mwg report to the mopc - rto insider · mwg postponed moving rr125 forward to the mopc on 12/15/15...

MWG Report to the MOPC

January 12-13, 2016

Richard Ross

Chairman Market Working Group

MWG UGLY SWEATER CONTEST

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Agenda• Approved Revision Requests

– RR111 – Local Reliability Make Whole Payment Distribution Amount

• MOPC Action Item #261

– Review MMU Recommendations from 2014 Annual State of the Market Report

• Approved Revision Requests for Consent agenda

• Appendix - Marketplace Revision Request Estimated Cost Summary

MARKETPLACE PROTOCOL REVISION REQUESTS (RRS)

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RR111 – Local Reliability Make Whole Payment Distribution Amount

Background:

• Local RUC MWP Distribution Amount is allocated by load to a single Settlement Area

• Certain loads are paying for other utilities not building out their local infrastructure

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RR111 proposes to:

• Allocate cost of manual commitments for voltage related Local Reliability Issues to Asset Owner based on impacted loads

• All non-voltage related Local Reliability Issues will continue to use current allocation method

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• Working Group Voting Results

– MWG approved 10/20/2015

Four abstentions

Six oppositions

– RTWG approved with modifications 11/19/2015

Six abstentions

One opposition

– MWG approved RTWG modifications 12/15/2015

Two abstentions

• MWG recommends MOPC approve RR111 9

MOPC ACTION ITEM #261: REVIEW MMU RECOMMENDATIONS FROM 2014 ANNUAL STATE OF MARKET REPORT

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Background • During the July 2015 SPP Board of Directors (BOD) meeting, the SPP

MMU presented its Annual State of the Market (ASOM) report

– 2014 ASOM includes nine recommendations from the MMU for changes or enhancements to the Integrated Marketplace design

• Board requested the Chairs of the MOPC and MWG review the 2014 ASOM MMU recommendations and develop an action plan

• MWG finalized responses to the MMU recommendations in November 2015 for presentation to MOPC and BOD in January 2016

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1. Quick Start Logic

MMU Summary

• The MMU supports the development of new rules governing the dispatch of quick-start resources that (1) do not subject quick-starts to RUC commitment; and (2) do not provide make whole payment eligibility for RTBM dispatch.

MWG Action/Response

• RR99-Short-Term RUC and RR116-Quick Start Enhancements have been approved and will be implemented in 2016

– RR99 implements an Intra-Day RUC with more granularity than 1 hour

– RR116 delays Quick Start Resource commitment to the RTBM

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2. Ramp-Constrained Shortage Pricing

MMU Summary

• Ramp-constrained Operating Reserve shortages should be priced in a manner similar to the Operating Reserve capacity shortages.

MWG Action/Response

• Price Formation Task Force formed

– Focus on several areas of Marketplace pricing, including shortage pricing, and will be reporting research results and information back to the MWG

– FERC released a NOPR on 9/17/15 related to shortage pricing

MWG proposes to wait for the associated FERC Order before taking any action towards revisions related to pricing during ramp shortages

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3. Potential Manipulation of Make Whole Payment Provisions

MMU Summary

• Potential for make whole payment manipulation for resources committed across the midnight hour, fixed regulation bids, Out-of-Merit energy payments, and jointly-owned units should be eliminated.

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Area of potential MWP Manipulation

MMU Concerns/Recommendations

Resources committed across the midnight hour

Evaluate solutions adopted by other RTOs to reduce exposure to market manipulation in make whole payment provisions for resources committed across the midnight hours.

Fixed Regulation Bids

Disqualify resources with fixed Regulation bids from receiving the Regulation Deployment Adjustment Charge.

Out-of-Merit energy (OOME) payments

Utilize automatic mitigation provisions for local reliability commitments for local reliability OOME events.

Jointly-Owned Units (JOUs)

Remove the ability to manipulate make whole payments under the JOU Combined Resource Option and improve market efficiency in the JOU design.

3. Potential Manipulation of Make Whole Payment Provisions (cont’d)

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Area of potential MWP Manipulation

MWG Action/Response

Resources committed across the midnight hour

SPP Staff and MMU will research further, including a look at what other RTOs/ISOs have done

Fixed Regulation Bids

SPP Staff and MMU will research further

Out-of-Merit energy (OOME) payments

MMU will research and submit a Revision Request

Jointly-Owned Units (JOUs)

On 11/17/15, the MWG approved Revision Request 127, which proposes market design changes to eliminate the ability to manipulate make whole payments under the JOU Combined Resource Option, and to improve market efficiency in the JOU design.

