agenda

http://nodal.ercot.com 1Lead from the front

Texas Nodal

Integrated ERCOT Readiness and Transition (IRT)

TPTF – December 4th, 2006

ERCOT Qualification Approach


Texas Nodal

Agenda

– Qualification vs. Readiness

– Types of Market Participants requiring qualification

– Qualification for the nodal market

– Qualification Timeline

– Next steps


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Qualification vs. Readiness

Readiness Criteria Qualification

Based on Transition Plan Based on the protocols

Developed for all Market Participants including ERCOT

Required for certain Market Participants

Continuously assessed and reported during transition

A series of tests administered upon request by the qualifying entity

Used to make readiness decisions for market trials and market open

Used to determine eligibility of the qualifying entity to participate in the nodal market

Assessment made by the Readiness Advisor

Qualification determined by ERCOT on a case


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Types of Market Participants requiring qualification

Market Participants in the nodal market: Congestion Revenue Rights (CRR) Account Holders

Load Service Entities (LSE)

Qualified Scheduling Entities (QSE)

Renewable Energy Credit Account Holders

Resource Entities

Transmission Service Provider (TSP)

Distribution Service Provider (DSP)

Qualification Required for the following Congestion Revenue Rights (CRR) Account Holders

Qualified Scheduling Entities (QSE)

Qualification based on market participation level Level 1 – Inter-QSE trades only

Level 2 – May represent load

Level 3 – May represent load and resources – No Ancillary Services

Level 4 – May represent load and/or resources – Participates in Ancillary Services market


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CRR Account Holders: Registration

Submit CRR Account Holder Registration Forms

Agreements

Submit Executed Standard Form Agreements

Satisfaction of credit requirements Creditworthiness determined at the “counter-party”

level (Includes a QSE, sub-QSEs and CRR Account Holder registrations that an entity may have registered with ERCOT)

CRR system connectivity test

Verification that an authorized user is able to access the CRR System

Access CRR system using required certificates

Download required applets

Etc…

Qualification for the nodal market

Company XCounter-Party

QSE A CRR

SubQSE A1

SubQSE A2


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Qualification

Types of Market Participants requiring qualification

Registration Agreements CommunicationFunctional

TestingSite Visit

Current Zonal Market QSE qualification activities QSE Level

1 2 3 4

Registration

Agreements

Credit Worthiness Requirements

Communication Circuit Installation (WAN) N/A N/A

Connectivity - Real-Time System Operations (RTU / ICCP)

N/A N/A

Connectivity - Market Operations (Portal / API)

Market Operations Functional Testing Portal Transactions (MIS)

Programmatic Transactions (API)

System Operations Functional Testing (Ancillary Services)

Regulation Reserve N/A N/A N/A

Responsive Reserve N/A N/A N/A

Non-Spinning Reserve N/A N/A N/A

Balancing Energy N/A N/A N/A

Site Visit

Required

Optional


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• Registration• Agreements• Credit Worthiness Requirements• Communication

– Circuit Installation (Voice and data circuits)– Connectivity– System Operations - Real Time

• Telemetry – RTU/ICCP– Market Operations)

• Portal Transactions (MIS)• Programmatic Transactions (API)

• Market Operations Functional Testing– Portal Transactions (MIS)– Programmatic Transactions (API)

• System Operations Functional Testing (Ancillary Services)– Regulation Reserve– Responsive Reserve– Non-Spinning Reserve– Balancing Energy Service

• Site Visit

Changes by

nodal transition?

Required for new and existing QSEs

Required

for new QSEs Only

Yes

No

Qualification approach Existing QSEs

Will only be required to complete those activities that have had significant changes due to nodal transition

New QSEs

Will be required to complete all activities required for qualification in the nodal market


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Nodal Market QSE qualification activities for QSEs in the zonal market*

QSE Level

1 2 3 4

Registration Resource Registration

Resource Registration

Agreements

Credit Worthiness Requirements

Communication Circuit Installation (WAN) N/A N/A

Connectivity - Real-Time System Operations (ICCP**)

N/A N/A

Connectivity - Market Operations (Portal / API)

Market Operations Functional Testing Portal Transactions (MIS)

Programmatic Transactions (API)


Regulation Reserve N/A N/A N/A

Responsive Reserve N/A N/A N/A

Non-Spinning Reserve N/A N/A N/A

Site Visit

* New QSEs will complete all applicable qualification activities Not Required

Required

Optional

** Pending Approval of Protocol Revision


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Registration QSE Registration

– Not required for existing QSEs Resource Registration

– Significant changes (Resource Parameters)– Resource asset registration forms required– QSEs with Generation or Load Resources will be required to

submit and maintain Resource Parameters– New asset registration forms required – Section 3.7 of the nodal protocols

Agreements A new Standard Form Market Participant Agreement required from

all Market Participants Section 22 of the nodal protocols


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Credit Worthiness Requirements Creditworthiness determined at the “counter-

party” level (Includes a QSE, sub-QSEs and CRR Account Holder registrations that an entity may have registered with ERCOT)

New QSEs ERCOT will confirm initial credit worthiness for

qualification

ERCOT will monitor credit and make collateral calls as needed

Existing QSEs No special nodal qualification requirements for

entry into the nodal market

ERCOT will monitor credit and make collateral calls as needed according to the nodal protocols

