tac july 2, 2003 market design implementation process recommendation

TAC July 2, 2003TAC July 2, 2003

Market Design Market Design Implementation Implementation Process Process RecommendationRecommendation

Guiding PrinciplesGuiding Principles

– Designed through an open, stakeholder process Designed through an open, stakeholder process similar to the “RUG” process used in 1999/2000.similar to the “RUG” process used in 1999/2000.

– Process organized and managed by Process organized and managed by stakeholders.stakeholders.

– Inclusive—all participants/ideas welcome.Inclusive—all participants/ideas welcome.– Facilitator of RUG-type organization for design & Facilitator of RUG-type organization for design &

protocols phases will be independent of protocols phases will be independent of individual stakeholders (assisted by ERCOT Staff individual stakeholders (assisted by ERCOT Staff and TAC Chair).and TAC Chair).

– Design & protocols developed with active input Design & protocols developed with active input from MOD.from MOD.

– Design & protocols developed with advice, Design & protocols developed with advice, logistics, and staff support provided by ERCOT logistics, and staff support provided by ERCOT staff.staff.

Guiding PrinciplesGuiding Principles

– Fair voting structure on all contested Fair voting structure on all contested issues.issues.

– Clearly defined appeals process.Clearly defined appeals process.– RUG-like process sunsets at end of RUG-like process sunsets at end of

protocol development phase; ERCOT protocol development phase; ERCOT staff lead implementation effort.staff lead implementation effort.

– Standing committees—through the TACStanding committees—through the TAC—provide advice to ERCOT during the —provide advice to ERCOT during the implementation phase.implementation phase.

– ERCOT Board oversight of process, ERCOT Board oversight of process, progress, and design.progress, and design.

Roles and Roles and ResponsibilitiesResponsibilities ERCOT Board:ERCOT Board:

– Approval of design and protocols.Approval of design and protocols.– Approve and/or select Approve and/or select

facilitators/experts if needed.facilitators/experts if needed.– Rule on disputes and appeals.Rule on disputes and appeals.– Provide guidance to MPs and ERCOT Provide guidance to MPs and ERCOT

Staff on financial parameters.Staff on financial parameters.

Roles and Roles and ResponsibilitiesResponsibilities Technical Advisory Committee:Technical Advisory Committee:

– Sponsor of RUG-like process.Sponsor of RUG-like process.– Direct oversight of design and protocols Direct oversight of design and protocols

development phases.development phases.– Advisor to ERCOT Staff in implementation Advisor to ERCOT Staff in implementation

phase.phase.– Sponsor stakeholder design proposals to Board Sponsor stakeholder design proposals to Board

for approval.for approval.– Sponsor stakeholder protocols language to Sponsor stakeholder protocols language to

Board for approval.Board for approval.– Resolve disputes arising from RUG-type Resolve disputes arising from RUG-type

organization.organization.– Prepare briefing materials for ERCOT Board on Prepare briefing materials for ERCOT Board on

disputes and appeals.disputes and appeals.

Roles and ResponsibilitiesRoles and Responsibilities

Independent leadership with ERCOT Staff Independent leadership with ERCOT Staff sponsor:sponsor:– Lead meetings of RUG-type organization.Lead meetings of RUG-type organization.– Coordinate development of work plans and Coordinate development of work plans and

schedules.schedules.– Plan/coordinate stakeholder educational activities Plan/coordinate stakeholder educational activities

about nodal markets (early in the design process).about nodal markets (early in the design process).– Organize flow of issues consideration and discussion.Organize flow of issues consideration and discussion.– Post agendas and provide notice of meetings.Post agendas and provide notice of meetings.– Oversight of communications with stakeholders, Oversight of communications with stakeholders, e.g.e.g., ,

website.website.

Roles and ResponsibilitiesRoles and Responsibilities

Independent leadership with ERCOT Staff Independent leadership with ERCOT Staff sponsor Con’t:sponsor Con’t:– Delegate assignments to ad hoc working groups and Delegate assignments to ad hoc working groups and

ERCOT staff.ERCOT staff.– Coordinate development of strawdogs.Coordinate development of strawdogs.– Track and follow up on schedules, issues, and Track and follow up on schedules, issues, and

assignments.assignments.– Coordinate with standing subcommittees as needed.Coordinate with standing subcommittees as needed.– Administer votes on disputed issues.Administer votes on disputed issues.– Report to TAC and PUC on progress.Report to TAC and PUC on progress.– TAC Chair or designee will advise independent leader TAC Chair or designee will advise independent leader

and ERCOT sponsor on all the above.and ERCOT sponsor on all the above.

