ercot wholesale market basics module 2 market operations

ERCOTWholesale Market Basics

Module 2Market Operations

2 ERCOT Wholesale Market Basics

Topics

Essential Concepts

Ancillary Services

Congestion Management

Module 2


Topic 1: Essential Concepts Module 2


• Market Structure, Wholesale Concepts and Roles

• Day-Ahead and Operating Day Concepts

Essential Concepts Module 2


Wholesale Market: Zonal Congestion Management

Unbundled Transmission

Bilateral Market

Requirements:

QSE Representation

Balanced Schedules

Portfolio & Unit-Specific Dispatch

Module 2Essential ConceptsMarket Structure, Wholesale Concepts and Roles


Qualified Scheduling Entities (QSEs) submit Balanced Schedules, Ancillary Services Bids and a Resource Plan (if applicable) to ERCOT.

Load Serving Entities (LSEs) provide electric service to retail and wholesale customers. LSEs include Retail Electric Providers, Competitive Retailers, and Non-Opt In Entities that serve load.

Resource Entities (REs) own or control a resource.

ERCOT manages any real-time imbalances during the Operating Period between forecasts and actual demands by deploying balancing energy to QSEs qualified to represent Resources.



ERCOT is here to ensure reliability by:

Resource capacity planning

Real-time transmission management

Procure balancing energy

Issue deployment instructions to units, as needed

ERCOT is similar to an Air Traffic Controller



Qualified Schedule Entities functions:

Submit Balanced Schedules

Submit Ancillary Services Bids

Resource Command and Control

Settle with ERCOT

QSE

All Resource Entities and LSEs must be represented by a QSE



Bilateral Transactions:

A trade agreement between two entities

Bilateral transactions are scheduled with ERCOT

Examples:

1.QSE A sells a block of 50 Mwh (North Zone), to QSE B for Hour-Ending 1100-1300

2.QSE A sells 3 Mw of Responsive Reserve to QSE B for Hour-Ending 1400.



Quantity of Resources and Obligations must Balance

Bilateral Transactions must include Qty, QSE, Zone, Matched with

Counterparty.

Resources: Generation or purchasesObligations: Load or sales


Bilateral Transactions cont’


QSE Balanced Schedule – Portal Display


ERCOT does not require QSEs to be balanced within each Congestion Zone.


Balanced, but mismatched



A QSE exporting from ERCOT through a DC Tie export schedule will include that DC Tie export schedule as an Obligation in its Balanced Schedule by using the identifier field indicating the appropriate DC Tie.

Imports include the DC Tie import schedule as a Supply in its Balanced Schedule (as shown below).

Direct Current Tie Transactions



Two commercially operational DC-Ties between ERCOT and the Eastern Interconnection

North (DC_N) located near Oklaunion

East (DC_E) located near Monticello

Three DC-Ties between ERCOT and Operating Authority in Mexico Comision Federal de Electricidad (CFE)

Eagle Pass (DC_S) located near Eagle Pass

Railroad (DC_R) located near McAllen

Laredo (DC_L) located near Laredo



QSE may set obligations equal to supply, and/or schedule BES via ERCOT to meet Obligations*

QSE is NOT to schedule ERCOT ISO as an Obligation for Balancing Energy (only used for RMR)

Resources: Generation or purchasesObligations: Load or sales

Module 2

* Limited by QSE’s collateral with ERCOT

Essential ConceptsMarket Structure, Wholesale Concepts and Roles

“Relaxed” Balanced Schedules:


Resource Plans

Each QSE representing a Resource or Load Acting as a Resource must submit a Resource Plan!!

Let’s Check

Under the Hood!


