MR-00305 (Day-Ahead Reliability Guarantees) An Overview IESO - - PowerPoint PPT Presentation

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MR-00305 (“Day-Ahead Reliability Guarantees”) – An Overview

IESO Technical Panel Meeting Tuesday, December 6th 2005

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MR-00305 Overview

• This presentation provides an overview to MR-

00305 – “Day-Ahead Reliability Guarantees”

• Topics:
• 1. Relationship to the other Day-Ahead Commitment

Process (DACP) Amendments

• 2. A brief overview to each of the 9 sub-parts to MR-

00305

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Interrelationships between the DACP Amendments

Related Market Rule Amendments:

– MR-00303 – Day-Ahead Commitment Process – Data Submission – MR-00304 – Day-Ahead Commitment Process – Pre-Dispatch Scheduling and Commitment

MR-00303 MR-00304 MR-00305

Time-dependent data processing relationship

• Data processing relationship (offer

submission, election for DA-GCG, etc.)

• Eligibility for Day-Ahead Generation

Cost guarantees (new section 2.2C)

• IESO de-commitment events affecting

DA-GCG (new section 6.3B)

• Data processing relationship (timelines

for pre-dispatch of record)

• Upstream impact on pre-dispatch of

record schedules used by settlements

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MR-00305 – Part R00

• New inputs from the Day-Ahead Commitment Process

required by Settlements

• Includes:

– Constrained schedules for import transactions (used in Day-Ahead Intertie Offer Guarantee calculations) – Constrained schedules for generation facilities (used in Day-Ahead Generation Cost Guarantee calculations) – Day-ahead import offers (used in Day-Ahead Import Failure Charge calculations) – IESO De-commitments of generation facilities (used in Day-Ahead Generation Cost Guarantee calculations) – Bona fide and legitimate import failures (i.e. transactions exempted from Day- Ahead Import Failure Charge calculations) – Financially-binding status of day-ahead import transactions (used in Intertie Offer Guarantee Offset calculations) – Day-Ahead Generation Cost Guarantee elections made by generators in the day-ahead pre-dispatch of record (used in Day-Ahead Generation Cost Guarantee calculations)

Affected Market Rule Provisions: Chapter 9, section 3.1 General Topic: Inputs from DACP to Settlements

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MR-00305 – Part R01

• Day-Ahead Intertie Offer Guarantees (DA-IOG):
• Same type of guarantee as real-time IOG, however:
• Based upon constrained quantities
• By using the MINIMUM of the day-ahead and real-time quantity, this

settlement amount ensures that the guarantee only covers those import transactions that are actually delivered in real-time

• Where a day-ahead import transaction attracts a DA-IOG and a real-time

IOG, the market participant is entitled to receive the higher of the two

• Where a day-ahead import transaction does NOT have financially binding

status, it may be subject to the IOG OFFSET process

• With these modifications, the IOG OFFSET will…

– continue to act upon al real-time import transactions that were not arranged in the day-ahead commitment process – now also include day-ahead import transactions that do not have financially- binding status

Affected Market Rule Provisions: Chapter 9, section 3.8A General Topic: Intertie Offer Guarantees and Offsets

6 Calculation of DA-IFC:

MR-00305 – Part R02

The DA-IFC rules outline a 3 step process

1) Determine the amount of the shortfall (if any) 2) Determine if the import transaction is exempt from the charge due to bona fide and legitimate reasons 3) Calculate the settlement amount as a function of the amount of the shortfall and the implied profit function derived from:

• prevailing 5-minute energy market price in Ontario
• Offers submitted into the day-ahead pre-dispatch of record

Affected Market Rule Provisions: Chapter 9, section 3.8B (new) General Topic: Day Ahead Import Failure Charge (DA-IFC)

EMP (Ontario zone) DA Offer Curve

Shortfall amount

DA-IFC

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MR-00305 – Part R03

Two changes: 1) Recover the costs of Day-Ahead IOG payments on the same hourly basis as they are incurred 2) Distribute proceeds from the Day-Ahead Import Failure Charge

