Congestion Training Redesign CongestionFinal3Q-IG.doc

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1 Congestion Training Redesign - 1 -

2 Congestion Training Redesign MANUAL OVERVIEW WHAT WILL THIS TRAINING ADDRESS? This training will address the wide variety of subject areas you can expect to encounter in your day-to-day More specifically, you will be refreshed on some key Operational areas that are critical to your success in understanding the Settlements Specific information You will become familiar with the California ISO s (CAISO) processes, procedures, terminology and how this can help you be more successful This is important because many questions arise when reviewing statements generated by CAISO that this training is designed to address The target audience of this training is Settlements Coordinators working with the California ISO WHAT YOU SHOULD GET FROM THIS TRAINING You should leave this training session with a greater understanding of the operational details involved in Settlements and how this impacts the Settlements Process The course and the manual will provide you with the tools you need to maximize your success A great deal of information will be covered during the course of this training It is not expected that you master all areas, but we do encourage you set goals on specific subject areas you wish to master by the end of this training Additionally, you should feel comfortable knowing where to go to find the information you need HOW TO USE THIS TRAINING MANUAL This manual is comprised of 2 modules, each designed to bolster your knowledge of the Settlements Process Each module is further broken down into these sections: Introduction Provides a brief overview and the performance objectives Operational Background Reviews key operational concepts The Basics A transition from the operational concepts into the basics of the specific module Applying Your Knowledge Sample exercises / practice scenarios designed to reinforce the performance objectives A Few Last Words A course recap & review of the module highlights Appendix Job Aides you can post and reference on-the-job Take notes, highlight areas and personalize this manual to make it most useful to you even if that means rearranging some sections! Use this manual as a resource to help you get your job done right While most people rarely open training manuals after the training session is over, we encourage you to view this one differently Here are additional suggestions on post training use include: Keep the manual in an easily accessible place If you can t see it, you probably won t refer to it when you need it most Use this manual as an ongoing guide Challenge yourself to try to find the answer within these pages before seeking additional resources Remove the job-aids from the Appendix and place them in a high visibility area

3 Congestion Training Redesign MANUAL OVERVIEW THE STRUCTURE OF THIS MANUAL This manual is designed to serve as a source of reference post training The tabbed sections can be revisited for a detailed explanation of various subject areas and the job aids are designed as a quick reference tool In addition, the Appendix provides in-depth information about areas covered in training that may need to be occasionally revisited while on the job Throughout each section you will find definitions of relevant abbreviations and acronyms Icons are scattered throughout each section to draw your attention to important areas: THE ICONS Nuts and bolts Key points & basics to know Operational / Background information Calculation Important formula Helpful Tip / Reminder THE OUTLINE OF THIS MANUAL The order of each section represents the most logical progression of the information The courses are progressive and a firm grasp of earlier modules is recommended in order to obtain the most from this training The layout is as follows: Section 1 Congestion This section will review a conceptual level operational & settlement overview of Congestion Management at the California Independent System Operation (ISO) Appendix 11 Glossary A definition of all underlined terms can be reviewed in this section Appendix 12 Congestion Management Charge Types A breakdown of the day-ahead, hour-ahead, real-time charge types & formulas Section 2 GMC This section will review a conceptual level operational & settlement overview of Congestion Management at the California Independent System Operation (ISO) Appendix 21 Glossary A definition of all underlined terms can be reviewed in this section Appendix 22 SC Specific Charge Types A breakdown of charge types specific to a few SCIDs

4 Congestion Training Redesign Congestion Key Terms & Acronyms Available Transmission Capacity (ATC) Congestion Management Protocol De-rate Inter-zonal Congestion Price Takers Mega Watt (MW) RTMA Existing Transmission Contract (ETC) Hour Ahead Market (HA) Day Ahead Market (DA) Intra-zonal Congestion Wheeling Mega Watt Hour (MWh) Pro-rata Reduction Adjustment Bid Auction Initial Preferred Schedules (IPS) Adjustment Bids Market Separation Concept Scheduling Coordinator (SC) Scheduling Infrastructure (SI) Revised Preferred Schedules

5 Congestion Training Redesign A INTRODUCTION s a Scheduling Coordinator it is critically important to understand the charges associated with Congestion This course will present an operational and settlement overview of congestion management at the California ISO This module will review various operational and settlement aspects of congestion It is designed to enable you to better understand Congestion Management at the California Independent System Operator (ISO) After the operational aspect is reviewed the charge types associated with Congestion will be introduced and explained Introduction When Does Congestion Occur? Congestion occurs when scheduled energy exceeds the Available Transmission Capacity in either Day Ahead or Hour Ahead markets If congestion is detected on a transmission path, the ISO will adjust the schedules to eliminate congestion according to the Congestion Management Protocols and Good Utility Practice Remember, underlined words and phrases are defined in Appendix #1 How Does the ISO Resolve Congestion? The ISO resolves congestion on a zonal basis A congestion zone is a predetermined area within the ISO control area in which congestion is unlikely to occur within the zone but likely between zones At the end of this training you will be able to: Conceptually understand how congestion occurs Know where the Specification for Settlement Statement Files are located Verify congestion charge types Validate the accuracy of congestion charge types It is recommended that you set goals on subject areas you hope to master by the end of this module Capture those goals here and revisit them at the end of the training You may also revisit this section after the reviewing the material to outline those areas you would like to master

