MWG Report to the MOPC

Transcription

1 MWG Report to the MOPC January 12-13, 2016 Richard Ross Chairman Market Working Group

2 MWG UGLY SWEATER CONTEST 2

3 3

4 4

5 Agenda Approved Revision Requests RR111 Local Reliability Make Whole Payment Distribution Amount MOPC Action Item #261 Review MMU Recommendations from 2014 Annual State of the Market Report Approved Revision Requests for Consent agenda Appendix - Marketplace Revision Request Estimated Cost Summary 5

6 MARKETPLACE PROTOCOL REVISION REQUESTS (RRS) 6

7 RR111 Local Reliability Make Whole Payment Distribution Amount Background: Local RUC MWP Distribution Amount is allocated by load to a single Settlement Area Certain loads are paying for other utilities not building out their local infrastructure 7

8 RR111 Local Reliability Make Whole Payment Distribution Amount RR111 proposes to: Allocate cost of manual commitments for voltage related Local Reliability Issues to Asset Owner based on impacted loads All non-voltage related Local Reliability Issues will continue to use current allocation method 8

9 RR111 Local Reliability Make Whole Payment Distribution Amount Working Group Voting Results MWG approved 10/20/2015 Four abstentions Six oppositions RTWG approved with modifications 11/19/2015 Six abstentions One opposition MWG approved RTWG modifications 12/15/2015 Two abstentions MWG recommends MOPC approve RR111 9

10 MOPC ACTION ITEM #261: REVIEW MMU RECOMMENDATIONS FROM 2014 ANNUAL STATE OF MARKET REPORT 10

11 Background During the July 2015 SPP Board of Directors (BOD) meeting, the SPP MMU presented its Annual State of the Market (ASOM) report 2014 ASOM includes nine recommendations from the MMU for changes or enhancements to the Integrated Marketplace design Board requested the Chairs of the MOPC and MWG review the 2014 ASOM MMU recommendations and develop an action plan MWG finalized responses to the MMU recommendations in November 2015 for presentation to MOPC and BOD in January

12 1. Quick Start Logic MMU Summary The MMU supports the development of new rules governing the dispatch of quick-start resources that (1) do not subject quick-starts to RUC commitment; and (2) do not provide make whole payment eligibility for RTBM dispatch. MWG Action/Response RR99-Short-Term RUC and RR116-Quick Start Enhancements have been approved and will be implemented in 2016 RR99 implements an Intra-Day RUC with more granularity than 1 hour RR116 delays Quick Start Resource commitment to the RTBM 12

13 2. Ramp-Constrained Shortage Pricing MMU Summary Ramp-constrained Operating Reserve shortages should be priced in a manner similar to the Operating Reserve capacity shortages. MWG Action/Response Price Formation Task Force formed Focus on several areas of Marketplace pricing, including shortage pricing, and will be reporting research results and information back to the MWG FERC released a NOPR on 9/17/15 related to shortage pricing MWG proposes to wait for the associated FERC Order before taking any action towards revisions related to pricing during ramp shortages 13

14 3. Potential Manipulation of Make Whole Payment Provisions MMU Summary Potential for make whole payment manipulation for resources committed across the midnight hour, fixed regulation bids, Out-of- Merit energy payments, and jointly-owned units should be eliminated. Area of potential MWP Manipulation Resources committed across the midnight hour Fixed Regulation Bids Out-of-Merit energy (OOME) payments Jointly-Owned Units (JOUs) MMU Concerns/Recommendations Evaluate solutions adopted by other RTOs to reduce exposure to market manipulation in make whole payment provisions for resources committed across the midnight hours. Disqualify resources with fixed Regulation bids from receiving the Regulation Deployment Adjustment Charge. Utilize automatic mitigation provisions for local reliability commitments for local reliability OOME events. Remove the ability to manipulate make whole payments under the JOU Combined Resource Option and improve market efficiency in the JOU design. 14

15 3. Potential Manipulation of Make Whole Payment Provisions (cont d) Area of potential MWP Manipulation Resources committed across the midnight hour MWG Action/Response SPP Staff and MMU will research further, including a look at what other RTOs/ISOs have done Fixed Regulation Bids Out-of-Merit energy (OOME) payments Jointly-Owned Units (JOUs) SPP Staff and MMU will research further MMU will research and submit a Revision Request On 11/17/15, the MWG approved Revision Request 127, which proposes market design changes to eliminate the ability to manipulate make whole payments under the JOU Combined Resource Option, and to improve market efficiency in the JOU design. 15