Plan of how Generation Resources will operate

Due to ERCOT by 4:00 pm of the day-ahead period

Used by ERCOT to determine resource adequacy

Validated against scheduled Portfolio Generation


Market Structure, Wholesale Concepts and Roles

Day-ahead and Operating Day Concepts

Essential Concepts Module 2


ERCOT Market Timeline

Market Operations

AdjustmentPeriod:Precedes Operating Period

Operating Period: Balancing Energy Clearing Occurs every 15 minutes

Power

Operations

Day-AheadPeriod: 6:00am to 6:00pm prior to Operating Day.

Commercial Operations

Initial Settlement10 days afterOperating Day

FinalSettlement59 days afterOperating Day

True-upSettlement:180 days afterOperating DayAnd/or specificProtocolCriteria is met

Module 2Essential ConceptsDay-ahead and Operating Day Concepts


Day-Ahead Period

6:00AM to 6:00PM on the day prior to the Operating Day (“flow” date)

QSEs submit balanced schedules and ancillary services bids

ERCOT clears Ancillary Services Markets, and publishes results

Adjustment Period

Time between the close of the Day-Ahead Market and the start of the Operating Period

QSEs may modify their schedules and/or bids during this time

Operating Period

Includes the Operating hour (“flow hour”) and the hour prior to Operating hour (look-ahead studies)



Market Timeline & When QSE Schedules Become Binding

DAY AHEAD ADJUSTMENT PERIOD OPERATING PERIOD

1300: A/S Schedules and

A/S Bids LOCKED

1600: Bilateral Energy and Resource Plan

snapshot

End of Adjustment Period snapshot:

Replacement Reserve, Resource Plan, Bilateral Energy

At each ExecutionOf SPD Balancing

Energy Market,Snapshot of QSE

Resource Plan is taken.

1800: End of Day Ahead

Period

Adjustment period begins at 1800 the day before the operating period and ends one hour prior to operating hour

HOUR 1: The operating period begins one hour

prior to the operating hour

HOUR 2: Operating hour

Two hour time period

Resource Plans may be Updated at any time during the

Balancing Energy Market

Essential ConceptsDay-ahead and Operating Day Concepts Module 2


Midnight



Day-Ahead Period Key Times06:00 Forecast and A/S Obligations Information Published11:00 Deadline for Day-Ahead Scheduling (Bilateral, A/S)11:15 Deadline to resolve Day-Ahead Mismatches13:00 Deadline for A/S Capacity Market Bids

Deadline for Adjusted Day-Ahead Schedules13:15 Deadline to resubmit corrected updated schedules13:30 A/S Capacity results & MCPC15:00 Submit updated AS schedule including Self-Arranged and

AS bids selected by ERCOT16:00 Deadline for Resource Plan submittal

Replacement Reserve BidsSystem Lockdown for Day-Ahead Analysis

18:00 Day-Ahead Period complete; start of Adjustment Period



Adjustment Period

On the Operating Day, the Adjustment Period is anytime up to one hour prior to Operating (“flow”) Hour when QSEs can alter or remove existing schedules, or submit new schedules for the Operating Hour.

Deadline for QSEs to submit schedules & changes is one hour prior to the “flow” hour. (i.e., deadline for HE1300 is 1100, because HE 1300 begins at 1200).



Operating Period is 2 Hours

It starts immediately after the Adjustment Period.

QSE schedules cannot be altered or removed.

−First Hour – system lockdown – allows for system studies for the upcoming flow hour based on QSE schedules

−Second Hour - is the Operating (“Flow”) Hour – real-time monitoring and security analysis



Topic 2: Ancillary Services Module 2

Essential Concepts

Ancillary Services

Congestion Management


Definitions and Requirements

LSE Obligations and Supply Options

Services Exclusively Arranged By ERCOT

Merit-Order vs. Out of Merit

Module 2Ancillary Services


What are Ancillary Services, and why does ERCOT need them?

Generation that is intentionally reserved, in the event it is needed (i.e., a plant that generates 50 Mw of its maximum of 100 Mw has 50 Mw of reserve capacity available)

Reserve capacity can be utilized (converted to energy) to keep the lights on in the event of an unforeseen system disturbance

“Energy Insurance”

Module 2Ancillary ServicesDefinitions and Requirements


As a QSE that schedules load, why do I need to know about A/S?