6 Congestion Training Redesign Markets U OPERATIONAL BACKGROUND nderstanding the timelines of the 3 types of markets will aid in understanding congestion and the corresponding charge types There are 3 distinct markets: 1 Day Ahead (DA) Often referred to as the Forward Market 2 Hour Ahead (HA) Often referred to as the Forward Market 3 Real Time Often referred to as the Imbalance Energy Market Operational Background Congestion Overview The definition of congestion depends on what market is being discussed Congestion is defined in the forward markets as a condition where there is insufficient Available Transfer Capability (ATC) to accommodate all preferred energy schedules simultaneously on a given zonal interface of the network model Congestion in the Real Time Market is a condition where the flows across a zonal interface exceed the total transfer capability in effect at the time There are 2 types of congestion: 1 Intra-zonal Congestion that occurs within a zone & only dispatched in the Real Time 2 Inter-zonal Congestion that occurs at the perimeter or zonal interface Can be solved in Forward Market or Real Time The Forward Markets (HA & DA) explicitly manage & settle Inter-zonal Congestion The Real-Time market manages & settles Inter-zonal Congestion implicitly and is discussed in CT4401 This module will focus on the Charge Types associated with the DA & HA markets and the management & settlement of Intra-zonal Congestion When Inter-zonal Congestion occurs in the forward markets, the ISO adjusts the schedules to eliminate Congestion in accordance with Congestion Management Protocols and Good Utility Practice Congestion is managed using a network model made up of a number of zones Therefore, schedule adjustments are bid based and create zonal reference prices that reflect the marginal cost of congestion on the applicable Inter-zonal interface The terms Inter-zonal interface, branch group and transmission path are considered synonymous and interchangeable in the context of forward market congestion A network model is a simplified representation of actual network topology

7 Congestion Training Redesign Markets Real Time Market Congestion OPERATIONAL BACKGROUND The congestion could be intra-zonal or inter-zonal in real time: Intra-zonal Real Time congestion is paid as bid; not transparent Inter-zonal Real Time congestion is transparent and causes separate prices on OASIS Real Time Intra-zonal Congestion is defined as a condition within a single zone where system reliability is compromised so that the ISO must utilize non-economic dispatch to meet imbalance energy needs Operational Background Real Time Inter-zonal Congestion is a condition where there is insufficient transfer capability available to accommodate Real-Time flows between zones and manifests via differing zonal MCPs for a given dispatch interval In the Real Time market, the network model is simplified in the sense that Inter-zonal Congestion is only accounted for, albeit indirectly, via the imbalance energy settlement When there is congestion on a path, the energy is split between zones and each resulting stack is dispatched independently to meet system imbalance energy needs This practice allows for divergent energy pricing between zones In contrast, if there were no RT congestion between zones, all imbalance energy would be priced at the same MCP This simplification to the Real Time model does not preclude the fact that another inter-zonal interface besides Path 15 could become congested in Real Time (eg, COI branch group) It simply means that the marginal pricing would not reflect such a case When the ISO dispatches in non-economic order (ie, out-of-sequence), those dispatches are typically settled at bid instead of MCP Contrast this to an unconstrained condition where the ISO would arrange the real-time bids in economic order and dispatch in economic order so that the cost of imbalance energy is minimized to the market

8 Congestion Training Redesign I OPERATIONAL BACKGROUND n order to understand Inter-Zonal congestion in the DA market, it is beneficial to review an operational background of the DA & HA market timelines: Day-Ahead Market Timeline 06:00AM PST 10:00AM PST 11:00AM PST 12:00PM PST 13:00PM PST The Day-Ahead Market Timeline Direct Access Load Forecast due ISO Scheduling coordinators submit initial preferred schedules for following day & the power plants that will produce the energy When inter-zonal congestion is present, CAISO publishes advisory schedules & gives SCs the opportunity to modify & resubmit schedules CAISO runs final iteration of DA market If congestion is still present, CAISO will modify the schedules to flow with transfer capacity CAISO closes DA market & usage charge for congested lines is calculated DA schedule is published Operational Background Hour-Ahead Market Timeline The Hour-Ahead Market Timeline (Example for HE 14:00) 10:45AM PST Scheduling coordinators submit incremental changes to their DA schedules for HE 14:00 HA market is run and Final Hour Ahead schedules are published There is no iteration for SCs to adjust schedules 13:00PM PST Start of the Operational Hour 14:00 Day-Ahead Vs Hour-Ahead Day-Ahead CAISO provides advisory schedules SCs can revise schedules Hour-Ahead No revised preferred market Schedules due 2 ¼ hrs prior to operating hour Final schedules 1 ¼ hrs prior to operating hour

9 Congestion Training Redesign Inter-zonal Congestion in DA Market T OPERATIONAL BACKGROUND he flowchart below details the sequence of events for resolving Inter-Zonal Congestion in the DA market The ISO will evaluate to determine if Inter-Zonal Congestion is present in the DA market as well as the HA market This section will break down the process in the DA market Operational Background IPS submitted 1st iteration of CONG Is run Is congestion present? No IPS published as final schedules YES SCs can submit revisions 2nd iteration of CONG is run Is congestion present? No Revisions published as final YES ISO alleviates congestion based on adjustm ent bids

