequency control SCE-based solutions to frequency control

and RGS procurement and deploymentand RGS procurement and deployment PRRs 356 and 358PRRs 356 and 358 PRR 525PRR 525

PRR 525 responsesPRR 525 responses PRR 586PRR 586 PRRs 605, 607, and 608PRRs 605, 607, and 608 PRRs 649, 656, 661, and 662PRRs 649, 656, 661, and 662

Schedule Control ErrorSchedule Control Error Key Features of PRR 525Key Features of PRR 525

Created new methodology for calculating QSE Created new methodology for calculating QSE SCESCE

Applied new SCE performance measure to all Applied new SCE performance measure to all resource QSEs (not just RGS providers) in all resource QSEs (not just RGS providers) in all intervals (not just when RGS provided)intervals (not just when RGS provided)

Did not address penalties for non-compliance, Did not address penalties for non-compliance, leaving Protocols 6.10.12 as sole enforcement leaving Protocols 6.10.12 as sole enforcement language (the “death penalty”)language (the “death penalty”)

Schedule Control ErrorSchedule Control Error Protocols Sec. 6.10.12Protocols Sec. 6.10.12

6.10.126.10.12 Non-Compliance Actions of ERCOTNon-Compliance Actions of ERCOTERCOT may revoke any or all Ancillary Service qualification of ERCOT may revoke any or all Ancillary Service qualification of

any QSE providing an Ancillary Service(s) for continued under-any QSE providing an Ancillary Service(s) for continued under-performance.performance.

Failure to deliver energy resulting from a valid Dispatch Failure to deliver energy resulting from a valid Dispatch Instruction is cause for ERCOT, at ERCOT’s option, to withhold Instruction is cause for ERCOT, at ERCOT’s option, to withhold payment for any Ancillary Services purchased and not payment for any Ancillary Services purchased and not delivered.delivered.

ERCOT will make information relative to each QSE’s performance ERCOT will make information relative to each QSE’s performance as well as ERCOT’s performance, available to the marketplace as well as ERCOT’s performance, available to the marketplace on a monthly basis, subject to the provisions of Section 1.3.1, on a monthly basis, subject to the provisions of Section 1.3.1, Restrictions on Protected Information. Restrictions on Protected Information.

Schedule Control ErrorSchedule Control Error PRR 525 implementationPRR 525 implementation

Adopted by ERCOT Board in April 2005Adopted by ERCOT Board in April 2005 System changes required to “unbox” PRR System changes required to “unbox” PRR

525 complete in October 2005525 complete in October 2005 Board resolution in December 2005 to Board resolution in December 2005 to

implement PRR 525 on January 1, 2006 with implement PRR 525 on January 1, 2006 with 6-month death penalty moratorium6-month death penalty moratorium

Absent Board action, stakeholders assume Absent Board action, stakeholders assume death penalty is reinstated July 1, 2006death penalty is reinstated July 1, 2006

QSE SCE performanceQSE SCE performance(CPS2 scores using PRR 525 methodology)(CPS2 scores using PRR 525 methodology)

17 1820

1820

18 18 18 1719 20 19 19

17 18

13

19

2426 25

13 12 910

9 1210 10 12

11 10 11 1113 12

16

9

4

5 7

1 11

11

1

1 11

2 2 2 2 2 3 44 4

44

0123456789

101112131415161718192021222324252627282930313233343536

Sep '04

Oct '04

Nov '04

Dec '04

Jan '05

Feb '05

Mar '05

Apr '05

May '05

Jun '05

Jul '05Aug '05

Sept '05

Oct '05

Nov '05

Dec '05

Jan '06

Feb '06

Mar '06

Apr '06

Num

ber o

f QSE

s

Passing QSEs Failing QSEs Failing Wind

Frequency Control Task Frequency Control Task ForceForce

Formed by WMS in July 2005Formed by WMS in July 2005 Met 18 times to date with participation from all Met 18 times to date with participation from all

market segments, incl. ERCOT and PUCTmarket segments, incl. ERCOT and PUCT Reports to WMS, ROS, and PRSReports to WMS, ROS, and PRS Focus on proper alignment of commercial incentives Focus on proper alignment of commercial incentives

with market goals, performance measures, and with market goals, performance measures, and compliance penaltiescompliance penalties

