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July 19, 2019

Texas PUC defers DAM changes to get RTC ASAP

by Kelso King, Grid Monitor
Source – Grid Monitor
Posted 07/19/2019

ERCOT informed the Commission that including enhancements to the Day-Ahead Market would add 2 years to the implementation of Real-Time Co-optimization of Energy and Ancillary Services in ERCOT. Chairman Walker was unwilling to have a 2-year delay, adding that the parties still need to think about how to address the DAM and this could be handled in the stakeholder process.

Prior to the Open Meeting, ERCOT filed a letter to the Commission concerning timing and cost issues that could impact the implementation of Real-Time Co-optimization of Energy and Ancillary Services (RTC).

ERCOT informed the Commission that its Energy Management System (EMS) would undergo an upgrade that would take four years to complete. ERCOT explained that, if RTC is implemented independently of the Day-Ahead Market (DAM) enhancements, ERCOT expects RTC to be deployed in mid-2024. However, if the Commission determines that RTC implementation should include DAM enhancements, implementation would extend beyond its EMS upgrade, with RTC deployed in mid-2026. ERCOT attached timelines demonstrating the interdependencies between RTC and the EMS upgrade project, as well as two alternative paths for incorporating DAM enhancements into RTC.

After reading the letter from ERCOT, Chairman Walker stated she would not recommend publishing the questions on the DAM right now because she was not willing to have a 2-year delay, which she expected would probably be longer, and did not think it had been thought through enough.

She noted that all of the parties, including the ERCOT Independent Market Monitor (IMM), still need time to think about all of this, how to address the DAM issue, and bring it back after they are done.

Chairman Walker noted that ERCOT said there would be “a delay in opening the hood” so fixing the DAM at the same time doesn’t fit in there. She would rather have the parties focusing on something they really need done, Real-Time Co-optimization. The Chair believed the DAM modifications could be undertaken in the normal stakeholder process and, if not, parties could come back to the PUCT for help.

Commissioner D’Andrea agreed, adding that he had heard from ERCOT that if RTC doesn’t go live with EMS it will push RTC off quite a bit and anything could cause it to do that. He added that there is lots of value in RTC and, if they want it on time, it needs to go live with EMS.

Chairman Walker concluded that she didn’t see any point in asking the previously proposed questions about the DAM now.

Commissioner D’Andrea added that there may also be different questions a year from now.

Background

On February 28, 2019 (published in the Texas Register on March 15, 2019) Staff requested comments on questions relating to the implementation of real-time co-optimization (RTC) of energy and ancillary services in the ERCOT Real-Time Market.

Prior to the June 27, 2019 Open Meeting, Chairman Walker filed a memo stating she was ready to make decisions on some of the issues necessary for implementation of RTC and made several proposals involving the System-Wide Offer Cap and the Value of Lost Load; the Low System-Wide Offer Cap; Ancillary Service Demand Curves; the Day-Ahead Market; and market rules for ancillary services. Other topics discussed during the June 27 Open Meeting included non-physically binding ancillary services, mandatory must-offer, withholding of ancillary services, and the “small fish” exemption.

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