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NPRR450

Summary

Title: Revise Requirements for Contracts to Procure Additional Capacity to Alleviate Emergency Conditions (formerly "Revise Board Approval Requirement for Contracts to Procure Additional Capacity to Alleviate Emergency Conditions")
Next Group:
Next Step:
Status: Approved on 04/17/2012
Effective Dates:
05/01/2012

Action

Date Gov Body Action Taken Next Steps
04/17/2012 BOARD Approved
04/05/2012 TAC Recommended for Approval ERCOT Board consideration of NPRR450
03/22/2012 PRS Recommended for Approval TAC consideration of NPRR450

Voting Record

Date Gov Body Motion Result
04/17/2012 BOARD To approve NPRR450 as recommended by TAC in the 4/5/12 TAC Report. Passed
04/05/2012 TAC To recommend approval of NPRR450 as recommended by PRS in the 3/22/12 PRS Report. Passed
03/22/2012 PRS To recommend approval of NPRR450 as amended by the 3/21/12 ERCOT comments. Passed

Vote tallies here reflect individual votes, not the weight of the votes by market segment. Affirmative votes are not recorded in these vote tallies. For additional details on the voting record, please consult the Recommendation or Action Report, or the official vote tally if available, as posted in the key documents.

Background

Status: Approved
Date Posted: Mar 14, 2012
Sponsor: ERCOT
Urgent: Yes
Sections: 6.5.1.1
Description: The Nodal Protocol Revision Request (NPRR) revises the process approved in NPRR432, Deployment of Resources to Alleviate Anticipated Emergency Conditions, for execution of contracts with Resources to alleviate anticipated Emergency Conditions. Consistent with the ERCOT Board’s discussion at its February 2012 meeting, this NPRR provides that such contracts may be executed by ERCOT, subject to the Notice provisions already included in NPRR432. This NPRR adds language that ERCOT will provide notice to the ERCOT Board of executed contracts at the first ERCOT Board meeting after the contract is signed. This provision is consistent with the notice to the ERCOT Board provided for Reliability Must Run (RMR) Agreements under Section 3.14.1.3, ERCOT Report to Board on Signed RMR Agreements. This NPRR also proposes revisions to remove the limitation in the procurement of Loads under NPRR432 to Loads that are currently registered with ERCOT as Load Resources.
Reason: When the ERCOT Board approved NPRR432 at its February 2012 meeting, the ERCOT Board instructed that the provisions of NPRR432 that require ERCOT Board approval of contracts contemplated by the revised Protocol language be subject to further review by TAC. The ERCOT Board requested that the issue be addressed by TAC and returned for consideration by the ERCOT Board at its April 2012 meeting. The ERCOT Board discussed various alternatives, but the central issue for reconsideration was the provision in NPRR432 that the ERCOT Board must vote to approve a contract to alleviate anticipated Emergency Conditions before ERCOT may execute the contract with a Resource Entity. This revision achieves the objective of removing the requirement that explicit ERCOT Board approval is required before ERCOT may execute such contracts. The revision retains the Notice provisions that require ERCOT to provide detailed descriptions of the reliability conditions prompting ERCOT to seek additional Resources, the identification of potential Resources considered for providing capacity, and a separate Notice identifying any specific Resource Entity with whom ERCOT will negotiate the terms for procurement of additional capacity. In addition, as noted above, the revision adds language requiring that ERCOT provide notice to the ERCOT Board of executed contracts at the first ERCOT Board meeting after the contract is signed. This provision is consistent with the notice to the ERCOT Board provided for RMR Agreements under Section 3.14.1.3. ERCOT considered providing additional options for the revision, but believes the proposed revision is the most straightforward and administratively manageable option for achieving the objectives discussed by the ERCOT Board. For example, ERCOT considered an approach discussed by the ERCOT Board that would have the ERCOT Board approve contracts after they have been executed by ERCOT and a Resource Entity. ERCOT is concerned that Resource Entities would justifiably hesitate to enter contracts that require immediate performance on their part but could be nullified by subsequent action by the ERCOT Board. In addition, ERCOT considered providing for a "pre-clearance" approval by the ERCOT Board, in which the ERCOT Board would authorize ERCOT to consider procurement of additional capacity prior to the issuance of the first Notice included in NPRR432. ERCOT believes that this approach may compromise ERCOT’s ability to begin the process for considering options contemplated in NPRR432. If the ERCOT Board must vote before ERCOT may begin considering options for procuring additional Resources for anticipated Emergency Conditions, it may create difficulties in the timing of procuring capacity (particularly if the Resource needed has a long-lead time to prepare for providing the contracted amount of capacity). In addition, ERCOT believes that the transparency provided by the Notices already required by NPRR432 will provide the ERCOT Board and Market Participants the quality of information and quantity of time necessary to raise questions with a proposed procurement before ERCOT executes contracts with Resource Entities. This NPRR also proposes revisions to address the unintended consequence of limiting the procurement of Loads under NPRR432 to Loads that are currently registered with ERCOT as Load Resources.

Key Documents

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