Roles and Responsibilities Roles and Responsibilities (con’t)(con’t)

Standing TAC subcommittees:Standing TAC subcommittees:– Primary focus on on-going market Primary focus on on-going market

operations during design and protocol operations during design and protocol development phases.development phases.

– Provide advice as necessary during Provide advice as necessary during market design and protocol market design and protocol development phases.development phases.

– Coordinate with ERCOT during Coordinate with ERCOT during implementation phase.implementation phase.


ERCOT Staff:ERCOT Staff:– Continue to operate and fine tune existing Continue to operate and fine tune existing

market.market.– Provide staff sponsors to work with RUG-Provide staff sponsors to work with RUG-

type organization and each type organization and each ad hocad hoc working working group.group.

– Maintain website with agendas, strawdogs, Maintain website with agendas, strawdogs, minutes, issue resolutions, etc.minutes, issue resolutions, etc.

– Provide advice on market design and Provide advice on market design and protocol development issues.protocol development issues.


ERCOT Staff Con’t:ERCOT Staff Con’t:– Provide logistical and staff support to RUG-Provide logistical and staff support to RUG-

type organization and each type organization and each ad hoc ad hoc working working group.group.

– Develop cost estimates (or estimated Develop cost estimates (or estimated ranges) of alternatives when requested by ranges) of alternatives when requested by the Independent Leader, TAC or the Board. the Independent Leader, TAC or the Board.

– Prepare design and protocols filings for Prepare design and protocols filings for Commission consideration.Commission consideration.

– Lead responsibility for implementation Lead responsibility for implementation phase.phase.


Market participants:Market participants:– Development of strawdogs.Development of strawdogs.– Participate actively.Participate actively.– Deliberation and voting.Deliberation and voting.– Right to appeal decisions to TAC, Board, Right to appeal decisions to TAC, Board,

and/or Commission.and/or Commission.


Market Oversight Division:Market Oversight Division:– Actively participate in RUG-type Actively participate in RUG-type

organization and organization and ad hoc ad hoc working groups working groups during market design and protocol during market design and protocol development phases.development phases.

– Advise Commission on design and Advise Commission on design and protocols developments.protocols developments.

– Ensure compliance with Commission rules Ensure compliance with Commission rules and orders.and orders.


Public Utility Public Utility Commission:Commission:– Resolve appeals from the Resolve appeals from the

Board and disputes arising Board and disputes arising from Board decisions.from Board decisions.

– Monitor progress and Monitor progress and provide feedback.provide feedback.

– Final approval of Final approval of protocols. protocols.

Market Design and Protocol Market Design and Protocol Development Implementation Development Implementation StructureStructure

Technical Advisory Committee

RUG-type Org.

Leadership: Independent leader supported by an ERCOT Sponsor

and TAC Chair or designee

Participation: MPs & MOD with ERCOT staff support

Process Sponsor & Oversight

Coordination of design and protocol development; formal voting as necessary

MOD

Ad hoc Working Groups

Leadership: Independent leader with ERCOT Sponsor

or ERCOT lead

Participation: MPs & MOD with ERCOT staff support

ERCOT BoardSupervision,Approvals & Disputes

PUC

White papers and protocol development

Assignments

Reports

ERCOT Staff

Protocols Protocols ImplementationImplementation

ERCOT BoardContracts Approval & Progress Tracking

Public Utility Commission

Progress Tracking

Technical, Contracts Management, Scheduling & Oversight

ERCOT Staff

TAC and Subcommittees

Design/Protocols Interpretation & Advice to ERCOT Staff

Progress reports. Interpretation inquiries.

Notice of variances between design and implementation.

Interpretations & clarifications

Reporting RelationshipsReporting Relationships

RUG-type organization to TAC:RUG-type organization to TAC:– All white papers circulated to TAC.All white papers circulated to TAC.– Leader reports on all major design Leader reports on all major design

decisions, including minority decisions, including minority positions.positions.

– Leader reports on all votes taken.Leader reports on all votes taken.– Leader elevates issues and disputes Leader elevates issues and disputes

that are not resolved.that are not resolved.

