Note there is training available on LMS about the Congestion Hedging / TCR markets.

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Norman Short
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1 SPP Congestion Hedging FAQ This document is intended to ddress frequently sked questions regrding SPP s Congestion Hedging process, reports, funding nd tools. This document hs nswers tht re subject to chnge with djustments to the SPP TCR mrkets business prctices nd chnges to the governing documents, the SPP Open Access Trnsmission Triff (OATT or Triff) nd/or the SPP Mrket Protocols. For ny further questions or clrifiction plese use RMS ( nd the Quick pick Trnsmission Congestion Rights (TCR) Inquiry. Note there is trining vilble on LMS bout the Congestion Hedging / TCR mrkets. Lst Revised: 6/30/2016 Contents Reports... 1 Self-Converts... 3 LTCR... 4 ILTCR... 5 Wht if?... 6 Process... 7 Funding... 9 Reports Q Where re the June monthly results for the TCR mrkets? There is no June monthly process. June is llocted (ARR) nd uctioned (TCR) in totlity in the nnul process. The results for June re found in the nnul results. Q Do the ggregted nnul lloctions for pth sum with the monthly lloctions to mke n ggregte of the nnul nd monthly results? Yes, when monthly lloction is posted, the wrds from the monthly lloction will ggregte with ny unsettled ARRs from the nnul lloction. Q Wht is SPP's schedule for posting historicl TCR bids nd offers? We post historicl TCR bid nd offer informtion 6 months fter ech uction. Q The historicl results from the TCR MUI differ with those pulled from the portl ( Why? The MUI Downlod > Public > Results for uctions only lists bid for or offered TCRs tht were wrded for ech specific uction. The TCR Auction Historicl Results on the Mrketplce Portl provide ll TCRs wrded from ech specific uction tht were bid for, offered or self-converted. The Existing

2 TCRs under MUI > Downlods > Public > Generl provides ll current existing TCRs for ll mrkets nd periods from ll sources. Q I m trying to verify my monthly ARRs in the MUI, but in the zip for the monthly lloction tht should show my firm trnsmission service reservtions (my entitlements) is empty, there re no reservtions listed. Is there different process to verify the monthlies? No, tht is the process of verifying your monthly entitlements. Plese remember tht during the monthly verifiction process the entitlements/cndidte ARRs tht you should observe (in tht zip file) nd verify should be only those firm trnsmission service reservtions tht re incrementl (dditionl) to wht ws verified nd received during the nnul process.

3 Self-Converts Q Is the self-convert bid strtegy wht ll MPs should be doing? SPP cnnot sy wht MPs should or should not be doing. However, doing nothing hs the potentil to leve prticipnt s ARR ssigned vlue by the mrket. Q If n MP self-converts nd doesn't put bid in, then the MP doesn t influence price, correct? Not exctly, if n MP 100% self-converts, then this tells the system to do everything it cn to get the TCR for the MP. This price will not ffect the MP becuse they re effectively pying themselves. The MP would be pying into the uction if it dded bid. Q Wht hppens if n MP wnts to self-convert ll ARRs nd there is not enough counterflow? The softwre will try nd mke tht counterflow hppen by purchsing buy bids; if the system cn t get enough counterflow the self-convert will be curtiled. Keep in mind tht self-converts occur during the uction process. In cses where the lloction percentge doesn t mtch the uction percentge, pre-run study is run prior so SPP knows wht will settle. The pre-run considers the mximum of request or minimum-settled in pre-run in order to preserve vibility of ARR funding by the TCR uction process. Q How cn self-convert be prorted when the pth clers negtive? If pth clers negtive it is counterflow, so why isn t the full volume fesible to cler? A self-convert cn be curtiled in the pre-run nd then be counterflow in the full uction run. In the pre-run, there re only self-converts nd ARRs, nd bids re dded in the full uction run. This difference in prticiption cn flip the flows between runs. Q I submitted self-convert in Round 1 of monthly two round uction nd converted 50% of my request. In order to convert remining ARRs, do I need to submit self-convert in Round 2? Yes. Q Should MPs ttempt to bid bove the minimum settled MW? Wouldn t this help me get more of my self-convert, i.e. for 100 MW ARR should I self-convert 100 MWs nd lso bid 10 MWs if I wnt to gurntee myself 100 MWs but expect the self-convert to be wrded t the minimum settled MW.) No. A self-convert will lwys trump bid (with the exception of self-converts curtiled in the prerun). If n MP is not getting TCR vi self-convert, bid on the sme pth will not help n MP receive more of their self-convert. Additionlly, if n MP is wrded self-convert equl to the minimum settled MWs, their sme-pth bid my lso cler. In this cse, the MP would py for the bid TCR out of pocket, i.e. in the uction, the 100 MW self-convert could be wrded from 0 to 100 MWs nd the MP would be, in effect, pying themselves. Any portion of the 10 MW bid which is wrded would be pid, out of pocket, into the uction by the MP. Q Cn n ARR be self-converted nd the resulting TCR be offered to sell in the sme round? No, only previously wrded TCR cn be sold in given uction round. For exmple, TCR from the nnul process could be sold in monthly uction. Additionlly, TCR obtined in Round 1 of monthly uction could be sold in Round 2 of tht two round monthly process.