Company XCounter-Party

QSE A CRR

SubQSE A1

SubQSE A2


Texas Nodal

Cisco7206VXR

Cisco7206VXR

Cisco75XX

CSU/DSU

CSU/DSU

CSU/DSU

CS

U/D

SU

CS

U/D

SU

ATM

ATM

Point to Point

Frame Relay

Point to Point

FRAME Relay Network

ERCOT - Austin

ERCOT - Taylor

QSEFrame Port

Cisco7206VXR

ATM Port

ATM PORT

DACS NETWORK


Communication Installation Wide Area Network (WAN) circuits for real-time voice and data communications

with ERCOT

New QSEs A Wide Area Network circuit installation required for new QSEs with Resources

(Level 3 and 4)

Existing QSEs Existing QSEs already meet this requirement


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Communications (Connectivity) Testing connectivity between ERCOT and QSEs control centers

Market operations

Portal and/or API (Web Services)

Required for all QSEs

System Operations - Real-time Telemetry

Required for QSEs with Resources (Level 3 and 4)

Inter-Control Center Protocol (ICCP). [Pending approval of NPRR]

Point by point telemetry verification expected to be completed as part of EDS-1 for most QSEs

Redundant communication link requirements

Any single element of the communication system fails can fail and;

For server failures – complete information re-established within five minutes by automatic failover

For all other failures – complete information continues with updates at a 30 second or less scan rate


QSE EMS

SCADA

ICC

P

ICC

P

ERCOT

EMS SCADA

ICCP Link


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Market Operations Functional Testing Required for all QSEs

Verification that QSEs are able to submit valid market transactions

Offers, Bids, Schedules, Trades, COP

Will be performed using a Market Operations sandbox

May be performed in stages ahead of each EDS phase

EDS-3 – Real Time Operations Transactions

EDS-4 – DAM Transactions

MIS Portal

Required for all QSEs

API (Web Services)

Applicable for all QSEs using programmatic interfaces

Required – Level 3 and 4

Optional – Levels 1 and 2


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System Operations Functional Testing

Ancillary Services Regulation Reserve

Responsive Reserve

Non-Spinning Reserve

Zonal market Ancillary Services providers qualified on a portfolio basis

Nodal Market Ancillary Services qualification requires

Qualification of the QSEs control system

Qualification of Resource providing the service

Each QSE may only provide Ancillary Services on those Resources for which it has met the qualification criteria

Qualification and testing program to be approved by the TAC and included in the Operating Guides

Detailed Ancillary Services qualification Plan to be presented at a later date



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Qualification for Ancillary Services Will be executed using the Early Delivery System (EDS) environments

Will be performed one QSE at a time

Successful completion results in the qualification of the QSE system and the Resource

Timeline Issue

Resources qualification, performed one resource at a time, requires more time than what could be accommodated by the nodal program schedule

Number of QSEs qualified for Ancillary Services may be a readiness criteria for a market trial phase

To complete the large number of resources expected to require qualification

Qualification tests for resources represented by one QSE will be performed concurrently

Larger QSEs may require multiple grouping of resources

QSEs will be surveyed to identify resources requiring qualification for each ancillary service type and preferred testing dates

Survey results will be used to prepare Ancillary Services testing schedule



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Qualification Timeline

Qualification Activity Early Start Late Finish* Comments

Registration (Resource) 10/1/2007 9/30/2008 Start requires delivery of registration system

Agreements 1/1/2007 9/30/2008 All QSEs will sign new agreements

Communication – Connectivity Testing Real Time (Telemetry)

5/15/2007 9/30/2008 Most QSEs will complete this activity as part of EDS-1

Communication – Connectivity Testing Market Operations (MIS Portal / API)

2/1/2007 9/30/2008 Start requires delivery of MIS Portal and Web Services test environments

Market Operations Functional Testing (MIS)

10/1/2007 9/30/2008 Start requires delivery of nodal Market Management System in MOTE

Market Operations Functional Testing (API)

10/1/2007 9/30/2008 Start requires delivery of nodal Market Management System in MOTE


1/1/2008 9/30/2008 Start requires delivery of nodal Energy Management System (EDS-3)

Site Visit As needed

Qualification Freeze 10/1/2008 3/31/2008

* Entry and exit criteria for the market trial phases may require that a given number of QSEs complete some qualification testing steps. Qualification activities will continue after a qualification freeze period


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Qualification Timeline

Q4-08 Q1-09Q2-08Q1-08 Q3-08Q4-07Q2- 07 Q3-07Q1 - 07

Agreements

Registration

MMS Functional Testing (MIS)

Real Tine Communications

Market Operations Communications

Qualification Freeze

MMS Functional Testing (API)

EDS 3

EDS 4

EDS 2

EDS 1 EDS-1

EDS-2

MMS Sandbox EDS-3 Real Time Operations

MMS Sandbox EDS 4 – DAM Operations

Qualification Freeze

Market Trials Start

LMP Market Readiness

Criteria

MET12/01/08

Real-time Markets GO LIVE

` 12/08/08

DAM Market GO LIVE

ICCP / Telemetry

Agreements

Resource Registration

MMS Connectivity Testing

As Testing

Market Operations Functional TestingAPI

System Operations Functional Testing(Ancillary Services)

Market Operations Functional Testing MIS Portal

Qualification Activities

Q4-08 Q1-09Q2-08Q1-08 Q3-08Q4-07Q2- 07 Q3-07Q1 - 07Transition Timeline


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Communication plan for qualification requirements ERCOT Qualification Approach

Comments due – 12/22/06

TPTF Approval - Jan 07

Qualification Guide - Jan 07

Ancillary Services Qualification Details – Jan 07

ERCOT Registration Approach – Jan 07

MP Registration Guide – Feb 07

Next steps


Texas Nodal

ERCOT Qualification Approach

agenda

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