Market Participants serving load have an A/S Obligation as a “cost of doing business”.

Similar to Auto Insurance: If you own a vehicle in Texas, Liability Insurance is a mandated cost that goes along with owning the vehicle.

Ancillary ServicesDefinitions and Requirements Module 2


Capacity Reserve Services that can be selfarranged by QSEs:

Regulation – provision of Resource capacity to ERCOT for continuous frequency control

Responsive Reserve – unloaded Generation, or Load Resources capable of controlling consumption, which can be deployed

within 15 seconds Non-Spinning Reserve – Off-line or reserved

capacity, or Loads acting as a Resource, capable of deploying within 30 minutes for

at least one hour



Balancing Energy Service:

Awarded by ERCOT to bidding QSEs

Used to balance system wide Load variations with generation

Used to resolve transmission constraints and congestion



System Requirements Annual ProcedureERCOT establishes the methodology for determining A/S system requirements. It is reviewed and approved in the stakeholder process (TAC).

Monthly CalculationSystem-wide requirement is calculated, based on statistical calculations and historical deployments.

“2008-2009 ERCOT Methodologies for Determining Ancillary Service” posted under Key Documents.

Module 2Ancillary ServicesDefinitions and Requirements


OK, what is my share of the ERCOT System Requirements?

It is based on your load relative to total ERCOT load, or Load Ratio Share (LRS).

If you have 10 Mw of Load, and ERCOT has 100 Mw of total load, your LRS is 10%. Your obligation will be 10% of each service that ERCOT requires.

QSE Day-Ahead LRS Obligations are posted each morning by 6AM



Do I have a requirement if I am a QSE that has no load?

No. If you only have bilateral transactions and no load, you will not incur any A/S Obligations, UNLESS……

…you have an EXPORT on the DC Tie. An export is considered load, so if you schedule an export, you can expect to see an A/S Obligation 14 days later.



A/S Obligation – Load Ratio Share

ERCOT calculates the “load-ratio share” (LRS) of each Load Serving Entity (LSE).

QSE’s Load Ratio Share is the aggregate total of the LSE LRS that it represents.

QSE’s A/S Obligation is its LRS of the Total ERCOT-wide requirement.

Module 2Ancillary ServicesLSE Obligations and Supply Options


Day-Ahead Obligation:

Based on the Load Ratio Share of the Load from the Initial Settlement data, for the Operating Day that is 14 days before the day in which the Obligation is being calculated.

After the Operating Day:

The AS Obligation calculations are adjusted (trued-up) based on the most up-to-date Load Data for each settlement run.

Module 2

Determination of LRS for Settlement

Ancillary ServicesLSE Obligations and Supply Options


A FULL SERVICE QSE

Markets and Schedules WATTSco power generation

Wholesale Supplier and Scheduler for POWERMART and EZWatts, retailers

Qualified to provide Ancillary Services

Provide Power Marketing Services

INTRODUCING!!

Module 2Ancillary ServicesExample – Load Ratio Share


Example: Day-Ahead A/S Obligation for 4/26/08 represents POWERMART [88] and EZWatts [55], LSEs. On April 12, 2008 (14-days ago) the aggregated load for these two LSEs came to:

April 12 Load LRS



A/S Obligation – For Example!For intervals “hour-ending” 1000 through 1200 the A/S obligations are determined by taking the LRS times each ERCOT-wide obligation, rounded to a whole MW.



A/S Obligation – For Example!- represents LSE_88 and LSE_55- A/S Obligation = sum of the obligations of LSE_88 and LSE_55:

26-Apr-0426-Apr-04



Posted by 6 AM one day prior to the Operating Day

Obligation is under “Required MW” column

Legend:DRS: Down Regulation ServiceNSRS: Non Spin Reserve ServiceRRS: Responsive Reserve ServiceURS: Up Regulation Service

Module 2

Portal View of Day-Ahead Obligations



What are my options for buying and scheduling Ancillary Services to fulfill my obligation?