4 LTCR Q How cn I surrender my LTCR? In Round 1 of the LTCR process you cn "Keep" or "Decline" existing LTCRs in the TCR MUI. The LTCR defult vlues will be set for the mximum vlue. To reduce or surrender LTCR MWs, reduce the MW mount to the desired vlue in 0.1 MW increments. Then you must sve nd submit your portfolio. Filing to sve nd submit would ultimtely men surrendering ll previously llocted LTCRs. Q Do llocted LTCRs require self-converting in the regulr ARR/TCR nnul process? No. The llocted LTCRs re utomtic TCR wrds nd vilble for your viewing through the MUI prior to the nnul TCR uction. Q Is it necessry to nominte the previously wrded LTCRs gin the following yers? Yes, previously wrded LTCRs must be nominted gin in Round 1 of the LTCR process to keep them. As long s the firm trnsmission service MW bcking the LTCR remins, the system prefills the nomintions with the ssumption tht you're keeping ll the previous LTCRs t the sme mount (MWs); if desired, you cn reduce the mount in 0.1 MW increments. Then you must sve nd submit the portfolio in order to keep them. Filing to sve nd submit would ultimtely men surrendering ll previously llocted LTCRs. Q Wht's the nomintion cp for ech round of the LTCR process? In Round 1, you keep or surrender previously wrded LTCRs. In Round 2, you cn nominte 100% of ny remining nomintion cp (less LTCRs kept in Round 1) from qulified LTCRs (cndidte LTCRs). Q Does electing to surrender or reduce n LTCR preclude n MP from nominting the cndidte LTCR in the future? No, electing to surrender or reduce n LTCR does not preclude nominting the sme cndidte LTCR in Round 2 of ny future nnul LTCR processes. Q Will I need to opt out of llocted LTCRs for resources tht retire or will the process utomticlly tke the entitlement for the LTCR out of my portfolio? Those pth(s) will not be vilble. The TSRs re reclled nd no longer exist on OASIS, so ny previous LTCR wrds tht use tht TSR will not be vilble to renew during Round 1 of the nnul LTCR process.

5 ILTCR Q Why do my ILTCR/LTCR reports not show Service Type or LSE Type for ILTCR records? ILTCRs do not hve Service Type or LSE Type becuse they do not tie directly to Trnsmission Service Reservtions. They re bsed on sponsored upgrdes, so NITS or PTP would not be ccurte. Even though they re not clssified s LSE (Lod Serving Entity) or non-lse, they re evluted long with LSEs in round 2 of the LTCR lloction prior to non-lse evlution. Q Are ILTCRs evluted s options or obligtions? Like LTCRs, ILTCRs re evluted s OPTIONS in the LTCR lloction simultneous fesibility evlution. However, once these ILTCRs re wrded nd directly converted to TCRs, they become OBLIGATION type similr to ll other TCRs. Q When is SPP going to run n Initil ILTCR mrket? Initil ILTCR mrkets only hppen when n MP request to receive ILTCRs from sponsored upgrde nd only tht MP will prticipte in the mrket. Depending on requests, one or more Initil ILTCR mrkets could occur t ny time during the TCR yer.

6 Wht if? Q Wht if I hve question or problem? Plese contct us vi the Request Mngement System (RMS) locted t We re gld to help nd ssist. Q Wht if n MP doesn t submit their portfolio during n uction/lloction open window? They re unble to prticipte in tht round of n uction/lloction. Q Is there wy SPP cn notify us of mrket ctions? Yes, just submit n RMS ticket requesting the Congestion Hedging notifiction survey. Once completed nd submitted vi RMS, you will be dded, messges re provided vi Mssge911. Q Does SPP renme nodes fter the TCR uction results re published? SPP does not renme nodes fter TCR uction results re published. We lso do not mintin comprison file of old vs new node nmes. Q For resource to be considered s n nnul LTCR or ARR source when is the dedline tht the ssocited NITS or PTP greement must be pproved? For exmple in 2016, the nnul processes were strted in erly Februry, Februry 1 dte then would typiclly llow new entitlements to be considered for the nnul LTCR nd/or ARR processes. Therefore, plese observe the timing of the nnul verifiction process for the dedline in ny given yer. Also, be wre of ny other processes tht my impct the bility to chieve useble firm NITS or PTP trnsmission service in the Congestion Hedging process such s: o o o Aggregte study timelines nd dedlines for long-term service AFC process for monthly service study timelines nd dedlines Registrtion dedlines for registering settlement loctions nd ssocited OASIS source/sink mppings(for 2016 s nnul process it ws December 15th 2015)

