External Business Requirements Specification

Transcription

1 External Busness Requrements Specfcaton Convergence Bddng Verson 1.0 Aprl 19, 2010 Revson Hstory Date Verson Descrpton Author 12/01/ Draft verson for publc revew. CAISO 04/219/ Added : Secton 4.11 to capture requrements from e- taggng stakeholder ntatve Secton 4.12 to capture requrements from Data Release stakeholder ntatve Phase 2 Secton 4.13 to capture requrements from Expost Prce Correcton Make Whole Payments for Convergence Bds CAISO Added language to appendx B to clarfy sgn conventon for the CRR Settlement Rule

2 Table of Contents 1. INTRODUCTION Purpose References DETAILS OF BUSINESS PROBLEM AND RELEVANT MARKET INITIATIVE Descrpton BUSINESS PROCESS IMPACTS Product Impacts External Busness Impacts Pros Cons Justfcaton BUSINESS REQUIREMENTS Busness Process: Manage Day Ahead Market Busness Requrements Busness Process: Manage Real Tme Market Busness Requrements Busness Process: Mantan Master Fle Busness Requrements Busness Process: Manage Market Results Postng for Convergence Bds Busness Process: Identfy and Resolve Post Market Data Issues Busness Requrements Busness Process: Manage Bllng and Settlements Busness Requrements Busness Process: Manage Credt Busness Requrements Busness Process: Manage Convergence Bddng Certfcaton and Interface wth Schedulng Coordnators Busness Requrements Busness Process: Manage Data Storage Needs from DMM...26 Path to fle: Page 2 of 58

3 4.9.1 Busness Requrements Busness Process: Metrcs and Performance Crtera Busness Requrements E-Taggng Tme Requrements Busness Requrements for HASP Reversal Settlement Rule CRR Settlement Rule appled to Interte HASP Reversals Real Tme Bd Cost Uplft Oblgaton Data Release and Accessblty - Phase Busness Requrements for Nodal Data Release Day Ahead Market Summary Report Busness Requrements for Make Whole Payments for Convergence Bddng APPENDIX A TERMS AND DEFINITIONS APPENDIX B CONGESTION REVENUE RIGHTS SETTLEMENT RULES Background Proposed CRR Settlement Rule CRR Settlement Rule Data Requrements APPENDIX C COST ALLOCATION FOR CONVERGENCE BIDS Grd Management Charge to Convergence Bdders Transacton Fees for Submtted Bds Allocaton of IFM and RUC Ter 1 Costs Revsed Cost Allocaton Proposal Vrtual Demand Oblgaton to Pay IFM Ter 1 Uplft Vrtual Supply Oblgaton to Pay RUC Ter 1 Uplft Path to fle: Page 3 of 58

4 Dsclamer All nformaton contaned n ths draft Busness Requrements Specfcaton (BRS) as provded by the Calforna Independent System Operator Corporaton (ISO) s prepared for dscusson and nformaton purposes only. The draft BRS s provded as s wthout representaton or warranty of any knd, ncludng, wthout lmtaton, a representaton or warranty as to accuracy, completeness, or approprateness for any partcular purpose. The draft BRS shall be revsed as the development and revew of the busness requrements progresses. The ISO assumes no responsblty for the consequences of any errors or omssons. The ISO may revse or wthdraw all or part of ths nformaton at any tme at ts dscreton wthout notce. 1. Introducton 1.1 Purpose The purpose of ths document s to capture and record a descrpton of what the Users and Busness Stakeholders of the project wsh to obtan by provdng hgh-level busness requrements. Ths document establshes the bass for the blateral agreement between the ntators and mplementers of the project. The nformaton n ths document serves as nput to determnng the scope of Informaton Systems projects and to all Busness Process Modelng and System Requrements Specfcatons efforts. These requrements are ntended for submsson to the Informaton Technology Servces (ITS) department and wll serve as the ntal set of busness unt requrements for the approprate software applcaton/systems development effort. It s understood that ITS wll perform addtonal requrements and systems analyss and may produce To Be Busness Process Models, System Requrements Specfcatons, and Use Cases to serve as the set of requrements documents used by the ITS development teams to buy, modfy, or buld the necessary software and hardware systems. The Busness Unt(s) nvolved n the project wll have an opportunty to revew and approve all ITS requrements documentaton produced. 1.2 References All references represent external requrements documents or stakeholder requests developed and submtted by the Busness Unts. 1) The draft fnal proposal and ts addendum for convergence bddng are located on the Convergence Bddng web page at Draft Stake Holder Proposal fnal proposal: Addendum to Draft Stake Holder proposal (ncludng updates/changes to the draft stake holder proposal): Path to fle: Page 4 of 58