10 Congestion Training Redesign C O N G C OPERATIONAL BACKGROUND ONG is the congestion management software used by the ISO in the DA and HA markets It analyzes Inter-zonal congestion conditions in the system, determines the revised schedules, and calculates congestion transmission path prices based on adjustment bids submitted by the Scheduling Coordinators (SCs) CONG also disaggregates the results of the congestion management by individual SC and by zone CONG provides the results to the Scheduling Infrastructure (SI) subsystem, which in turn publishes it to the respective SC s workspace & the ISO OASIS Internet site CONG provides the following data to SI and then to the SC User Interface: Operational Background Generation Schedules Load External Transfer Schedules Congestion Zone Costs Inter-Zonal Interface Loading Marginal Cost Total SC Interchange in Each Congestion Zone Some important notes on CONG: Existing Transmission Contract (ETC) holders who schedule within their existing rights will not be affected by CONG CONG evaluates Available Transmission Capacity (capacity less ETC) CONG evaluates ATC (Total Transfer Capability less ETC s)[gl11] If the ETC holder schedules above the existing rights, they may be subject to Inter-zonal Congestion for the portion above their rights If a line is de-rated and the ETC holder does not adjust their schedules to reflect the new ETC availability, the schedules may be subject to Inter-zonal Congestion for the portion that is scheduled over and beyond their adjusted rights Inter-zonal Congestion is assessed on all Non-ETC Wheeling Transactions when applicable Cong is run 3 times: 2 times in the DA and once in the HA markets If Inter-zonal Congestion exists after Revised Preferred Market (DA), it will be alleviated in the following order: 1 Adjustment bid auction 2 Pro-rata schedule reduction

11 Congestion Training Redesign Inter-zonal Congestion in DA Market THE BASICS The Basics If the ISO is forced to resolve congestion, it will not perform trades between the SCs to resolve congestion Under the concept of Market Separation Concept, an SC is required to submit a balanced portfolio if it wishes to participate in the ISO s forward markets CONG does not perform trades between SCs Portfolios that are not balanced will fail the ISO s Phase II validation procedure Phase II validation is performed prior to running CONG Along with its portfolio, the SC may also submit adjustment bids Adjustment bids represents the amount of financial risk each SC s portfolio is willing to take to resolve congestion If no adjustment bids are submitted, the SC is a deemed a price taker by CONG An SC may utilize the Inter-SC trade functionality in the SI workspace to perform a trade with another SC Unmatched trades will be rejected by Phase II validation It is important to note that congestion can still occur even if there is no load or generation An example of this would be if an SC is importing energy and the transmission line becomes congested Relieving Inter-Zonal Congestion in DA Market I f congestion exists after the revised preferred schedules, CONG will first alleviate congestion through adjustment bid auction If the adjustment bid auction is unsuccessful, pro-rata schedule reduction is instituted Adjustment Bid Auction Adjustment bids are prices submitted by SCs indicting the cost of either increasing or decreasing power within a Zone SCs can submit adjustment bids with their IPSs based on their value of the line (If an SC does not submit an adjustment bid, they are price takers) CONG analyzes adjustment bids on both sides of the congested path and: 1 Adjusts schedules in a balanced and fair manner according to each SC s adjustment bid 2 SCs that value the congested path the least (most expensive) are cut first The cuts continue until all bids are exhausted or congestion is relieved If adjustment bids are exhausted and congestion remains, CONG will cut the remaining schedules on a pro-rata basis 3 Adjustment Bid Auction generates zonal reference prices that will be applied to all SCs with a net zonal import/export for the trade hour SC portfolios are kept in balance; within 003 MW tolerances The final schedules are based on the results of CONG

12 Congestion Training Redesign DA Congestion Initial Preferred Schedule THE BASICS Adjustment Bid Auction The Basics Let s take a look at an example showing Congestion relief in the DA Initial Preferred Schedule The following example depicts 2 SC Schedules Please note that each SC schedule is independent of one another: Scheduling Coordinator 1 Generator MWh Adjustment Bids Inc: $10/MWh Dec: $8/MWh Load A1 100 MWh Scheduled Flow: 600 MWh Generator 2 0 MWh Adjustment Bids Inc: $20/MWh Dec: $10/MWh Load A2 600 MWh Zone A Net Scheduled Flow 1200 MWh Available Transfer Capability 1000 MWh Scheduling Coordinator 2 Zone B Generator MWh Adjustment Bids Inc: $30/MWh Dec: $15 MWh Load B1 100 MWh Scheduled Flow: 600 MWh Generator 4 0 MWh Adjustment Bids Inc: $60/MWh Dec: $45/MWh Load B2 600 MWh Scheduled flow exceeds ATC by 200 MWh = Congestion Example Overview Congestion is present given IPS total net schedule of 1200 MW schedule on a 1000 MW rated path On a portfolio basis, Cong will reduce the flow from Zone A to Zone B in the most economical fashion and in this case, by increasing generation in Zone B and decreasing generation in Zone A CONG will adjust portfolios as required to relieve Congestion as per each SC s adjustment bids The next page reviews how the net flow is determined and the value of the path

13 Congestion Training Redesign DA Congestion Initial Preferred Schedule Analysis THE BASICS The Basics In the example above, each SC s net flow across the inter-zonal interface is determined by its schedules Moreover, the total net flow is the sum of all SC net flows across Zone A to Zone B Net Scheduled Flow is determined as follows: SC1: 700MW (Zone A Generation) MW (Zone A Load) = 600 MW (net export from Zone A to Zone B) SC2: 700MW (Zone A Generation) MW (Zone A Load) = 600 MW (net export from Zone A to Zone B) SC1 Scheduled Flow + SC2 Scheduled Flow = Net Scheduled Flow Value of Path is determined as follows: SC 1 value of path = Inc in Zone B Dec in Zone A: $20 - $8 = $12 SC 2 value of path = Inc in Zone B Dec in Zone A: $60 - $15 = $45 The DA zonal reference price is determined by the difference in the marginal adjustment bids used by CONG In this example, the marginal adjustment was made in SC1 s portfolio and the marginal cost of congestion is $12: Final Analysis SC1: $20 - $8 = $12 SC 1 values the path less than SC 2 and will therefore have its portfolio adjusted to relieve congestion The SC that values the path most is SC2 CONG will determine the DA price by looking at the portfolio of the marginal SC that was last adjusted to relieve congestion Schedules must remain balanced in each individual SC portfolio even after adjustments by CONG If the SC does not like the results of the IPS they can then revise their schedules to avoid paying the calculated value of the path This entire process is repeated to create the final schedules

