RE: Suggested Solution to the PUC's Concerns Regarding Local Cong ,
 Is Clayton reading it correctly?  I must admit that I am having trouble
interpreting the proposed solution as well.  Also, I would respectfully
disagree that the problem (i.e., potential for gaming) exists only when the
zonal MCPE is negative.

> ----------
> From:  Greer, Clayton[SMTP:cgreer@tnpe.com]
> Sent:  Wednesday, November 29, 2000 9:42 AM
> To:  isonp@ercot.com; piwg@ercot.com; operations@ercot.com;
> manuel-munoz@reliantenergy.com
> Cc:  kevin-gresham@reliantenergy.com; Brenda_B_Harris@reliantenergy.com
> Subject:  RE: Suggested Solution to the PUC's Concerns Regarding Local
> Cong estion
>
> If I am reading this correctly, it appears that rather than provide an
> adjustment for decremental units relieving local congestion, they will be
> required to either pay the market clearing price of energy for the zone or
> redispatch another unit in the same zone to counter act the decremental
> instruction.
>
> I believe we can support this change as long as few questions are properly
> handled:
>
> If there are multiple units that can clear the local congestion problem,
> who
> gets selected?  (best shift factor, submitted dec bids, ERCOT flips a
> coin?)
>
> If a generator fails to follow this instruction will it properly show up
> as
> an uninstructed deviation, or will ERCOT follow performance to these
> direct
> instructions some other way?
>
> Can this similar methodology be used on the incremental side to curb abuse
> by those who manipulate their resource plans to create congestion they
> will
> be the only resource to correct?
>
> Have a great day!
>
> > ----------
> > From:
> > manuel-munoz@reliantenergy.com[SMTP:manuel-munoz@reliantenergy.com]
> > Sent:  Sunday, November 26, 2000 7:45 PM
> > To:  isonp@ercot.com; piwg@ercot.com; operations@ercot.com
> > Cc:  kevin-gresham@reliantenergy.com;
> Brenda_B_Harris@reliantenergy.com
> > Subject:  Suggested Solution to the PUC's Concerns Regarding Local
> > Congestion
> >
> > <<File: Adib103100>><<File: stoft-game.pdf>><<File:
> > stoft-intra-zonal.pdf>>
> > In a memo from Parvis Adib dated Oct. 31 (copy attached), the PUC
> > describes
> > a serious concern on the part of the Commission regarding market abuse
> > through relieving Local Congestion under the current Protocols. John
> Meyer
> > has asked me to draft a suggested solution to this concern. I am
> > recommending the following solution and believe it should be very easy
> to
> > implement.
> >
> > THE PROBLEM: Gaming whereby an entity deliberately and chronically
> places
> > itself in a situation to create local congestion in order to profit from
> > instructions to decrement its energy deliveries.
> >
> > The current language states that when a resource  is instructed to
> > decrement its energy deliveries and a Market Solution does not exist the
> > resource's QSE will pay the minimum of the MCPE for that zone or 0. The
> > trouble with this approach is that if the MCPE is negative the QSE is
> > rewarded for having a resource causing local congestion. If the
> situation
> > persisted over time this could encourage inefficient generation to be
> > built
> > on the same area so that it can profit by having its output reduced or
> > even
> > turned off.
> >
> > Note that this would only happen in a situation where the local
> congestion
> > is located within a zone that is also susceptible to CSC congestion as
> > well
> > and the QSEs in such a zone are decremented most of the time which leads
> > to
> > high incidence of negative MCPE for the zone. This does not appear
> likely
> > but could occur if a zone is relatively small; i.e., dominated by QSEs
> > that
> > are few in number and that consistently overschedule across a CSC zone
> > with
> > the anticipation that they will always be instructed to decrement energy
> > in
> > real time.
> >
> > RECOMMENDED SOLUTION :
> >
> > Do not compensate or charge a resource that is instructed to decrement
> its
> > energy deliveries by ERCOT when a Market Solution does not exist in
> > relieving local congestion.  However, the resource must obey the
> > instruction in order to maintain system reliability.
> >
> > Please give me your comments on this solution concept  before Dec. 1. I
> > am
> > recommending that we add this as an item to vote on at the RUG meeting
> > scheduled for Dec. 6. I will also draft the recommended language changes
> > (very minor) to sections 6 and 7 and distribute it prior to the meeting.
> >
> > Manny
> >
> >
> > (See attached file: Adib103100)
> >
> > (See attached file: stoft-game.pdf)
> >
> > (See attached file: stoft-intra-zonal.pdf)
> >
> >
>
isonp@ercot.com, piwg@ercot.com, operations@ercot.com, 