5 2) DMM revsed proposal for convergence bddng s located at 3) CRR proposal for convergence bddng s located at 4) Techncal document for Nodal lmt for convergence bddng s located at 5) Credt Management System documents are located at For CAISO credt polcy for convergence bddng, please go to the lnk to the draft fnal proposal n reference 1, Chapter 6. Also refer to the followng lnk to CAISO s CRR credt polcy presentaton 6) Decson on Convergence Bddng Desgn - Memo Followng s a lnk to the Board memo whch represents fnal Board-approved polcy. On October 29, 2009, ISO Board of Governors approves the proposed market enhancement, convergence bddng, as descrbed n the lnked document Detals of Busness Problem and Relevant Market Intatve 2.1 Descrpton On September 21, 2006, FERC ssued an Order 1 drectng the CAISO to fle tarff language for our revew for the mplementaton of convergence bddng wthn 12 months after the effectve date of MRTU Release 1.. FERC recognzed that, although each of the elements was mportant, mplementng them smultaneously wth MRTU Release 1 would mpede the CAISO s ablty to mplement MRTU tmely. By mplementng Convergence Bddng and the other elements of Markets and Performance ( MAP ) n a phased approach followng mplementaton of MRTU, the CAISO can successfully balance the need to mplement and stablze the base MRTU desgn tmely wth the benefts of addng market effcences wthn a reasonable tme after MRTU Go Lve. The Calforna ISO (the CAISO) has engaged n an on-gong stakeholder process to develop the key features for convergence bddng that began n summer of 2006 and contnued wth a seres of meetngs n 2007 and There was no stakeholder actvty on convergence bddng from November 2008 through June 2009 whle the ISO prepared to launch MRTU and durng the frst few months of MRTU operaton. The stakeholder FERC 61,274; Unted States Of Amerca; Federal Energy Regulatory Commsson; Docket Nos. ER , ER , ER , ER , ER ; Order Condtonally Acceptng The Calforna Independent System Operator s Electrc Tarff Flng To Reflect Market Redesgn And Technology Upgrade; (Issued September 21, 2006) Path to fle: Page 5 of 58