14 Congestion Training Redesign DA Congestion Final Schedule THE BASICS The Basics Now let s take a look at how congestion was relieved after SC 1 reduces their schedule and resubmits into the Revised Preferred Market Scheduling Coordinator 1 Generation MWh Adjustment Bids Inc: $10/MWh Dec: $8/MWh Load A1 100 MWh Scheduled Flow: 400 MWh Generation MWh Adjustment Bids Inc: $20/MWh Dec: $10/MWh Load A2 600 MWh Zone A Net Scheduled Flow 1000 MWh Available Transfer Capability 1000 MWh Scheduling Coordinator 2 Zone B Generation MWh Adjustment Bids Inc: $30/MWh Dec: $15 MWh Load B1 100 MWh Scheduled Flow: 600 MWh Generation 4 0 MWh Adjustment Bids Inc: $60/MWh Dec: $45/MWh Load B2 600 MWh Scheduled flow equals Available Transmission Capacity = No Congestion

15 Congestion Training Redesign THE BASICS Relieving Inter-Zonal Congestion in DA Market T he previous example illustrates how the CONG can relieve Inter-zonal Congestion through adjustment bid auction This method, however, is not always successful If adjustment bids are exhausted and congestion remains, CONG will cut remaining schedules on a pro-rata basis The Basics Pro-rata Curtailments CONG s use of Adjustment Bids is important to understand when looking at Congestion CONG will evaluate the adjustment bids that are submitted for a particular path to calculate the respective zonal reference prices Adjustment bids are optional for the SC to submit If an SC does not submit adjustment bids they become price takers The default usage charge is assessed when there is no adjustment bid submitted for a particular path, and the ISO must solve congestion on a pro-rata basis

16 Congestion Training Redesign DA Congestion Initial Preferred Schedule THE BASICS The Basics Pro-rata Reduction Let s take the same scenario and eliminate the SCs adjustment bids This example shows Congestion relief in the DA Initial Preferred Schedule using pro-rata reduction Please note that each SC schedule is independent of one another: Scheduling Coordinator 1 Generation MWh Adjustment Bids Inc: None Dec: None Load A1 100 MWh Scheduled Flow: 600 MWh Generation 2 0 MWh Adjustment Bids Inc: None Dec: None Load A2 600 MWh Generation MWh Adjustment Bids Inc: None Dec: None Zone A Load B1 100 MWh Net Scheduled Flow 1200 MWh Available Transfer Capability 1000 MWh Scheduling Coordinator 2 Scheduled Flow: 600 MWh Generation 4 0 MWh Adjustment Bids Inc: None Dec: None Zone B Load B2 600 MWh Example Overview No adjustment bids are submitted so the default usage charge will be put into effect Net Scheduled Flow is determined as follows: SC1: 700MW (Zone A Generation) MW (Zone A Load) = 600 MW (net export from Zone A to Zone B) SC2: 700MW (Zone A Generation) MW (Zone A Load) = 600 MW (net export from Zone A to Zone B) SC1 Scheduled Flow + SC2 Scheduled Flow = Net Scheduled Flow

17 Congestion Training Redesign DA Congestion Final Schedule THE BASICS The Basics CONG has relieved Congestion through Pro-Rata Reduction Scheduled flow now equals ATC because Generation in Zone A was reduced by 100 MW each: Generation MWh Adjustment Bids Inc: None Dec: None Load A1 100 MWh Scheduling Coordinator 1 Scheduled Flow: 500 MWh Generation 2 0 MWh Adjustment Bids Inc: None Dec: None Load A2 500 MWh Zone A Net Scheduled Flow 1000 MWh Available Transfer Capability 1000 MWh Scheduling Coordinator 2 Zone B Generation MWh Adjustment Bids Inc: None Dec: None Load B1 100 MWh Scheduled Flow: 500 MWh Generation 4 0 MWh Adjustment Bids Inc: None Dec: None Load B2 500 MWh Final Analysis SC1 & SC2 generation schedules cut to 600 MW in Zone A SC1 & SC2 load cut to 500 MW in Zone B to balance schedules Note: This is because there was no Generation to increase IG note: If you do something on one side of the equation, you have to do something on the other Each SC pays the default usage charge on it s net final flow from A to B

18 Congestion Training Redesign Inter-Zonal Congestion in HA Market T THE BASICS he HA market is incremental to the DA market In the HA market, SCs may submit balanced schedule changes and bids If no schedule changes or bids are submitted by the SC in the HA market, its final DA schedule will remain unchanged, assuming that the path is not de-rated Note that unlike the DA market, advisory schedules are not produced in the HA market The Basics De-rating of a transmission path may occur during the DA and HA markets or during real time A natural disaster, a down line, unscheduled flow (loop flow), scheduled maintenance, or forced outages may cause this If a path is de-rated after close of the DA market, the ISO will notify SCs at least 2 hours prior to running the HA market for the trade hour that the de-rate takes effect In the HA market, SCs may submit schedule changes and adjustment bids to mitigate the impact of the de-rated path In any event, when the HA market is run, CONG will solve using the revised rating for the derated path If a path is de-rated after the close of the HA market, the ISO will re-dispatch resources in real-time to alleviate any congestion that may exist Transmission De-Rate Between DA & HA ISO Notification Procedure (times are hypothetical) 08:20AM PST 08:45AM PST 10:45AM PST Immediately after the de-rate, ISO will notifiy Market Participants via and publish de-rate percentage via PMI templates on the ISO web page Start of 2-hour notice SCs submit incremental changes to the ISO and adjustments to their DA schedules for HE 14:00 13:00PM PST Start of real time operating hour, HE 14:00

