eils update dswg ercot staff october 9, 2009. 2 2 eils update to dswgoctober 9, 2009 contents...
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EILS Update
DSWG
ERCOT Staff
October 9, 2009
22
EILS Update to DSWGOctober 9, 2009
Contents
• Procurement results: Current & historical• Price comparison: EILS to Ancillary Services• Recap of VOLL discussion• Procurement schedule for Feb.-May 2010 Contract Period• Process flow improvements (Carl & Diana)• Procurement & settlement issues:
– Load & unique meter identification– Meter data submittal– Dispute process
• New issues– All or nothing bid options– Re-constitution of aggregations within a Contract Period– Substitutions
• Compliance issues
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EILS Update to DSWGOctober 9, 2009
Current Bid Cycle
Time PeriodBusiness Hours 1
Business Hours 2
Business Hours 3
Non-Business Hours
Definition8 AM to 1 PMMon-Fri except Holidays
1 PM to 4 PMMon-Fri except Holidays
4PM to 8 PMMon-Fri except Holidays
All other hours
EILS Procured 360.9 MW 353.3 MW 268.0 MW 334.5 MW
# of EILS Resources
61(includes 37
aggregations)
59(includes 35
aggregations)
75(includes 46
aggregations)
55(includes 35
aggregations)
Avg. Cost per MW per Hour
$ 8.02 $ 8.12 $ 8.87 $ 7.77
• Oct. 2009 – Jan. 2010 Contract Period Procurement Results
• Projected cost for this Contract Period: $ 7.79 million• Max. cost for 2009 program year: $18.35 million
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EILS Update to DSWGOctober 9, 2009
EILS Procurement Trends (Business Hours 1)Business Hours 1
262 310 271 164 276 361
8
11 90
0
96
55
0
75
150
225
300
375
450
Feb-May08 Jun-Sept08 Oct08-Jan09 Feb-May09 Jun-Sept09 Oct09-Jan10
MW Bid, Not Procured
MW Procured
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EILS Update to DSWGOctober 9, 2009
EILS Procurement Trends (Business Hours 2)Business Hours 2
262 219 288 168 155 353
8
12
86
074
58
0
75
150
225
300
375
450
Feb-May08 Jun-Sept08 Oct08-Jan09 Feb-May09 Jun-Sept09 Oct09-Jan10
MW Bid, Not Procured
MW Procured
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EILS Update to DSWGOctober 9, 2009
EILS Procurement Trends (Business Hours 3)Business Hours 3
262
216
290
163
237
268
8
11
86 137
0
75
150
225
300
375
450
Feb-May08 Jun-Sept08 Oct08-Jan09 Feb-May09 Jun-Sept09 Oct09-Jan10
MW Bid, Not Procured
MW Procured
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EILS Update to DSWGOctober 9, 2009
EILS Procurement Trends (Non-Business Hours)
Non Business Hours
185
216
272
138
256
335
104
110
86
73
40
0
75
150
225
300
375
450
Feb-May08 Jun-Sept08 Oct08-Jan09 Feb-May09 Jun-Sept09 Oct09-Jan10
MW Bid, Not Procured
MW Procured
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EILS Update to DSWGOctober 9, 2009
Number of EILS Procured Resources
0
10
20
30
40
50
60
70
80
Feb-May08 June-Sept08 Oct08-Jan09 Feb-May09 Jun-Sept09 Oct09-Jan10
Nu
mb
er o
f R
eso
urc
es
BH1 BH2 BH3 NB
EILS Procurement Trends (Number of Resources)
EILS Resources include individual Loads and aggregations
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EILS Update to DSWGOctober 9, 2009
EILS Procurement Trends
• Cumulative unique ESI IDs offered into EILSNumber of ESIIDs Bid (Cumulative)
28
380
417
478
729
946
0
75
150
225
300
375
450
525
600
675
750
825
900
975
1050
febmay08 junsep08 oct08jan09 febmay09 junsep09 oct09jan10
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EILS Update to DSWGOctober 9, 2009
A/S Price Comparison: Business Hours 1
36.09
29.98
14.75
7.70 7.07
26.64 26.88
11.09
7.19 6.59
16.58
6.304.021.56 2.44
$0
$10
$20
$30
$40
$50
$60
$70
$80
Feb-May08 Jun-Sept08 Oct-08-Jan09 Feb-May09 Jun-Sept09
$/M
WH
RRS URS NSRS EILS
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EILS Update to DSWGOctober 9, 2009
A/S Price Comparison: Business Hours 2
36.09
55.52
7.45
