Texas Nodal Program ERCOT Readiness

1
Texas Nodal Program ERCOT Readiness Transition
(ERT) Supplemental Information

• TPTF
• January 12, 2009
• Kevin Frankeny

2
ERCOT Core Nodal Business Processes
Level 1 and 2 Details January 12, 2008
3
Notes about this document

• This presentation documents the Conceptual Level
  (1) and Process Identification Level (2) Core
  Nodal Business Processes
• Standard Change and Business Support Business
  Processes are not presented here
• Does not include Zonal As-is Business Processes
• This is a working document
• There is a summary display that shows all of the
  Conceptual and Process Identification processes
  on one screen
• There is also a paragraph describing each
  Conceptual and Process Identification item

4
ERCOT Core Business Processes
5
ERCOT Core Business Processes
6
Plan the Power System
7
Plan the Power System

• ERCOT performs numerous planning and forecasting
  activities, including transmission planning,
  resource adequacy, load forecasting, renewable
  generation forecasting, outage coordination, and
  power system modeling.
• Process Identification Level (2)
• Plan the Transmission System
• Plan for Resource Adequacy
• Manage Power System Modeling
• Perform Operational Planning

8
Plan the Power System

• Process Identification Level (2)
• Plan the Transmission System
• Plan for Resource Adequacy
• Manage Power System Modeling
• Perform Operational Planning

ERCOT is responsible for overall planning of
transmission and generation projects for the
ERCOT Transmission Grid. For local transmission
projects, its authority is limited to supervising
and coordinating the planning activities of
Transmission Service Providers. ERCOT also makes
recommendations to the PUCT for needed
Transmission Facilities and provides Market
Participants with transmission plans for each of
the next 5 years.
9
Plan the Power System

• Process Identification Level (2)
• Plan the Transmission System
• Plan for Resource Adequacy
• Manage Power System Modeling
• Perform Operational Planning

ERCOT has several long-term planning
responsibilities related to resource adequacy. It
analyzes and produces load, wind, generation and
system reserve forecasts on a rolling 36-month
basis. It contracts for Reliability Resources and
EILS loads and determines the standards for
determining Ancillary Service Quantities.
10
Plan the Power System

• Process Identification Level (2)
• Plan the Transmission System
• Plan for Resource Adequacy
• Manage Power System Modeling
• Perform Operational Planning

ERCOT manages the Network Operations Model, which
includes the physical characteristics, ratings,
and operational limits of all Transmission
Elements of the ERCOT Transmission Grid based on
information obtained from the Transmission
Service Providers and QSEs. The models are fully
tested prior to use in ERCOTs production systems
and made available to all Market Participants on
the Market Information System (MIS) Secure Area.
For each of the next five years, ERCOT develops
models for annual planning purposes that contain,
as much as practicable, information consistent
with the Network Operations Model.
11
Plan the Power System

• Process Identification Level (2)
• Plan the Transmission System
• Plan for Resource Adequacy
• Manage Power System Modeling
• Perform Operational Planning

Operational Planning timeframes range from days
to months in the future. ERCOT activities include
Outage Coordination, Current Operating Plan (COP)
administration, and producing 7-day hourly
forecasts of loads and wind-generation.
12
Operate the Power System Markets
13
Operate the Power System Markets

• ERCOT operates the power system in an
  economical and reliable manner. ERCOT conducts
  CRR and Day-Ahead Markets, performs Day-Ahead
  Security Analysis including Reliability Unit
  Commitment, manages the Adjustment Period
  (including SASM), and controls the Real-Time
  Power System.
• Process Identification Level (2)
• Manage Congestion Revenue Rights
• Manage the Day-Ahead Market
• Perform Security Analysis Reliability Unit
  Commitment
• Manage the Adjustment Period
• Operate the Real-Time Power System

14
Operate the Power System Markets

• Process Identification Level (2)
• Manage Congestion Revenue Rights
• Manage the Day-Ahead Market
• Perform Security Analysis Reliability Unit
  Commitment
• Manage the Adjustment Period
• Operate the Real-Time Power System

ERCOT initiates, directs and oversees the
auctions for Congestion Revenue Rights (CRRs).
ERCOT also records bilateral trades of CRRs.
15
Operate the Power System Markets

• Process Identification Level (2)
• Manage Congestion Revenue Rights
• Manage the Day-Ahead Market
• Perform Security Analysis Reliability Unit
  Commitment
• Manage the Adjustment Period
• Operate the Real-Time Power System