6 process resumed n July 2009 wth a Straw Proposal posted on July 2 and a stakeholder meetng held on July 9. A seres of three stakeholder conference calls were held n August through September to contnue to dscuss key elements of the desgn of convergence bddng wth stakeholders. Ths Draft Fnal Proposal ncorporates new desgn features dscussed on the recent stakeholder conference calls and ncorporates stakeholder comments. A combned Market Survellance Commttee (MSC) Stakeholder meetng has been held on September 18, 2009 to dscuss the key elements of the proposal. CAISO has ssued an addendum to the draft fnal proposal to descrbe the revsons on October 2, 2009 and dscussed wth stakeholders at a meetng scheduled on October 9. The ISO s requested fnal comments from stakeholders on the Draft Fnal Proposal for Convergence Bddng by close of busness October 14. On October 21, 2009, CAISO has ssued Board memo descrbng the fnal polcy on convergence bddng for Board approval. On October 29, 2009, CAISO Board of Governors approved the proposed market enhancement, convergence bddng, as descrbed n the Board memo. Whle the MRTU desgn provdes a complete framework for a nodal-based electrcty market that generates Locatonal Margnal Prces (LMPs), the elements contaned wthn MAP wll ncrease the effcency and lqudty of the MRTU desgn by addng bddng tools, creatng ncentves for ncreased supply/reduced demand and removng mpedments to bddng. These enhancements can be expected to ncrease partcpaton n the CAISO market, provde more robust competton for supply and demand and, ultmately, may reduce prces pad by end users. Convergence Bddng tends to cause DAM and RTM prces to move closer together, or "converge," thus the name Convergence Bddng. Ths reduces ncentves for under-schedulng Load n the DAM by reducng potental fnancal benefts for watng untl the RTM. It also provdes greater transparency by makng convergence bds explct, rather than mplct. The ncreased market lqudty from convergence bddng also can help mtgate the market power of physcal supplers. Some market partcpants can use convergence bddng as a rsk management tool to hedge the possblty of generator outage. 3. Busness Process Impacts 3.1 Product Impacts Energy: Convergence bddng wll add lqudty to the Energy market. It s dffcult to estmate whether there wll be a net upward or downward nfluence on DA or RT prces, although CB should reduce the dfference between prces n the two markets. RUC: Although Convergence Bds wll not explctly mpact RUC as RUC wll contnue to use Forecast Demand, rather than Bd-In Demand, RUC may need to commt more resources wth RA capacty and/or nternal generators f vrtual supply largely exceeds vrtual demand. Generaton: Convergence Bddng Enttes (.e. enttes that regster as qualfy to become Convergence Bddng Enttes wll be permtted to submt vrtual supply/demand bds (through Schedulng Coordnators) at any prcng node that s connected to a physcal generaton resource (subject to lmtatons) and at the EZ- Gen Hubs. Load Convergence Bddng Enttes wll be permtted to submt vrtual supply/demand bds (through Schedulng Coordnators) at any ndvdual prcng node that s connected to a demand resource (subject to lmtatons) and at default load aggregaton ponts (LAPs). Path to fle: Page 6 of 58

7 Intertes: Convergence Bddng Enttes wll be permtted to submt vrtual supply/vrtual demand bds (through Schedulng Coordnators) at the ntertes (subject to lmtatons). 3.2 External Busness Impacts Convergence Bddng mpacts external busness process prmarly through the Day Ahead bddng process. Generator owners can hedge the fnancal mpacts of generator outages. Convergence Bddng Enttes can realze profts or losses based on prce dfferences between DAM and RTM Pros 1.) Generator owners can hedge the rsk of outages that occur after the close of the DA market. Rather than assumng the fnancal rsk of purchasng Energy at Real Tme prces to compensate for DA awards that are not delvered. They can mtgate ther rsk by usng Convergence Bds to assume a fnancal poston based on the RTM-DAM prce dfference 2.) Enttes that operate n fnancal nstruments can apply ther market knowledge and rsk management strateges to arbtrage prce dfferences between the DA and RT markets, thus offerng opportuntes for proft as well as rsk of loss. 3.) As Convergence Bddng matures, those who use ths functon are expected to cause DAM and RTM prces to converge. Ths convergence between DA and RT prces wll reduce the ncentve for Load to defer bddng and schedulng untl RT. A hgher percentage of Loads scheduled n the DA Market wll ncrease the CAISO s ablty to manage the grd relably Cons 1.) Because convergence bds are fnancal nstruments only, they offer the potental for fnancal gan (and loss) wthout delverng a physcal product. 2.) The presence of convergence bds n the market optmzaton could affect the ablty of the optmzaton to reach an optmal soluton. 3.) Convergence bds may cause phantom or artfcal network congeston durng Network Applcaton executons n the DAM. 3.3 Justfcaton There are three prmary justfcatons for mplementng Convergence Bddng: 1.) Market Lqudty. Convergence Bddng adds lqudty to the CAISO market that s not present n the exstng producton. Specfcally, Convergence Bddng wll attract market partcpants that trade n fnancal products that wll add depth to the CAISO s Day Ahead Market. 2.) Conformty wth other ISOs. The addton of Convergence Bddng conforms the CAISO market to those n place n other ISOs throughout North Amerca, thus provdng a desgn consstent wth those used by the CAISO s market Partcpants. 3.) FERC Complance. Implementng Convergence Bddng would place the CAISO n complance wth drecton from FERC to mplement Convergence Bddng. Path to fle: Page 7 of 58

