TNT Working Meeting

1
TNT Working Meeting

• Trip Doggett, Vikki Gates Cuddy, Jim Galvin
• September 10, 2003

2
September 10 Agenda

• Welcome
• 0827 Minutes review and approval
• Review Future Meeting Schedule
• Communication Update
• Vote Number of Proxies Allowed
• Protocol Development and Cost Benefit Timeline
• Concept Groups
• Scope
• Timeline
• Charter
• Leadership, Members, Meetings
• Education Forums

3
Future TNT Meetings

• September 10
• September 24
• October 1
• October 22
• November 3
• November 17
• December 2
• December 17
• December 31?

Wednesday meetings
Monday meetings
Tuesday meeting
Wednesday meetings
4
Communication Update - Email
tnt_at_lists.ercot.com
5
Communication Update - Website
6
Communication Update Web meetings
7
Vote - Proxies

• Need to determine the maximum number of proxies a
  representative may hold during TNT voting
• At their September 4 meeting, TAC asked TNT to
  decide
• Quantity of 4 was mentioned

8
Texas Nodal Timeline
Design Nodal Market
Market Operations Concept Group
Congestion Management Concept Group
Commercial Operations Concept Group
Market Mitigation Concept Group
Cost Benefit Concept Group
Conduct Cost Benefit Analysis
Select CB Analysts
Execute Analysis
Prepare and Publish Findings
Prepare and File Protocols
Layout Determination
Committee Protocol Development
Stakeholder Review Period
Prepare Board PUCT Filing
9/1
10/21
12/10
1/29
3/19
5/8
6/27
8/16
10/5
11/24
9
Protocol Development Timeline
Prepare and File Protocols
Layout Determination
Research and Identify Source Layout
Format and Finalize Template
Present TOC and Layout for Board Review
Baseline Protocol Development
Draft Protocols from TNT Strawman
Conduct Legal Review
Review baseline with Board
Incorporate feedback, format and publish draft
Stakeholder Review Period
Publish Draft
Round 1 Collaborative Review
Round 2 Collaborative Review
Identify Unresolved Items
Draft summary of Unresolved items
Prepare Board PUCT Filing
Consistency Check
Board Meeting
Incorporate feedback and file w/ PUCT
2/15
4/5
5/25
7/14
9/2
10/22
10
Protocol Development Roles and Responsibilities
Aruba, Jamaica
Finish Concept Groups
Collaborative Protocol Revisions
Internal Company Review
Determine Layout
Collaborative Protocol Revisions
Bermuda, Bahamas
Exec Summary Package Protocols
Baseline Protocols
Checkpoints
11
Texas Nodal Timeline
Design Nodal Market
Market Operations Concept Group
Congestion Management Concept Group
Commercial Operations Concept Group
Market Mitigation Concept Group
Cost Benefit Concept Group
Conduct Cost Benefit Analysis
Select CB Analysts
Execute Analysis
Prepare and Publish Findings
Prepare and File Protocols
Layout Determination
Committee Protocol Development
Stakeholder Review Period
Prepare Board PUCT Filing
9/1
10/21
12/10
1/29
3/19
5/8
6/27
8/16
10/5
11/24
12
Concept Groups

• A Concept Group will
• Provide an open forum for participation of all
  stakeholders
• Champion education, resolution and definition of
  its respective issue, action or strawman
• Accept assignments to draft whitepapers,
  conceptual diagrams or other materials as
  requested by the Facilitation Team
• Will report developments in each TNT Facilitation
  meeting