ERCOT manages the Day-Ahead Market (DAM). The DAM
is a daily, co-optimized market for buyers and
sellers of energy, Ancillary Service capacity,
and certain Congestion Revenue Rights. ERCOT
maintains records of financial energy
transactions between Market Participants.
16
Operate the Power System Markets

• Process Identification Level (2)
• Manage Congestion Revenue Rights
• Manage the Day-Ahead Market
• Perform Security Analysis Reliability Unit
  Commitment
• Manage the Adjustment Period
• Operate the Real-Time Power System

ERCOT performs security analysis including
Reliability Unit Commitment (RUC) to ensure
Transmission System reliability and sufficient
Resource capacity to serve the forecasted hourly
load. ERCOT conducts at least one Day-Ahead RUC
(DRUC) and at least one Hourly RUC (HRUC) before
each hour of the Operating Day.
17
Operate the Power System Markets

• Process Identification Level (2)
• Manage Congestion Revenue Rights
• Manage the Day-Ahead Market
• Perform Security Analysis Reliability Unit
  Commitment
• Manage the Adjustment Period
• Operate the Real-Time Power System

During the Adjustment Period, ERCOT continues to
evaluate system sufficiency and security and
produces reports of resource adequacy to the
market. In addition to operating and Hour Ahead
Security analysis including HRUC, ERCOT may elect
to open one or more Supplemental Ancillary
Service Markets (SASMs).
18
Operate the Power System Markets

• Process Identification Level (2)
• Manage Congestion Revenue Rights
• Manage the Day-Ahead Market
• Perform Security Analysis Reliability Unit
  Commitment
• Manage the Adjustment Period
• Operate the Real-Time Power System

During Real-Time operations, ERCOT controls
Generation Resources based on economics and
reliability to match system Load with on-line
generation while observing Resource and
transmission constraints. The Security
Constrained Economic Dispatch (SCED) process
produces Base Points for all Generation
Resources. ERCOT uses Load Frequency Control
functions, Base Points from the SCED process and
deployments of Ancillary Service capacity to
control system frequency and solve potential
reliability issues by providing instructions to
TSPs and QSEs controlling Generation and Load
Resources. ERCOT provides information to the
Market Participants concerning current operating
conditions. Under Emergency Conditions, ERCOT
may implement manual procedures as provided for
in the protocols and notifies Market Participants
of system conditions. ERCOT also maintains
real-time telemetry with the TSPs and QSEs and
the State Estimator as required by protocol.
19
Manage Commercial Operations
20
Manage Commercial Operations

• Following Real-Time Operations, ERCOT must
  collect and aggregate metering data and pricing
  information to create settlement statements, and
  manage the resultant financial transactions.
• Process Identification Level (2)
• Meter and Aggregate Data
• Perform Settlements Billing
• Perform Financial Transfers

21
Manage Commercial Operations

• Process Identification Level (2)
• Meter and Aggregate Data
• Perform Settlements Billing
• Perform Financial Transfers

ERCOT uses the Meter Data Acquisition System
(MDAS) to collect generation and consumption
energy data for settlement purposes. This data is
validated, edited, estimated, adjusted, netted,
loss corrected, split, aggregated and profiled as
necessary to provide the Settlement inputs. ERCOT
also computes Transmission and Distribution Loss
Factors and calculates and allocates Unaccounted
For Energy (UFE). Aggregated meter data is used
in settlement calculations.
22
Manage Commercial Operations

• Process Identification Level (2)
• Meter and Aggregate Data
• Perform Settlements Billing
• Perform Financial Transfers

Settlement resolves financial obligations between
a Market Participant and ERCOT, including
administrative and miscellaneous charges.
Settlement also provides Transmission Billing
Determinants to Transmission and Distribution
Service Providers. There are separate Settlement
and billing processes for Congestion Revenue
Rights, the Day-Ahead Market (DAM), and the
Real-Time Market, which encompasses Day-Ahead
Reliability Unit Commitment, the Adjustment
Period, and Real-Time Operations.
23
Manage Commercial Operations

• Process Identification Level (2)
• Meter and Aggregate Data
• Perform Settlements Billing
• Perform Financial Transfers

ERCOT collects and disperses funds based on the
invoices generated for Congestion Revenue Rights,
the Day-Ahead Market (DAM), and the Real-Time
Market. The payment schedule varies, depending on
the settlement type.
24
Provide Market Services
25
Provide Market Services