QSEs can Self-Arrange: a. Using its own resource b. Purchase from another QSE (A/S Bilateral Trade)

QSEs can purchase from ERCOT at the Day-Ahead MCP for Capacity (MCPC)

Note: Per Protocol Section 4.3.1: QSEs that intend to purchase their obligation from ERCOT MUST schedule a bilateral PURCHASE from ERCOT.



Ancillary Services Sellers

A/S providers must be qualified by ERCOT to provide each A/S

Must keep awarded capacity in reserve

Must meet performance metrics (perform when called upon)

A/SA/S



Ancillary Service Status Deployment ReasonRegulation Up On-Line Immediate Small changes in Frequency

Regulation Down On-Line Immediate Small changes in Frequency

Responsive Reserve On-Line Within a few minutes

Significant deviation in Frequency

Non-Spinning Reserve

Off-LineOrOn-Line

Within 30 Minutes >92 degrees, < 30 degrees, or contingency of resource loss

Target Frequency: 60 Hz

Other Attributes:Day-Ahead Capacity MarketSelected in Merit Order

Module 2

Option to Self-Arrange



QSE A ERCOT

Day-Ahead Capacity ResultAward * $ Hourly MCPC

“I will reserve X Mw (awarded qty) of

generation”

QSE A ERCOTMw * $ MCPE (BES)

Deployment on Operating Day

ERCOT-instructed Mw

Module 2

A/S Cash Flows



If NO Deployments are issued by ERCOT QSE “A” KEEPS the capacity payment

Also similar to paying auto insurance premium, but not having a claim before the policy expires

QSE A ERCOT

Day-Ahead Capacity ResultAward * $ Hourly MCPC

“I will reserve X Mw (awarded qty) of

generation”



ERCOT charges load QSEs for non-self-arranged obligations

ERCOT remains revenue-neutral!

QSE A(e.g. Resource) ERCOT

How does ERCOT get the money to pay for Capacity?

$$$$

Capacity (MW)

QSE Z(Load)

Capacity (MW)



Replacement Reserve Resources planned to be off-line, but available

Deployed for Capacity Insufficiency, Local Congestion

Black Start Widespread black out event

Started without support of the power grid

Contracted by ERCOT annually

Module 2Ancillary ServicesExclusively Arranged By ERCOT


Reliability Must-Run (RMR)

Resolves local system reliability

Contracted by ERCOT

Otherwise would not be an active resource



Emergency Interruptible Load Service (EILS)Protocol Section 6.1.13

Special emergency service used as part of a Level 2 Energy Emergency Alert (EEA) to reduce Load and assist in maintaining or restoring system frequency (with the intention to prevent or shorten duration of conditions requiring the EEA)

Provided by Loads capable of reducing their electricity consumption during an EEA

For deployment, all QSEs providing EILS are instructed via a single Verbal Dispatch Instruction (VDI)



Standing Contract Periods

– February through May

– June through September

– October through January

QSEs representing Load may elect to self-provide part or all of their EILS obligation

ERCOT contracts for EILS capacity through EILS bids and self-provision offers

– Paid as-bid (no clearing price)

The amount of MW procured for an EILS contract period not to exceed 1,000 MW

EILS Procurement



Ancillary Services can be awarded in one of two ways:

Merit-Order Based on bids, “stacked” from least to most expensive Market Price for Capacity and Energy is produced

Out-of-Merit Without respect to cost Needed for reliability, regardless of economics Also utilized when no market solution exists

ERCOT NEEDS YOU!

