Meeting Summary – 08/30/24 WMWG Meeting

1 – Antitrust Admonition – Blake Holt

2 – 2025 AS Methodology – Luis Hinojosa

• Started discussions in July to get feedback and shared proposed methodology in August.
• Updated data for inertia and IFRO change for Responsive Reserve; minor quantity changes.
• Responsive Reserve: Updated inertia for 2023 and 2024, IFRO changed to 1365.
• Regulation: Proposes to switch from net load forecast ramping and accounting for historical regulation deployment to net load forecast error.
• Regulation: No changes to FRS or integralACE components, LFL analysis ongoing.
• ECRS: Recommend taking the maximum of capacity needed between net load forecast error and frequency recovery.
• ECRS: Bumped frequency recovery to 70th percentile, changes due to increased solar capacity.
• Non-Spin: Maintain 6-hour ahead forecast, but move to 4-hour ahead for nighttime hours.
• Reviewed data from 2020-2024 to justify comfortable capacity levels in nighttime hours.
• Slight increase in Non-Spin quantities with proposed methodology adjustments.
• Plan to discuss further in ROS, WMS, and TAC meetings.

3 – State of Charge Monitoring – Luis Hinojosa

• Production data from July is now included in the report.
• The report, which monitors ancillary services carried by ESRs and their state of charge (SOC), is now available and will be posted monthly on the WMS page.
• Failure to provide based on SOC is calculated by EMS, including failure to perform analyses for FME and non-FME events.
• Slides discussed failures due to low SOC and actions taken with PDCWG.
• Clarification provided on how evaluated ESRs are determined and their performance metrics.
• Confirmed the need for contacting underperforming ESRs.
• Definition provided for ‘failure’ in the context of primary frequency response (PFR) – failure to meet at least 0.75% of the expected response for an event.
• Discussion on the relationship between SCED dispatches and low SOC impacting PFR.
• Consensus on making the report a regular agenda item for questions.
• Suggestion to consider the aggregate SOC of batteries in ancillary service procurement due to the increasing penetration of batteries.
• Mention of a standard revision in progress to better evaluate batteries, indicating potential changes in how batteries are assessed.

4 – Pricing Impacts of LDL Override Decisions made during 4/8 Eclipse – Cory Carswel

• Request made at WMS for details on price impacts of low dispatch limit (LDL) override instructions during April eclipse.
• ERCOT team still working on the analysis.
• Other priorities have delayed the analysis.
• Discussion on this topic deferred to September.

5 – NPRR1230 Methodology for Setting Transmission Shadow Price Caps for an IROL in SCED – Monitoring – Blake Holt

• The ERCOT board approved NPRR1230 at their August meeting.
• Approval by the PUC is expected by late September, with an effective date of October 1.
• The new methodology involves dynamic shadow price calculations at TAC.
• There was a recommendation for regular monitoring of the new methodology’s effectiveness, and ERCOT supports this.
• Discussion needed on whether the monitoring should be done by WMWG or CMWG.
• ERCOT’s previous analysis included violation relief in megawatt-hours and the market solution’s dollar impact.
• Suggestion made that CMWG handle the analysis due to its focus on congestion management.
• No objections raised; will suggest to WMS that analysis should be referred to CMWG.
• Ryan King from ERCOT supported the suggestion and mentioned they have no updates to share due to other priorities.
• Next steps include planning to provide more information on the potential impacts of the NPRR.

6 – NPRR1235 Dispatchable Reliability Reserve Service – Next Steps – Ryan King

• Ryan King emphasized the need to codify discussions from stakeholder workshops regarding the DRRS.
• ERCOT proposed a two-phase approach to NPRR1235, with Phase One focusing on areas with high confidence and Phase Two discussing concerns such as energy storage integration.
• There is a commitment from ERCOT to start discussions on Phase Two within the year.
• Clarification was made that ERCOT cannot make firm guarantees about implementation timelines due to dependencies on completed NPRR designs and IA assessments.
• Bill Barnes supported the phase approach and stressed the importance of including ESR capacity in the RUC engine to meet statutory requirements.
• Michael Jewell was concerned about the eligibility of ESRs to participate in DRRS and felt this should align with legislative intent.
• Discussion on how DRRS resources would be applied in market settings and the need for clear guidelines on inclusion in the RUC engine was raised.
• Stakeholders expressed interest in deploying four-hour batteries and ensuring market signals support longer duration batteries.
• Specific points of NPRR1235 were highlighted, such as the ancillary service demand curve and scaling factors to ensure DRRS appears cheaper in the RUC engine.
• Questions and clarifications were made regarding self-deployment for DRRS.
• There was no final consensus from stakeholders on moving NPRR1235 forward, with some supporting moving ahead with the current NPRR and others wanting ESRs included in the first phase.

