Cold Snap Task Force Working Group

1
Cold Snap Task Force Working Group

• Update on Straw Proposals
• May 10, 2004

2
Straw Proposal 1Adjust Market Timelines

• Current electric market timeline results in
  generator schedules published at 1600 for the DA
  Market and 2200 for the RT Market
• Natural gas scheduling process requires day ahead
  (timely) nominations to be finalized by 1230
• On very cold days, it is highly unlikely that the
  gas fired unit can procure intra-day gas after
  1230 day ahead schedule
• As witnessed on January 14, this can lead to a
  significant loss of operable capacity impacting
  system reliability

3
(No Transcript)
4
Straw Proposal 1Adjust Market Timelines

• Possible Alternative
• Move up the Market Process by 12(?) hours
• Event Driven (parameters to be determined)
• DAM Offers in by midnight vs. noon
• DAM clears 0400
• Re-offer window 0400-0600
• RAA completed by 1000

5
Straw Proposal 1Adjust Market Timelines

• Advantages
• Generator schedules known in advance of timely
  natural gas nomination requirements
• Stakeholders are fully informed of forecasted
  abnormal system conditions
• Makes use of existing Market Rules and structure
• Minimal disruption to current business practices
  (ISO and Market Participants) event driven not
  a permanent change

6
Straw Proposal 1Adjust Market Timelines

• Disadvantages
• Natural gas prices are less evident at the time
  electric market offers are submitted
• Current Market Rules do not result in
  financially firm schedules for RAA market
  commitments, leaving certain market risks with
  gas-fired generators in a constrained natural gas
  market
• No guarantees that generators will operate as
  scheduled if financial risk is not mitigated

7
Straw Proposal 1Adjust Market Timelines

• Use Posturing Rules
• After the RAA is finalized at 1000, identify the
  natural gas units committed
• Assume these units are energy limited to the RAA
  schedule and posture that schedule for real
  time dispatch
• In real time, ISO will run the RAA schedule to
  make sure natural gas purchased will be consumed
• Treat unit(s) as following its dispatch
  instruction so they are kept whole for start up,
  no-load and other operating reserve credits

8
Straw Proposal 1Adjust Market Timelines

• Settlement
• Use RAA schedule (or actual) as the basis for
  computing lost opportunity posturing dollars
• This should result in no lost opportunity cost
  payments RAA (actual) Available Energy
• By running the RAA schedule in actual and paying
  for OR as applicable, the unit will be treated as
  if the RAA schedule were physically firm,
  similar to a DA financially firm schedule

9
Straw Proposal 1Adjust Market Timelines

• Market Issues
• Which resources can set price?
• What performance penalties should be placed on
  under performance?
• How should mitigation be addressed when an event
  is declared?
• Market rule changes
• Manual 11
• Manual 28/Market Rule 1 (?)

10
Straw Proposal 1Adjust Market Timelines

• Technical Issues
• E-market software
• Open and Close times
• Unit Manager functionality
• RAA commitment software
• 24 hour window
• External contract scheduling
• OASIS

11
Triggering a Cold Snap Event

• Criteria
• Natural Gas Factors
• Electric Power System Factors
• Weather Factors
• Market Factors

12
Cold Snap Event

• How do we enter the process?
• Minimum timeframe for market notice
• Communication plan and process
• Normal business days
• Weekend/Holiday
• Notification list
• Market Participants
• State Officials
• Natural Gas Industry
• Notification methods

13
Cold Snap Event

• How do we exit the process?
• Minimum timeframe for market notice
• Communication plan and process
• Normal business days
• Weekend/Holiday
• Notification list
• Market Participants
• State Officials
• Natural Gas Industry
• Notification methods

14
Human Factors

• What adjusted market timeline provides minimal
  disruption?
• 12 hour slide?
• 16 hour slide DA market/12 hour RAA
• ISO Considerations
• Participant Considerations
• Impact on communication plan
• Other

15
Next steps

• Schedule next working group meeting(s)
• Continue development of market timeline straw
  proposal
• Detail all technical impediments to be resolved
• Develop trigger mechanisms
• Develop communication plan
• Prepare for Cold Snap Task Force and NEPOOL
  Markets Committee in June