Module 2Ancillary ServicesMerit-Order vs. Out of Merit


System Requirement – 2300 Mw

23002300

1380

Self-Arranged Qty(from A/S schedules)

ERCOT to procure 920 Mw via A/S Capacity Market

Module 2

Day-Ahead A/S Capacity Market Selection Example

Ancillary ServicesMerit-Order vs. Out of Merit


920920

ERCOT moves “up the bid stack” until it reaches the necessary qty. The price associated with that qty set the MCPC. ($2.10 in this example)



Out-of-Merit Capacity (OOMC)

Capability of providing additional Balancing Energy Service-more Resources on-line.

Otherwise not selected because of the place (or absence) in the Merit Order bid stack

Out-of-Merit Energy (OOME)

Provision of balancing energy to solve local congestion, or when no market solution exists



Balancing Energy (Merit Order)Energy deployed by ERCOT every 15 minutes

Deployed when load forecast is higher or lower than scheduled OR

Also deployed to resolve Congestion

Market Clearing Price for Energy (MCPE)



Option to Self Arrange OR Purchase from ERCOT

No Option to Self Arrange: Exclusively provided by ERCOT

Module 2

Summary

Ancillary ServicesMerit-Order vs. Out of Merit


Who determines daily Ancillary Service requirements?ERCOT

Who schedules Ancillary Services?QSE

What entity does ERCOT allocate Ancillary Services obligations to?

LSE

What is the only instance a QSE may schedule ERCOT as an bilateral energy obligation?

RMR

ERCOT Wholesale Market Operations: Review Module 2


Topic 3: Congestion Management Module 2


Definitions and Key Concepts

Zonal vs. Local Congestion

Transmission Congestion Rights

Congestion Management Module 2


Managing traffic on the electric grid

When safe operating limits on the transmission system are projected to be exceeded.

ERCOT will take action as the physical flow approaches transfer limits.

– Resources are re-dispatched

QSEs may take actions to mitigate cost impact of congestion.

Module 2Congestion Management Definitions and Key Concepts


Four Congestion Zones

Five CSCs1. South to North

2. North to South

3. North to Houston

4. West to North

5. North to West

Zones and CSCs

NorthWest

SouthHouston

Module 2Congestion Management Definitions and Key Concepts


Constraint:A transmission element or group of elements that limit the free flow of energy. Constraints are typically thermal, voltage stability, and angular stability limitations. These constraints are the result of defined contingencies such as the trip of a generating unit or transmission circuit.

Module 2Congestion ManagementDefinitions and Key Concepts


Commercially Significant Constraint (CSC):A constraint in the ERCOT Transmission Grid that is found to limit the free flow of energy a commercially significant degree.


Closely Related Element (CRE):Those transmission facilities that have shift factor impacts similar to those associated with a particular Commercially Significant Constraint (CSC), and for which there exists a limited amount of Boundary Generation Resources between it and the particular CSC, so that the zonal deployment of Balancing Energy Service is effective in mitigating Zonal Congestion.


Congestion:The situation that exists when scheduled power flows, when netted, are projected to exceed the capability of a Transmission element or set of elements.

Congestion Zone:A grouping of busses that create a similar Shift Factor on CSCs.

CSC Limit:Maximum flow allowed across a CSC to maintain reliable operation



Shift Factor (SF):Measure of power flow impact on a transmission element

Schedule Impact (SI):The MW impact that bilateral energy schedules have on a CSC.

Shadow Price (SP):The marginal price of the constraint ~ it indicates the change in the overall cost, in $/MW.

TCR’s:Transmission Congestion Rights are a financial instrument that enables QSEs to hedge against the risk of incurring congestion charges.



Congestion must be managed, and it costs Dollars!

