This Nodal Protocol Revision Request (NPRR) adds:
(1) A provision to Section 3.19 that all transmission constraints are treated as non-competitive constraints during an initial 45 Operating Day period, beginning with the Texas Nodal Market Implementation Date (TNMID).
(2) New Section 18.104.22.168, which requires that the System-Wide Offer Cap (SWCAP) be set to the higher of $180 per MWh or 18 mmBtu per MWh times the Fuel Index Price (FIP) during an initial 45 Operating Day period, beginning with the TNMID, provided that a Market Participant who burns fuel oil rather than natural gas may dispute the use of $180 per MWh or 18 mmBtu heat rate per MWh times FIP if the Generation Resource’s Settlement Point Price does not cover the cost incurred by the Market Participant to provide energy or Ancillary Services. This new section also establishes an Energy Offer Curve floor adjusted to -$50 per MWh.
(1) The purpose of these changes is to add safeguards during an initial shake-down period of nodal market operations to limit the economic consequences of bids and offers as reflected in the Day Ahead Market (DAM) and Real Time Settlement Point Prices. The shake-down period has been selected to allow Market Participants sufficient time to build experience by becoming familiar with the operation of the DAM and Real Time nodal market systems.
The methodology selected implements the safeguards described in this NPRR by utilizing the existing ERCOT nodal system designs and will not, and are not intended, to require ERCOT to change or modify the market system design. In all cases, either during this shake-down period or during normal operation of the nodal market systems, all DAM and Adjustment Period and Real Time Energy Offers and DAM Ancillary Service Offers are validated against the SWCAP to assure that no offers used in the nodal price calculations for energy or ancillary service capacity exceed the SWCAP in both the DAM and Real Time Market. Therefore, no special changes are required to the functionality of ERCOT or Market Participant systems during the initial shake-down period or upon its expiration and the assumption of normal system operations.
(2) This NPRR creates a set of offer caps for the 45 day period after Nodal startup.
(3) This NPRR incorporates the concept into the Nodal Protocols of the Nodal Startup Transition Rules proposal from the Independent Market Monitor (IMM), which was approved by TPTF on September 25, 2007.(4) This NPRR incorporates into nodal Protocols a set of Nodal Startup Transition Rules in response to the PUCT Chairman Memo of July 28, 2005 (filed in PUCT Project 28500, Activities Related to the Implementation of a Nodal Market for the Electric Reliability Council of Texas) and "requiring cost based offer limitations for an appropriate time period."