7 Process Q Wht is the bid limit per MP? Section 5.4.1(4) of the SPP Mrket Protocols sttes tht n MP is limited to mximum combined submittl of 2,000 TCR bids nd/or TCR offers per TCR round for ech Asset Owner it represents. Q Wht is reference bus in SPP? It is the swing bus in the RAW file. Q How is the model mde? The TCR Mrket Modeling Prctices guide cn be found on You could use the url or follow >> Mrkets & Opertions >> TCR Mrkets >> Relted Document Groups >> TCR Reference Documents >> TCR Mrket Modeling Prctices. Q I m trying to downlod nd historic network models t SPP Mrketplce Portl>TCR MUI>Downlod>Public>Network>Model.Rw, but when downloding the.zip file the contents of the file show 'nofileavilble.txt.' Why? Due to differing security requirements, the network model files re hosted on Trueshre, not the MUI. Q How do I get ccess to the network model RAW file? The RAW file is vilble through Trueshre, to get ccess to Trueshre plese submit n RMS ticket sking for TCR model Trueshre ccess. We will provide you with non-disclosure greement (NDA). Q How re outges pplied in the TCR process? The TCR Mrket Modeling Prctices guide cn be found on The section on Scheduled Outges cn be found on pge 6. You could use the url or follow >> Mrkets & Opertions >> TCR Mrkets >> Relted Document Groups >> TCR Reference Documents >> TCR Mrket Modeling Prctices. Q Where cn I trck my enhncement requests? Enhncement requests re trcked in Silk nd must be pproved by SPP mngement. SPP periodiclly ssesses this informtion, nd when enhncements re pproved it is communicted through the Chnge Working Group (CWG) process. To be dded to system notifictions, subscribe to the CWG Exploder here. Enhncement efforts my be trcked in CWG meeting mterils. Q Is there clendr of the process? Yes. Here is link from the SPP Mrketplce Portl tht hs the ltest TCR clendr informtion: Plese feel free to utilize the.ics files vilble in this folder; we worked very hrd on them!

8 Q Is there mpping between the Dy-Ahed/Rel-Time monitored/contingent fcilities nd the TCR device nmes? There is NERC ID ssocited with the Dy-Ahed/Rel-Time monitored/contingent fcilities file. You cn cross-reference tht ID ginst the OASIS flowgte posting nd the TCR flowgtes file to mtch up the elements. The OASIS flowgtes file is posted t in the Trnsmission > Flowgtes folder using the nvigtion br on the left of the screen. Q When running DC power flow nlysis in Power World using the RAW file published on TrueShre the power flow will not converge. Is there ny wy to fix this RAW file so it converges? No, we re unble to ssist with troubleshooting ny solutions in Power World becuse we do not use this softwre to vlidte power flow solution. Q Will I see chnges mde to my entitlements/cndidte ARRs, ARRs or self-converted TCRs or LTCRs if chnge occurs to the underlying firm confirmed trnsmission service fter it is verified in the TCR mrkets nnul process? No, once verified in the nnul verifiction process the entitlements/cndidte ARRs or ny ARRs or self-converted TCRs from verified trnsmission service will be honored until the next nnul verifiction process. However, there re two exceptions to the bove sttement tht pply to certin circumstnces. First, Attchment AE, section describes the reversion of ARR/TCR rights bsed on trnsmission service with unexercised rollover rights. For trnsmission service with rollover rights whose dedline for providing notice of rollover occurs fter the Annul LTCR/ARR verifiction but before June 1, the Trnsmission Provider shll ssume tht the rollover will occur nd shll consider the trnsmission service entitlement to spn the entire lloction yer, provided, however, tht, if rollover rights for such trnsmission service re not exercised by the pplicble dedline, ny ARRs, TCRs, or LTCRs ssocited with such trnsmission service shll revert to the Trnsmission Provider effective on the dte such trnsmission service termintes. See SPP's Triff t Attchment AE, section ("Trnsmission Service nd Incrementl Long-Term Congestion Rights Verifiction"). Second, Attchment AE, section 7.9 (citing Attchment X) describes scenrio in which SPP termintes the TCR positions of n MP tht hs defulted. See Attchment AE, section 7.9 ("Liquidtion of Trnsmission Congestion Rights in the Event of Mrket Prticipnt Defult").

