16 Tex. Admin. Code § 25.501 - Wholesale Market Design for the Electric Reliability Council of Texas
(a) General. The
protocols and other rules and requirements of the Electric Reliability Council
of Texas (ERCOT) that implement this section shall be developed with
consideration of microeconomic principles and shall promote economic efficiency
in the production and consumption of electricity; support wholesale and retail
competition; support the reliability of electric service; and reflect the
physical realities of the ERCOT electric system. Except as otherwise directed
by the commission, ERCOT shall determine the market clearing prices of energy
and other ancillary services that it procures through auctions and the
congestion rents that it charges or credits, using economic concepts and
principles such as: shadow price of a constraint, marginal cost pricing, and
maximizing the sum of consumer and producer surplus.
(b) Bilateral markets and default provision
of energy and ancillary capacity services. ERCOT shall permit market
participants to self-arrange (self-schedule or bilaterally contract for) energy
and ancillary capacity services, except to the extent that doing so would
adversely impact ERCOT's ability to maintain reliability. To the extent that a
market participant does not self-arrange the energy and ancillary capacity
services necessary to meet its obligations or to the extent that ERCOT
determines that the market participant's self-arranged ancillary services will
not be delivered, ERCOT shall procure energy and ancillary capacity services on
behalf of the market participant to cover the shortfall and charge the market
participant for the services provided.
(c) Day-ahead energy market. ERCOT shall
operate a voluntary day-ahead energy market, either directly or through
contract.
(d) Adequacy of
operational information. ERCOT shall require resource-specific bid curves for
energy and ancillary capacity services that it competitively procures in the
day-ahead or operating day, and ERCOT shall use these bid curves or ex-ante
mitigated bid curves to address market failure, as appropriate, in its
operational decisions and financial settlements.
(e) Congestion pricing.
(1) ERCOT shall directly assign all
congestion rents to those resources that caused the congestion.
(2) ERCOT shall be considered to have
complied with paragraph (1) of this subsection if it complies with this
paragraph. ERCOT shall settle each resource imbalance at its nodal locational
marginal price (LMP) calculated pursuant to subsection (f) of this section;
each load imbalance at its zonal price calculated pursuant to subsection (h) of
this section; and congestion rents on each scheduled transaction for a resource
and load pair at the difference between the nodal LMP at the resource injection
location calculated pursuant to subsection (f) of this section and the zonal
price at the load withdrawal location calculated pursuant to subsection (h) of
this section.
(f) Nodal
energy prices for resources. ERCOT shall use nodal energy prices for resources.
Nodal energy prices for resources shall be the locational marginal prices,
consistent with subsection (e) of this section, resulting from
security-constrained, economic dispatch.
(g) Energy trading hubs. ERCOT shall provide
information for energy trading hubs by aggregating nodes and calculating an
average price for each aggregation, for each financial settlement
interval.
(h) Zonal energy prices
for loads. ERCOT shall use zonal energy prices for loads that consist of an
aggregation of either the individual load node energy prices within each zone
or the individual resource node energy prices within each zone. Individual load
node or resource node energy prices shall be the locational marginal prices,
consistent with subsection (e) of this section, resulting from
security-constrained, economic dispatch. ERCOT shall maintain stable zones and
shall notify market participants in advance of zonal boundary changes in order
that the market participants will have an appropriate amount of time to adjust
to the changes.
(i) Congestion
rights. ERCOT shall provide congestion revenue rights (CRRs), but shall not
provide physical transmission rights. ERCOT shall auction all CRRs, using a
simultaneous combinatorial auction, except as otherwise ordered by the
commission for any preassigned CRRs approved by the commission. CRRs shall not
be subject to "use-it-or-lose-it" or "schedule-it-or-lose-it" restrictions and
shall be tradable.
(j) Pricing
safeguards. ERCOT shall apply pricing safeguards to protect against market
failure, including market power abuse, consistent with direction provided by
the commission.
(k) Simultaneous
optimization of ancillary capacity services. For ancillary capacity services
that it competitively procures in the day-ahead or operating day, ERCOT shall
use simultaneous optimization and shall set prices for each service to the
corresponding shadow price.
(l)
Multi-settlement system for procuring energy and ancillary capacity services.
For any energy and ancillary capacity services that it competitively procures
in the day-ahead or operating day, ERCOT shall set a separate market clearing
price for each procurement of a particular service.
(m) Energy Storage.
(1) For a storage facility that has more than
one delivery point, ERCOT shall net the impact of those delivery points on the
ERCOT system for settlement purposes.
(2) Wholesale storage occurs when electricity
is used to charge a storage facility; the storage facility is separately
metered from all other facilities including auxiliary facilities; and energy
from the electricity is stored in the storage facility and subsequently
re-generated and sold at wholesale as energy or ancillary services. Wholesale
storage is wholesale load and ERCOT shall settle it accordingly, except that
ERCOT shall settle wholesale storage using the nodal energy price at the
electrical bus that connects the storage facility to the transmission system,
or if the storage facility is connected at distribution voltage, the nodal
price of the nearest electrical bus that connects to the transmission system.
Wholesale storage is not subject to retail tariffs, rates, and charges or fees
assessed in conjunction with the retail purchase of electricity. Wholesale
storage shall not be subject to ERCOT charges and credits associated with
ancillary service obligations, or other load ratio share or per megawatt-hour
based charges and allocations. The owner or operator of electric storage
equipment or facilities shall not make purchases of electricity for storage
during a system emergency declared by ERCOT unless ERCOT directs that such
purchases occur.
Notes
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