By Tom Kleckner

AUSTIN, Texas — ERCOT will send state regulators a white paper that outlines potential revisions to its operating reserve demand curve (ORDC) but makes no recommendations because of a lack of consensus on the need for changes.

The Technical Advisory Committee unanimously endorsed the white paper Thursday as “responsive” to questions Public Utility Commissioner Ken Anderson raised regarding the ORDC’s performance last summer.

In a memo to his two fellow commissioners in October, Anderson called for a PUCT review of the methodology behind the ORDC, a price adder intended to reflect the value of reserves.

ERCOT instituted the ORDC in June 2014 in response to a PUCT order. Energy and reserves were previously priced separately, and ERCOT could show low energy prices during a reserve shortage, creating reliability concerns.

‘Unexpected’ Results

Anderson said the ORDC was an improvement. During late summer, however, he said it produced “unexpected” results, citing Aug. 13, when he said “the ORDC adder did not seem to reflect appropriately” a reduction in physical responsive capacity (PRC) — online generation able to quickly respond to system disturbances.

ERCOT operators can take out-of-market actions, such as calling Energy Emergency Alerts (EEA), when PRC drops too low.  On Aug. 13, operators deployed non-spinning reserve service (NSRS) as the PRC dropped to 2,371 MW. However, real-time online reserve capacity (RTOLCAP) was 3,629 MW and wholesale prices reflected that availability.

Anderson’s memo — known as “the Aug. 13 memo” — questioned whether the inputs used to calculate the loss-of-load probability should be reevaluated. “I ask the question because at certain hours of certain days last summer the price adder resulting from the ORDC seem to suggest [a loss-of-load probability] of well under 1%, even though ERCOT was considering making conservation appeals.”

Some stakeholders quoted in the white paper cited Anderson’s observation, saying the incident demonstrated that the ORDC “is not aligned with operations.”

Other stakeholders said that the ORDC is performing as intended. “There was sufficient additional offline generating capacity not counted in PRC available to the system during the 8/13/15 event, so it was appropriate for ORDC to recognize a low loss-of-load probability,” the white paper said.

The Aug. 13 incident came just three days after ERCOT set a new peak demand of 69,877 MW.

ERCOT staff said the initial assumption was that the behavior was related to ORDC. However, it has since determined the event is related to how available reserves are counted.

Coordinated Review

Anderson suggested PUCT staff coordinate their work with ERCOT’s in reviewing ORDC parameters. That includes the 2,000-MW threshold for operating reserves and whether they should be more closely correlated with the PRC, the value of lost load (currently $9,000/MWh), the calculations that go into the ORDC’s loss-of-load probability curve and other data inputs.

ERCOT’s Supply Analysis Working Group developed the 14-page white paper to address each of Anderson’s bullet points and provide more informed discussion on his request. It collects stakeholder recommendations and staff analysis, but the paper “is not intended to address any threshold issues such as what an appropriate reserve margin is for the ERCOT region or how it should be attained,” it said.

The paper also was endorsed by ERCOT’s Wholesale Market Subcommittee, though it was careful to note the endorsement “does not reflect any unanimous recommendations by either WMS or SAWG.”

SAWG stakeholders did agree that operators should not be given additional discretion in calling an EEA and that the “effective price cap” should remain at $9,000/MWh.

TAC Chair Randa Stephenson, of the Lower Colorado River Authority, praised the working group for its “Herculean effort in a short amount of time” before making it clear to the committee what it was endorsing.

“We’re not endorsing the white paper, because there are lots of ideas but little discussion. But we’re endorsing the white paper as being responsive to Commissioner Anderson,” said Stephenson, newly re-elected as the TAC’s chair.

ERCOT staff will file the white paper while staff, stakeholders and PUCT staff continue their ORDC review.

ERCOT Explains Delay in CRR Auction Results

On another matter, ERCOT staff explained a recent three-day delay in posting the results of February’s monthly congestion revenue rights (CRR) auction as a result of “new, unidentified software behavior that was not compatible with our procedures.” Staff said the error was not identified until CRR systems attempted to transfer auction transactions to the settlements systems and pre-assigned CRRs were not priced in the auction.

Market participants were notified the CRR auction was invalid 6 ½ hours after the incorrect results were initially posted Jan. 14. Updated results were posted almost 72 hours later, on Jan. 17.

Staff told the TAC the issue can be resolved with process changes.

Protocol Revision Requests OK’d

The TAC also unanimously approved eight protocol revision requests, ranging from aligning protocols with NERC reliability standards to reactive-power testing requirements:

• NPRR691, Alignment of Protocols with NERC Reliability Standard BAL-001-TRE-1;
• NPRR713, Reactive Power Testing Requirements;
• NPRR720, Update to Settlement Stability Reporting Requirements;
• NPRR734, Digital Attestation Signature Authority Expansion;
• NPRR739, Prohibiting Load Resources in Participating as Dynamically Scheduled Resources;
• NPRR740, Retail Clarification and Cleanup;
• NPRR742, CRR Balancing Account Invoice Data Cuts; and
• NPRR743, Revision to MCE to Have a Floor for Load Exposure.