Meeting Summary – 10/22/24 RTCBTF Meeting

1 – Antitrust Admonition – Matt Mereness

2 – RTCBTF Updates and Issues – Matt Mereness

2_RTCBTF_Update_10222024.pdf

• Provided updates from the previous board meeting, reviewing the cycle and scope of the program.
• Discussed RTC+B Program go-live plans and milestones, noting the target go-live date as December 5.
• Highlighted processes to ensure milestones are met by ERCOT and market participants.
• Explored policy parameters and potential changes to the governance framework.
• Explained new additions to program scope, specifically around RTC and battery storage design.
• Addressed efficiency improvements, including removing dynamically scheduled resources.
• Discussed some governance issues with RTC principles and protocols developed in 2019-2020.
• ERCOT legal suggests creating a single NPRR to capture TAC approved items to avoid governance issues.
• Discussed go-live date assurance with ERCOT committing not to start earlier than planned.
• Outlined testing processes and considerations for operational interference, especially in summer months.
• Highlighted plan for training and market trials, noting the development of handbooks for participants.
• Discussed potential challenges with achieving NPRR approval before go-live and stakeholder processes for contentious issues.
• Scheduled upcoming meetings, including technical workshops for a comprehensive review.

3 – Scaling Factors for Ramp Sharing – Abhi Masanna Gari

RTCBTF_ScalingFactors_102224_V1.pdf

• Scaling factors between zero and one are used to determine ramp sharing between energy base points and regulation.
• Scaling factors ensure that regulation up and down awards are feasible, reflecting the rarity of simultaneous ramp for energy and regulation.
• Current system uses a five by seven scaling factor for regulation up and down ramp rates.
• In RTC, SCED up and down ramp rate calculations will be discontinued, but the current approach to share ramp rate between energy and regulation can still be used to inform scaling factor for RTC.
• ERCOT proposes continuing with the current five by seven scaling factor due to lack of concerns over time, but acknowledges it can be changed if necessary.
• Discussion raised about whether controlling language for the ramp sharing rate exists in protocol and suggestion to include it if future contention arises.
• Feedback requested from participants to raise any concerns by next meeting.

4 – Review RTC and ESR Clarifying – Matt Mereness

4.1 – NPRR1245 – Matt Mereness

• NPRR1245 was approved two PRS meetings ago.
• No further comments or issues are expected from the team.
• The NPRR is on track for TAC and board approval with no additional requirements.

4.2 – NPRR1246 – Matt Mereness

• NPRR1246 was approved by PRS recently, and there are operating guide revisions, planning guide revisions, and other related documents.
• The task force has reviewed these and may submit comments indicating no further input is needed and that other groups like the planning group and RoS need to complete their reviews.
• Approval and recommendation by ROS for NOGRR and PGRR were noted on October 3.
• Discussion revolved around whether to proceed with submitting comments on behalf of RTC+B to signify review completion.
• Concerns were raised about the implementation of new language in the NPRR1245 protocols regarding load shed and how it impacts pricing, particularly without stakeholder input.
• There was acknowledgment that the current NPRR introduces language absent from RTC protocols previously and that this could have significant market impacts.
• Debate ensued on the implication of setting both energy and ancillary services prices at their caps during load shed events, which may send incorrect price signals.
• Clarification was sought regarding whether changes could still be made or if issues should be added to a list of post-RTC considerations.
• The policy for NPRR1081 was cited as precedent, and the new changes were noted as being consistent with previously established policy, which was already reviewed.
• Concerns regarding future enhancements were acknowledged, with agreements to revisit some issues post-RTC if necessary.
• Ned pointed out the importance of ensuring ancillary service prices are correctly set, considering constraints and potential risks, agreeing with some concerns about the reliability of awarding services behind constraints.
• Unless opposition arises, the completion of the review for NOGRR268, PGRR118, and OBDRR52 will be filed, allowing these provisions to move forward.

5 – Market Trials Plan Review – Matt Mereness

Discussion Points:

• Matt Mereness reviews the RTC+B task force charter to reinforce the overall purpose and duties of the RTCBTF, encouraging analysis and discussion of the plan before asking for TAC’s endorsement next week.
• Market Trials planning includes connectivity testing, integration type testing, and LFC tests.
• Details on handling disputes and backup dates for tests were discussed.
• ERCOT will not require QSEs to change telemetry during tests to avoid disruptions.
• The settlement on the current pricing algorithm remains unchanged during tests.
• Queries about closed-loop testing and duplication of submissions were raised.
• Expectations for market submissions and QSE’s coordination were addressed.
• Discussions on handling dispatch instructions during market trials.
• Request for clarity on new market offerings and their impact during tests.
• Agreement that the Trials Handbook should be ready earlier than three months before trials begin.
• No opposition voiced to moving the Market Trials Plan forward for TAC endorsement.

Actions:

• Take Market Trials Plan to TAC for endorsement.
• Provide weekly market calls for progress updates.
• Ensure Trials Handbook draft is available sooner.
• Coordinate technical working groups with market trial discussions.
• Objectives include mitigating risks and supporting the successful implementation of the RTC+B program.
• A forum will be provided for analysis or policy discussions.
• Inclusion of reviewing draft NPRRs to implement the program within identified timeframes.