13
Concept Group Scope
Settlements
Commercial Model
Market Operations
Congestion Management
Commercial Operations
Market Mitigation
14
Concept Group Scope
Outage Plans
Bilateral
Dispatch
Credit
Settlements
Network
Schedules
Data
Exposure
Model
Scheduling Data
Data
Operating
Conditions
Network Model Related
Data
Settlements
CRR
Mitigated
Data
Bids
Operating
Data
Participant
Data
Participant
Consumption
Data
Data Mappings
Data
Commercial Model
Participant
RMR Contracts
Data
AS Obligations
Market Operations
Congestion Management
Commercial Operations
Market Mitigation
15
Market Design Timeline
Design Nodal Market
Market Operations Concept Group
Design Real-Time
Design Day-Ahead
Capture Market Input Requirements
Congestion Management Concept Group
CRR Allocation Mechanism
CRR Auction Mechanism
CRR Settlement
Commercial Operations Concept Group
Design Commercial Operations
Market Information Requirements
Market Mitigation Concept Group
Evaluate Market Indices
Analyze Conduct Thresholds
Cost Benefit Concept Group
Cost Benefit Methodology Forum
Market Segment Input to CB Analysis
9/1
9/15
9/29
10/17
10/20
11/14
11/28
12/8
12/22
1/5
1/19
2/2
2/16
3/1
3/15
3/29
4/12
4/26
16
Market Operations Charter

• Research and recommend method to implement
  resource specific bid curves, schedules, and
  direct assignment of local congestion
• Include options to manage congestion through
  sound microeconomic market mechanisms
• Determine how congestion will be managed and paid
• Transmission planning in a nodal environment
• Document market information changes
• Provide input into cost/benefit analysis
• Address Testing / Implementation issues

17
Day Ahead Topics to Address

• SCED or Non-SCED
• Nature of instruments traded (intervals, blocks,
  shapes)
• Contract obligation of buyers and sellers
• Units and term
• Transaction location
• Operational party (ERCOT or other)

• Bid and offer approach
• Bid and offer clearing method and schedule
• Credit risk management and cash settlement
  schedule
• Implementation timeline goals
• Other items

18
Market Design Timeline
Design Nodal Market
Market Operations Concept Group
Design Real-Time
Design Day-Ahead
Capture Market Input Requirements
Congestion Management Concept Group
CRR Allocation Mechanism
CRR Auction Mechanism
CRR Settlement
Commercial Operations Concept Group
Design Commercial Operations
Market Information Requirements
Market Mitigation Concept Group
Evaluate Market Indices
Analyze Conduct Thresholds
Cost Benefit Concept Group
Cost Benefit Methodology Forum
Market Segment Input to CB Analysis
9/1
9/15
9/29
10/17
10/20
11/14
11/28
12/8
12/22
1/5
1/19
2/2
2/16
3/1
3/15
3/29
4/12
4/26
19
Congestion Management Charter

• Research and recommend market approach for Load
  Zones and Trading Hubs
• Identify the types of congestion rights, features
  of congestion rights and method to recognize
  pre-assigned congestion rights
• Document key features and desired approach to
  administering congestion rights auction(s)
• Assess the impacts of the policies contained in
  the white papers on ERCOT, QSEs, LSEs and PGCs.
• Provide input into cost/benefit analysis

20
CRR Topics to Address

• Financial, not Physical
• Point to Point, Flowgate
• Options, Obligations
• Pre-Assigned, termination?, other Terms
  Conditions
• Terms (annual, monthly, multi-year)
• Simultaneous Combinatorial Auction
• Distribution of Auction Revenue
• Derate?

• Shift factor changes
• Losses
• Revenue Adequacy
• Market Power
• No use it or lose it
• Consider complexity
• Offer resource node to load zone only?
• Limit number of Flowgates
• On peak vs. Off peak
• Wires Participate?
• Credit risk

21
Market Design Timeline
Design Nodal Market
Market Operations Concept Group
Design Real-Time
Design Day-Ahead
Capture Market Input Requirements
Congestion Management Concept Group
CRR Allocation Mechanism
CRR Auction Mechanism
CRR Settlement
Commercial Operations Concept Group
Design Commercial Operations
Market Information Requirements
Market Mitigation Concept Group
Evaluate Market Indices
Analyze Conduct Thresholds
Cost Benefit Concept Group
Cost Benefit Methodology Forum
Market Segment Input to CB Analysis
9/1
9/15
9/29
10/17
10/20
11/14
11/28
12/8
12/22
1/5
1/19
2/2
2/16
3/1
3/15
3/29
4/12
4/26
22
Commercial Operations Charter