19 Congestion Training Redesign Day Ahead Charge Types Purpose THE BASICS The Basics In the DA market, the ISO will allocate the Available Transmission Capability of the actively managed branch groups and assess usage charges/payments on the congested inter-zonal interfaces The value of the transmission on a given congested inter-zonal interface is equal to the total net usage charge assessed to those SCs that were awarded the transmission on that interface Charge Types There are 2 DA charge types: 1 CT 203: Inter-Zonal Congestion Settlement 2 CT 204: Inter-Zonal Congestion Refund due to Transmission Owner and FTR Holder Hour Ahead Charge Types Purpose In the HA market, the ISO reallocates the Available Transmission Capability of the actively managed branch groups based on changes to schedules, adjustment bids and branch group ratings Usage charges/payments are assessed to SCs with schedule changes on congested inter-zonal interfaces The change in value of the transmission on a given congested inter-zonal interface is equal to the change in the total net usage charge assessed to those SCs that were awarded the transmission on that interface Charge Types There are 4 HA charge types: 1 CT 253: Inter-Zonal Congestion Settlement 2 CT 254: Inter-Zonal Congestion Refund due to Transmission Owner and FTR Holder 3 CT 255: Inter-Zonal Congestion Debit to Transmission Owners and FTR Holders 4 CT 256: Inter-Zonal Congestion Debit to SC s due to Path Deration

20 Congestion Training Redesign Real Time Charge Types Purpose THE BASICS The Basics There are 4 options highlighted for resolving Intra-Zonal congestion, a) the dispatch of in sequence market bids which is settled in accordance with the Instructed and Uninstructed energy payment/charge, b) the dispatch of RMR units, which is settled in accordance with the RMR contract, c) dispatch of Out of Sequence (OOS) bids which a portion of the financial settlement will be handled through CT 4271 and d) dispatch of OOM handled though CT 4272 When dispatching OOS/OOM: Uplift payments based on above Ex-Post prices for Instructed Imbalance Energy shall be subject to resources operating within their applicable Tolerance Band Resources that operate outside of their relevant Tolerance Band will be not be eligible for otherwise applicable uplift payments associated with bid cost amounts for relevant Settlement Intervals Charge Types There are 4 Real Time charge types: 1 CT 4271: Intra-Zonal Congestion for Above MCP Bid Payment for OOS Calls 2 CT 4272: Intra-Zonal Congestion for Above MCP Bid Payment for OOM Calls 3 CT 1277: Intra-Zonal Congestion Debit to Corresponding Transmission Owner (4271 Costs) 4 CT 1278: Intra-Zonal Congestion Debit to Corresponding Transmission Owner (4272 Costs) Additional Congestion resources mentioned throughout this course: 1 Charge Type Matrix: (This is also a laminated job aide) 2 Specification for Settlement Statement Files Version 173, effective trade date: 6/1/05 (be sure to check ISO website for the most current file specs): Each charge type mentioned on the 2 previous pages are broken down on the following pages and consists of the following sections: Purpose provides an overview of the purpose of the charge Formula details the formula for calculating the charge Verify provides necessary information for verifying the components of the charge formula Validate describes how the charge can be verified using the Settlement Statement File Specification

21 Congestion Training Redesign Charge Type 203 Purpose DAY AHEAD CHARGE TYPES To assess usage charges/payments to SCs who are awarded schedules on congested interzonal interfaces in the DA market Charge Type 203, DA Inter-zonal Congestion, is assessed whenever there is congestion on an inter-zonal interface in the DA market If an SC has a non- ETC flow scheduled on a congested inter-zonal interface in the DA market, the SC will have a settlement for CT 203 Charge Type 203 If the SC s net scheduled flow is in the direction of the congestion, the SC will be charged If the SC s net scheduled flow is in the opposite direction of congestion, the SC will receive a payment The settlement in CT 203 is hourly and is derived from the final schedules and zonal reference prices that are produced by CONG Calculation Formula Charge/Payment = Sum of Net Import into Zone * DA Zonal Reference Price Verify The Charge Formula Component Sum of Net Import into Zone Import Export Load Generation Transfer DA Zonal Reference Price Charge Verification Load - Generation + Transfer Any DA final schedule that injects energy into the zone from an adjacent zone DA final schedule that ejects energy out of the zone to an adjacent zone Any DA final schedule that consumes energy within the zone Any DA final schedule that produces energy within the zone Any applicable DA Inter SC trades The adjustment bid associated with the marginal unit (ie, MWh)

22 Congestion Training Redesign Validate The Charge DAY AHEAD CHARGE TYPES Validate the charge amount by calculating the following components: Charge Type Sum of Net Import into Zone Validate using this equation: Load Generation + Transfer 2 SC s Net Zonal Import/Export This information can be verified from an SC s final DA schedules 3 Load & Generation This information is determined by individual SC s final DA schedules 4 Reference Price by Zone The prices are listed on OASIS under Transmission: Choose DA Final Congestion Zone Reference Prices>Select Advanced Query>Enter the date & zone for the reference prices you wish to retrieve Final Schedules should be downloaded daily after the close of the market to determine if any adjustments have been made

