NPRR174

This Nodal Protocol Revision Request (NPRR) modifies the verifiable Startup Cost and verifiable minimum energy cost calculation to include a $.50 adder for the Fuel Index Price (FIP).  This NPRR also allows through the dispute process for the recovery of the difference between the Reliability Unit Commitment (RUC) Guarantee based on the actual price paid for delivered natural gas and a fuel price of FIP*1.X.

In lieu of system changes, ERCOT may implement this NPRR by making appropriate adjustments to the verifiable cost procedures to accommodate the $.50 adder.  These procedures will be described in the Verifiable Cost Manual.

When submitting verifiable costs, current Nodal Protocol language only allows for gas fuel recovery at the FIP.  FIP alone seldom covers all natural gas costs incurred by Qualified Scheduling Entities (QSEs).  Fuel transport costs, swing contract costs, and imbalance fees are examples of typical costs that are added to the underlying commodity price.   These additional costs can be especially significant when resource owners are forced to buy intra-day gas in order to meet a RUC deployment instruction.

The impact of FIP plus $.50 in the verifiable cost process is primarily twofold:  1) Ensures a closer alignment of cost recovery to actual gas costs for RUC-deployed units that are, by design, committed after the gas markets close, and 2) Modifies Startup Offer caps and Minimum-Energy Offer caps by ten percent since verifiable costs replace generic caps once verifiable costs are submitted.

This NPRR also allows a QSE to file a settlement dispute for a Resource’s RUC Make-Whole Payment if the actual price paid for delivered natural gas for a specific Resource during a RUC instruction interval is greater than FIP * 1.X.  The maximum amount that may be recovered through this dispute process is the difference between the RUC Guarantee based on the actual price paid and a fuel price of FIP*1.X.