This Nodal Protocol Revision Request (NPRR) creates a new process for determining the Mitigated Offer Cap (MOC) for Contract for Capacity (C4C) Resources procured through Section 6.5.1.1, ERCOT Control Area Authority. This NPRR proposes using market design principles to allow the C4C Resource to be Dispatched but still be above other Resources that solve the same constraint. This NPRR uses the “last-in-line” principle from NPRR826, Mitigated Offer Caps for RMR Resources, to set the MOC for C4C Resources and minimize their effect on market competition. This NPRR sets clear requirements for using this method. If those requirements aren't fulfilled, mitigation of the C4C Resource is determined by cost. The C4C MOC methodology in this NPRR will only be applied to an active constraint when all of the following three conditions are true: 1) The C4C Resource has an unloading Shift Factor more than 2% on the Transmission Facility; 2) The C4C Resource has a greater than 5% unloading impact* on the Transmission Facility; and 3) At least one other non-C4C Resource has a 5% or more unloading Shift Factor on the Transmission Facility. Unloading impact is reduction of flow on the Transmission Facility and is used in ERCOT’s evaluation of whether the unit would be an effective C4C Resource. The MOC methodology in this NPRR is similar to the NPRR826 approach and works as follows to create the line: 1) Identify all non-Reliability Must-Run (RMR) and non-C4C Resources that have a greater than 5%* unloading Shift Factor on the Transmission Facility; 2) Collect the highest energy offer point (mitigated if applicable) for each Resource in step 1 and convert to a Shadow Price equivalent; 3) Select the highest value from step 2 and ensure it is less than the Shadow Price cap for the constraint by $1; 4) Add $0.01 to the value from step 3, multiply by the Shift Factor of the C4C Resource to convert back to an energy offer equivalent, and set as the C4C MOC; and 5) If there are multiple constraints, use the lowest value from step 4. Finally, if possible, ERCOT should implement this NPRR with NPRR826, stop manual MOC calculations for RMR and C4C, and remove related Protocol language.
