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ERCOT Reports Discrepancy In Calculation Of Real-Time LMPs For Certain CCGRs
August 07,2018 ERCOT said in a market notice that it recently discovered two discrepancies between ERCOT Protocol Section 6.6.1.1, Real-Time Settlement Point Price for a Resource Node, and ERCOT systems with respect to Locational Marginal Prices (LMPs) at the logical Resource Node for On-Line Combined Cycle Generation Resources (CCGRs). ERCOT said in a market notice that its preliminary analysis indicates that these discrepancies had a limited impact on prices in the Real-Time Market. ERCOT said in a market notice that it is unable to correct prices because the market cannot be rerun to calculate LMPs at the logical Resource Node for CCGRs as required by current Protocols without a significant system change. ERCOT said in a market notice that the LMP impacted by these discrepancies is used only in the limited circumstance of determining Settlement Point Prices (SPPs) for settling the Real-Time Energy Imbalance Service associated with Day-Ahead Market (DAM) Three-Part Supply Offer awards to CCGRs. ERCOT said in a market notice that one of the discrepancies existed from December 1, 2010 (nodal go-live) until July 2, 2015, and the other has existed since July 2, 2015. ERCOT said in a market notice that, to address this issue in the near term, ERCOT intends to: (1) implement a system change on August 8, 2018, to remedy the discrepancy that arose in 2015; and (2) submit an urgent Nodal Protocol Revision Request (NPRR) to remedy the other discrepancy. ERCOT said in a market notice that it will continue to evaluate an appropriate long-term solution to this pricing issue and intends to present the matter for discussion in stakeholder forums, beginning with the August 8, 2018 Wholesale Market Subcommittee (WMS). ERCOT provided in the market notice further details as follows: July 2, 2015 – Present ERCOT Protocol Section 6.6.1.1(2)(b) and Section 4.3(h) of the Other Binding Document (OBD) “Procedure for Identifying Resource Nodes” require that ERCOT apply a weight factor in calculating Real-Time LMPs for a Resource Node using the Real-Time telemetered outputs of the generation units in the On-Line CCGR. However, as part of system changes implemented on July 2, 2015, the weight factor used in this calculation was changed to use each generation unit’s High Reasonability Limit (HRL). To address this issue, ERCOT will be implementing an emergency system change on August 8, 2018, that will revert this calculation back to using a weight factor based on the Real-Time telemetered outputs of the generation units in the On-Line CCGR, as required by ERCOT Protocol Section 6.6.1.1(2)(b). December 1, 2010 – July 2, 2015 ERCOT Protocol Section 6.6.1.1(2)(a) and Section 4.3(h) of the OBD “Procedure for Identifying Resource Nodes” require that Real-Time LMPs at the logical Resource Node for On-Line CCGRs be calculated using a weighted average of Locational Marginal Prices (LMPs) at the Resource Node of each of the generation units in the On-Line CCGR, using the Real-Time telemetered outputs of the generation units to calculate the weight factor. ERCOT’s systems, however, have never had the capability to perform this precise calculation. Rather, from nodal go-live (i.e., December 1, 2010) until July 2, 2015—and following the implementation of the system changes noted above on August 8, 2018—this calculation was and will be performed by calculating the CCGR’s LMP implicitly using a weighted average of the Shift Factors of each unit in the On-Line CCGR, using the Real-Time telemetered outputs of the generation units to calculate the weight factor. From July 2, 2015 until now, this calculation has been performed by using a weighted average of the LMPs of each unit in the On-Line CCGR, but it improperly used each unit’s HRL to calculate the applied weight factor, as noted above. The telemetry and pricing information needed to calculate LMPs for CCGR logical Resource Nodes as currently required under ERCOT Protocol Section 6.6.1.1(2) is located in two different systems. Accordingly, ERCOT cannot perform the calculation as required by current Protocols without implementing system changes. Prior to nodal go-live, ERCOT informed the market that its systems were built in a manner such that this CCGR LMP would be calculated using an aggregate Shift Factor that is the weighted average of the Shift Factors of the units in the CCGR weighted by the telemetered output of the units (see June 2, 2010, Nodal Combined-Cycle Workshop PowerPoint at http://www.ercot.com/calendar/2010/6/2/34936-MT). This methodology, however, was not clearly reflected in the language of ERCOT Protocol Section 6.6.1.1(2) or the OBD “Procedure for Identifying Resource Nodes.” To remedy this discrepancy in the near term, ERCOT will submit an urgent NPRR and OBD Revision Request to revise the language in Protocol Section 6.6.1.1(2) and section 4.3 of the OBD “Procedure for Identifying Resource Nodes” to align with ERCOT’s systems. ERCOT is continuing to evaluate whether a system change would be an appropriate long-term solution to this issue, and will address any proposed rule revisions and/or system changes in relevant stakeholder forums.
ERCOT Protocol Section 6.3(4) requires ERCOT to correct prices when, among other reasons, (i) a market solution is determined to be invalid, or (ii) invalid prices are identified in an otherwise valid market solution, unless accurate prices cannot be determined. In this case, accurate prices cannot be determined because without a software change that is not immediately available, the market cannot be rerun to calculate LMPs at the logical Resource Node for CCGRs as required by the current language of ERCOT Protocol Section 6.6.1.1(2). Therefore, ERCOT will not correct prices.
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