• Synchronize Load Zones with ERCOT Data
  Aggregation and Settlement rules
• Ensure Market Operations and Market Settlement
  synchronization
• Identify and prepare for protocol settlement
  algorithms
• Facilitate implementation of Congestion Rights
  rules and auction procedures
• Asses the impacts of the commercial functions on
  ERCOT, QSEs, LSEs and PGCs
• Provide input into cost/benefit analysis
• Address Testing / Implementation issues

23
Market Design Timeline
Design Nodal Market
Market Operations Concept Group
Design Real-Time
Design Day-Ahead
Capture Market Input Requirements
Congestion Management Concept Group
CRR Allocation Mechanism
CRR Auction Mechanism
CRR Settlement
Commercial Operations Concept Group
Design Commercial Operations
Market Information Requirements
Market Mitigation Concept Group
Evaluate Market Indices
Analyze Conduct Thresholds
Cost Benefit Concept Group
Cost Benefit Methodology Forum
Market Segment Input to CB Analysis
9/1
9/15
9/29
10/17
10/20
11/14
11/28
12/8
12/22
1/5
1/19
2/2
2/16
3/1
3/15
3/29
4/12
4/26
24
Market Mitigation Charter

• Define Ex-ante Market mitigation process
• Develop recommendations for thresholds and
  reference prices
• Integration with Day Ahead and Real Time Market
  Operations

25
Cost Benefit Timeline
Design Nodal Market
Market Operations Concept Group
Congestion Management Concept Group
Commercial Operations Concept Group
Market Mitigation Concept Group
Cost Benefit Concept Group
Conduct Cost Benefit Analysis
Select CB Analysts
Execute Analysis
Prepare and Publish Findings
Prepare and File Protocols
Layout Determination
Committee Protocol Development
Stakeholder Review Period
Prepare Board PUCT Filing
9/1
10/21
12/10
1/29
3/19
5/8
6/27
8/16
10/5
11/24
26
Market Design Timeline
Design Nodal Market
Market Operations Concept Group
Design Real-Time
Design Day-Ahead
Capture Market Input Requirements
Congestion Management Concept Group
CRR Allocation Mechanism
CRR Auction Mechanism
CRR Settlement
Commercial Operations Concept Group
Design Commercial Operations
Market Information Requirements
Market Mitigation Concept Group
Evaluate Market Indices
Analyze Conduct Thresholds
Cost Benefit Concept Group
Cost Benefit Methodology Forum
Market Segment Input to CB Analysis
9/1
9/15
9/29
10/17
10/20
11/14
11/28
12/8
12/22
1/5
1/19
2/2
2/16
3/1
3/15
3/29
4/12
4/26
27
Cost Benefit Charter

• Develop evaluation criteria recommended for
  selection of Cost Benefit analysts
• Provide input on impacts to Market Participant
  segments

28
Independent Cost Benefit Timeline
Conduct Cost Benefit Analysis
Select CB Analysts
Execute Analysis
Prepare and Publish Findings
2/1
2/15
2/29
3/14
3/28
4/11
4/25
5/9
5/23
6/6
6/20
7/4
7/18
8/1
8/15
8/29
9/12
9/26
10/10
10/24
29
Cost Benefit Roles and Responsibilities
. . .
Recommend Evaluation Criteria
Market Segment Input
Select CBA Firm
Provide system and ERCOT market specific
information
Execute Cost Benefit Analysis
Prepare Publish Findings
Checkpoints
30
Review from 08-27Leadership Candidates
31
Education Topics