Even when the flow on the constraint is brought down below the limit by redispatch, we are in a

congestion situation

Keep line flows under the limits, or

System may become unstable

Equipment may be damaged

Module 2Congestion ManagementZonal vs. Local Congestion


Zonal Congestion

a.k.a. INTER-zonal congestion

Occurs between congestion zones

Resolved using Zonal Balancing Energy (in Merit Order)

Types of Congestion

North

West

SouthHouston

Module 2Congestion ManagementZonal Congestion


Zone B

Zone A

10MW

2 MW Zonal Shift Factor B-A

Zone

0.2South-0.3North

10MW

3 MW

Aggregate Generation B-A CSC

Zonal shift factor is the average effect that changing generation in a zone has on a particular CSC constraint

Module 2Congestion ManagementZonal Congestion


Local Congestion

a.k.a. INTRA-zonal congestion

Occurs within a congestion zone

Cannot be resolved with Zonal

balancing energy

Must be resolved with Unit-specific

deployments

Types of Congestion

NorthWest

SouthHouston

Module 2Congestion ManagementLocal Congestion


ZONE10MW

5 MW Resource Shift Factor

bus-0.2 Unit 1

0.1Unit 2

Specific Resource Intra-Zonal

Resource specific shift factor is used with Bid Premiums to resolve Local Congestion

Module 2Congestion ManagementLocal Congestion

Unit 1

Unit 2

Bid Premium is Generic Cost determined for Specific Resource Type (CC, CT, WGR)

1MW

1MW


Zonal Congestion Direct Assignment to ALL QSEs with schedules impacting congested CSCs

Cost = Schedule Impact on each CSC * Shadow Price

Local Congestion Total ERCOT cost Uplifted at Load Ratio Share

All QSEs with load pay for local congestion if it exists anywhere


Who pays for Congestion?


Power Flow Analysis

Procurement of services

Dispatch resources

Post information

What ERCOT does to control traffic



Known transmission conditions

Expected transmission conditions for the next day

Resource Plans for next day

Bilateral Schedules for next day

Congestion Studies – Day-Ahead



Procurement of RPRS and OOMC (Capacity and Local Congestion)

Deployment of LBES and OOME

Congestion Studies – Day Ahead and before each Operating Hour

The Studies Result in:



Real-time Are created by Simultaneous Feasibility Test (SFT) software

LocalOC3

NOT USED Limit may be changed in adjustment or operating period based on impending congestion conditions

LocalOC2

Real-time Limit may be changed in adjustment or operating period based on impending congestion conditions

Setting of 9999 indicates constraint not active

ZonalCSC / CRE

OC1

Monthly Based on planning studies taking into account planned outages, flow patterns

Basis of TCRs and CSC congestion notifications Suppressed in favor of OC1 in Real-time

Balancing

ZonalCSC

OC0

FrequencyDescriptionApplicabilityLimit

Module 2

Types of Constraints

Congestion ManagementZonal vs. Local Congestion


Module 2

What the ERCOT Operator Sees:

Congestion ManagementZonal Congestion


Module 2

What the Operator Does

Congestion ManagementZonal Congestion


When zonal transmission constraints are NOT in effect:

The BES bid curves submitted by QSEs are used to establish a single bid stack.

The ERCOT EMS uses this stack to competitively select up or down balancing energy, whichever

is needed in the next interval for zonal balancing.

Stack’mUP!

Module 2

Balancing Energy Deployments (BES)



North

South

MW

$

MW

$MW

$

One consolidated bid stack for Balancing Energy

MCPE

Module 2

MCPE - No Congestion



When zonal transmission constraints ARE in effect:

The BES bid curves are separated out into prospective zonal bid stacks for the EMS to competitively select up or down balancing energy to unload the inter-zonal congestion.

The resulting zonal BES deployment is the incremental MW increase (UBES) or decrease (DBES) each QSE awarded BES needs to move their portfolio of resources as deviation from their planned schedule. Nort

hZone

South

Zone

Module 2

Balancing Energy Deployments (BES)



North

South

MW

$

MW

$

MCPENorth

MCPESouthMCPESPCS-N

Note – MCPEs and MCPESPCs are capped at offer cap ($2,250)

Module 2

MCPE – Zonal Congestion



Limit = 500 MW200 MW

300 MW

100 MWOVERLOAD

“Generate at 200”200 MW

Question: How does ERCOT select the unit?

