| (I) If at any time after the auction is completed, there shall occur a downgrade event with respect to the credit standing of the seller, then the entitlement holder may require the seller to provide a credit assurance in an amount determined by the entitlement holder in a commercially reasonable manner. In the event the seller fails to provide a commercially reasonable performance assurance or guarantee within three business days of the receipt of notice, then an event of default shall be deemed to have occurred, and the entitlement holder will be entitled to suspend performance under the Agreement and withhold payments for energy not yet delivered, and may ultimately terminate the Agreement after the suspension period as prescribed in the Agreement. (f) Product descriptions for capacity auctions in ERCOT. The provisions in this subsection apply to capacity auctions in ERCOT. Subsection (g) of this section contains provisions applicable to capacity auctions in non-ERCOT areas. (1) Definitions. (A) The following words and terms, when used in this subsection shall have the following meanings, unless the context indicates otherwise. (i) Balancing energy service down deployed--The number of megawatt- hours (MWh) of balancing energy service down deployed by ERCOT from an entitlement. (ii) Balancing energy service up deployed--The number of MWh of balancing energy service up deployed by ERCOT from an entitlement. (iii) Daily capacity commitment--The amount of capacity scheduled by an entitlement holder that an affiliated PGC must make available from an entitlement for the provision of energy or permitted ancillary services for an operating day from an entitlement. (iv) Day-ahead schedule--A schedule submitted by an entitlement holder to an affiliated PGC of the entitlement holder's scheduled usage of the entitlement for the following operating day. (v) Default qualifying scheduling entity (QSE)--The QSE that is designated by the entitlement holder to ERCOT as its default QSE. (vi) Energy scheduled--The final schedule for energy, for each settlement interval, that an entitlement holder submits to an affiliated PGC, subject to the limits on timing and amounts of schedules contained in the capacity auction product descriptions. (vii) Energy deployed down--The sum of regulation energy down energy deployed and balancing energy service down energy deployed. (viii) Energy deployed up--The sum of regulation energy up energy deployed, responsive energy deployed, non-spinning energy deployed, and balancing energy service up energy deployed. (ix) Grouped entitlements--All of the entitlements from an affiliated PGC that an entitlement holder holds for a particular entitlement month. (x) Grouped ancillary services--The amount of each type of ancillary service available from each entitlement grouped by: (I) Type of ancillary service; (II) Type of capacity auction product; and (III) Congestion zone for those ancillary services that are, or may be, dispatched by congestion zone. (xi) Hour-ahead schedule--A schedule other than a day-ahead schedule submitted by an entitlement holder to an affiliated PGC no later than one hour before the end of an adjustment period of the entitlement holder's scheduled use of the entitlement for the operating hour corresponding to that adjustment period. (xii) Non-spinning energy deployed--Energy deployed by ERCOT from the non-spinning reserve service as determined under the procedures in paragraph (2)(B) of this subsection. (xiii) Product--Electric capacity, energy, capacity auction products or other product(s) related thereto as specified in a transaction by reference to a product listed in the Agreement or as otherwise specified by the parties in a transaction. (xiv) Regulation energy down deployed--Energy deployed down by ERCOT from the regulation energy service as determined under the procedures of paragraph (2)(B) of this subsection. (xv) Regulation energy up deployed--Energy deployed up by ERCOT from the regulation service as determined under the procedures of paragraph (2)(B) of this subsection. (xvi) Responsive energy deployed--Energy deployed by ERCOT from the responsive reserve service as determined under the procedures of paragraph (2)(B) of this subsection. (xvii) Two-day-ahead schedule--A schedule submitted by the entitlement holder to the affiliated PGC of the entitlement holder's scheduled usage of the entitlement for the operating day two days in the future. (B) The following terms have the respective meanings given to them in the ERCOT protocols as amended from time to time: (i) Ancillary services; (ii) Balancing energy service; (iii) Congestion zone; (iv) Non-spinning reserve service; (v) Operating day; (vi) Operating hour; (vii) Regulation service; (viii) Responsive reserve service; (ix) Settlement interval; and (x) Zonal market clearing price. (2) General provisions. (A) Responsibility transfers. (i) The entitlement holder may not use an entitlement for the provision of balancing energy service until a responsibility transfer (RT) between the entitlement holder's QSE and the affiliated PGC's QSE is established and operated in accordance with the ERCOT protocols for the deployment of balancing energy service. The entitlement holder shall establish a separate RT with the affiliated PGC for each congestion zone from which the entitlement holder desires to provide balancing energy service. (ii) When ERCOT has developed the details and specifications of RTs between QSEs, including without limitation, mechanics, settlement, and communication, then, at the request of the entitlement holder, the parties shall negotiate in good faith to transfer responsibility between their respective QSEs to: (I) Allow the entitlement holder to provide balancing energy service from the entitlement; and (II) Allocate the cost of establishing that capability. (iii) The entitlement holder's QSE shall act as the controller of RTs used for balancing energy service from an entitlement. The entitlement holder's QSE shall use RTs to provide instructions regarding balancing energy service to the affiliated PGC's QSE. These instructions shall comply with all the limitations in the applicable capacity auction product description. (iv) Both the entitlement holder's QSE and the affiliated PGC's QSE shall enter an inter-QSE trade in accordance with the ERCOT protocols to represent an RT before any operating hour in which the entitlement holder deploys balancing energy service from an entitlement. (v) The affiliated PGC's QSE is only responsible for complying with RTs sent by the entitlement holder's QSE and is not responsible for ERCOT instructions sent to the entitlement holder. (vi) The affiliated PGC and the entitlement holder shall rely upon any integration of the RT over each settlement interval performed by ERCOT. If ERCOT does not perform that integration, then the integration shall be performed in a manner mutually agreed to by both parties. (vii) The entitlement holder is deemed not to have provided any balancing energy service from an entitlement if the affiliated PGC loses or does not receive the balancing energy service signal from ERCOT. The affiliated PGC will promptly notify the entitlement holder if it does not receive or loses the balancing energy service signal from ERCOT. (B) Deployment of energy from ancillary services. Subject to the limitations and conditions set out in this subsection, and except when the affiliated PGC is excused from hierarchical dispatch by ERCOT of ancillary services under clause (i) or (v) of this subparagraph, ERCOT shall be deemed to have dispatched ancillary services from the entitlements in the entitlement group in a hierarchical order according to the requirements of this subsection. Otherwise, ancillary services shall be dispatched for each entitlement in an entitlement group independently. (i) Notice of grouped entitlements. Not later than five days before the beginning of an entitlement month, the entitlement holder shall notify the affiliated PGC of all entitlements from the affiliated PGC that are held by the entitlement holder for that entitlement month. The list shall contain sufficient detail for the affiliated PGC to identify the entitlements held by the entitlement holder for that month, including without limitation any unique entitlement number assigned by the affiliated PGC to the entitlement and listed on the letter confirmation for the entitlement. If the affiliated PGC does not timely receive this notice, then the affiliated PGC is excused from its obligation to dispatch ancillary services on a hierarchical basis under this section. (ii) Amount of ancillary services scheduled from entitlements. Cont'd... |