16 4. Day-Ahead Must-Offer Requirement MMU Summary The MMU recommends that SPP eliminate the limited day-ahead mustoffer provision and revise the Physical Withholding rules to include a penalty for non-compliance. In the event that the limited must-offer provision is continued, SPP should address design weaknesses. MWG Action/Response RR125-Removal of Day-Ahead Limited Must Offer was approved by the MWG on 11/17/15 MWG postponed moving RR125 forward to the MOPC on 12/15/15 until the group had further discussion on Physical Withholding MMU submitted RR135 (Revision of Physical Withholding Rules) for review at December MWG Members and SPP RTO raised concerns with RR135 that need to be addressed at the 1/19/16 MWG meeting 16

17 5. TCR and ARR System Availability MMU Summary TCR and ARR system availability should be reduced to minimize the over-allocation of TCRs and ARRs that Day-Ahead Market congestion revenues do not support MWG Action/Response RR91-Annual Allocation Percent Change will be implemented in time for the 2016 TCR Annual Auction Process MWG will re-evaluate the TCR Market after seeing results of the TCR Year

18 6. Transmission Outage Reporting and Modeling MMU Summary The MMU supports SPP s current efforts to improve planned outage reporting and suggests adding flexibility to outage inclusion criteria for ARR and TCR modeling. MWG Action/Response MWG approved in October a change to add transmission outages with a Proposed status to the list of current outage types accepted in the models for the TCR Market 18

19 7. TCR Bidding at Electrically Equivalent Settlement Locations MMU Summary A systematic block of TCR bidding at electrically equivalent settlement locations should be implemented to prevent ongoing tariff violations. MWG Action/Response MWG directed SPP Staff to complete the following in 2016: Research ERCOT s dead bus logic Create Impact Analysis for the systematic block/validation In the meantime, SPP Staff will continue its current approach, which is described as follows: Post a list of prohibited settlement location pairs Inform AOs when prohibited bids are submitted Manually remove prohibited bids from ARR Allocations and TCR Auctions 19

20 8. Allocation of Over-Collected Losses MMU Summary SPP should remove the Bilateral Settlement Schedule transactions from the over-collected losses distribution calculation and consider overcollected losses (OCL) distributions to exports relative to interface transaction profit margins to assess potential distortion of market incentives. MWG Action/Response FERC Order ER stated disagreement with MMU and Xcel Energy proposed removal of BSSs from the OCL distribution It appears that the idea of removing BSSs from OCL distribution is not necessarily final upon further review of the Order Discussion and consideration at MWG in Q

21 9. Market Power Mitigation Conduct Thresholds MMU Summary The MMU supports a modest increase in offer conduct thresholds for start-up offers, regulation offers, and for energy offers for Frequently Constrained Areas. MWG Action/Response MWG will await submission of RRs by MMU for consideration and possible approval MMU will submit a Revision Request for the FCA threshold change MMU will continue to do research and analysis on the threshold changes for start-up and regulation offers, and submit a Revision Request in

22 CONSENT AGENDA: MARKETPLACE PROTOCOL REVISION REQUESTS (RRS) 22

23 RR32_MPRR218 Market Registration Naming Conventions SPP s Registration process does not require consistent naming convention for Market assets Establishing consistent naming convention will Ensure names for all Market assets are consistent Provide ease in asset identification in all SPP Reliability and Market models, and systems Naming conventions will only apply to market assets after June 1, 2016 forward 23

24 RR32_MPRR218 Market Registration Naming Conventions Working Group Voting Results MWG approved 11/17/2015 One abstention One Opposition RTWG approved 12/17/2015 MWG recommends MOPC approve RR32_MPRR218 24

25 RR115 Resource Retirement Timeline SPP does not have established requirements for MPs to provide notice of intent to deactivate, retire or mothball a Resource This revision request will: Require a 6-month notice prior to a Resource being deactivated, retired or mothballed. Provide sufficient time to study and mitigate potential reliability and economic impacts 25

26 RR115 Resource Retirement Timeline Working Group Voting Results MWG approved 10/20/2015 One abstention ORWG unanimously approved 11/5/2015 RTWG unanimously approved 11/19/2015 MWG recommends MOPC approve RR115 26

27 RR124 Rejection of Incomplete Market Registration Documentation RR124 provides consistency between the Tariff and Market Protocols RR124 adds language from the Tariff to the Market Protocols supporting SPP s ability to reject incomplete Market Registration applications Working Group Voting Results MWG approved 10/20/2015 Two abstentions RTWG unanimously approved 11/19/2015 MWG recommends MOPC approve RR124 27

28 RR127 JOU Combined Option Aggregate Energy Offer Curve Background: Current design of Combined Resource Option for JOUs, an Asset Owner could potentially game Energy Offer Curve of MWP Potential gaming opportunity is achieved by putting in a larger than normal Energy Offer Curve and getting dispatched to minimum Since entire JOU plant is committed or none at all, Asset Owner with higher than normal Energy Offer Curve is made whole to that curve 28

