ERCOT has reported on the disposition of an Alternative Dispute Resolution (ADR) proceeding with Tenaska Power Services Co. (TPS) related to Reliability Unit Commitment (RUC) Clawback Charges.

Background:

On December 3, 2016, TPS submitted a request for ADR to ERCOT for reimbursement of approximately $25,000 in Reliability Unit Commitment (RUC) Clawback Charges assessed to TPS for the October 3, 2016 Operating Day. Specifically, TPS alleged that ERCOT should have accepted TPS’s request to opt out of RUC Settlement, or self-commit, for Hours Ending (HE) 12 through 23.

On October 3, 2016, ERCOT issued a RUC instruction to TPS to commit a Resource for which TPS serves as Qualified Scheduling Entity (QSE) for HE13-23. Approximately twenty minutes prior to the end of the Adjustment Period for HE13, TPS updated the Current Operating Plan (COP) status for the Resource to ONOPTOUT for HE13-23. Subsequently, ERCOT issued a Verbal Dispatch Instruction (VDI) to extend the RUC commitment to include HE12, resulting in a contiguous block of RUC-Committed Hours from HE12-HE23. Because TPS could not update the COP status for the Resource prior to the end of the Adjustment Period for HE12, ERCOT applied RUC Settlement for the entire block of RUC-Committed Hours from HE12-23. Paragraph (11)(a) of Protocol Section 5.5.2 requires that the QSE notify ERCOT of its intent to self-commit the Resource by setting the COP Resource Status to ONOPTOUT before the end of the Adjustment Period for the first hour of a contiguous block of RUC-Committed Hours that includes the RUC Buy-Back Hour. If an existing RUC instruction is extended by a later RUC instruction, all contiguous RUC-Committed Hours shall be treated as one block.

TPS argues that by issuing the VDI extending the RUC commitment after the end of the Adjustment Period for the first hour of the contiguous block of RUC-Committed Hours, ERCOT effectively made it impossible for TPS to submit an updated COP status by the end of the Adjustment Period for that first hour as required by Section 5.5.2(11)(a), which penalizes TPS for providing reliability support as requested. Accordingly, TPS argues that ERCOT should have honored TPS’s request to self-commit the Resource and opt out of RUC Settlement for the following reasons:

• Because TPS opted out of the first RUC instruction provided for HE13-23 within the time allowed by Section 5.5.2(11)(a), ERCOT should consider the opt out request as valid and apply it to the entire, extended contiguous block from HE12-23, and treat all hours in the block as RUC Buy-Back Hours.

• Alternatively, the VDI committing the Resource for HE12 was not identified by the ERCOT Operator as a RUC instruction, and therefore HE12 should not be considered part of the contiguous block of RUC-Committed Hours. As a result, ERCOT should honor the request to opt out of RUC Settlement for HE13-23, since TPS updated the COP status for the relevant Resource prior to the end of the Adjustment Period for HE13.

ERCOT’s Disposition/Reasoning:

"ERCOT has determined the appropriate disposition of this ADR proceeding is to deny TPS’s request for relief," ERCOT said in a market notice

"It is ERCOT’s position that ERCOT correctly followed the Settlement procedures enumerated in the Protocols in settling the Operating Day for the Resource at issue, and ERCOT does not believe that it has the authority to vary from these procedures. The VDI committing the Resource for HE12 was an extension of a prior RUC commitment and was therefore appropriately considered to be a RUC VDI. This resulted in the contiguous block of RUC-Committed Hours being extended one hour forward from H13-23 to HE12-23. Correspondingly, the time by which TPS had to opt out of RUC Settlement by submitting an updated COP status – i.e., the end of the Adjustment Period for the first hour of a contiguous block of RUC-Committed Hours – must also be determined based on the first hour of the extended block, or HE12. Accordingly, because the COP status for the Resource in question could not be updated prior to the end of the Adjustment Period for HE12, TPS did not opt out of RUC Settlement for the contiguous block of RUC-Committed Hours from HE12-23, and RUC Settlement was therefore appropriately applied to the entire period," ERCOT said in a market notice

"ERCOT notes that Nodal Protocol Revision Request (NPRR) 744, RUC Trigger for the Reliability Deployment Price Adder and Alignment with RUC Settlement, was approved by the ERCOT Board on April 19, 2016, but is presently grey-boxed pending implementation of system changes. Once effective, NPRR744 will revise Section 5.5.2(11) to allow a QSE additional time to opt out of RUC Settlement. Opting out will no longer be based on COP status at the end of the Adjustment Period for the first hour of the contiguous block of RUC-Committed Hours. Instead, the QSE will be able to opt out of RUC Settlement by setting the telemetered Resource Status of the RUC-committed Resource to ONOPTOUT for the first Security-Constrained Economic Dispatch (SCED) run that the Resource is On-Line and available for SCED dispatch during the first hour of a contiguous block of RUC-Committed Hours," ERCOT said in a market notice

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