Jonathan Lowell Principal analyst market development Updates to Market Rule 1 and Appendix F3 to Address the New NCPC Payments Design NCPC Cost Allocation Conforming Changes Background Conforming and Cleanup Changes are Required in Several Areas Related to EMOF and NCPC ID: 803376
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April 8, 2014 | NEPOOL markets committee
Jonathan Lowell
Principal analyst | market development
Updates to Market Rule 1 and Appendix F.3 to Address the New NCPC Payments Design
NCPC Cost Allocation –Conforming Changes
Slide2Background – Conforming and Cleanup Changes are Required in Several Areas Related to EMOF and NCPC
ISO is grouping these changes into two projects:
All changes related to Appendix F NCPC cost allocation will be included under the NCPC Cost Allocation: Phase 1 projectConforming changes that do not modify the NCPC cost allocation are described in this presentation
The Phase 1 Cost Allocation changes are discussed in a separate presentation as part of the same April MC agenda item
All changes related to Market Rule 1, Appendix A and Appendix F (NCPC payments) will be included under the
Energy Market Offer Flexibility Conforming Changes
projectThis topic will be presented in a separate agenda item at the April MC Meeting
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Slide3Conforming Changes Required for NCPC Cost Allocation – Appendix FExisting language in III.3.2.3 is being consolidated into Appendix F – NCPC
Some portions were incorporated into F.2 NCPC Credits, but not removed from III.3.2.3 at that time.One provision with general applicability will be moved into F.1
Portions related to NCPC cost allocation will be removed from III.3.2.3 and pulled into Appendix F.3 Charges for NCPCAppendix F becomes “home sweet home” for all things NCPC-related in Market Rule 1The new NCPC Payments design eliminates Minimum Generation Emergency (MGE) Credits as a separate NCPC credit calculation.This requires conforming changes in Appendix F.3 so as to
not impact how MGE costs are allocated
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Slide4Overview of Min Gen Emergency NCPC – Old DesignThe “old” MGE credit compensated generators that were dispatched up out of rate by the ISO during a MGE, when most resources are being dispatched to their Emergency Min, and RTLMP is administratively set to $0/MWH
The cost of MGE credits was allocated to Real-Time Generation Obligations (RTGO), excluding any Exempt RTGO
Exempt RTGO = RTGO – EcoMin energy (i.e. the out-of-merit dispatch requested by the ISO)
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Slide5Overview of MGE NCPC – New DesignIn the “new” NCPC Payments design, out-of-rate dispatch is addressed by the Real-Time Dispatch Credit, which compensates resources when dispatched by the ISO to operate out of rate, including during an MGE
To avoid any change in NCPC cost allocation, RT Dispatch Credits during a MGE must be accumulated separately for allocation to RTGO excluding exempt RTGO
To abuse the famous words of William Shakespeare, “A Min Gen Emergency Credit by any other name would still smell as sweet [and still be allocated like a Min Gen Emergency Credit].”
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Slide6Overview of MGE NCPC – New DesignTo accomplish these changes:
Minimum Generation Emergency Credits are redefined in terms of Real-Time Dispatch Credits during a MGEDefinition of Exempt RTGO is eliminatedRather than referring to Exempt RTGO, tariff language will instead refer to “RTGO during an MGE that is eligible for a RT Dispatch NCPC Credit”
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Slide7Conforming Changes to Address MGE Cost AllocationMGE Credit definition modified to conform to new NCPC Payments terminology
Definition of Exempt RTGO eliminated, but the same concept still appliesDefinition of MGE Charge eliminated – not used or referred to anywhereAppropriate sections of Appendix F.3 rewritten for clarity, but allocation is unchanged.
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Slide8Appendix F.3 is Rewritten to Provide Consistency with the New Appendix F.2 and to Improve ClarityThe rewrite makes no changes to how NCPC costs are allocatedIt does consolidate language from III.3.2.3 into one convenient location
The rewritten App F.3 will no longer require a secret decoder ring to parse sentences like:“The ISO calculates for each Operating Day the non-Postured non-Synchronous Condenser related, Synchronous Condenser related, non-Local Second Contingency Protection Resource related, non-Regulation and non-SCR related economic NCPC Charges for the Real-Time Energy Market for each Market Participant …”
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Slide9Summary of Changes in Appendix F9
Original Section
DescriptionNew Location
DiscussionI.2.2
Definition of MGE Credits
I.2.2
Conformed to new NCPC Credit rulesI.2.2Definition of MGE ChargeRemoved
No longer needed. Implicitly included in F.3.1.4
I.2.2
Definition of Exempt Real-Time Generation Obligation
Removed
Incorporated into the description in F.3.1.4 of how the cost of Min Gen Emergency Credits are allocated.
III.3.2.3(e)(iii)
Description of "following dispatch instructions"
F.1(h)
No change
III.3.2.3(f)
Postured for reliability credit
F.2.3.4
No longer
needed. Addressed in NCPC Payments redesign.
III.3.2.3(g)
Accumulation of NCPC Credits to be allocated
F.3.1.2
Now incorporated into the new F.3.1.2
Slide10Summary of Changes in Appendix F10
Original Section
DescriptionNew Location
DiscussionIII.3.2.3(h)
Allocation of "all other" RT NCPC charges
F.3.1.2(g)
The tariff structure is reorganized to first describe how the cost of specific credit categories are allocated, and then describing how "all remaining" RT credits are allocated.III.3.2.3(h)
No NCPC deviations for gen cleared in DA but dispatched off in RT due to MGE
F.3.1.3(a)
No change
III.3.2.3(h)
Exclusion of DARD pump RTLO in accordance with ISO instructions from RTLO deviations.