8 4. Busness Requrements The sectons below descrbe the Busness Processes and the assocated Busness Requrements nvolved n the project. These may represent hgh level functonal, non-functonal, report and/or nfrastructure requrements. These busness requrements drectly relate to the hgh level scope tems determned for the project. In the followng busness requrements, there are some namng conventons beng used, Convergence Bddng Entty (CB), Schedulng Coordnator (SC) and SC ID Refer to Chapter 5 for an explanaton of these terms and ther relatonshp; Convergence Bd, Vrtual Supply Bd and Vrtual Demand Bd We follow the same conventon as n our polcy paper. Whle the fnancal bd s generally referred to as convergence bd, the supply sde or demand sde s generally referred to as vrtual supply bd or vrtual demand bd. Refer to Chapter 5 for more explanaton. 4.1 Busness Process: Manage Day Ahead Market Busness Requrements ID# BRQ001 BRQ002 Busness Feature Convergence bds shall nclude the followng logcal data elements: 1. An ndcator that dentfes them as convergence bd (SIBR should not requre market partcpants to explctly ndcate a physcal.); 2. A pnode or Apnode ID that ndcates the bddng locaton; 3. An ndcator that dentfes whether t s a supply or demand; 4. SC ID that represents the current bd; 5. Energy bd curve 6. Trade Day / Trade Hour SIBR shall ensure that convergence bds may be submtted only n the Day Ahead Market. Applcaton(s) Impacted SIBR SIBR Path to fle: Page 8 of 58

9 ID# BRQ004 Busness Feature SIBR needs to get the elgble locatons and nodal MW lmts for use n the poston lmt calculaton from MF. Elgble locatons and lmts nclude: An ndvdual prcng node or aggregated generaton node that s connected to a physcal resource (ncludng te ponts) and ts poston lmt; There wll be no poston lmts appled to default LAPs or tradng hubs Applcaton(s) Impacted SIBR, MF BRQ005 BRQ006 BRQ007 SIBR needs to get the lst of SC IDs mapped to CBs authorzed to partcpate n convergence bddng. These wll be the SC IDs authorzed to submt Convergence Bds. Intally all authorzed SC IDs are elgble to bd n any node provded by MF n BRQ004. However, specal rules wll apply f Suspenson functon s defned usng BRQ010 or BRQ012. For the energy bd curve n a convergence bd, SIBR needs to ensure the followng, An energy bd curve ($/MWh) s structured n the same way as physcal energy bd curve and may have no more than 10 segments, startng at 0 MW; For a supply curve, t shall be monotoncally ncreasng; For a demand curve, t shall be monotoncally decreasng. Convergence bds shall be submtted through SIBR va any exstng methods (GUI and/or API). SIBR, MF SIBR SIBR Path to fle: Page 9 of 58

10 ID# Busness Feature Applcaton(s) Impacted BRQ008 Credt checkng wll be performed at the new credt management system. Followng s what SIBR needs to do, 1. Upon each convergence bd submsson or a batch of bds, SIBR wll send credt management system the followng data and wat for an approval (can have more than one bd due to batch): 1.1 Bd ID 1.2. Trade Day 1.3. Per Trade Hour wth exstence of bd curve, Trade Hour Hghest Bd Segment MW (one value per hour) ; SIBR, Credt Management System 2. Credt management system wll send back the approval status (Y/N) to SIBR to approve or reject the bd. 2 SIBR shall expect the followng reply (can have more than one bd due to batch), 2.1.Bd Id; 2.2. Approval Status (Y/N). 3. If a bd does not pass the credt check, ths bd wll be rejected. 4.Whenever a bd s cancelled by SC or rejected by SIBR (can be for reasons other than credt check), SIBR needs to send Credt Management the followng cancellaton messages (can have more than one bd due to batch), 1. Bd ID SIBR does not expect any response back for tem 4. 2 Addtonal desgn detal for ths valdaton s needed for what element to send, whether to be batch rather than bd by bd for performance consderaton. Path to fle: Page 10 of 58

