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Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Williams III, Bill </O=ENRON/OU=NA/CN=RECIPIENTS/CN=BWILLIA5< X-To: Symes, Kate </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Ksymes< X-cc: X-bcc: X-Folder: \ExMerge - Williams III, Bill\Sent Items X-Origin: WILLIAMS-W3 X-FileName: This is the new CAISO calculation for ancillary service charges. Please look it over and let me know if you have any questions. Thanks, Bill -----Original Message----- From: CRCommunications <CRCommunications@caiso.com<@ENRON [mailto:IMCEANOTES-CRCommunications+20+3CCRCommunications+40caiso+2Ecom+3E+40ENRON@ENRON.com] Sent: Tuesday, July 10, 2001 1:59 PM To: SC Settlements Contacts Cc: TSWG; ISO Client Relations; Ng, Chi-Pui; Blatchford, James; Klussmann, Rhonda; Morgan, Elizabeth Subject: CAISO Communication: Draft Statement File Specification (V13.1) - "Soft Price Cap for Ancillary Services" SC Settlement Contacts: IMPORTANT NOTICE Draft Statement File Specification (V13.1) ISO plans to make some minor changes to the Settlement Statement Files related to "Soft Price Cap for Ancillary Services", described as follows: Soft Price Cap for Ancillary Services Problem Description Last December, ISO implemented the Soft Price Cap scheme that established a soft price cap for both energy and Ancillary Services (A/S). Bids above the soft cap, if accepted, would be paid as bid (subject to review and refund), but would not be able to set the Market Clearing Price (MCP). The soft cap was set to $250 initially and then changed to $150 in January. In the subsequent FERC Orders dated 4/25 and 6/19, FERC has established new price mitigation schemes. However, the underlying mechanism of the soft price cap scheme has remained the very much similar. The only difference is that the soft cap becomes a more dynamic number under the more recent schemes. The soft price cap for energy is processed automatically by ISO's Settlement System. For A/S, a manual process is being used. When an A/S bid at above the mitigated price cap is accepted, it receives two payments: one at MCP and another that accounts for the difference between the bid price and MCP. Currently, this surplus payment is calculated manually and appears as a manual adjustment in the SC's statement file. The corresponding allocation of such surplus payments to the market also appears as manual adjustments in the other SCs' statement files. The manual process is labor intensive, more prone to error and creates a large number of manual adjustments that are difficult to track. Proposed Solution ISO plans to automate A/S Soft Price Cap scheme. Once automated, the accepted A/S bids will receive only one payment whose price is the higher of the bid price and Market Clearing Price. No manual adjustments will be needed. The entire payment will appear in the Day Ahead Ancillary Services Due SC payments (charge types 1, 2, 4, 5 and 6) or Hour Ahead Ancillary Services Due SC payments (charge types 51, 52, 54, 55 and 56). The Ancillary Services cost allocation (charge types 111,112,114,115 and 116) will be calculated using a weighed average prices for the service instead of the MCPs. Settlement Calculations For Day Ahead (DA) A/S Due SC payments, the price will be given by: Price = max (Bid Price, DA Zonal MCP of given service) Similarly, for Hour Ahead (HA) A/S Due SC payments, Price = max (Bid Price, HA Zonal MCP of given service) For A/S Cost Allocation, the unit price of A/S obligation is currently determined as follows: Allocation Price = (DAQ*DAMCP + HAQ*HAMCP) / (DAQ + HAQ) where DAQ = DA procurement target in the subject DA Region HAQ = Incremental HA procurement target in the zones that make up the DA region DAMCP = MCP of the subject service in the DA region HAMCP = Weighted average MCP of the subject service in the zones that make up the DA region Under the new scheme, the MCP terms in the above equation will be replaced by average procurement costs. Thus, Allocation Price = (DAQ*DAP + HAQ*HAP) / (DAQ + HAQ) where DAP = Average procurement price of the subject service in the DA region HAP = Average procurement price of the subject service in the zones that make up the DA region Settlement Statements There is no change to the settlement files structure. The meaning of several fields in the Ancillary Services Detail File have been modified slightly. These changes are explained in the latest draft of the ISO Settlement Statement Files Specification - Version 13.1. Implementation Timelines The change described above will take place in the Settlement Statements beginning with trade date 5/29/2001, on which the FERC price mitigation scheme (as described in the FERC 4/25 Order) took effect. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXX Attached for your review are: - Draft Settlement Statement File Specification (V13.1); and - Draft ISO Charge Matrix for Automated Charge Types (V13.1). There is no structural change made to the Settlement Files. Only the definition of several data fields have been changed. <<File Spec - Version 13.1 - 070601 - Draft.doc<< <<Charge Matrix (Automated Chrg Types) - Version 13.1 - 070601 - Draft.xls<< <<Market Notification.doc<< Questions and Comments Please direct your questions and comments to Mr. C. P. Ng via email (cng@caiso.com). Client Relations Communication CRCommunications@caiso.com - File Spec - Version 13.1 - 070601 - Draft.doc - Charge Matrix (Automated Chrg Types) - Version 13.1 - 070601 - Draft.xls - Market Notification.doc
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