| the notice with modifications. With respect to the September 10, 2003 auction: (I) Affiliated PGC's shall include a reference to Project Number 27826, Rulemaking Proceeding to Require Another Set of Two-Year Strips Under the Capacity Auction Rule, §25.381 , in their 60-day notice with a statement that the products to be auctioned in the September 2003 auction will not be fully known until after the commission finalizes Project Number 27826; and (II) Within five days after the rule amendment in Project Number 27826 becomes effective, affiliated PGC's shall revise their notice, with sufficient explanation, to accurately reflect the products to be auctioned. (ii) Contents of notice. (I) The auction notice shall include the auction start date, the date and time by which bids must be received for the first round, and the types, quantity (number of blocks), congestion zone, and term of each entitlement available in that auction. The notice shall also include the following range of bid increments for each product type to be used to adjust the price of entitlements between rounds of the auction: (-a-) Baseload - $ .05 to $ .75; (-b-) Gas-intermediate - $ .02 to $ .30; (-c-) Gas-cyclic - $ .02 to $ .30; (-d-) Gas-peaking - $ .02 to $ .30. (II) The affiliated PGC shall also specify which power generation units will be used to meet the entitlement for each type of entitlement to be auctioned. If baseload entitlements are being auctioned, the utility shall also specify the fuel cost prescribed in subsections (f)(3)(B)(ii) and (g)(2)(F)(ii) of this section at the time of the auction. If an entitlement to be auctioned is subject to the forced outage provision in subsection (e)(2)(B) of this section, then the notice must include the applicable three-year rolling average of the forced outage rate. (iii) The affiliated PGCs shall publish their respective notices and application forms on their web sites no later than 45 calendar days before the start of each auction. Each entity that intends to bid in an affiliated PGC's auction shall complete the forms, which include the first page of the cover sheet to the Agreement, and submit them to the affiliated PGC at least 20 business days before the auction starts, to allow enough time for evaluation and approval of credit. Potential bidders may submit the required documents after that time, but at the risk of not having credit and document approval in time for them to participate in the auction. (iv) Credit approval for entities bidding on capacity auction products in ERCOT or in non-ERCOT areas of Texas will be performed pursuant to subsection (e)(7) of this section. (v) The affiliated PGC shall notify an approved bidder of its available credit and send the approved bidder a completed capacity auction- specific version of the applicable Agreement, executed by the affiliated PGC, within ten business days after the bidder has submitted the required information. The approved bidder should attempt to execute and return the executed Agreement to the affiliated PGC no later than five business days before the auction starts. The executed Agreement shall be received by the affiliated PGC no later than two business days before the auction starts. The affiliated PGC shall provide a password or passwords to the approved bidder to allow access to the auction web site and to allow it to bid no later than one business day before the auction starts. An approved bidder may not request or receive additional credit after the auction starts. (vi) Specific information on how to place bids and navigate the auction sites will be provided by the affiliated PGCs to their qualified bidders prior to the beginning of the capacity auction. (3) Term of auctioned capacity. (A) Initial auction. For the initial auction in September 2001, each entitlement was one month in duration, with: (i) Approximately 20% of the entitlements auctioned as two one-year strips with the strips auctioned jointly (the 12 months of 2002 and 2003), (ii) Approximately 30% of the entitlements as one-year strips (the 12 months of 2002), and (iii) Approximately 20% of the entitlements as discrete months for each of the 12 months of 2002 (January through December of 2002) (iv) Approximately 30% of the entitlements as discrete months for the first four months of 2002 (January through April of 2002). (v) Reductions in the amounts of entitlements available during the months of March, April, May, October, and November of each calendar year shall be accounted for in the entitlements offered as discrete months. (B) Schedule of subsequent auctions. (i) The auction in March of a year will auction approximately 30% of the entitlements as the discrete months of May through August of that year. (ii) The auction in July of a year will auction approximately 30% of the entitlements as the discrete months of September through December of that year. (iii) The auction in September of a year will auction: (I) Approximately 50% of the entitlements as the one-year strips for the next year; and (II) Approximately 20% of the entitlements as discrete months for each of the 12 calendar months of the next year. (iv) The auction in November of a year will auction approximately 30% of the entitlements as the discrete months of January through April of the next year. (v) Reductions in the amounts of entitlements available during the months of March, April, May, October, and November of each calendar year shall be accounted for in the entitlements offered as discrete months. (vi) The commission will periodically evaluate the need to sell one-year and two-year strips and make appropriate adjustments to the terms of the auctions. (C) Modification of term. If the auction is for a one-year or two-year strip term and the affiliated retail electric provider (REP) expects to reach the 40% load loss threshold in paragraph (1)(A)(iii) of this subsection, the affiliated PGC may request a shorter term strip by providing evidence of the loss of customer load. Similarly, prior to an auction for the next four available months, an affiliated PGC may request to not auction months in which it projects reaching the 40% threshold. Such filings shall be made 90 days before the auction start date. An affiliated PGC that will satisfy its auction requirements through divestiture, as described in subsection (d) of this section may petition the commission to set an appropriate term for entitlements. The affiliated PGC may not adjust the amount or length of an entitlement to be auctioned except as authorized by the commission. (4) Quantity to be auctioned. (A) Block size and number of blocks. The block size of the auctioned capacity entitlement is 25 MW. The affiliated PGC shall divide the amount determined for each product referenced in subsection (e)(1) of this section by 25 to determine the number of blocks of each type to be auctioned. (B) Divisibility. If the amount to be auctioned for an affiliated PGC for a particular product is not evenly divisible by 25, any remainder shall be added to the product most highly valued in the immediately preceding auction for products of the same duration and shall increase by one the number of entitlements of that product. (C) Total amount. The sum of the blocks of capacity auctioned shall total no less than 15% of the affiliated PGC's Texas jurisdictional installed generation capacity. (5) Bidders. For each auction, potential bidders shall pre-qualify by demonstrating compliance with the credit requirements in subsection (e)(7) of this section in advance of submission of a bid. (6) Bidding procedures. For purposes of this section, the term "set of entitlements" shall refer to all of a seller's products of the same type and period. For example, a quantity of baseload products sold as a one-year strip for 2002 would be a set of baseload-annual 2002 entitlements, while a quantity of baseload products sold as the discrete month of July 2002 would be a set of baseload-July 2002 entitlements. (A) Method of auction for affiliated PGCs within ERCOT. Each auction shall be a simultaneous, multiple round, auction that includes procedures that allow switching by bidders between affiliated PGCs and product types. (i) Auction duration. Once a product auction commences it will continue through each business day until that auction concludes. (ii) Round duration. Each auction's first round will begin promptly at 8:00 a.m. and each round will last for 30 minutes with 30 minutes between rounds. For example, the first round of bidding will start at 8:00 a.m. and end at 8:30 a.m., the second round will start at 9:00 a.m. and end at 9:30 a.m., etc. No round may start later than 4:00 p.m. All times are in central prevailing time. Cont'd... |