• n the same hourly basis as they are assessed

In both cases:

• The IESO would have interim authority to allocate these charges
• n a monthly basis (related amendment sub-part: R07)

Affected Market Rule Provisions: Chapter 9, section 3.9 General Topic:

Modifications to hourly uplift settlement amount

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MR-00305 – Part R04

• Minor change to clarify the rule that the real-

time Generation Cost Guarantee (also known as the “SGOL” program) should not overlap with any payments from the day-ahead IOG

Affected Market Rule Provisions: Chapter 9, section 4.7B General Topic:

Modifications to RT Generation Cost Guarantee

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MR-00305 – Part R05

• The Day-Ahead Generation Cost Guarantee (DA-GCG) offers a guarantee
• f cost recovery for eligible costs for commitments scheduled in the day-

ahead pre-dispatch of record.

• Assessed on the basis of eligible revenues determined by the IESO

settlement process over the course of the minimum run-time and eligible costs submitted by the market participant:

– Eligible Revenues:

• Energy revenues up to the minimum loading point
• CMSC for energy up to minimum loading point
• All operating reserve revenues
• All CMSC for operating reserve

– Eligible Costs:

• Same “combined guaranteed costs” (see also, amendment sub-part R09) as the real-time

GCG program PLUS – Incremental variable operating costs – Incremental variable maintenance costs

Affected Market Rule Provisions: Chapter 9, section 4.7D (new) General Topic:

(new) Day-Ahead Generation Cost Guarantee

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MR-00305 – Part R06

• The Day-Ahead Fuel Cost Compensation Settlement Amount is

meant to be triggered on the basis of the following chain of events:

1. An eligible generation facility (see also, MR-00303) is committed for a Day- Ahead Generation Cost Guarantee in the day-ahead pre-dispatch-of-record 2. The IESO subsequently de-commits the facility in the intervening time between the day-ahead pre-dispatch-of-record and the end of the scheduled minimum run-time 3. As a result of the above, the market participant incurs a demonstrable financial loss on any associated fuel costs.

• Successful claims credited to the market participant at the end of

the applicable billing period

• Costs for such claims are recovered as a non-hourly uplift amount

(see also, amendment sub-part R07)

Affected Market Rule Provisions: Chapter 9, section 4.7E (new) General Topic:

(new) Day-Ahead Fuel Cost Compensation Settlement Amount

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MR-00305 – Part R07

• Sections 4.8.1.13 and 4.8.2.2 reserved for interim,

monthly allocation of: – Day-Ahead Interie Offer Guarantee costs – Proceeds from Day-Ahead Import Failure Charges

• New, enduring non-hourly charges:

– Recovery of costs for Day-Ahead Generation Costs Guarantee (section 4.8.11) – Recovery of costs for Day-Ahead Fuel Cost Compensation Settlement Amount (section 4.8.12)

Affected Market Rule Provisions: Chapter 9, section 4.8 General Topic:

DACP Non-hourly Settlement Amounts

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MR-00305 – Part R08

• Overall scope of chapter 9 (“Settlements and

Billing”) expanded to include the necessary provisions for DACP settlement amounts

Affected Market Rule Provisions: Chapter 9, section 1 General Topic:

DACP Consequential Amendment

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MR-00305 – Part R09

• New Definition: pre-dispatch of record

– The essential sub-process of the day-ahead commitment process that provides most of the necessary schedules necessary to settle the DACP settlement amounts included in this amendment.

• Revised Definition: combined guaranteed costs

– Releases the IESO and market participant from the obligation of ensuring that the submission of combined guaranteed costs correspond exactly with the facility’s minimum loading point – Does NOT change the fact that submitted combined guaranteed costs must reflect only those costs actually incurred – Does NOT relieve the registered market participant for the generation facility from its responsibility to follow dispatch instructions

Affected Market Rule Provisions: Chapter 11, revised definitions General Topic:

DACP Definitions related to Settlements

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End of Slides