11 ID# BRQ009 Busness Feature SIBR shall use the general rule to enforce poston lmts: 1. Be able to obtan the MW lmts for each elgble locaton from MF (Pnode/APnode) and ETCC (nterte); Applcaton(s) Impacted SIBR, MF, ETCC 2. Provde two confgurable poston lmt percentages: One for nternal nodes/apnodes (default to 5%); One for nter-te ponts (default to 10%); 3. Poston lmts are determned and appled to the CB ndvdually based on the confgurable percentage multpled by the MW lmt for each elgble locaton. If a CB entty maps to multple SC IDs and the SC submt bds on a sngle node, the poston lmt apples to all the sum of those bds on the same node; 4. All poston evaluaton wll be done based on the hghest bd segment MW pont submtted n the energy bd curve. Supply and demand convergence bds are evaluated separately. A bd or a set of bds (for CB mappng to multple SC IDs) wll be rejected f the sum of all hghest bd segment MWs n the bds nvolved s hgher than the poston lmt multpled by the percentage; 5. For nternal nodes, the poston lmt s enforced at bd submsson. Compare the MF defned locaton lmt (MW) multpled by the poston lmt percentage wth the hghest MW segment of the submtted convergence bd (possble usng sum of bds for a CB mappng to multple SC IDs). It s possble that an enforcement of a later submtted bd can cause a prevously approved bd rejected f they are on the same node and for the same CB. 6. For nter-te ponts, the poston lmt s enforced at market closng tme for convergence bds. Compare the OTC from the nter-te constrant multpled by the poston lmt percentage wth the hghest MW segment of the submtted convergence bd (possble usng sum of bds for a CB mappng to multple SC IDs); 7. Suspenson rules n BRQ010 and 012 supersede rule 4 and 5 n ths secton. Path to fle: Page 11 of 58

12 ID# Busness Feature Applcaton(s) Impacted BRQ010 Suspenson functon (Internal Pnode/APnode): -- Ths functonalty s assumed to be n SIBR. Provde a manual opton to enable or suspend convergence bddng by a gven SC ID for a gven set of Pnode/Apnodes and a range of days. 3 Functonalty wll be provded that allows CAISO to 4 : 1.Be able to dsable an SC IDs from submttng convergence bds on a gven set of node/apnodes; Or 2.Be able to adjust the poston lmt (MW or percentage) down on for partcular SC IDs and a gven Pnode/Apnode; Or 3.Dsable SC IDs from submttng convergence bds entrely; SIBR, MF Such lmtatons wll supersede MF defntons for ther effectve day range untl modfcatons are made. Ths functon s expected to be used at a very exceptonal bass. Snce SCs may submt bds up to seven days n advance of market close, t s possble that there wll be convergence bds already approved when the suspenson decson s made. The system needs to be able to re-evaluate all approved bds for the CB SC IDs and Pnodes/Apnodes to reject those prevously approved bds. 3 Once we apply the suspenson, we wll provde FERC wth supportng documentaton wthn 10 days. The suspenson would reman n place for 90 days unless FERC drects otherwse or the ISO determnes t s no longer needed. 4 Once we apply the suspenson, we wll provde FERC wth supportng documentaton wthn 10 days. The suspenson would reman n place for 90 days unless FERC drects otherwse or the ISO determnes t s no longer needed Path to fle: Page 12 of 58