29 RR127 JOU Combined Option Aggregate Energy Offer Curve RR127 eliminates potential gaming opportunity: All shares of Combined JOU Option will start at zero for first price point SPP will aggregate all price points into one new Energy Offer curve Commitment of JOU remains all or none at all Shares will only be dispatched off of zero if those share(s) are economical Each JOU share is eligible for recovery of Start-Up Offer and No-Load Offer costs when committed 29

30 RR127 JOU Combined Option Aggregate Energy Offer Curve Impact Analysis Estimated cost $148k, 6 months to complete Benefit realized Eliminates potential gaming opportunity 30

31 RR127 JOU Combined Option Aggregate Energy Offer Curve Working Group Voting Results MWG approved 11/17/2015 Seven abstentions ORWG approved 12/3/2015 One abstention RTWG approved 12/17/2015 Three abstentions MWG recommends MOPC approve RR127 31

32 RR128 Clarification to the Start-Up Eligibility Rules Rules for Start-Up eligibility for Day-Ahead and RUC MWP has circular references and could be confusing when read RR128 will clarify language for rules on Start-Up eligibility for Day-Ahead and RUC MWP Circular reference is removed and format of the language is changed to allow a better read 32

33 RR128 Clarification to the Start-Up Eligibility Rules Working Group Voting Results MWG unanimously approved 11/17/2015 RTWG approved with modifications 12/17/2015 One abstention MWG recommends MOPC approve RR128 pending MWG approval of RTWG s minor modifications 33

34 RR129 Settlements Clean-Up RR129 was drafted to include various Settlement clean up items that were found in the Protocols: Deleting attributes Adding a hashtag in front of billing determinates Cleaning up various definitions in the variable table Adding 5min to Real-Time Flags Adding language to the Protocols to match ER Tariff Clean-Up filing 34

35 RR129 Settlements Clean-Up Working Group Voting Results MWG unanimously approved 11/17/2015 RTWG unanimously approved 12/17/2015 MWG recommends MOPC approve RR129 35

36 RR130 Commitment Notification Enhancement Timestamp of receipt log is maintained by SPP in order to provide assurance that a MP received all SPP Resource commitment start-up and shut-down notifications There is a gap in current process where a MP s system provides a timestamp of receipt, however the operator does not receive commitment instruction RR130 requires a manual acknowledgement to confirm the notifications were received 36

37 RR130 Commitment Notification Enhancement Working Group Voting Results MWG approved 11/17/2015 One abstention One opposition ORWG approved with modifications 12/3/2015 Three abstentions RTWG unanimously approved 12/17/2015 RCWG approved 12/21/2015 One abstention MWG recommends MOPC approve RR130 pending MWG s approval of ORWG s modifications 37

38 RR138 Revisions to Attachment AF, Addendum 1 Frequently Constrained Areas SPP Market Monitor has completed annual Frequently Constrained Area (FCA) study as required by Attachment AF, Section to the Tariff Changes to Attachment AF, Addendum 1 reflect the recommended updates to the tariff. 38

39 RR138 Revisions to Attachment AF, Addendum 1 Frequently Constrained Areas Working Group Voting Results MWG approved 12/15/2015 One abstention RTWG unanimously approved 12/17/2015 MWG recommends MOPC approve RR138 pending 39

40 APPENDIX - MARKETPLACE REVISION REQUEST ESTIMATED COST SUMMARY 40

41 Marketplace Revision Request Estimated Cost Summary RRs Estimated Cost MWG Approval Date Estimated Implementation RR1_101 $ 9,200, /17/2013 Qtr 1, 2017 RR6_MPRR151 $ 29, /22/2014 Qtr 1, 2016 RR16_MPRR190 $ 4, /19/2014 Qtr 1, 2016 RR18_MPRR196 $ 51, /21/2014 Qtr 1, 2016 RR25_MPRR211 $ 4, /10/2015 Qtr 1, 2016 RR46_MPRR233 $ 33, /10/2015 Qtr 4, 2015 RR77 $ 21, /21/2015 Qtr 1, 2016 RR82 $ 52, /18/2015 Qtr 1, 2017 RR91 $ 113, /15/2015 Qtr 1, 2016 RR99 $ 334, /16/2015 Qtr 2, 2016 RR100 $ 1,510, /16/2015 Qtr 3, 2016 RR106 $ 9, /21/2015 Qtr 1, 2017 RR116 $ 200, /15/2015 TBD RR127 $ 148, /17/2015 TBD $ 11,711, Total Approved and Pending requests with system changes addressing enhancements/defects 41

42