1. business and industrial
2. energy
3. electricity

Proxy $G and other
Loads in SCED2 Litmus Tests
Loads in SCEDv2 Subgroup
Dec. 2, 2014
Background
• Loads in SCED Subgroup is contemplating a v2 that would
allow three settlement options, all consistent with the concept
of LMP minus G:
1. Existing Bid-to-Buy – for LRs represented by their LSE
2. Volumetric G – for LRs represented by 3rd party QSEs with DR
measurable at ESI ID level
3. Proxy $G – for LRs represented by 3rd party QSEs and…
•
•
With hedged retail energy pricing
With DR measurable at the LSE portfolio level
Dec. 2, 2014
2
Loads in SCEDv2
LMP-G Road Map (Hybrid approach)
Represented
by LSE/REP
or DR QSE?
Loads in SCED
Resource/ALR
Request
LSE/
REP
Bid to buy
in SCED
DR
QSE
Offer to sell
in SCED
Settled as
LMP-VG
Yes
Settled as
LRISv1
Settled as
LMP-$G
Can we accurately
estimate customerlevel curtailment?
Offer to sell
in SCED
No
Yes
Is Resource a residential
aggregation with customer
rate composition compatible
with LMP-$G?
Yes
Does aggregation meet
minimum customer count
for baseline accuracy?
No
No
ALR fails qualification
(Bilateral only)
Dec. 2, 2014
3
Loads in SCEDv2
Who’s eligible for Proxy $G?
• Under this settlement option, the LR’s LSE(s) would be
reimbursed by the DR QSE for the demand response value at
the Proxy $G rate
– IE, the DR QSE will ‘sell back’ the (unused) energy to the market
at LMP minus G
• This only works if the LR is buying its energy on a hedged price
contract
– If the LR is avoiding a real-time price, this would amount to
‘double payment’
• Proxy $G eligibility should be a simple binary designation –
‘Hedged’ or ‘Unhedged’ – assigned by the LSE
• The question is, who’s hedged and who isn’t?
Dec. 2, 2014
4
Loads in SCEDv2
Retail product types (from the DR data project)
• RTP – Real Time Pricing – retail prices for all hours or intervals
based on ERCOT Real-Time Settlement Point Prices for the
premise Load Zone, calculated every 15 minutes, or other real-time
wholesale price indicator(s).
• BI – Block & Index – fixed pricing for a defined volume of usage,
coupled with pricing indexed to the wholesale market for usage
exceeding the block. Block prices and volumes may vary by time of
day/week. Option could include if usage dips below the block.
• CPP – Critical Peak Pricing –prices that rise during critical peaks:
limited duration periods of time identified by the LSE that usually
correlate to high prices in the real-time wholesale market. Critical
peak events may occur a limited number of times per year and
typically are communicated a day in advance.
• PR – Peak Rebates – rebates paid to customers for load reductions
taken during periods of time identified by the LSE.
Dec. 2, 2014
5
Loads in SCEDv2
Retail product types (from the DR data project)
•
•
•
•
•
4CP – Four Coincident Peak – predictor signals or direct load control provided
to customers in advance of potential Four Coincident Peak (4CP) intervals
during summer months (June through September). Reducing load during such
intervals lowers transmission charges. 4CP charges apply to large customers
(peak demand ≥700 kW) in competitive choice areas, and also to NOIEs at the
boundary meter level.
TOU – Time of Use — prices that vary across defined blocks of hours, with
predefined prices and schedules. (As used here, does not apply to seasonal
adjustments).
OLC – Other Direct Load Control – contracts that allow the LSE or a third party
to control the customer’s load remotely for economic or grid reliability purposes.
This category applies to Direct Load Control (DLC) with different deployment
criteria than described elsewhere. (Avoid double counting if DLC data was
reported in other categories.)
OTH – Other Voluntary Demand Response Product – any retail product not
covered in the other categories that includes a demand response incentive or
signal.
FO – Financial Option – product where LSE purchases an option from the
customer that is backed by a specified level of DR and uses it for portfolio trades
in the wholesale market.
Dec. 2, 2014
6
Loads in SCEDv2
Time of Use trends (from ‘14 data collection project)
• TOU as of 6/15/13:
• TOU as of 9/30/14*:
117,570
290,400
* Preliminary and unofficial
• Most of the other categories also showing strong increases
• ERCOT still working with REPs to clarify some anomalies
• We need good discussion on which of these product types
qualify as ‘unhedged’
• Especially TOU -- almost entirely residential
Dec. 2, 2014
7
Loads in SCEDv2
Things to think about
• Absent a TX SET change, LSEs will need to submit lists of
Unhedged ESI IDs to ERCOT on a regular (monthly?) basis
• ERCOT will need a mechanism to inform DR QSEs when a
member of an ALR is designated as Unhedged
– DR QSE must then remove it from the ALR
• Does the current list of product types cover all the bases?
• Should the litmus test requirement also extend to NOIEs that
permit 3rd party DR QSEs in their territories?
– If so, how to coordinate unique meter IDs?
Dec. 2, 2014
8
Loads in SCEDv2
Other litmus tests…
• An Aggregate Load Resource (ALR) must meet a minimum size
threshold in order for performance to be measured accurately
– For Weather-Sensitive ERS, ERCOT set the minimum at 500 kW
of DR capability
– Is this the right threshold for ALRs in SCED?
– Are there incentives for QSEs to create many small ALRs vs. a
few large ALRs, and if so, are those incentives perverse?
• Members of an ALR may be served by multiple LSEs – should a
minimum size be established for LSE portfolios within ALRs?
– ERCOT Settlements will need to allocate DR values (x Proxy $G)
back to each LSE
– DR QSEs may not know REPs for all their clients, and customers
switch – minimum thresholds could be unworkable
– Is a threshold really necessary?
Dec. 2, 2014
9
Loads in SCEDv2
Questions?
ON
OFF
Dec. 2, 2014
10
Loads in SCEDv2