13 ID# BRQ011 Busness Feature Inter-te poston lmts enforcement (SIBR): 1.Obtan the OTC values from ETCC and MF defntons for assocaton between Te ponts and Inter-te Constrants (ITC); 2.All poston valdaton wll be performed at market close tme; 3. Comparson s on an hourly bass snce OTC can change hourly; 4.For the nter-te pont that has one to one relatonshp to an ITC, per CB (mappng to multple SC IDs) and Te Pont, If SUM(the hghest MWs of the supply (mport) bds on ths te pont and SC IDs mappng to a CB) > Confgurable Percentage * OTC of the mport drecton of the ITC, then the bd s rejected; If SUM(the hghest MWs of the demand (export) bds on ths te pont and SC IDs mappng to a CB) > Confgurable Percentage * OTC of the export drecton of the ITC, then the bd s rejected; 5.For multple nter-te ponts that relates to one ITC, per CB (mappng to multple SC IDs) and ITC, If SUM (the hghest MWs of the supply (mport) bds on the te ponts and SC IDs mappng to a CB) > Confgurable Percentage * OTC of the mport drecton of the ITC, then ALL supply bds on those tes are rejected; If SUM (the hghest MWs of the demand (export) bds on the te ponts and SC IDs assocated wth the CB) > Confgurable Percentage * OTC of the export drecton of the ITC, then ALL export bds on those tes are rejected; Applcaton(s) Impacted SIBR, MF, ETCC Confgurable Percentage for nter-tes s defned n BRQ009 tem 2. Path to fle: Page 13 of 58

14 ID# BRQ012 Busness Feature Suspenson Functon (Inter-Te Ponts): Applcaton(s) Impacted SIBR, MF, ETCC Provde the followng suspenson functonalty on SC IDs, a gven set of ITCs and a range of days 5,: 1.Be able to dsable SC IDs from submttng convergence bds on a gven set of Te Ponts; Or 2.Be able to adjust downward the confgurable nterte poston lmt percentage down for one or more SC IDs and ITC base; Or 3. Dsable one or more SC IDs from convergence bds; Such lmtatons wll supersede MF defntons for ther effectve day range untl modfcatons are made. If a specfc percentage adjustment s gven, then the comparson of the SC ID s convergence bds to the ITC s OTC value needs to use the adjusted percentage. Ths functon s expected to be used at a very exceptonal bass. Snce SCs may submt bds up to seven days n advance of market close, t s possble that there wll be convergence bds already approved when the suspenson decson s made. The system needs to be able to re-evaluate all approved bds for the convergence bddng elgble SC IDs and Pnodes/APnodes to reject those prevously approved bds. 5 Once we apply the suspenson, we wll provde FERC wth supportng documentaton wthn 10 days. The suspenson would reman n place for 90 days unless FERC drects otherwse or the ISO determnes t s no longer needed. Path to fle: Page 14 of 58

15 ID# BRQ013 Busness Feature Snce convergence bds can be submtted per Pnode/APnode for each elgble SC ID, n order to control the volume of bds nto IFM, the followng methodology needs to happen between SIBR and IFM, Step 1: At the market close for convergence bds the DA applcatons develop a "pre-market aggregaton" process to aggregate the bds on each PNode/APnode to create one aggregate vrtual supply bd and one aggregate vrtual demand bd at each locaton (the aggregate bd can contan many more segments beyond 10); Wth step 1, we wll guarantee the number of aggregated convergence bds to be no more than about 3500 * 2 (3500 beng roughly the number of Pnodes/APnodes). Step 2: Have MPM/RRD - IFM - RUC run wth the physcal bds and aggregated convergence bds. For the aggregated convergence bds, the applcaton should generate the cleared bd results per Pnode/APnode and supply/demand bd, f any. Step 3: Use a post-ruc process to "de-aggregate" the cleared convergence bd results and allocate them to the correct convergence bddng elgble SC ID. Step 4: Publsh day-ahead market results, ncludng convergence bd results. Ths step needs to antcpate the potental for dfferent clearng tme and publcaton tme for physcal versus convergence bds. Applcaton(s) Impacted SIBR, IFM For aggregaton of bds, follow the standard of stackng up bd segments when prces are dfferent whle addng MWs f prces are the same; For de-aggregaton of bd results, for a non-margnal segment, t s straght forward to assgn the ndvdual cleared MW. For a non-margnal segment, the relevant cleared amount can be assocated wth multple bd segments and hence a proratng s needed to get the ndvdual cleared MW amount. Prorate the awarded MWs proportonal to the submtted MWs of the margnal segment of each convergence bddng elgble SC ID contrbutng to the margnal aggregate segment. Path to fle: Page 15 of 58

