1 tac report to the ercot board january 17, 2006
DESCRIPTION
3 PRR 625 – Clarification of Emergency QSE Purpose (ANP, IGEN, WMS/RMS JTF) Addresses when and how an Emergency QSE may be used Benefit Clarifies process for Virtual/Emergency QSE and shortens the timeframe for default providing positive credit implications for ERCOT Market Impact Decreases time to post credit and could transfer risk from market to QSE System Change NoN/A AssumptionsN/A TAC Vote Approved with 7 NO Votes and 5 Abstentions (see next slide for further discussion); all market segments were present Effective Date February 1, 2006TRANSCRIPT
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TAC Report to the ERCOT TAC Report to the ERCOT BoardBoard
January 17, 2006January 17, 2006
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TAC SummaryTAC Summary• 4 PRRs (2 Unanimous and 1 Urgent)4 PRRs (2 Unanimous and 1 Urgent)• TAC Discussion Regarding System TAC Discussion Regarding System
OutageOutage
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PRR 625 – Clarification of Emergency QSEPRR 625 – Clarification of Emergency QSEPurposePurpose(ANP, IGEN, WMS/RMS (ANP, IGEN, WMS/RMS JTF)JTF)
Addresses when and how an Emergency QSE Addresses when and how an Emergency QSE may be usedmay be used
BenefitBenefit Clarifies process for Virtual/Emergency QSE and Clarifies process for Virtual/Emergency QSE and shortens the timeframe for default providing shortens the timeframe for default providing positive credit implications for ERCOTpositive credit implications for ERCOT
Market ImpactMarket Impact Decreases time to post credit and could transfer Decreases time to post credit and could transfer risk from market to QSErisk from market to QSE
System ChangeSystem Change NoNo N/AN/A
AssumptionsAssumptions N/AN/A
TAC VoteTAC Vote Approved with 7 NO Votes and 5 Abstentions (see Approved with 7 NO Votes and 5 Abstentions (see next slide for further discussion); all market next slide for further discussion); all market segments were presentsegments were present
Effective DateEffective Date February 1, 2006February 1, 2006
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PRR 625 – Clarification of Emergency QSEPRR 625 – Clarification of Emergency QSEThis PRR is a product of the Mass Default Joint Task ForceThis PRR is a product of the Mass Default Joint Task Force– What is the appropriate amount of credit risk for ERCOT v. bilateral marketWhat is the appropriate amount of credit risk for ERCOT v. bilateral market
This PRR primarily does two things:This PRR primarily does two things:– clarifies that an LSE whose QSE has provided notice of its intent to terminate its clarifies that an LSE whose QSE has provided notice of its intent to terminate its
relationship with the LSE must either select a new QSE; qualify as an emergency relationship with the LSE must either select a new QSE; qualify as an emergency QSE; or become designated as a virtual QSE; andQSE; or become designated as a virtual QSE; and
– Changes notice period a QSE must provide ERCOT before terminating relationship Changes notice period a QSE must provide ERCOT before terminating relationship with an LSE or Resourcewith an LSE or Resource
Vote Results at PRS and TACVote Results at PRS and TAC– PRS:PRS: Change current notice period to 20 days from 5 days; Approved with Change current notice period to 20 days from 5 days; Approved with 3 3
Against and 9 Abstentions; all market segments presentAgainst and 9 Abstentions; all market segments presentTAC:TAC:– Motion to change QSE notice to ERCOT to terminate a relationship with a LSE or Motion to change QSE notice to ERCOT to terminate a relationship with a LSE or
Resource back to 5 days from 20 days in PRR as presented to TAC; Failed with 8 in Resource back to 5 days from 20 days in PRR as presented to TAC; Failed with 8 in favor; 19 opposed; and 2 abstentions;favor; 19 opposed; and 2 abstentions;
– Motion to approve as submitted with 20 days as notice period for a QSE to terminate Motion to approve as submitted with 20 days as notice period for a QSE to terminate a relationship with a LSE or Resource; Failed with 16 in favor; 7 opposed; and 5 a relationship with a LSE or Resource; Failed with 16 in favor; 7 opposed; and 5 abstentions;abstentions;
– Motion to change notice period to 12 business days before termination date; Motion to change notice period to 12 business days before termination date; Approved with 17 in favor; 7 opposed; and 5 abstentions.Approved with 17 in favor; 7 opposed; and 5 abstentions.
