NPRR782 Impacts on DAM Make Whole Adjustments
NPRR782 introduced a clawback mechanism affecting Day-Ahead Make-Whole payments due to infeasible Ancillary services. This could lead to reductions in payments, impacting resource cost recovery in the Day-Ahead Market. Proposed solutions involve spreading charges and adjustments on DAM purchases and real-time markets.
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Day Ahead Make Whole Adjustments due to Ancillary Infeasible MW in Real-Time Follow up to NPRR782 Austin Rosel ERCOT October 14, 2016
NPRR782 Impacts on DAM Make Whole NPRR782 introduced a clawback mechanism for infeasible Ancillary services. A QSE incurs a clawback charge equal to the infeasible MW times the DAM clearing price for the Ancillary Service. This is a reduction in a payment that is used to offset Day Ahead Guaranteed Costs used in the Day Ahead Make Whole Payment. It s possible this reduction could cause a Resource to not recover all costs covered under the Day Ahead Make Whole Payment. The lost Make Whole is not accounted for in NPRR782. 2 PUBLIC
Day Ahead Make Whole Payment DAASREV is essentially reduced due to the Ancillary Services clawback introduced in NPRR782. It s possible the reduction could cause the resource to not be made whole in DAM. 3 PUBLIC
NPRR782 Clawback Allocation 4 PUBLIC
DAM Make-Whole Adjustment Charge Funds to pay for any DAM Make-Whole adjustments need to be collected. Where should these be collected? NPRR 782 uses clawed back AS revenues to offset the total costs allocated to load via NP6.7.4 Adjustments to Cost Allocations for Ancillary Services Procurement.This is done for each AS type separately and is based on Hourly Load Ratio Share. DAM Make- Whole is not separated by AS type so a simple adjustment to NPRR782 formulas shouldn t be done. 5 PUBLIC
Proposed Solution For Allocation DAM Solution Spread charges for DAM Make-Whole adjustment on DAM purchase ratio share Net the clawback payments and charges on a DAM purchase ratio share RTM Solution Spread costs for DAM Make-Whole adjustment on HLRS Keep 782 as is Adjust 782, keep the concept but remove clawback payment from AS adjustment formulas Same as above only net the clawback payments and allocate on HLRS DAM Make Whole Charges are spread over DAM purchase ratio share 6 PUBLIC
DAM Make-Whole Adjustment Payment Proposed calculation to true-up DAM Make-Whole amounts in situations where the claw-back charges would introduce additional make-whole amounts. This calculation nets the original Dam Make-Whole result with the result of the calculation considering revenue from the AS clawback and nets the new DAM Make-Whole with DAM Make-Whole that occurred in DAM Settlements. Any required incremental payments would be made on a RTM invoice NPR782 clawback amounts at a Resource level Recalculate DAM make-whole considering clawed back revenues for DAM committed intervals only Allocates payment (and charge) to infeasible intervals. Could also be spread evenly over the DAM block 7 PUBLIC