4. Day-Ahead Must-Offer Requirement

MMU Summary

• The MMU recommends that SPP eliminate the limited day-ahead must-offer provision and revise the Physical Withholding rules to include a penalty for non-compliance. In the event that the limited must-offer provision is continued, SPP should address design weaknesses.

MWG Action/Response

– RR125-Removal of Day-Ahead Limited Must Offer was approved by the MWG on 11/17/15

MWG postponed moving RR125 forward to the MOPC on 12/15/15 until the group had further discussion on Physical Withholding

– MMU submitted RR135 (Revision of Physical Withholding Rules) for review at December MWG

Members and SPP RTO raised concerns with RR135 that need to be addressed at the 1/19/16 MWG meeting

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5. TCR and ARR System Availability

MMU Summary

• TCR and ARR system availability should be reduced to minimize the over-allocation of TCRs and ARRs that Day-Ahead Market congestion revenues do not support

MWG Action/Response

• RR91-Annual Allocation Percent Change will be implemented in time for the 2016 TCR Annual Auction Process

• MWG will re-evaluate the TCR Market after seeing results of the TCR Year 2016-2017

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6. Transmission Outage Reporting and ModelingMMU Summary

• The MMU supports SPP’s current efforts to improve planned outage reporting and suggests adding flexibility to outage inclusion criteria for ARR and TCR modeling.

MWG Action/Response

• MWG approved in October a change to add transmission outages with a “Proposed” status to the list of current outage types accepted in the models for the TCR Market

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7. TCR Bidding at Electrically Equivalent Settlement LocationsMMU Summary

• A systematic block of TCR bidding at electrically equivalent settlement locations should be implemented to prevent ongoing tariff violations.

MWG Action/Response

• MWG directed SPP Staff to complete the following in 2016:

– Research ERCOT’s “dead bus logic”

– Create Impact Analysis for the systematic block/validation

• In the meantime, SPP Staff will continue its current approach, which is described as follows:

– Post a list of prohibited settlement location pairs

– Inform AOs when prohibited bids are submitted

– Manually remove prohibited bids from ARR Allocations and TCR Auctions

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8. Allocation of Over-Collected Losses

MMU Summary

• SPP should remove the Bilateral Settlement Schedule transactions from the over-collected losses distribution calculation and consider over-collected losses (OCL) distributions to exports relative to interface transaction profit margins to assess potential distortion of market incentives.

MWG Action/Response

• FERC Order ER15-763 stated disagreement with MMU and Xcel Energy proposed removal of BSSs from the OCL distribution

– It appears that the idea of removing BSSs from OCL distribution is not necessarily final upon further review of the Order

– Discussion and consideration at MWG in Q1-2016

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9. Market Power Mitigation Conduct Thresholds

MMU Summary

• The MMU supports a modest increase in offer conduct thresholds for start-up offers, regulation offers, and for energy offers for Frequently Constrained Areas.

MWG Action/Response

• MWG will await submission of RRs by MMU for consideration and possible approval

– MMU will submit a Revision Request for the FCA threshold change

– MMU will continue to do research and analysis on the threshold changes for start-up and regulation offers, and submit a Revision Request in 2016

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CONSENT AGENDA: MARKETPLACE PROTOCOL REVISION REQUESTS (RRS)

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RR32_MPRR218 – Market Registration Naming Conventions• SPP’s Registration process does not require consistent

naming convention for Market assets

• Establishing consistent naming convention will

– Ensure names for all Market assets are consistent

– Provide ease in asset identification in all SPP Reliability and Market models, and systems

• Naming conventions will only apply to market assets after June 1, 2016 forward

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RR32_MPRR218 – Market Registration Naming Conventions



One abstention

One Opposition

– RTWG approved 12/17/2015

• MWG recommends MOPC approve RR32_MPRR218

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RR115 – Resource Retirement Timeline

• SPP does not have established requirements for MPs to provide notice of intent to deactivate, retire or mothball a Resource

• This revision request will:

– Require a 6-month notice prior to a Resource being deactivated, retired or mothballed.

– Provide sufficient time to study and mitigate potential reliability and economic impacts

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RR115 – Resource Retirement Timeline



One abstention

– ORWG unanimously approved 11/5/2015

– RTWG unanimously approved 11/19/2015

• MWG recommends MOPC approve RR115

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RR124 – Rejection of Incomplete Market Registration Documentation

• RR124 provides consistency between the Tariff and Market Protocols

• RR124 adds language from the Tariff to the Market Protocols supporting SPP’s ability to reject incomplete Market Registration applications



Two abstentions



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RR127 – JOU Combined Option – Aggregate Energy Offer Curve

• Background:

– Current design of Combined Resource Option for JOUs, an Asset Owner could potentially game Energy Offer Curve of MWP

