NOTICE DATE: May 11, 2020

NOTICE TYPE: M-A051120-01 Operations

SHORT DESCRIPTION:  Software Error Identified with Implementation of OBDRR002, ORDC OBD Revisions for PUCT Project 47199

INTENDED AUDIENCE: All Market Participants and Technical Advisory Committee

DAYS AFFECTED: Certain Operating Days from May 31, 2018 to May 6, 2020

LONG DESCRIPTION: ERCOT has identified a software error with the implementation of Other Binding Document Revision Request (OBDRR) 002, ORDC OBD Revisions for PUCT Project 47199, and implemented a fix to the software on May 6, 2020. This OBDRR revised the “Methodology for Implementing Operating Reserve Demand Curve (ORDC) to Calculate Real-Time Reserve Price Adder” to account for the impact of Resources committed through a Reliability Unit Commitment (RUC) when determining Real-Time On-Line Reserve Capacity (RTOLCAP) and Real-Time Off-Line Reserve Capacity (RTOFFCAP), as well as the corresponding Real-Time On-Line Reserve Price Adder (RTORPA) and Real-Time Off-Line Reserve Price Adder (RTOFFPA), by excluding Resources with a Real-Time telemetered Resource Status of “ONRUC” when calculating the system total Real-Time telemetered High Sustained Limit (RTOLHSL) component of RTOLCAP. This same reserve capacity was then added to RTOFFCAP if the RUC-committed Resource was otherwise qualified to contribute to RTOFFCAP.  OBDRR002 went into effect on May 31, 2018.

When software was updated to make the aforementioned changes, the implementation did not account for a reasonability check that is applied at the Resource-level before finalizing the RTOLCAP value. This reasonability check was part of the original ORDC implementation and ensures that an individual Resource does not have a negative MW contribution to the total RTOLCAP by applying a Resource-level RTOLCAP floor of 0 MW.  However, with OBDRR002, a RUC-committed Resource can have a negative contribution to RTOLCAP. The software error therefore had the impact of counteracting a portion of the RTOLCAP adjustment that was intended under OBDRR002, and impacted the RTORPA and RTOFFPA values for certain Operating Days (ODs) in 2018, 2019 and 2020. In all affected Security-Constrained Economic Dispatch (SCED) intervals, the impact was to reduce the value of the RTORPA and RTOFFPA.    

ERCOT has completed an initial analysis of the impact of this error on ORDC prices. Prices were affected by $0.01/MWh or more by this software error on 20 ODs. The following table is a summary of the impacts of this error for the RTORPA. The most significant impacts were limited to a single OD—September 6, 2019. All but one of the SCED intervals with an RTORPA impact greater than $100/MWh occurred on that OD.  This OD is then followed by ODs October 4, 2018, and November 14, 2018, in terms of price impact.

The attached spreadsheet shows the impact of this error on RTOLCAP, RTORPA, and RTOFFPA for each affected SCED interval for the impacted ODs.

ERCOT is taking steps to ensure quality delivery of system changes impacting market pricing.  Going forward, ERCOT will implement additional management level review and approval of system changes impacting ORDC and pricing.  ERCOT is also initiating a systematic review of the historical ORDC code and outcomes.  Further, as a result of the price corrections authorized by the ERCOT Board of Directors (Board) in late 2019, ERCOT initiated process improvements for changes to ERCOT systems.  While these coordination steps were not directly driven by this ORDC software error, they are expected to improve the quality of future software deliveries.

While the Real-Time prices for certain SCED intervals in 2018, 2019, and 2020 were inconsistent with ERCOT Protocols due to this software error, they are now final and the 30-day period in which ERCOT must give Market Participants notice in order to seek review of prices by the ERCOT Board has passed for the impacted ODs, as the most recent OD with prices impacted by this error was February 26, 2020.  Accordingly, pursuant to ERCOT Protocol Section 6.3(6), the ERCOT Board is precluded from correcting prices for the impacted ODs.

ADDITIONAL INFORMATION: ERCOT staff will discuss the issues in this Market Notice at the Protocol Revisions Subcommittee (PRS) meeting on May 13, 2020, and at the Technical Advisory Committee (TAC) meeting on May 27, 2020.

CONTACT: If you have any questions, please contact your ERCOT Account Manager. You may also call the general ERCOT Client Services phone number at (512) 248-3900 or contact ERCOT Client Services via email at ClientServices@ercot.com.

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