Loads in SCED Version 2Proxy G Proposal

This is a proposal from Carl Raish as an individual … it has not been vetted internally at ERCOT and should not be construed in any way as an ERCOT proposal or endorsed by ERCOT.

Disclaimer

Three Methods for LMP - G• I would recommend retaining current Bid-to-Buy method

– LSE can participated but can only represent their own customers– Customers could be price responsive or not

• LMP - Volumetric G– I would recommend allowing this if all ESIIDs could be accurately base-

lined by ERCOT– ERCOT would disaggregate load reductions to ESIID-level and pass

those to the respective LSE QSE– I would recommend requiring one or more ESIIDs in the resource to

be price responsive• LMP - Proxy G

– No price responsive ESIIDs allowed– OK if LSE-level load can be accurately base-lined by ERCOT– Would not require ESIID-level load reduction estimation

ERCOT Price Responsive Load Survey

• On 2013 survey REPs identified 25,229 ESIIDs as being on price responsive products– 22,947 on Block and Index– 4,105 on Real Time Pricing– 1,877 on Peak Rebate

• Residential price response participation– 1,816 customers– 5.9 million competitive residential customers

• Non-residential price response participation – 23,413 customers – 51 (out of 199) Load Resource ESIIDs were reported by REP as being

on price responsive rate– 863,904 competitive non-residential customers reported on fixed

price rates

ERCOT Price Responsive Load Survey• My biggest concern with LMP-Volumetric G is estimating load reduction at the

ESIID-level• This graph illustrates the concern … the average load is for 1,652 customers

reported on RTP rates, the two customer loads are for randomly chosen customers for the same date

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6

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0 10 20 30 40 50 60 70 80 90

kW

Interval

RTP Participant Load on August 7, 2013

Average Customer 1 Customer 2

Comparison of Volumetric G to Proxy G

Volumetric G Proxy G

1. DR QSE registers a resource as a third-party DR provider

a. Signs up customers without regard to LSE (competitive)b. Sends list via NAESB or TX Set to ERCOT for validationc. Invalidated ESIIDs are removedd. Regularly submits updates to add/remove ESIIDs

Same for both Volumetric and Proxy G

Comparison of Volumetric G to Proxy G

2. LSE QSEs provide lists of ESIIDs to ERCOT that are on price-responsive rates

a. Sends list via NAESB or TX Set to ERCOT for validationb. Valid and active ESIID in ERCOT settlement systemc. LSE QSE represents the REP that owns the ESIIDd. ERCOT periodically validates submissions to confirm price-

responsivenesse. This activity is already being done by ERCOT on a periodic basis …

would change to continuous update process

Comparison of Volumetric G to Proxy G

3. ERCOT validation of DR QSE listsa. Applicable to Volumetric and Proxy G

a. Valid and active ESIID in ERCOT settlement systemb. Consistent profile code (Res only or Non-Res only)c. Interval metering with sufficient history to support accurate base-lined. Base-line analysis performed to establish that accuracy standards are met …

resource is rejected if base-line fails standardse. As updates are submitted, ERCOT confirms baseline is still accurate … otherwise

updates are rejected

b. Applicable to Proxy G onlya. ERCOT compares DR QSE list to LSE list of price-responsive ESIIDs … if any are

found, they are rejected from the resourceb. ERCOT periodically validates DR QSE list to confirm absence of price-

responsiveness … if significant price-responsiveness is evident, ERCOT checks at LSE-level to identify compliance failures

Comparison of Volumetric G to Proxy G

4. DR QSE submits offers to sell DR capacitya. Volumetric G - if offer is cleared, DR QSE is paid LMPb. Proxy G - if offer is cleared, DR QSE is paid LMP – Gp

c. In both cases, might pay based on telemetered load reduction with claw-back if ERCOT finds discrepancy

d. Proxy G could be a rolling average LZ_SPP, perhaps seasonally adjustede. Average by interval / day-type or perhaps average across intervals?

Comparison of Volumetric G to Proxy G

120 Day Rolling Average LZ_SPP

5. Settlement – Volumetric Ga. DR QSE provides ESIID-level load reduction to ECOTb. ERCOT validates DR QSE telemetry against aggregated interval datac. ERCOT validates ESIID-level load reduction against ESIID-level interval datad. ERCOT passes ESIID-level load reductions to respective LSE QSEse. ERCOT settles LSE QSE with load reductions added on to its loadf. LSE QSE bills customers for unused energy … presumably for the energy only

does not bill for TDSP charges or ERCOT feeg. ERCOT includes cost of load reduction in RTM settlementh. Since customer has to pay for unused energy, they are not over-paid for

reductioni. Since LSE QSE is settled for the unused energy, they do not profit by being

long in RTM

Comparison of Volumetric G to Proxy G

Comparison of Volumetric G to Proxy G

Scenario:Generator A producing 96 MW and selling into RTMGenerator B producing 10 MW and selling 6 MW into RTMCSP B producing 4 MW of load reduction and selling into RTM

Load A (owned by REP A) consuming 100 MW from RTM (96 from A 4 from B)Load B (owned by REP B) consuming 6 MW from RTM (0 from A 6 from B)

has a contract with Generator B for 4 MW at $60/MWh typically consumes 10 MW … 6 MW from RTM and 4 MW from generator B

deployed by CSP B down to 6 MWLMP = $3000/MWhProxy G = $70/MWh

REP A pays ERCOT $300,000. ([load(100) + curtailed load(0)] * 3000 LMP)REP B pays ERCOT $18,240. [load(6) * 3000 LMP] + [curtailed load(4) * 60 contracted price]

ERCOT pays Generator A $288,000.00 (3000 LMP * 96 Gen)ERCOT pays Generator B $18,240. [RTM(6) * 3000 LMP] + [contracted(4) * 60 contracted price]ERCOT Pays CSP B (the CSP representing load B) $11,720 (4 curtailed load * [2930 LMP- Proxy G])Presumably the CSP would then relay the $11,720 (less any fee) to the customer associated with load B.ERCOT pays REP B $280 (4 curtailed load * 70 G proxy)

ERCOT receives $318,240 and pays $318,240

Proxy G Example

Scenario:Generator A producing 96 MW and selling into RTMGenerator B producing 10 MW and selling 6 MW into RTMCSP B producing 4 MW of load reduction and selling into RTM

Load A (owned by REP A) consuming 100 MW from RTM (96 from A 4 from B)Load B (owned by REP B) consuming 6 MW from RTM (0 from A 6 from B)

has a contract with Generator B for 4 MW at $60/MWh typically consumes 10 MW … 6 MW from RTM and 4 MW from generator B

deployed by CSP B down to 6 MWLMP = $3000/MWhProxy G = $70/MWh

REP A pays ERCOT $300,000. ([load(100) + curtailed load(0)] * 3000 LMP)REP B pays ERCOT $18,240. [load(6) * 3000 LMP] + [curtailed load(4) * 60 contracted price]

ERCOT pays Generator A $288,000.00 (3000 LMP * 96 Gen)ERCOT pays Generator B $18,240. [RTM(6) * 3000 LMP] + [contracted(4) * 60 contracted price]ERCOT Pays CSP B (the CSP representing load B) $12,000 (4 curtailed load * [30000 LMP])Presumably the CSP would then relay the $12,000 (less any fee) to the customer associated with load B.

ERCOT reports 4 MW reduction for Load B to LSE QSE … REP B bills customer for unused energy

ERCOT receives $318,240 and pays $318,240

Volumetric G Example