22.34
26.64
51.76
9.92
5.45
22.78
16.58 16.39
9.84
13.44
2.57 2.17$0
$10
$20
$30
$40
$50
$60
$70
$80
Feb-May08 Jun-Sept08 Oct-08-Jan09 Feb-May09 Jun-Sept09
$/M
WH
RRS URS NSRS EILS
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EILS Update to DSWGOctober 9, 2009
A/S Price Comparison: Business Hours 3
36.09
75.78
23.54
14.77
25.3526.64
64.76
25.29 25.48
16.5818.61
2.86 1.83
7.02
13.83
$0
$10
$20
$30
$40
$50
$60
$70
$80
Feb-May08 Jun-Sept08 Oct-08-Jan09 Feb-May09 Jun-Sept09
$/M
WH
RRS URS NSRS EILS
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EILS Update to DSWGOctober 9, 2009
A/S Price Comparison: Non-Business Hours
24.92 24.10
18.07
8.206.37
21.14 21.08
13.54
9.006.476.21
3.53
12.00
1.69 2.20$0
$10
$20
$30
$40
$50
$60
$70
$80
Feb-May08 Jun-Sept08 Oct-08-Jan09 Feb-May09 Jun-Sept09
$/M
WH
RRS URS NSRS EILS
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EILS Update to DSWGOctober 9, 2009
Average Monthly Fuel Price
$0
$2
$4
$6
$8
$10
$12
$14
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
08 08 08 08 08 08 08 08 08 08 08 08 09 09 09 09 09 09 09 09 09
$/M
WNatural gas price trend
2008 2009
EILS Costs & Benefits(Value of Lost Load discussion)
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EILS Update to DSWGOctober 9, 2009
EILS Costs & Benefits
• In August, VP of System Operations Kent Saathoff briefed the ERCOT Board responding to questions raised earlier about EILS costs and benefits
• The same issue had been raised in early 2007 when EILS Protocols were being considered
• ERCOT Staff’s response to a series of questions posed by PRS included a discussion of EILS in the context of Value of Lost Load (VOLL)– Response is summarized here
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EILS Update to DSWGOctober 9, 2009
Value of Lost Load
• ERCOT Staff analyzed several VOLL studies from other markets
• VOLL estimates range from $2,240 / MWh to $20,000/ MWh
• Based on methodologies from the 2003 Northeast Blackout, direct VOLL for the April 17, 2006, ERCOT load shedding event can be estimated at between $14.8 million and $22.4 million
• VOLL is a mathematically-calculated estimation of direct economic loss due to loss of electric service
• VOLL does not capture broader, intangible societal costs associated with firm load shedding that are very difficult to quantify in monetary terms, such as:
– Potential risk to human health and safety posed by blackouts – Effect on consumer confidence in the electric grid and market– Negative national publicity to the region– Financial and business communities’ outlook with potential impacts to future
economic development and gross domestic product
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EILS Update to DSWGOctober 9, 2009
Cost of EILS
• In its first two program years EILS has incurred a total maximum cost of $34.9 million, under a two-year cost cap of $100 million
• Assuming EILS would only be used in potential loss of load events that statistically could occur approximately once in ten years, it would not be justified based on VOLL alone.
• However, since VOLL does not quantify all the intangible costs of a loss of load event, EILS can be viewed in a broader context as an additional hedge against firm load shedding
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EILS Update to DSWGOctober 9, 2009
EILS Additional Value
• The PUCT expanded the EILS mission in the 2007 rule amendments:
• ‘The commission … finds value in having resources that have not participated in demand response programs being enabled to do so by this program. The commission encourages ERCOT to make an effort to attract such customers to the program.’
• ‘The commission … agrees … that it is in the public interest for the commission to expand the scope of demand-response through the implementation of EILS.’