16 ID# BRQ015 Busness Feature Convergence Bds shall be excluded from the day-ahead MPM/RRD process. MPM/RRD contnues to use physcal supply bds and load forecast. Therefore there s no change n DA RMR determnaton process. Applcaton(s) Impacted IFM, RUC BRQ016 BRQ017 Convergence Bds that are cleared n the Integrated Forward Market shall not be transferred to RUC. In order to make sure IFM physcal nter-te schedules complyng wth NERC/WECC rules whle allowng shadow/congeston prces beng mpacted by convergence bds, the followng constrants need to be used n the IFM run, Exstng Constrant [1] The Physcal Constrant enforced n schedulng run ONLY: Schedulng lmt s contnung to be observed usng the formula Per ITC and Drecton, OTC (net physcal energy) max(0, (ETC enttlements ETC schedules)) AS mport >= 0 (no AS mport needs to be observed n the export drecton). New Constrant [2] The Physcal + Vrtual Constrant: Enforced n both schedulng run and prcng run. Per ITC and Drecton, OTC (net physcal energy + convergence energy) max(0, (ETC enttlements ETC schedules)) AS mport >= 0 (no AS mport needs to be observed n the export drecton) IFM, RUC IFM, ETCC BRQ018 BRQ019 In ths methodology, physcal schedules cleared from schedulng run need to be fxed n the prcng run. Also ETC schedules and AS mport contnue to be physcal snce we do not allow convergence bds to submt AS product or utlze ETC contracts. Shadow prces and hence congeston prces wll be mpacted by convergence bds. To the extent that convergence bds are allowed at an aggregated level (currently Default LAP or Tradng Hub or aggregated generaton node), they must be dsaggregated by each node for use n the IFM. The same dstrbuton or allocaton factors used n exstng applcaton wll contnue to be used. The current MPM-RRD run wll contnue to use physcal supply and load forecasts and thus does not get mpacted by convergence bddng. Furthermore, the RMR determnaton process wll also stay the same. IFM IFM, MPM/RRD Path to fle: Page 16 of 58

17 ID# BRQ021 Busness Feature In order to acheve the Alternate-Current (AC) power flow soluton n the Day-Ahead (DA) market applcaton n case of over-schedulng of convergence bds, IFM shall have the ablty to enforce nodal MW lmt constrants automatcally and/or manually. Further detal needs to be documented n IFM desgn n ths area. Please refer to the lnked document n reference secton tem 4 for more detals. Applcaton(s) Impacted IFM 4.2 Busness Process: Manage Real Tme Market Busness Requrements ID# BRQ022 Busness Feature The real tme market applcaton shall gnore convergence bds. All real-tme functonalty stays as t s. Applcaton(s) Impacted SIBR, RTN 4.3 Busness Process: Mantan Master Fle Busness Requrements ID# Busness Feature Applcaton(s) Impacted Path to fle: Page 17 of 58

18 ID# BRQ024 Busness Feature MF 6 Poston Lmt for nternal PNode/APNodes, Applcaton(s) Impacted MF, SIBR BRQ025 For all nternal load and generaton PNodes and aggregated generaton APNode, MF shall defne the maxmum lmt (one MW value per node) and provde the nternal PNode/APNode defntons along wth ther maxmum lmts to SIBR. These lmts need to be communcated to market partcpants as well. There are three scenaros to determne the lmts. For nodes assocated wth generators, the maxmum lmts for the PNode could be ted drectly to the capacty of that generator. For example, f PNode X s the njecton pont for a generator wth a PMax of 100 MWs, the maxmum MW lmt at PNode X would be 100 MWs. For nodes assocated wth demand, a frm MW amount could be determned by the maxmum MW amount that flows over that node over a perod of tme, or by the MWh volume of the peak wthdrawal at each node. (Maxmum Constrant MW). For PNodes or APNodes that both nject and wthdraw power, the larger of the maxmum demand and the maxmum capacty MW value could provde the bass for the applcaton of poston lmts for the applcable PNode or APNode. In desgn phase, further detal s needed to determne the maxmum MW lmt for dfferent nodes. MF Defnton for nter-te ponts and ITC (maybe exstng functon but need valdaton) MF needs to defne the te ponts and ther relatonshp to an Inter-te Constrant (ITC). Ths nformaton needs to be provded to SIBR for the poston lmt enforcement on the tes (BRQ011). Note: 1. Te Pont to ITC relatonshp s a many to one relatonshp. There can be more than one te pont lnked to an ITC; 2. Snce the poston lmt s based on the OTC value on the ITC, MF does NOT have to defne poston lmts for the te ponts. MF, SIBR 6 MF team has ndcated that, there are attrbutes Max and Mn defned for each Pnode already. Those attrbutes are not used at ths pont. There are no Max or Mn attrbutes defned per Apnode. Path to fle: Page 18 of 58