7 – NPRR1229 RTM CMP Energy Payment – Policy Questions – Ino Gonzalez

• ERCOT received comments from staff and questions they posted.
• ERCOT ready to help staff and market participants with NPRR.
• Current NPRR as written cannot be implemented.
• Significant policy decisions need to be made.
• STEC provided comments and a draft of the NPRR with changes.
• Policy question about paying for repair costs as well as capital expenditures.
• STEC made it clear the intent was to pay for repairs, working to clarify that in the NPRR.
• Policy question on paying lost opportunity payments during the outage period and its duration.
• Clarification needed on paying lost opportunity vs. bilateral contracts.
• STEC clarified that if paying for bilateral contracts, you will not pay for lost opportunity and vice versa.
• Policy questions on paying for lost opportunity need to be addressed by stakeholders.
• Example scenario: generator cannot go offline due to high repair costs.
• Discussion on communication and advance notice for CMP between ERCOT and STEC.
• Lucas and Freddie provide insights on forming CMP agreements and the necessity for operating instructions for significant operational risks.
• Concerns about the non-optional nature of operating instructions and potential guardrails.
• Suggestion to discuss policy issues at the next TAC meeting, considering if these policy decisions should be brought to the PUC.
• Acknowledgment of the significant impact of repair costs on the market.
• Need for high-level visibility for significant policy impacts.
• Ongoing work to clarify points in NPRR without implying ERCOT’s agreement with its concepts.

8 – NPRR1238 Voluntary Registration of Loads with Curtailable Load Capabilities – ORDC Implications – Katie Rich

• Katie Rich introduced the topic and the context of the NPRR, referring to the need to discuss implications on market prices and deployment triggers.
• The NPRR addresses price formation partially through the inclusion of VECL deployments and the termination of the RDPA.
• Bob Wittmeyer raised concerns about early curtailments resulting in no response during trigger pulls by ERCOT and questioned the necessity of additional adders.
• Katie and others discussed the potential impact on ORDC and the possibility of incorporating it into the NPRR.
• Blake Holt from LCRA and others clarified their understanding of ORDC capacity calculations and the inclusion of offline capacities.
• Additional discussions on ORDC methodology, settlement calculations, and the need for telemetry to track curtailed loads.
• Steve Reedy recapped that Katie suggested a method to calculate deployed MWs of VECL, and subtracting that from the RTOL cap calculation, potentially increasing ORDC adder prices.
• Katie Rich agreed to draft language for next month’s meeting to provide clarity and allow for internal consideration.
• ERCOT (specifically Austin from settlements) mentioned the potential need for impact analysis once the language is drafted.

9 – NPRR1241 FFSS Availability and Hourly Standby Fee – Initial Discussion – Katie Rich

• Discussion about further refinement of clawback and withholding amounts based on recent firm fuel deployments.
• Stair-step approach proposed for FSR clawback criteria:
  • Minimum, maximum clawback for unavailability greater than 75% of hours
  • Reduction decreases to 10% if unavailable for 10% or less of the hours
• Comparison with current ERCOT criteria: increase from 90 days.
• Concern about whether changes would improve service quality, referencing the July 30 settlement report.
• Comments on proportionality and thresholds for clawback days.
• Discussion on the relationship between proposed changes and paragraphs 10-14 related to failures due to fuel or non-fuel issues.
• Clarification provided on which paragraphs apply to different situations (watch vs. deployment).
• Agreement on the need for further discussion and refinement of percentages/values.
• Katie Rich volunteers to summarize the discussion for WMS and continue collaboration on improving NPRR1241.

10 – Other Business – Blake Holt

• Pushing the CARD discussion from last WMS to next month’s meeting.
• IMM is conducting an analysis relevant to the discussion.
• Members are encouraged to post materials early or reach out to Ryan King at ERCOT with suggestions.

11 – Adjourn – Blake Holt