6 – Discuss Approach to Training/Readiness Matt Mereness

• Vision for RTC+B webpage to include readiness materials with standalone training videos.
• Plan to memorialize presentations and materials, like Nathan Smith’s market submissions talk and Maggie Shanks’ billing determinants deep dive.
• Discussion about different training content types: executive overview, RTC basics, market details, tutorial for RTC simulation.
• Real-time operations content is a priority due to upcoming QSE operations seminars.
• Settlement extracts and market submission changes are recorded, looking for a web posting place.
• Feedback on including content for 2024 operator training seminar.
• Suggestions for creating concise one-pagers for executive-level personnel.
• Feedback on the representation of market benefits and risks, particularly concerning the 1.5 billion benefit bullet point.
• Emphasis on market efficiency and reliability by design as primary goals of RTC+B.
• Request for feedback on content and training materials via a task force to ensure comprehensive coverage.
• Recognition that QSE operations piece is a priority due to high internal questions.
• Engagement on how to present complex information effectively possibly through slides with animations.
• Plan to launch training modules as they’re ready, including immediate notification of new postings.
• Discussion on protocol and scaling factor for resource sharing in real-time co-optimization not explicitly captured.

7 – Review of Parameters for AS Proxy Offer Curves ERCOT Staff

RTCBTF – Parameters for Proxy Ancillary Service Offer Floors – 10-22-24.pdf

• Recap of prior meeting discussions on AS proxy offer structures and processes.
• Prior ERCOT presentations included historical analysis of energy offer curves and AS proxy offer floors.
• Discussion on the RTC proxy offer curve within an open item NPRR.
• Recommendation for AS proxy offer floor set at $0 per megawatt per hour.
• Arguments for the $0 setting: reduced risks for day-ahead offers, floor primarily comes into play when there is no offer at all, availability of real-time telemetry.
• Feedback during September meeting suggested setting the proxy offer floor at the system-wide offer cap ($2,000 per megawatt hour).
• Concerns about operational issues with a $0 proxy offer floor, potential load on resources with technical issues.
• Implications of setting the proxy offer floor at the cap include potential ineffectiveness for certain services (non-spin and ECRS) due to their demand curves.
• Distinction made between proxy EOCs and AS proxy offers; proxies at cap might lead to shortages if demand curves are below the cap.
• Discussion to consider potential cost implications of different floor settings and their impact on resource dispatching.

8 – RTC Simulator Update – Matt Mereness

2024-10-22 RTC Sim Tool Case Studies.pdf

• Matt Mereness provided an update on the RTC Simulator, focusing on potential shortages despite high reserves.
• The discussion included a comparison of energy prices and ancillary service prices with different proxy offer floors: $2,000/MWh and $0/MWh.
• Energy prices were relatively similar across proxy offer floors, while ancillary service prices varied significantly.
• Concerns were raised regarding the reliability impact of not awarding ERCOT and non-spin services.
• Discussions included the modeling challenges related to curtailed renewables and their capability to provide ancillary services.
• Participants debated the reliability impact and the pricing impact of setting different proxy offer floors.
• Simulation limitations were acknowledged, particularly concerning real-time telemetry and real-time offers.
• There was support for exploring a middle-ground approach for proxy offers, rather than setting them at $0 or the cap.
• The idea of a ‘last in line’ process or a demand curve-derived approach was proposed.
• There was a need for a disclaimer in presentations indicating the limitations of backcast simulations.
• The meeting concluded with the group preparing to break for lunch and continue discussions afterward.

9 – Placeholder for MPs Discussion – Matt Mereness

• The meeting was waiting for additional participants before starting.
• The discussion focused on the market participant placeholder for the as demand curve.
• A review of the history of the as demand curves, as shaped under the ORDC (Operating Reserve Demand Curve), was conducted.
• Reference was made to the 2019 memo from Chairman Walker and the evolution of key principles.
• Current protocols and updates, including NPRR1245, were discussed regarding the ORDC and equations.
• There is ongoing monitoring of the as demand curve situation.
• Discussion included potential reshaping of the ORDC curve, involving its shape and value, seen as a policy decision.
• Possible need for refactoring in the ERCOT system to accommodate changes or integrations in the as demand curves was mentioned.

9.1 – IMM Discussion – Matt Mereness

• IMM has discussions with the board and plans to bring forward proposals regarding the ORDC curve.
• A detailed memo will be delivered to ERCOT soon. Current indications suggest existing market designs can be adjusted without major overhauls.
• There is market resistance to nested demand curves due to historical controversy and the complexity in ERCOT’s current market model.
• Concerns exist over market efficiency with the current ORDC partitioning which might result in suboptimal pricing outcomes.
• Blending curves throughout the ORDC with exponential shapes yields better pricing outcomes, and these can be implemented using current ERCOT software.
• Adjustments being explored involve setting higher caps for more valuable products to optimize for higher quality ancillary services.
• Considerations include how substitutes for different ancillary services are priced and the impact on market efficiency.
• Minimum contingency level fixed at 3000 MW creates non-ideal outcomes, such as higher pricing during lower available auxiliary service scenarios.
• Feedback from stakeholders, including concerns about how reliability and pricing align with long-term market goals, especially during scarcity conditions.
• Key focus areas involve the impact of the proposal on market efficiency, pricing outcomes, and ensuring the flexibility of ERCOT’s systems.

10 – Adjourn – Matt Mereness