(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.
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Source Note: The provisions of this §25.501 adopted to be effective October 13, 2003, 28 TexReg 8901; amended to be effective November 18, 2004, 29 TexReg 10504; amended to be effective April 18, 2012, 37 TexReg 2613 |