Module 2

Congestion Management - Local



In real time, ERCOT manages Local Congestion using unit-specific deployments.

Units selected are based on Operator Directed or by Step 2 of SPD Solution.

SPD selects using generic Bid Premiums and Real-Time Shift Factor.

Units selected are paid as OOM Energy if Operator Directed or Local Balancing Energy if SPD Solution.

Charge uplifted to QSEs on a Load Ratio Share Basis.

Module 2

Recap Congestion Management - Local



Scheduling, Pricing and Dispatch = SPDExecutes every 15 minutes to deploy Balancing Energy

Calculated CSC flows and Shadow PricesCalculated flow for OC3 constraintsPortfolio Balancing Awards and resource specific instructionsZonal MCPEs

Inputs OutputsTelemetered Generator MW outputShift factorsBalancing Energy BidsForecasted loadQSE Energy SchedulesQSE Resource Plan dataOC1 and OC3 constraint limits

ERCOT Market Operating System

* Note: Real time (Physical) line limits are not inputs to SPD

I’mSPUD



1. Solve for CSC Constrained System Imbalance with zonal BES

2. Solve for Local Congestion with local BES

3. Resolve for System Imbalance with BES *

SPD Solution STEPS

ERCOT Market Operating System

* Note: Final Market Clearing Price of Energy is published after Step 3



Portfolio vs. Unit-Specific Deployment QSEs shall first meet the specific resource

deployment and then meet the BES deployment instruction.

In the event that a QSE is unable to provide the BES due to a specific resource

deployment then the QSE will follow the notification procedures established in Section 5, Dispatch.



Transmission Congestion Rights (TCRs)Financial instruments– Can be a hedge against congestion charges

To participate in auctions requires TCR registration and qualification.

TCR Holders are not represented by QSEs

Revenues from TCR auctions go to QSEs representing load.

Module 2Congestion ManagementTransmission Congestion Rights


The maximum power that may be transferred across a transmission corridor while maintaining reliability

Calculated on an annual basis

Updated monthly

TTC for each CSC establishes the number of Transmission Congestion Rights

(TCRs) to be auctioned

Module 2

Total Transfer Capability

Congestion ManagementTransmission Congestion Rights


Certain TCR Holders are eligible for Pre- assigned Congestion Rights (PCRs)

TCR Auction Allocation

– Annual: (40% of TTCs) minus PCRs

– Monthly: (60% of TTCs) minus PCRs

Module 2Congestion ManagementTransmission Congestion Rights

TCR Auction


ERCOT sells TCRs

TCR auction revenues to QSEs with

load

Winning TCR bidder pays ERCOT and

receives TCR.

TCR Price = Clearing price X Number of Hours in period

Module 2

TCR Auction Settlement


TCR Holders are Limited to 25%

Ownership per CSC


Total Transfer Capability MW

SI * SP = Amount Collected from CSC Congestion charges

Amount Paid to clear congestion

Amount Paid to TCR Holders

Scheduled Qty MW

Module 2

Real-time Congestion Settlement



Total Transfer Capability MW

SI * SP = Amount Collected from CSC Congestion charges

Amount Charged to clear congestion

Amount Paid to TCR Holders

Scheduled Qty MW

Module 2

Real-time Congestion Settlement



Who pays for Local Congestion? QSEs at LRSWho pays for Zonal Congestion?

QSEs with impacted schedules

What is a TCR?Transmission Congestion Right

What are the three steps to awarding Balancing Energy?1) System Load Balance; Inter-zonal Congestion2) Local Congestion3) Re-balance Load and Inter-zonal Congestion

ERCOT Wholesale Market Operations: Review Module 2


Questions Module 2