23 Congestion Training Redesign Charge Type 204 Purpose DAY-AHEAD CHARGE TYPES To allocate the Congestion Charges collected to the TOs and FTR Holders Charge Type 204 Used to allocate the total net congestion revenue collected in CT 203 Limited to FTR Holders and/or PTO(s) of a given congested inter-zonal interface Settled hourly FTR and PTO ownership rights are defined relative to the ATC on a given path and direction In CT 204, an FTR Holder has priority over a PTO in the allocation of congestion revenue The allocation percentage applied to an FTR Holder is dependent on: The DA loading of the path The total amount of ATC encumbered by FTR The amount of FTR that the Holder owns If the DA loading is less than or equal to the total amount of FTR, then the total amount of FTR is used in the denominator to calculate the effective allocation percentage of the FTR Holder If the DA loading is greater than the total amount of FTR, then the DA loading is used in the denominator to calculate the effective allocation percentage of the FTR Holder In the latter case, when funds remain after paying out the FTRs, they are allocated to the PTO(s) relative to their ownership rights on the portion of the ATC that is not encumbered by FTR Calculation Formula Payment = DA Congestion Price * (Total DA Path Load * TO or FTR Owner % on Branch Group) Verify The Charge Formula Component DA Congestion Price: Total DA Path Load: TO or FTR Owner % on Branch Group Charge Verification DA Zonal Reference Price Zone A DA Zonal Reference Price Zone B (Zone A & Zone B represent the two zones on each side of the congested path/interface) The amount of Available Transmission Capacity that is utilized by the total net schedules for a given branch, direction and trade hour in the DA market Total net schedules refers to the inclusion of counter-schedules The ownership percentage of a PTO for a given branch, direction and trade hour

24 Congestion Training Redesign DAY-AHEAD CHARGE TYPES Validate The Charge This charge is validated using the Settlement Statement File Specification: Refer to p 8 12; Section 33 Settlement Detail Records Charge Type 204

25 Congestion Training Redesign DAY-AHEAD CHARGE TYPES Validate The Charge Charge Type 204 Validate Price: 1 The DA Congestion price may be found on OASIS under Transmission: Select the DA Final Branch Group>Congestion Usage Charges Validate Percent of Ownership: 2 The total Path Loading may be found on OASIS under Branch Group Congestion Settlement Information, Net NFU Schedules 3 The % Ownership formula for the TO or FTR Owner is as follows: SC s FTR MW on Path Total FTRs owned on Path The % Ownership formula for the TO(s) takes the difference between the Total FTRs Owned on the path and the Total Path Loading, then applying their contracted ownership percentages to the remaining amount Therefore, if the FTR MW owned are greater than or equal to the DA Path loading, there will be no payments made to the TO, all revenues will be allocated to FTR holders only The TO or FTR holder has this information available through corporate records The following is a simplified example but is helpful in providing a conceptual understanding of how price is determined: DA Cong Price Zone A: $0 DA Cong Price Zone B: $10 Zone A Congested Path Zone B In the example above, the Usage Charge is $10 to go from Zone A to Zone B

26 Congestion Training Redesign Charge Type 253 Purpose HOUR-AHEAD CHARGE TYPES To assess usage charges/payments to SCs with schedule changes on congested inter-zonal interfaces in the HA market Assessed whenever there is congestion on an inter-zonal interface in the HA market If a change is made to an SC s final DA schedule in the HA market and that change flows on a congested inter-zonal interface, the SC will have a settlement for CT 253, provided that the change is not covered by an ETC If an SC s HA schedule changes result in a net flow in the direction of congestion, the SC will be charged If an SC s HA schedule changes result in a net flow in the opposite direction of congestion, the SC will receive a payment The settlement in CT 253 is hourly and is derived from the final DA and HA schedules and HA zonal reference prices that are produced by CONG If no change is made to an SC s final DA schedules in the HA market, the SC will not have a settlement in CT 253 Charge Type 253 Calculation Formula Charge/Payment = HA Revised Scheduled Quantity DA Scheduled Quantity * HA Congestion Price Verify The Charge Formula Component HA Revised Scheduled Quantity DA Scheduled Quantity Import Export Load Generation Transfer HA Congestion Price Charge Verification Captures incremental changes (if any) in HA schedule This information can be verified from an SC s final DA and HA schedules Will be the billable quantity from CT203 Any DA final schedule that injects energy into the zone from an adjacent zone DA final schedule that ejects energy out of the zone to an adjacent zone The individual SC determines this information This is based on scheduled load, soon to be metered load The individual SC also determines this information Any applicable DA Inter SC trades HA usage price (can be found on OASIS) An HA final schedule change is equal to the difference between the HA final schedule and the DA final schedule

27 Congestion Training Redesign Validate The Charge HOUR-AHEAD CHARGE TYPES This charge is validated using the Settlement Statement File Specification: Refer to p 9; Section 33 Settlement Detail Records Charge Type HA Revised Scheduled Quantity (Sum of Net Import into Zone) Validate using this equation: Load Generation + Transfer 2 DA Scheduled Quantity (Sum of Net Import into Zone) Validate using this equation: Load Generation + Transfer 3 Price by zone: The prices are listed on OASIS under Transmission An SC can then choose the day or hour for which it is requesting the usage charges The charges are listed by hour for every possible inter-zonal congestion occurrence