Produced PRRs 661 and 662 as a “package Produced PRRs 661 and 662 as a “package solution” to SCE performance measures, solution” to SCE performance measures, commercial incentives, and compliance penaltiescommercial incentives, and compliance penalties


Issues examined by FCTFIssues examined by FCTF Contribution of SCE to poor frequency Contribution of SCE to poor frequency

controlcontrol Contribution of SCE to regulation Contribution of SCE to regulation

procurement and deploymentprocurement and deployment Contribution of load swings and load Contribution of load swings and load

forecast error to regulation deploymentforecast error to regulation deployment Market obligations / incentives to provide Market obligations / incentives to provide

primary frequency responseprimary frequency response


Issues examined by FCTF (cont.)Issues examined by FCTF (cont.) Market incentives / penalties for SCE Market incentives / penalties for SCE

performanceperformance Uncontrollable Renewable Resource Uncontrollable Renewable Resource

forecast errorforecast error Accuracy of ERCOT regulation signals and Accuracy of ERCOT regulation signals and

their impact on the QSE SCE calculationtheir impact on the QSE SCE calculation Evaluation of PRR 525 implementationEvaluation of PRR 525 implementation


Set of options presented to ROS and Set of options presented to ROS and WMS in April 2006WMS in April 2006 ROS recommended retaining the existing ROS recommended retaining the existing

performance measure (PRR 525)performance measure (PRR 525) WMS agreed with ROS recommendation WMS agreed with ROS recommendation

and narowed FCTF options to and narowed FCTF options to incentive/penalty structures built upon incentive/penalty structures built upon existing CPS2 metricexisting CPS2 metric


Key Features of PRR 661Key Features of PRR 661 Maintains existing SCE Performance MeasureMaintains existing SCE Performance Measure

10-minute measure applied to all resource QSEs in all intervals10-minute measure applied to all resource QSEs in all intervals Requirement to pass 90% of all intervals in each month Requirement to pass 90% of all intervals in each month

maintainedmaintained Applies financial penalties to non-performersApplies financial penalties to non-performers Creates financial incentives for complianceCreates financial incentives for compliance Provides physical penalties for very poor performance, Provides physical penalties for very poor performance,

without death penalty shockwithout death penalty shock Provides adjustment mechanism to scale financial Provides adjustment mechanism to scale financial

penalty factor based on experiencepenalty factor based on experience

PRR 661 Backcast AnalysisPRR 661 Backcast Analysis

ID AINT Cost to get to 90% MINT PINT

Failing Interval Count Comment

AO 32.5 $12,463.46 4375 3905 470 Round up to 33

AQ 313.9 $12,868.75 1141 713 428 Round up to 314

B 239.2 $29,403.65 4028 3386 642 Round up to 240

H 219.2 $29,440.61 3578 3001 577 Round up to 220

L 791.3 $81,454.30 4387 3157 1230 Round up to 792

R 79.1 $23,422.18 4439 3916 523 Round up to 80

AL 2971.9 4311 908 3403 Wind-Only QSE

AG 2743 4240 1073 3167 Wind-Only QSE

AN 2532.2 4138 1192 2946 Wind-Only QSE

AM 2391.2 4008 1216 2792 Wind-Only QSE

$189,052.95


Key Features of PRR 662Key Features of PRR 662 Clarifies/tightens unit trip exemptionClarifies/tightens unit trip exemption Addresses unit testingAddresses unit testing Addresses Uncontrollable RenewablesAddresses Uncontrollable Renewables Clarifies unit and portfolio capability Clarifies unit and portfolio capability

violationsviolations Deletes RRS deployment exemptionDeletes RRS deployment exemption

Questions?Questions?

Documents

Frequency Control Task Force Presentation to the ERCOT Technical Advisory Committee June 1, 2006