9 Funding Q How re TCRs priced? TCRs re priced in the Dy-Ahed Mrket by the cretion of Loctionl Mrginl Prices (LMPs) mde up of three components: energy, losses, nd congestion. The hourly TCR vlue is construct of the differentil in the congestion component of LMP between the TCR s source Settlement Loction nd sink Settlement Loction. Plese note tht this finncil position cn be credit or chrge in ny given hour. The dollr mount to ech Asset Owner (AO) for ech TCR instrument for given hour of the Operting Dy is clculted s follows: TcrHrlyQty * (DMccHrlyPrc source - DMccHrlyPrc sink) See the SPP Mrket Protocols Trnsmission Congestion Rights Funding Amount The Settlement formuls cn be found in Section 4 of the SPP Mrket Protocols. Q Where does the money come from to py TCRs? The monetry funds to settle TCRs come from the Dy-Ahed Mrket congestion monies tht re collected from lod; this is fundmentl element of LMP mrket. For hours where those funds re not sufficient to cover ll TCRs, TCR uplift chrge is pplied. Q Why does TCR underfunding occur? TCR funding diverges from full funding when the vlue of TCRs sold cnnot be covered by Dy-Ahed Mrket congestion funds collected. This occurs when the TCRs sold re in excess of wht cn effectively flow on the given Dy-Ahed trnsmission system model. Per the Mrket Protocols under Trnsmission Congestion Rights Dily Uplift Amount, to the extent tht congestion revenues collected over the Operting Dy re not sufficient to fund the net of the totl chrges nd credits clculted under Section over the Operting Dy. Q How voltile is TCR funding? Within ny given dy TCR funding my be over-funded or under-funded ech hour resulting in the operting dy being over-funded or under-funded on net. This dily net funding then results in over-funding or under-funding for the month, s TCRs re Monthly time-of-use right/hedging instrument. The intent of the mrket design nd the running of the TCR mrkets is for funding to, on verge, pproch full funding (100%) over the TCR settlement yer, which begins on June 1 of ech yer nd runs through the end of My in the subsequent yer. Q Wht re the mechnics tht cuse TCR funding divergence from 100%, i.e. too mny TCRs? The TCR funding issues re function of wht is known nd forecsted t the time of the nnul nd monthly congestion hedging mrket processes nd wht ctully occurs in the Dy-Ahed Mrket. The cuses of under-funding tend to be function of bse loding from the nnul process nd the model ssumptions such s rtings, outges (tht re plnned vs ctully occur), nd prllel (loop) flows (forecsted vs ctully occur).

10 Q Wht s SPP done/doing to ddress TCR funding issues? SPP continues working on improving ccurcy of estimtions for prllel flow nd outges. With implementtion of Revision Request 91 (RR 91), in FERC Docket ER16-13, for the 2016 nnul TCR process, SPP will be better ble to wrd rights on more representtive trnsmission system network model in the monthly processes, thereby ssisting TCR funding. Q Where is TCR funding discussed? TCR funding is discussed in vrious reports by the SPP Mrket Monitoring Unit nd by the TCR Mrket tem, including presenttions t the SPP Mrket Working Group (MWG) meetings. TCR funding is topic which is discussed by other SPP Orgniztionl Groups meetings such s: Mrkets nd Opertions Policy Committee (MOPC); Cost Alloction Working Group (CAWG); Credit Prctices Working Group (CPWG); Regionl Stte Committee (RSC); the SPP Bord of Directors/Members Committee. There re reports nd presenttions vilble s bckground mterils for the vrious groups. Q How is TCR uplift determined? Uplift is result of funding shortge incurred on n hourly bsis where the Dy-Ahed Mrket congestion funds re not sufficient to cover the existing TCRs. The resulting uplift is distributed to MPs with TCRs bsed on pro rt shre of the bsolute vlue of the sum of ll TCRs s relted to the overll totl TCR vlues in the Dy-Ahed Mrket for tht Operting Dy. For exmple: Within specific hour, TCRs hve required pyment. Let's sy on net (positive nd negtive TCRs) the TCR pyout is 100. Dy-Ahed congestion pid is 90 so there is deficit of 10. As SPP is revenue neutrl, tht 10 deficit is mde up for by the TCRs tht were settled in the hour. An MP s portion of the 10 would be: 10 x [(n MP s positive TCRs + bs vlue of n MP s negtive TCRs) / (ll MPs positive TCRs + the bsolute vlue of ll MPs negtive TCRs)] See the Mrket Protocols: Trnsmission Congestion Rights Dily Uplift Amount The Settlement formuls cn be found in Section 4 of the SPP Mrket Protocols. Q Where cn I get informtion bout wht TCR funding is? Informtion is publicly vilble on the SPP Mrketplce Portl From the Settlements link > Reports see the most up-to-dte TCRARR_MMDDYYYY Excel document tht provides ARR nd TCR chrge type ctivity by operting dy. From the TCR Mrket link > Monthly Funding By Constrint see the vrious yers TCR funding by Dy-hed Mrket binding constrint.

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