Reporting RelationshipsReporting Relationships

TAC to ERCOT Board:TAC to ERCOT Board:– TAC regularly briefs Board on TAC regularly briefs Board on

process, milestones, major decisions process, milestones, major decisions and votes, and other issues of and votes, and other issues of concern/interest.concern/interest. Presentations to provide all viewpoints Presentations to provide all viewpoints

on policy issue disputes and resolutions.on policy issue disputes and resolutions.

– TAC elevates issues and disputes TAC elevates issues and disputes that are not resolved by TAC.that are not resolved by TAC.

Reporting Relationships Reporting Relationships (con’t)(con’t)

ERCOT to PUC:ERCOT to PUC:– TAC, leader of RUG-type organization, and TAC, leader of RUG-type organization, and

ERCOT Staff provide regular updates to ERCOT Staff provide regular updates to PUC during design & protocol development PUC during design & protocol development phases.phases.

– ERCOT Staff provides regular updates to ERCOT Staff provides regular updates to PUC during implementation phase.PUC during implementation phase.

– ERCOT Board elevates issues and disputes ERCOT Board elevates issues and disputes to PUC for resolution.to PUC for resolution.

– ERCOT Board approves filings prepared by ERCOT Board approves filings prepared by ERCOT Staff:ERCOT Staff:

Informational filing on design.Informational filing on design. Filing on protocols for final approval.Filing on protocols for final approval.


ERCOT Staff to RUG-type organization:ERCOT Staff to RUG-type organization:– Coordination with leader of RUG-type organization Coordination with leader of RUG-type organization

and and ad hoc ad hoc working group leaders on schedules and working group leaders on schedules and time line feasibility.time line feasibility.

ERCOT Staff to TAC:ERCOT Staff to TAC:– Regular progress updates and tracking reports on Regular progress updates and tracking reports on

schedules.schedules.– Regular reporting to TAC on ERCOT staff resources Regular reporting to TAC on ERCOT staff resources

and constraints in support of RUG-type organization, and constraints in support of RUG-type organization, its its ad hocad hoc working groups, and the TAC standing working groups, and the TAC standing subcommittees.subcommittees.

– Questions regarding interpretation of new protocols Questions regarding interpretation of new protocols (during implementation phase).(during implementation phase).

– Reporting on compliance of systems to protocols Reporting on compliance of systems to protocols (implementation phase).(implementation phase).


ERCOT Staff to Board:ERCOT Staff to Board:– Regular progress reporting.Regular progress reporting.– Financial projections and Financial projections and

tracking.tracking. ERCOT Staff to PUC:ERCOT Staff to PUC:

– Regular progress reporting.Regular progress reporting. ERCOT Staff to the MarketERCOT Staff to the Market

– Expand website...Expand website...

ERCOT Website

Agenda posted in advance of meeting. Meeting notes/minutes posted by COB next day. Future meeting schedules and timeline. Current strawdogs. Recorded votes, with summary of issues and minority

positions. Rules for: design process; meeting notice; and voting

procedures. Contact information for leadership team. Other?

Voting StructureVoting Structure– It is not necessary for an entity to be an ERCOT member, except in the

Consumer Segment, to participate and vote. – Entities will be grouped into the seven segments as defined in the

ERCOT Bylaws.– Entities must have a business interest in the segment selected.– Each segment will have one (1) vote.– Five of seven segments are required for a quorum. – Entities must designate the segment from which they will vote.– This designation shall be in force throughout the process. – Entities or their affiliates may not belong to more than one segment.– One person present can only cast one vote.– An entity or its affiliate may not have more than one (1) vote in any

vote taken.– Entities must be present to vote.– Proper controls will be developed to allow entities participating by

phone to be considered present.– Two-thirds of all fractional votes cast from all segments are required to

pass a motion.

Dispute and Appeals Dispute and Appeals ProcessProcess Design and protocols phases:Design and protocols phases:

– Leadership may elevate unresolved issues Leadership may elevate unresolved issues to next level.to next level.

– Any party may appeal a decision to the next Any party may appeal a decision to the next level.level.

– TAC hears appeals from RUG-type TAC hears appeals from RUG-type organization.organization.

– ERCOT Board hears appeals from TAC.ERCOT Board hears appeals from TAC.– PUC hears appeals from ERCOT Board.PUC hears appeals from ERCOT Board.

Implementation phase:Implementation phase:– Disputes between ERCOT Staff and Disputes between ERCOT Staff and

Stakeholders on design/protocols Stakeholders on design/protocols interpretations appealed to TAC/Board.interpretations appealed to TAC/Board.

tac july 2, 2003 market design implementation process recommendation

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