28 Congestion Training Redesign Charge Type 254 Purpose HOUR-AHEAD CHARGE TYPES To allocate the total net congestion revenue that is collected in CT 253 The same allocation factors used in CT 204 are also used in CT 254 To review, the allocation factors are derived from the following parameters: DA loading of the path Total amount of ATC encumbered by FTR Amount of FTR that the Holder owns If the DA loading is less than or equal to the total amount of FTR, then the total amount of FTR is used in the denominator to calculate the effective allocation percentage of the FTR Holder If the DA loading is greater than the total amount of FTR, then the DA loading is used in the denominator to calculate the effective allocation percentage of the FTR Holder Charge Type 254 Used to allocate the total net congestion revenue collected in CT 253 Limited to FTR Holders and/or PTO(s) of a given congested inter-zonal interface Settled hourly FTR Holder has priority over the PTO in allocation of HA congestion revenue Calculation Formula Due to TO/FTR = [(Total DA ATC Loading -Total HA ATC Loading) * % of rights] * HA Congestion Price of the Branch Group Location Verify The Charge Formula Component Total DA ATC Loading Total HA ATC Loading Percentage of rights HA Congestion Price of the Branch Group Location Charge Verification The amount of Available Transmission Capacity that is utilized by the total net schedules for a given branch, direction and trade hour in the DA market Total net schedules refers to the inclusion of counter-schedules The amount of Available Transmission Capacity that is utilized by total net schedules for a given branch, direction and trade hour in the HA market Total net schedules refers to the inclusion of counter-schedules The ownership percentage of a PTO for a given branch, direction and trade hour The marginal cost of congestion for a given branch group, direction and trade hour

29 Congestion Training Redesign Validate The Charge HOUR-AHEAD CHARGE TYPES This charge is validated using the Settlement Statement File Specification: Refer to p 8 12; Section 33 Settlement Detail Records Charge Type 254

30 Congestion Training Redesign Validate The Charge HOUR-AHEAD CHARGE TYPES Charge Type Total DA ATC Loading OASIS Market Information under Transmission tab Select DA Final Available Transmission Capacity 2 HA ATC Loading OASIS Market Information under Transmission tab Select HA Final Available Transmission Capacity 3 HA Congestion Price: OASIS Market Information under Transmission tab Select HA Final Branch Group Congestion Usage Prices 4 Percentage of Ownership: The TO or FTR holder has this information available through corporate records

31 Congestion Training Redesign Charge Type 255 Purpose HOUR-AHEAD CHARGE TYPES To provide a one-for-one return of funds collected by the FTR holders and PTOs in the DA market (ie, CT 204) due to a reduction in the Available Transfer Capability of the inter-zonal interface in the HA market CT255 charges FTRs and/or PTOs when there is an HA de-rate on a congested inter-zonal interface that was also congested in the DA market Charge Type 255 Calculation Formula Charge = DA Congestion Price * [(Total DA ATC Total HA ATC) * (TO or FTR Owner % on BG)] Verify The Charge Formula Component DA Congestion Price Total DA ATC Loading Total HA ATC Loading TO or FTR Owner % on BG Charge Verification The marginal cost of congestion for a given branch group, direction and trade hour The amount of Available Transmission Capacity that is utilized by the total net schedules for a given branch, direction and trade hour in the DA market Total net schedules refers to the inclusion of counter-schedules The amount of Available Transmission Capacity that is utilized by total net schedules for a given branch, direction and trade hour in the HA market Total net schedules refers to the inclusion of counter-schedules The ownership percentage of a PTO for a given branch, direction and trade hour

32 Congestion Training Redesign Validate The Charge HOUR-AHEAD CHARGE TYPES This charge is validated using the Settlement Statement File Specification: Refer to p 8 12; Section 33 Settlement Detail Records Charge Type 255

33 Congestion Training Redesign Validate The Charge HOUR-AHEAD CHARGE TYPES Charge Type 255 The total charge in CT 255 is calculated by taking the product of the DA price and the TO/FTR s percent ownership reduction in loading on the inter-zonal interface and the The total charge in CT 255 is allocated to FTR holders and PTOs using the same effective allocation percentages that were used to settle CT 204 If there is not congestion on the inter-zonal interface in the DA market, then there is no settlement in CT 255 because the DA price would be zero

34 Congestion Training Redesign Charge Type 256 Purpose HOUR-AHEAD CHARGE TYPES To allocate any cost differential that may arise between the HA credit that is calculated in CT 253 and the TO Debit that is calculated in CT 255 so that the HA congestion settlement for the given interface and trade hour is made financially neutral This charge occurs when there is a de-rate on a congested inter-zonal interface in the HA market The allocation is pro-rata based on SC s DA final schedules that flow in the direction of HA congestion Charge Type 256 In CT 256, the HA cost differential is allocated pro-rata to those SCs who had DA final schedules in the direction of HA congestion on the given inter-zonal interface When the HA credit is greater than the TO debit, the differential cost allocation in CT 256 is a debit When the HA credit is less than the TO debit, the differential cost allocation in CT 256 is a credit Calculation Formula Charge = {[DA ATC Loading HA ATC Loading] * HA Congestion Price TO Debit amount for the Path} Total DA Path Flow in the Congested Direction Verify The Charge Formula Component DA ATC Loading HA ATC Loading HA Congestion Price TO Debit amount for Path Total DA Path Flow in Congested Direction Charge Verification The amount of Available Transmission Capacity that is utilized by the total net schedules for a given branch, direction and trade hour in the DA market Total net schedules refers to the inclusion of counter-schedules The amount of Available Transmission Capacity that is utilized by total net schedules for a given branch, direction and trade hour in the HA market Total net schedules refers to the inclusion of counter-schedules HA usage price (can be found on OASIS) Amount cut & split for TO (provided in Settlement Detail Records) The amount of Available Transmission Capacity that is utilized by the total net schedules for a given branch, direction and trade hour in the DA market Total net schedules refers to the inclusion of counter-schedules