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PRR 625 – Clarification of Emergency QSEPRR 625 – Clarification of Emergency QSE
Impact AnalysisImpact AnalysisItem ReviewedItem Reviewed DescriptionDescriptionNoNo
ImpactImpact
Credit Monitoring/LiabilityCredit Monitoring/Liability
BudgetBudget
StaffingStaffing
Computer SystemsComputer Systems
Business FunctionsBusiness Functions
Grid OperationsGrid Operations
ImpactImpact
Occasional increase in workload
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PRR 633 – Transmission Service Provider PRR 633 – Transmission Service Provider Data Information RequirementsData Information Requirements
PurposePurpose(CNP, IOU, NDSWG)(CNP, IOU, NDSWG)
Updates and clarifies data requirements for Updates and clarifies data requirements for modeling transmission grid that TSPs must modeling transmission grid that TSPs must provide ERCOTprovide ERCOT
BenefitBenefit Increases TSP resource use efficiencyIncreases TSP resource use efficiency
Market ImpactMarket Impact NoneNone
System ChangeSystem Change NoNo N/AN/A
AssumptionsAssumptions N/AN/A
TAC VoteTAC Vote Unanimously approved; all market segments Unanimously approved; all market segments presentpresent
Effective DateEffective Date February 1, 2006February 1, 2006
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PRR 633 – TSP Data Information PRR 633 – TSP Data Information RequirementsRequirements
Impact AnalysisImpact AnalysisItem ReviewedItem Reviewed DescriptionDescriptionNoNo
ImpactImpact
Credit Monitoring/LiabilityCredit Monitoring/Liability
BudgetBudget
StaffingStaffing
Computer SystemsComputer Systems
Business FunctionsBusiness Functions
Grid OperationsGrid Operations
ImpactImpact
88
PRR 634 – ESI IDs Inadvertently Placed Into PRR 634 – ESI IDs Inadvertently Placed Into Inactive StatusInactive Status
PurposePurpose(CNP, IOU, DEWG)(CNP, IOU, DEWG)
Provides ERCOT the ability to re-instate ESI Ids Provides ERCOT the ability to re-instate ESI Ids incorrectly placed into an inactive statusincorrectly placed into an inactive status
BenefitBenefit Accurate settlement dataAccurate settlement data
Market ImpactMarket Impact Accurate settlement dataAccurate settlement data
System ChangeSystem Change NoNo N/AN/A
AssumptionsAssumptions N/AN/A
TAC VoteTAC Vote Unanimously approved; all segments presentUnanimously approved; all segments present
Effective DateEffective Date February 1, 2006February 1, 2006
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PRR 634 – ESI IDs Inadvertently Placed Into PRR 634 – ESI IDs Inadvertently Placed Into Inactive StatusInactive Status
Impact AnalysisImpact AnalysisItem ReviewedItem Reviewed DescriptionDescriptionNoNo
ImpactImpact
Credit Monitoring/LiabilityCredit Monitoring/Liability
BudgetBudget
StaffingStaffing
Computer SystemsComputer Systems
Business FunctionsBusiness Functions
Grid OperationsGrid Operations
ImpactImpact
1010
PRR 646 – Establish a Floor for Responsive PRR 646 – Establish a Floor for Responsive Reserve Service -- Reserve Service -- URGENTURGENT
PurposePurpose(ERCOT, ISO, CWG)(ERCOT, ISO, CWG)
Provides that until 1/1/07, all bids to provide Provides that until 1/1/07, all bids to provide Responsive Reserve must be equal to or greater Responsive Reserve must be equal to or greater than –$1,000than –$1,000
BenefitBenefit Prevents large negative bids reduces credit Prevents large negative bids reduces credit exposure or liability in ERCOTexposure or liability in ERCOT
Market ImpactMarket Impact N/AN/A
System ChangeSystem Change NoNo N/AN/A
AssumptionsAssumptions N/AN/A
TAC VoteTAC Vote Approved with 3 voting NO (Consumers) and 5 Approved with 3 voting NO (Consumers) and 5 Abstentions (2 Consumers and 3 Power Abstentions (2 Consumers and 3 Power Marketers); all segments were presentMarketers); all segments were present
Effective DateEffective Date February 1, 2006February 1, 2006
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PRR 646 – Establish a Floor for PRR 646 – Establish a Floor for Responsive Reserve Service -- Responsive Reserve Service -- URGENTURGENT
Credit Working Group believes current LaaR bidding activity has Credit Working Group believes current LaaR bidding activity has large credit implications.large credit implications.Due to cap on LaaRs providing Responsive Reserve some LaaRs Due to cap on LaaRs providing Responsive Reserve some LaaRs have been submitting negative bids in order to avoid pro-rata award have been submitting negative bids in order to avoid pro-rata award of bid.of bid.Credit Working Group proposed a floor of $0.Credit Working Group proposed a floor of $0.PRS recommended a floor of negative $1000 as a compromise.PRS recommended a floor of negative $1000 as a compromise.This is a short term solution as the PRR as proposed is only This is a short term solution as the PRR as proposed is only effective until January 1, 2007.effective until January 1, 2007.Demand Side Working Group is investigating long term solutionsDemand Side Working Group is investigating long term solutions
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Recommended Board ActionsRecommended Board Actions• ApprovalApproval
• PRR 625 – Clarification of Emergency QSEPRR 625 – Clarification of Emergency QSE• PRR 633 – Transmission Service Provider Data Information PRR 633 – Transmission Service Provider Data Information
Requirements (unanimous)Requirements (unanimous)• PRR 634 – ESIDs Inadvertently Placed Into Inactive Status PRR 634 – ESIDs Inadvertently Placed Into Inactive Status
