CRR Offers in the Day-Ahead Market

TPTF – August 28, 2007Presented by Mark Patterson

2August 28, 2007 TPTF – CRR Offers in DAM

Contents

• CRR offers to DAM– CRR Offers and Validations– CRR DAM Clearing and Settlement– An example

3August 28, 2007 TPTF – CRR Offers in DAM

CRR offers

• Who can offer their CRRs into the Day-Ahead market?– Only NOIEs, through their QSE

• Protocol ref: 4.3 (1) (b)

• What products can be offered into DAM?– PTP Options– PTP Options with Refund– Products acquired through Allocation or Auction may be offered

• Protocol ref: 4.4.5 (2) & (3)• Once paid for, PCRR allocations of Capacity type, are not differentiated from

other PTP Obligations or PTP Options awarded via Auction.

• What is the meaning of a CRR offer to DAM?– If the DAM LMP is greater than or equal to the Minimum Reservation

Price of a CRR offer, the CRR Account Holder will be paid based on DAM LMPs;

– If the DAM LMP is less than the price offered, the offer is not cleared and the CRR Account Holder will be paid based on RT LMPs.

– If no offer is made, the CRR Account Holder will be settled at DAM LMPs

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Validation of CRR Offers

• CRR Offers shall include the following information:– The name of the QSE submitting– The name of the CRR Account Holder who owns the CRRs– CRR ID – Unique identifier provided by the CRR system at the

conclusion of each allocation and auction– Minimum Reservation Price ($/MWh) – Quantity (MW)– …

• Validation rules– If the QSE and CRR Account Holders are separate entities, the

relationship between the two must be formalized. – The CRR Account Holder is identified as a NOIE– The CRR ID will be validated against the CRR Ownership information

provided on a daily basis to the MMS-DAM by the CRR system– …

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Settlement of DAM Results

• After DAM execution,– If a CRR offer is partially cleared in DAM, the cleared quantity

will be settled using DAM LMPs– Not cleared CRR offers will be settled by Real-Time LMP

• Two notes:– If a NOIE wants declare its CRR PTP options to be settled in

Real-Time, this NOIE shall submit CRR offers to DAM and indicate the Minimum Reservation Price;

– If no Minimum Reservation Price is specified, $2000/MWh will be assigned as a default.

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An Example

CRR settlement:– “CRRID-1”

• 100 MW will be settled by DAM LMP

– “CRRID-2”• 40 MW not offered part will be settled by DAM LMP

• 60 MW not cleared part by Dam will be settled by RT LMP

NOIE: ee QSE: qqSource/Sink settlement points: A/B

Owned CRR Pre Day-Ahead

CRR Offers DAM LMP AB=40$/MW

CRRID CRR Type

Quantity (MW)

Minimum Reservation Price ($/MW)

Quantity (MW)

Cleared Quantity (MW)

CRRID-1 PTP Opt 100 30 60 60

CRRID-2 PTP Opt with RF

100 50 60 0

7August 28, 2007 TPTF – CRR Offers in DAM

Example 1

• Joe’s NOIE CRR Account Holder, owns 100 MW PTP Option between PointA and PointB (CRRID #1)

• Joe’s NOIE QSE offers 100 MW of CRRID #1 into the DAM, with a minimum reservation price of $30 /MW

• After DAM clearing, the price difference between PointA and PointB is $40 / MW

• All 100 MWs of the offered CRR clears at DAM LMPs

• Joe’s NOIE CRR Account Holder will receive $40 /MW for all 100 MW

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Example 2

• Joe’s NOIE CRR Account Holder, owns 100 MW PTP Option between PointA and PointB (CRRID #1)

• Joe’s NOIE QSE offers 60 MW of CRRID #1 into the DAM, with a minimum reservation price of $30 /MW

• After DAM clearing, the price difference between PointA and PointB is $40 / MW

• 60 MWs of the offered CRR clears at DAM LMPs• 40 MWs of the non-offered CRR is paid based on DAM LMPs

• Joe’s NOIE CRR Account Holder will receive $40 /MW for all 100 MW

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Example 3

• Joe’s NOIE CRR Account Holder, owns 100 MW PTP Option between PointA and PointB (CRRID #1)

• Joe’s NOIE QSE offers 60 MW of CRRID #1 into the DAM, with a minimum reservation price of $80 /MW

• After DAM clearing, the price difference between PointA and PointB is $40 / MW

• After RT clearing the price difference between PointA and PointB is $90 / MW

• 40 MWs of the non-offered CRR is paid based on DAM LMPs• 60 MWs of the offered CRR is not cleared, and will flow to RT and be

paid based on RT LMPs

• Joe’s NOIE CRR Account Holder will receive $40 /MW for 40 MW and $90 / MW for 60 MW

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Example 4

• Joe’s NOIE CRR Account Holder, owns 100 MW PTP Option between PointA and PointB (CRRID #1)

• Joe’s NOIE QSE offers 100 MW of CRRID #1 into the DAM, but does not specify a minimum reservation price

• After DAM clearing, the price difference between PointA and PointB is $40 / MW

• After RT clearing the price difference between PointA and PointB is $90 / MW

• 100 MWs of the offered CRR is not cleared because the default price is $2000 / MW, and will flow to RT and be paid based on RT LMPs

• Joe’s NOIE CRR Account Holder will receive $90 /MW for 100 MW

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Example 5

• Tom’s NOIE CRR Account Holder, owns 100 MW PTP Option between PointA and PointB (CRRID #1)

• Bill’s QSE is authorized to represent Tom’s NOIE CRR Account Holder

• Bill’s QSE offers 100 MW of CRRID #1 into the DAM, with a minimum reservation price of $30 /MW

• After DAM clearing, the price difference between PointA and PointB is $40 / MW

• All 100 MWs of the offered CRR clears at DAM LMPs

• Bill’s CRR Account Holder will receive $40 /MW for all 100 MW

12August 28, 2007 TPTF – CRR Offers in DAM

Questions? DAM