discuss infrastructure to support bilateral contracting between csps and reps in the retail market...
TRANSCRIPT
Discuss infrastructure to support bilateral contracting between CSPs
and REPs in the Retail Market
Loads in SCED Sub-groupMay 22, 2014
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Key Terms
• CSP = Curtailment Service Provider (i.e. 3rd Party DR Provider)
• For simplicity, ‘REP’ is used in these slides as entity involved in transaction flow– REP settlement remains thru REP’s QSE, a
separate entity
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Objectives
• Design a transaction-based infrastructure to facilitate bilateral contracts between CSPs providers and REPs.
• Promote more robust competition in the DR space.• Address the impact of customer switching on CSPs.• Eliminate LMP-volumetric G issues.• Provide notification and transparency for all parties
involved and impacted by a DR transaction.• Utilize retail electric service customer protection rules
well-established by the PUCT for the solicitation of DR products and services.
• Eliminate complex changes to MMS/EMS for LRISv2.3
Features of Bilateral Approach• ALRs represented by REPs continue to participate in
SCED on a ‘bid to buy’ basis– REP’s QSE is the only entity involved in ERCOT settlement
• Allows CSP to solicit customers directly• CSPs gain ability to maintain DR relationships when
customers switch REPs• Creates incentive for CSPs and DR-friendly REPs to
contract bilaterally to promote DR products and services
• CSP new role in market: Qualification to submit and receive ERCOT transactions
• Maximum flexibility for DR market
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Customer
ERCOT
REPCSP1) CSP and REP negotiate contract terms for DR products and services, settlement
2) REP markets bundled DR products/services with electric service
3) Interaction as currently designed
Benefits:-Simplifies implementation and operations by ERCOT (no change)-Easiest to understand for customers?
Status Quo: REP initiates DR product/service
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Transaction-Based Bilateral Approach
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Customer
ERCOT
REPCSP
Existing relationship w/customer for electric service
1) CSP initiates DR service w/customer
2) CSP notifies ERCOT of DR relationship w/customer; identifies and provides ERCOT information about customer type, aggregation, response type, etc. Return transaction reveals REP of record to CSP.
3) ERCOT notifies REP of DR relationship between CSP and customer
Benefits:-Provides CSP and REP with customer level DR information to facilitate bilateral contracts and partnerships
-Improves ERCOT’s ability to centrally track and manage ALRs
Manage CSP/ALR-REP relationships
Service initiation by CSP Requires bilateral contract between CSP & REP
New transactions
Existing Contract or Negotiate New
New transacti
ons
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Customer
ERCOT
REPCSP
1) REP submits bids to ERCOT for ALRs (negotiated in bilateral contracts with CSP)
3) M&V, ALR telemetry validation
DR customer deployment
2) SCED dispatches ALR when LZ SPP is >= bid price
Customer deployment flexibility, contractual terms dictate
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Customer
ERCOT
REPCSP
Settlement of DR customer deployment
1) ERCOT settles REP for load curtailment as reduced adjusted metered load (Base Point Deviations and CLREDP scores apply)
3) REP charges customer for actual metered consumption and may provide additional incentives for load reduction (DR service terms)
2) REP pays CSP for curtailment (G) based on bilateral contract terms including performance true ups
Benefits:-No double payment by ISO-Eliminates the volumetric G problem-REP acts as single billing agent for customer
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Customer
ERCOT
Old REPCSP
2) Switch transaction at ERCOT triggers 2nd transaction notifying CSP of new REP
1) Customer with CSP relationship switches REPs via normal switching process (TDSP interaction not shown for simplicity)
Manage ALR-REP relationships
Customer switches REPs
New REP
Normal switching process (TDSP interaction not shown for simplicity)
3) CSP has option to continue serving customer; informs customer of service continuity or change
4) ERCOT notifies new REP of DR relationship
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New transactionsNew transactions
Issues/concerns with this approach• Forces CSPs to contract with REPs to deliver products
and services to customers (is this a bad thing?) • CSP incurs REP risk as well as customer risk (is this a
bad thing?)– Operational– Credit
• REP may incur commercial risk as a result of CSP deployment
• REP incurs deployment compliance risk for the CSP (same as today)
• REP acts as settlement agent for CSP (same as today)• Implement via TX SET/NAESB additions?
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Customer
ERCOT
REPCSP
Is there another way? LMP- Proxy $G?
2) SCED Base Points sent to CSP
5) REP charges customer for actual metered consumption
Issues:-Complex implementation-Must implement Loads in SCED as a resource for this-Disruptive to REPs-Is critical mass realistic?-Define acceptable Proxy $G (target for litigation/dispute?)
6) CSP passes on DR payment at contract terms
4) ERCOT charges REP for adjusted metered load
1) CSP notifies REP of DR relationship with customer
3) ERCOT pays CSP for load curtailment (X) at LMP-Proxy $G
Drawback: Customers on indexed price are ‘double-paid’?
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3 Ways to Implement LMP - G1) Avoid it! (Status quo or bilateral approach)or• L = Actual Load (MWh)• C = Curtailment (MWh)• G = Retail Rate2) Volumetric LMP-G (Proving unworkable)
Customer settlement = -(L+C)*G + LMP*C= -L*G + (LMP-G)*C
3) LMP – Proxy $G (Complex and disruptive to retail)Customer settlement = -L*G + (LMP-G)*C
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