(unanimous)(unanimous)• Urgent PRR 646 – Establish a Floor for Responsive Reserve Urgent PRR 646 – Establish a Floor for Responsive Reserve
ServiceService
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TAC Discussion Regarding System OutageTAC Discussion Regarding System OutageLively discussion regarding scope and impact of outage, as well as action Lively discussion regarding scope and impact of outage, as well as action items to eliminate or help minimize similar outages in the future.items to eliminate or help minimize similar outages in the future.ERCOT and Market Participants worked tirelessly to minimize impact of ERCOT and Market Participants worked tirelessly to minimize impact of outage.outage.Examples of TDSP and Competitive Retailer efforts:Examples of TDSP and Competitive Retailer efforts:TDSP Impact:TDSP Impact:– Manage Field Service Work ManuallyManage Field Service Work Manually
All field work for switches, move ins, move outs was manually managed throughout All field work for switches, move ins, move outs was manually managed throughout the duration of the outage. This caused significant delays in getting work to the the duration of the outage. This caused significant delays in getting work to the field rep or field tech in a time efficient manner. Backlog of work also was produced field rep or field tech in a time efficient manner. Backlog of work also was produced as a result of manual process. Field services has to work throughout the night on as a result of manual process. Field services has to work throughout the night on multiple occurrences and many orders were not processed within the timeframes multiple occurrences and many orders were not processed within the timeframes established by the market and as expected by customers.established by the market and as expected by customers.Safety net order increased by 10 times what is considered normal. TDSP service Safety net order increased by 10 times what is considered normal. TDSP service order management hours were nearly round the clock in order to make the best order management hours were nearly round the clock in order to make the best attempt possible at ensuring service for customers.attempt possible at ensuring service for customers.Move-out orders were not executed because it was not possible to determine if a Move-out orders were not executed because it was not possible to determine if a move-in was needed to restore service, and more importantly, to avoid interruption move-in was needed to restore service, and more importantly, to avoid interruption of service for customers.of service for customers.
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TAC Discussion Regarding System OutageTAC Discussion Regarding System Outage
Competitive Retailer Impacts:Competitive Retailer Impacts:– Manage Transactional Work ManuallyManage Transactional Work Manually
No move-in transactions were processed to avoid service interruptions for No move-in transactions were processed to avoid service interruptions for customers. Instead, CRs performed “safety net” move-ins and this process customers. Instead, CRs performed “safety net” move-ins and this process is manual and tedious requiring significant overtime hours. Also, in order to is manual and tedious requiring significant overtime hours. Also, in order to limit lost revenue some CRs requested priority move-ins to avoid delayed limit lost revenue some CRs requested priority move-ins to avoid delayed move-ins.move-ins.98 switches that avoided “first available date” could impact terms and 98 switches that avoided “first available date” could impact terms and conditions of agreement between CR and customer.conditions of agreement between CR and customer.Move-outs and drops to AREP or POLR were limited during this period Move-outs and drops to AREP or POLR were limited during this period requiring some CRs to remain REP of record for longer than desired.requiring some CRs to remain REP of record for longer than desired.Load extracts unavailable to help manage portfolio by providing visibility into Load extracts unavailable to help manage portfolio by providing visibility into ERCOT’s data aggregation process.ERCOT’s data aggregation process.
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TAC Discussion Regarding System OutageTAC Discussion Regarding System OutageTAC discussion focused on communications between TAC discussion focused on communications between ERCOT and market participants during outage and ERCOT and market participants during outage and identifying source of outage.identifying source of outage.““Lesson Learned” meeting has been scheduled to review Lesson Learned” meeting has been scheduled to review occurrence and begin discussing ways to eliminate or occurrence and begin discussing ways to eliminate or limit similar outages.limit similar outages.TAC action items:TAC action items:– Assigned communications issue to RMS; Can the Assigned communications issue to RMS; Can the
communications in instances such as this improve?communications in instances such as this improve?– ERCOT to report to TAC in February regarding source of ERCOT to report to TAC in February regarding source of
outage; whether any current or pending projects could have outage; whether any current or pending projects could have prevented the outage; what changes/projects are necessary to prevented the outage; what changes/projects are necessary to avoid future outages, if any.avoid future outages, if any.