F.3.1.3(b)
No change
III.3.2.3(
i
)
Credits for synchronous condensing
F.2.3.5
No longer
needed. Addressed in NCPC Payments redesign.
III.3.2.3(j)
Synchronous condensing NCPC charge
F.3.1.2(e)
Implicitly included
in"all
remaining" RT NCPC costs.
Slide11Summary of Changes in Appendix F11
Original Section
DescriptionNew Location
DiscussionF.3.1
Description of how the cost of DA NCPC Credits are allocated.
F.3.1.1
Tariff structure reorganized for DA cost allocationF.3.1Description of how the cost of RT NCPC Credits are allocated.F.3.1.2
Tariff structure reorganized for RT cost allocation
F.3.1(1) - F.3.1(4)
Allocation of costs for Min Gen Emergency Credits
F.3.1.2(f)
The conformed language describes the calculation in a single step, replacing the step-by-step instructions in the current rule, and recognizes that Exempt RTGO corresponds to the RTGO during a MGE that would be eligible for a RT NCPC Dispatch Credit (i.e. the out-of-rate MWH between the EDP and the DDP)
F.3.2.1
Accumulation of DA NCPC for generators, postured generators (non-VAR), and DARDs (pumps only).
F.3.1.1
Reworded for simplicity and clarity
Slide12Summary of Changes in Appendix F12
Original Section
Description
New LocationDiscussion
F.3.2.2
Accumulation of DA LSCPR credits
F.3.1.1(c)Reworded for simplicity and clarityF.3.2.3Accumulation of DA VAR related credits
F.3.1.1(a)
Reworded for simplicity and clarity
F.3.2.4
Allocation of DA economic
NCPC
F.3.1.1
F.3.2.4
Allocation of DA NCPC for exports and
Decs
to DAGO at the External Node
F.3.1.1(e)
Reworded for simplicity and clarity
F.3.2.4
Allocation of DA NCPC for imports and
Incs
to DALO at the External Node
F.3.1.1(d)
Reworded for simplicity and clarity
F.3.2.5
“Reserved”
deleted
F.3.2.6
Allocation of DA NCPC VAR-related costs
F.3.1.1(a)
Reworded for simplicity and clarity
F.3.2.7
Allocation of RT Economic NCPC (Non-SCR)
F.3.1.2(g)
Reworded for simplicity and clarity
F.3.2.8
Accumulation of RT LSCPR credits
F.3.1.2(e)
Reworded for simplicity and clarity
Slide13Summary of Changes in Appendix F13
Original Section
DescriptionNew Location
DiscussionF.3.2.9
Accumulation of RT SCR credits
F.3.1.2(b)
Reworded for simplicity and clarityF.3.2.10Accumulation of RT VAR credits (including Synch Conds & Posture)
F.3.1.2(a)
Reworded for simplicity and clarity
F.3.2.11
Accumulation of RT Credits for ISO Initiated Audit
F.3.1.2(c)
Reworded for simplicity and clarity
F.3.2.12
Determination of participants hourly RTLO deviations as the sum of the difference between RTLO and DALO over all locations
F.3.2(e)
Reworded for simplicity and clarity
F.3.2.13
“Reserved” (no content)
deleted
Slide14Summary of Changes to Appendix F.314
Original Section
DescriptionNew Location
Discussion
F.3.2.14
Determination of participants hourly RTGO deviations at External Nodes as the sum of the difference between RTGO and DAGO over all External Nodes
F.3.2(f)Reworded for simplicity and clarity
F.3.2.15
Allocation of "all other" economic RT NCPC costs not specifically allocated otherwise
F.3.1.2(g)
F.3.2.15(a)
RT Gen deviations
F.3.2(a)
F.3.2.15(b)
RT Gen deviations
F.3.2(b)
F.3.2.15(c)
RT Gen deviations
F.3.2(c)
F.3.2.15(d)
RT Gen deviations
F.3.2(d)
Slide15Summary of Changes to Appendix F.315
Original Section
DescriptionNew Location
DiscussionF.3.2.15(e)
RTLO deviations
F.3.2(e)
F.3.2.15(f)RTGO deviations at External NodesF.3.2(f)
F.3.2.15(g)
Increment Offers
F.3.2(g)
F.3.2.16 (overall text)
Local Second Contingency Protection Resource NCPC Charges
F.3.3
Simplified/clarified language
F.3.2.16(a)
LSCPR/External Node CETICZ
F.3.3(a)
Simplified/clarified language
F.3.2.16(a)
LSCPR/External Node Emergency Energy sale
F.3.3(b)
Simplified/clarified language
F.3.2.16(b)
LSCPR Reallocation Trigger Conditions
F.3.3(c)
No change
Slide16Summary of Changes to Appendix F.316
Original Section
DescriptionNew Location
DiscussionF.3.2.17
Allocation of RT VAR charges
F.3.1.2(a)
Incorporated into restructured description of allocationsF.3.2.18Allocation of RT SCR chargesF.3.1.2(b)
Simplified/clarified language
F.3.2.19
Allocation of RT ISO Initiated Audit NCPC charges
F.3.1.2(c)
Simplified/clarified language
Slide17Next StepsTariff review will follow the stakeholder schedule for the NCPC Cost Allocation Phase 1These tariff changes will be voted as part of the NCPC Cost Allocation Phase 1
Request MC vote at May meetingTargeted for Q4 2014 effective date
Coincident with Energy Market Offer Flexibility and new NCPC Payments implementationNo implementation concerns for the F.3 rewrite, because these changes do not alter the settlement of NCPC Charges.
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