35 Congestion Training Redesign Validate The Charge HOUR-AHEAD CHARGE TYPES This charge is validated using the Settlement Statement File Specification: Refer to p 8 10; Section 33 Settlement Detail Records Charge Type 256 Need help determining steps for validating There will only be a CT 256 where there is a difference between the DA and HA usage prices

36 Congestion Training Redesign Charge Type 4271 Purpose REAL-TIME CHARGE TYPES The Real-Time Intra-zonal Congestion INC/DEC Settlement is an excess cost payment for: a) Out-of-Sequence Instructed Imbalance Energy (OOS IIE) related to out-of-sequence dispatches for Intra-zonal Congestion b) Decremental Instructed Imbalance Energy (IIE) Minimum Load dispatched for Intra-zonal Congestion Charge Type 4271 CT 4271 is associated with two OOS types, Reliability and LMPM (Note: As part of the DEC Reference price mitigation process, generators dispatched for Decremental OOS IIE due to Intrazonal congestion have OOS Type = LMPM) Incremental and Decremental OOS IIE with OOS Type = Reliability settled at the better of its bid price or its Resource-Specific Ex Post Price Incremental and Decremental OOS IIE with OOS Type = LMPM are paid as-bid subject to its relevant mitigated prices The settlement process occurs in two steps in two separate settlement charges: 1 Incremental (Decremental) OOS IIE is settled at its Resource-Specific Ex Post Price for OOS Type = Reliability or the lower (higher) of its OOS Price or its Resource-Specific Ex Post Price for OOS Type = LMPM in CT 4401 as Instructed Imbalance Energy 2 The portion of Incremental (Decremental) OOE IIE with OOS Prices above (below) the Resource-Specific Ex Post Price is settled in this CT 4271 as an excess cost payment for Real-Time Intra-Zonal Congestion subject to meeting the Tolerance Band check CT 4271 also includes excess cost payments for Decremental IIE Minimum Load that are dispatched for Real-Time Intra-zonal Congestion Payment for this Decremental IIE Minimum Load is settled in two settlement charges in the same manner as OOS IIE 1 Decremental IIE Minimum Load is settled at the greater of its Decremental Reference Price or its Resource-Specific Ex Post Price in CT 4401 as Instructed Imbalance Energy 2 If the Decremental IIE Minimum Load has a Decremental Reference Price below its Resource-Specific Ex Post Price, an excess cost is calculated in CT 4271 and paid subject to meeting its Tolerance Band check The CT 4271 payment is initiated only for Settlement Intervals when the resource operates within its tolerance band Calculation Formulas Incremental OOS IIE Excess Cost Amount per interval = -1 * (max (0, (OOS Price Resource-Specific Ex Post Price)) * Dispatch Interval Incremental OOS IIE Quantity) Decremental OOS IIE Excess Cost Amount per interval = -1 * (min (0, (OOS Price Resource-Specific Ex Post Price)) * Dispatch Interval Decremental OOS IIE Quantity) Decremental IIE Minimum Load Excess Cost Amount per interval = -1 * (min (0, (Decremental Reference Price Resource-Specific Ex Post Price)) * Dispatch Interval Decremental IIE Minimum Load Quantity)

37 Congestion Training Redesign Verify The Charge REAL-TIME CHARGE TYPES Charge Type 4271 Formula Component Real Time Inc/Dec: Bid Price Reference Price Billable Quantity Charge Verification Verify by looking at your final schedules for the DA, HA and Real Time markets and reviewing the logs based on ISO instructions Verify by looking at the final bid prices associated with the above schedules It is important to look at the entire bid including step bids and the incremental or decremental prices and MW associated with each step The Reference Level Curves (RLC) can be accessed through SI Workspace in the format specified in the SI Data Templates and Validation Rules available at Energy delivered [per SC, per Location/Interchange] having a price segment > MCP Real Time Inc/Dec: Verify by looking at your final schedules for the DA, HA and Real Time markets and reviewing the logs based on ISO instructions Bid Price: Verify by looking at the final bid prices associated with the above schedules It is important to look at the entire bid including step bids and the incremental or decremental prices and MW associated with each step Reference Price: The Reference Level Curves (RLC) can be accessed through SI Workspace in the format specified in the SI Data Templates and Validation Rules available at Validate The Charge Charge Type information can be obtained from your settlement detail records The actual call type and bid price information will be shown in OOS Detail Records: Refer to p 10; Section 33 Settlement Detail Records

38 Congestion Training Redesign Charge Type 1277 Purpose REAL-TIME CHARGE TYPES The Real Time Intra-zonal Congestion Allocation Settlement allocates the amount in Real Time Intra-zonal Congestion INC/DEC Settlement (CT 4271) pro-rata to all Scheduling Coordinators based on Metered Demand within a zone Meter Demand is defined as metered Load plus Real Time Exports Charge Type 1277 will allocate the costs associated with Charge Type 4271 to metered demand in the zone were Intra-Zonal Congestion occurred Charge Type 1277 Calculation Formula Real Time Intra-zonal Congestion Allocation Price = Amount of RT Intra-zonal Congestion INC/DEC Settlement (CT 4271) dollars / CAISO Total Metered Demand for the zonal load Real Time Intra-zonal Congestion Allocation Settlement Amount = Zonal Interval Metered Demand Quantity * RT Intra-Zonal Congestion Allocation Price Verify The Charge Formula Component Charge Verification 4271 Per Unit Price See CT4271 SC Metered Demand Verified through Settlement Detail Records