• ERCOT provides all services required to
  enable participation in the markets and the other
  mandated programs it administers. These services
  include registration activities, provision of
  information necessary to meet market and
  regulatory requirements, and dispute management.
• Process Identification Level (2)
• Register and Qualify Market Participants
• Manage Market Information System
• Manage Disputes
• Facilitate Customer Choice Program
• Administer Renewable Energy Credit Program
• Manage Protocol Revisions

26
Provide Market Services

• Process Identification Level (2)
• Register and Qualify Market Participants
• Manage Market Information System
• Manage Disputes
• Facilitate Customer Choice Program
• Administer Renewable Energy Credit Program
• Manage Protocol Revisions

ERCOT registers and qualifies Market Participants
prior to and during participation in the ERCOT
markets. This activity includes registration as a
type of market participant / account holder,
qualifying all entities operational and
commercial capabilities, performing initial and
ongoing qualification testing of resources, and
contracting for non-market services.
27
Provide Market Services

• Process Identification Level (2)
• Register and Qualify Market Participants
• Manage Market Information System
• Manage Disputes
• Facilitate Customer Choice Program
• Administer Renewable Energy Credit Program
• Manage Protocol Revisions

ERCOT has the responsibility to provide to Market
Participants all data required by governing
documents such as the Nodal Protocols and Nodal
Market and Operating Guides.
28
Provide Market Services

• Process Identification Level (2)
• Register and Qualify Market Participants
• Manage Market Information System
• Manage Disputes
• Facilitate Customer Choice Program
• Administer Renewable Energy Credit Program
• Manage Protocol Revisions

ERCOT provides a process to resolve with Market
Participants any issues with the various market
settlement statements produced as a result of
Commercial Operations. If the result an initial
resolution is not reached, a binding Alternative
Resolution Dispute Resolution Procedure may be
implemented.
29
Provide Market Services

• Process Identification Level (2)
• Register and Qualify Market Participants
• Manage Market Information System
• Manage Disputes
• Facilitate Customer Choice Program
• Administer Renewable Energy Credit Program
• Manage Protocol Revisions

ERCOT, by legislative mandate, facilitates the
Texas Customer Choice Program (retail
competition). Responsibilities include customer
registration, communications and systems for the
tracking of choice of competitive retail electric
provider.
30
Provide Market Services

• Process Identification Level (2)
• Register and Qualify Market Participants
• Manage Market Information System
• Manage Disputes
• Facilitate Customer Choice Program
• Administer Renewable Energy Credit Program
• Manage Protocol Revisions

ERCOT, by legislative mandate, is charged with
administering the Texas Renewable Energy Credit
Program. Responsibilities include the creation of
REC accounts and registration of participants,
the awarding and tracking of credits and offsets
and the submission of required reports to the
appropriate regulatory agencies.
31
Provide Market Services

• Process Identification Level (2)
• Register and Qualify Market Participants
• Manage Market Information System
• Manage Disputes
• Facilitate Customer Choice Program
• Administer Renewable Energy Credit Program
• Manage Protocol Revisions

The protocols specify the procedures and
processes used by ERCOT and market participants
for the orderly functioning of the ERCOT system
and nodal market. ERCOT is responsible for
administering the stakeholder process for the
additions, edits, deletions, revisions, or
clarifications to these Protocols.
32
Support Operational Market Monitoring
33
Support Operational Market Monitoring

• ERCOT monitors, collects and reports the
  operational and market performance data required
  for the appropriate regulatory agencies to
  adequately perform their oversight
  responsibilities.
• Process Identification Level (2)
• Monitor and Report Operational Performance
• Provide Market Monitoring Data

34
Support Operational Market Monitoring

• Process Identification Level (2)
• Monitor and Report Operational Performance
• Provide Market Monitoring Data

ERCOT monitors and collects data regarding the
operational performance of itself and Market
Participants and provides reports and data as
required to the Market Participants, Public
Utilities Commission, the Independent Market
Monitor, and/or the Texas Regional Entity as
required.
35
Support Operational Market Monitoring

• Process Identification Level (2)
• Monitor and Report Operational Performance
• Provide Market Monitoring Data

ERCOT monitors and collects data regarding the
Market behavior of Market Participants and
provides reports and data as required to the
Public Utilities Commission, and the Independent
Market Monitor as required.
36
Comments or questions may be submitted
to ERT_at_ercot.com