-- Preamble to the Order adopting amendments
to Subst. Rule §25.507, Nov. 1, 2007
(Project 34706)
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EILS Update to DSWGOctober 9, 2009
Future of EILS
• Kent concluded:
– Any significant changes to or discontinuation of EILS will require revision of PUC Subst. Rule §25.507
– ERCOT Staff is open to any suggestions to modify or improve the program within the parameters of the PUCT Rule
– There is a Demand Side Working Group of the WMS that is another appropriate stakeholder forum to have such discussions
EILS Administration
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EILS Update to DSWGOctober 9, 2009
Procurement Schedule: Feb-May 2010 Contract Period
Date Action
Mon Nov 2 2009DRAFT Technical Requirements & Scope of Work posted to EILS web page. Market Participant comments accepted through Nov. 16.
Fri Nov 20 2009Request for Proposal (RFP) Issued. FINAL Technical Requirements & Scope of Work posted to EILS web page.
Wed Nov 25 2009 Last date for QSEs to request preliminary baseline reviews.
Mon Nov 30 2009Resource ID process begins — submittal of Resources for baseline assignment &
capacity pre-screening.
Wed Dec 16 2009Resource IDs due by 3:00 pm in order to get a Default Baseline assignment. Submittals received after 3:00 pm will be eligible for Alternate Baseline only.
Thu Dec 17 2009 Last date to submit EILS Resource IDs.
Fri Dec 18 2009QSEs receive baseline assignment & capacity pre-screening information for prospective
EILS Resources.
Thu Jan 7 2010 BIDS & Self Provision Offers Due
Wed Jan 20 2010EILS Award Notifications and contract materials distributed to awarded QSEs.Market Notice with summary of EILS awards released
Thu Jan 28 2010 Signed contracts must be returned to ERCOT
Mon Feb 1 2010 First day of Contract Period.
Mon May 31 2010 Last day of Contract Period.
Mon July 5 2010 Deadline for submitting NOIE or non-TDSP interval meter data to ERCOT.
Thu July 15 2010 ERCOT provides unofficial availability and event performance data to QSEs.
Mon July 26 2010 Deadline for QSEs to identify any discrepancies with ERCOT’s unofficial data.
Mon Aug 9 2010 Settlement date for this Contract Period.
Key dates
only.
Full draft schedule is posted to the web page for this DSWG meeting.
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EILS Update to DSWGOctober 9, 2009
Process flow improvements
• Carl & Diana slides
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EILS Update to DSWGOctober 9, 2009
Procurement & settlement issues
• Load identification
– Need naming conventions, especially for Loads in NOIE territories
• Unique meter identification
– Need naming convention to assure continuity
– Applies to submetered Loads, NOIE Loads, and PUN Loads
• Meter data submittal
– Starting now, ERCOT staff will require monthly submittal of submeter data
• Settlement issues
– 10-day window to notify ERCOT informally of any disagreement with availability and performance results
– Also the deadline for identifying mitigating factors
– Formal settlement disputes must be filed within 10 Business Days after the settlement is posted
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EILS Update to DSWGOctober 9, 2009
New issues
• All-or-nothing bid options– Some participants have requested ability to opt out if not
selected for all Time Periods– Numerous possible permutations could complicate
administration• Re-constitution of aggregations within a Contract Period
– Should ESI IDs be allowed to float among aggregations for different Time Periods?
– Many implications for administration and testing• Substitution provisions
– Current provisions were written to accommodate unplanned outages
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EILS Update to DSWGOctober 9, 2009
Compliance
• Subst. R. 25.507 (e)– (e) Compliance. QSEs representing EILS resources are subject
to penalties for failure to meet their obligations under this section. ERCOT shall withhold all or part of an EILS resource’s capacity payment for a contract period and suspend participation in EILS for six months if the EILS resource fails to make its committed load available during its committed hours, or fails to meet its load reduction obligations in an EILS deployment event. In order to be reinstated after the suspension the load must demonstrate its capability of performing the service by satisfactorily performing a test conducted by ERCOT.
• Suspensions apply to all Time Periods, not just those in which the EILS Resource failed
• Suspensions apply to all Loads within an aggregation– ERCOT does not have tools to determine which Loads caused
an aggregation to fail
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EILS Update to DSWGOctober 9, 2009
Compliance (cont.)
• 12 EILS Resources totalling ~38 MW are currently suspended due to availability factors of <95% for Feb.-May ’09 Contract Period– ERCOT considers availability to be the responsibility of the
Load, not the QSE• PUC Oversight & Enforcement division has requested that
ERCOT file a Complaint with the TRE for any availability or performance failures
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EILS Update to DSWGOctober 9, 2009
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