– Potential gaming opportunity is achieved by putting in a larger than normal Energy Offer Curve and getting dispatched to minimum

– Since entire JOU plant is committed or none at all, Asset Owner with higher than normal Energy Offer Curve is made whole to that curve

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• RR127 eliminates potential gaming opportunity:

– All shares of Combined JOU Option will start at zero for first price point

– SPP will aggregate all price points into one new Energy Offer curve

– Commitment of JOU remains all or none at all

– Shares will only be dispatched off of zero if those share(s) are economical

– Each JOU share is eligible for recovery of Start-Up Offer and No-Load Offer costs when committed

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• Impact Analysis

– Estimated cost $148k, 6 months to complete

• Benefit realized

– Eliminates potential gaming opportunity

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RR127 – JOU Combined Option – Aggregate Energy Offer Curve• Working Group Voting Results


Seven abstentions

– ORWG approved 12/3/2015

One abstention

– RTWG approved 12/17/2015

Three abstentions


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RR128 – Clarification to the Start-Up Eligibility Rules

• Rules for Start-Up eligibility for Day-Ahead and RUC MWP has circular references and could be confusing when read

• RR128 will clarify language for rules on Start-Up eligibility for Day-Ahead and RUC MWP

• Circular reference is removed and format of the language is changed to allow a better read

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RR128 – Clarification to the Start-Up Eligibility Rules• Working Group Voting Results

– MWG unanimously approved 11/17/2015

– RTWG approved with modifications 12/17/2015

One abstention

• MWG recommends MOPC approve RR128 pending MWG approval of RTWG’s minor modifications

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RR129 – Settlements Clean-Up

• RR129 was drafted to include various Settlement clean up items that were found in the Protocols:

– Deleting attributes

– Adding a hashtag in front of billing determinates

– Cleaning up various definitions in the variable table

– Adding 5min to Real-Time Flags

– Adding language to the Protocols to match ER16-130 Tariff Clean-Up filing

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RR129 – Settlements Clean-Up


– MWG unanimously approved 11/17/2015



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RR130 – Commitment Notification Enhancement

• Timestamp of receipt log is maintained by SPP in order to provide assurance that a MP received all SPP Resource commitment start-up and shut-down notifications

• There is a gap in current process where a MP’s system provides a timestamp of receipt, however the operator does not receive commitment instruction

• RR130 requires a manual acknowledgement to confirm the notifications were received

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RR130 – Commitment Notification Enhancement



One abstention

One opposition

– ORWG approved with modifications 12/3/2015

Three abstentions


– RCWG approved 12/21/2015

One abstention

• MWG recommends MOPC approve RR130 pending MWG’s approval of ORWG’s modifications

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RR138 – Revisions to Attachment AF, Addendum 1 Frequently Constrained Areas

• SPP Market Monitor has completed annual Frequently Constrained Area (FCA) study as required by Attachment AF, Section 3.1.1 to the Tariff

• Changes to Attachment AF, Addendum 1 reflect the recommended updates to the tariff.

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RR138 – Revisions to Attachment AF, Addendum 1 Frequently Constrained Areas



One abstention


• MWG recommends MOPC approve RR138 pending

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APPENDIX - MARKETPLACE REVISION REQUEST ESTIMATED COST SUMMARY

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Marketplace Revision Request Estimated Cost Summary

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Approved and Pending requests with system changes addressing enhancements/defects

RRs Estimated Cost MWG Approval Date Estimated Implementation

RR1_101 9,200,000.00$ 9/17/2013 Qtr 1, 2017

RR6_MPRR151 29,341.00$ 7/22/2014 Qtr 1, 2016

RR16_MPRR190 4,000.00$ 8/19/2014 Qtr 1, 2016

RR18_MPRR196 51,131.00$ 10/21/2014 Qtr 1, 2016

RR25_MPRR211 4,400.00$ 2/10/2015 Qtr 1, 2016

RR46_MPRR233 33,044.00$ 2/10/2015 Qtr 4, 2015

RR77 21,369.00$ 4/21/2015 Qtr 1, 2016

RR82 52,000.00$ 8/18/2015 Qtr 1, 2017

RR91 113,810.00$ 9/15/2015 Qtr 1, 2016

RR99 334,542.00$ 6/16/2015 Qtr 2, 2016

RR100 1,510,590.00$ 6/16/2015 Qtr 3, 2016

RR106 9,000.00$ 7/21/2015 Qtr 1, 2017

RR116 200,000.00$ 9/15/2015 TBD

RR127 148,050.00$ 11/17/2015 TBD

11,711,277.00$ Total

mwg report to the mopc - rto insider · mwg postponed moving rr125 forward to the mopc on 12/15/15...

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