19 ID# Busness Feature Applcaton(s) Impacted BRQ026 Provde functonalty and relevant data for the certfcaton of Convergence Bddng enttes (CBs) ncludng ther relevant schedulng coordnators (SCs) for convergence bddng. A sngle CB can have multple SC IDs whch are each certfed to partcpate n convergence bddng. MF, SaMC, Credt Management, SIBR BRQ027 Our bddng valdaton, credt lmt and settlement are all based on SC IDs. The only excepton s that, poston lmts are managed at the corporate entty level. MF needs to provde the certfcaton status on an SC ID level to SIBR, Settlement and Credt Management systems. 7 The CAISO Master Fle shall allow addtons, deletons and changes of Convergence Bd related data descrbed n BRQ024, 025, 026 va all nterfaces (API and GUI) that are used for physcal resources. MF 7 Once a SC s certfed, t s assumed to have rghts on all the Pnodes/Apnodes. MF does not control whch Pnode that a SC has rghts for convergence bddng. Ths s lmtaton s enforced n SIBR f necessary. Path to fle: Page 19 of 58

20 4.4 Busness Process: Manage Market Results Postng for Convergence Bds BRQ028 OASIS Report 1 (based on results from IFM): The (aggregate) volume of vrtual supply bds and vrtual demand bds shall be posted on OASIS at the clearng tme of the DA market for convergence bds. Ths report shall report the followng: Per Trade Day/Trade Hour System wde total cleared supply convergence MW and total cleared demand convergence MWs separately; OASIS, SIBR, IFM, MDS OASIS Report 2 (based on bds from SIBR): Pseudo Convergence Bds shall be posted on OASIS n a smlar manner to pseudo physcal bds. SC IDs shall be strpped out or replaced wth mock IDs. Ths report shall follow the same 180 days rule applcable to pseudo physcal bds. OASIS Report 3 (from credt management): Publsh the reference prces calculated by credt management. Reference prces ($/MWH) need to be reported usng the followng granularty, 1.Per Pnode/Apnode; And 2.Per standard quarter (Jan-Mar, Apr-Jun, Jul-Sep, and Oct- Dec) n a year; OASIS Report 4 (two reports from MF): In the exstng reports (Pnode, APnode) n the ATLAS secton, add addtonal attrbutes ncludng the maxmum MW lmt and ts effectve dates per Pnode/Apnode as defned n MF. The effectve dates for poston lmts are dfferent from the effectve dates of the Pnodes/Apnodes. Not all pnodes/apnodes wll have the maxmum MW lmts defned. Note 1: Credt Management wll calculate and publsh reference prces on a yearly bass based on the prevous year s market prces Note 2: Prces for convergence bddng are the DA LMPs on Pnode/Apnode. OASIS reports these LMPs already. Path to fle: Page 20 of 58

21 BRQ029 CMRI Report (Convergence Bd Clearng Results): Cleared convergence bd MWs need to be reported on the followng granularty, 1.Per SC ID; And 2.Per Pnode/Apnode; And 3.Per supply and demand vrtual separately And 4. Per Trade Day/Trade Hour CMRI, IFM, MDS Ths report has to be able to group all the convergence bd results for a Convergence Bddng Entty by ncludng all the SC IDs related to that Convergence Bddng Entty n a sngle report. Ths s to allow the Convergence Bddng Entty to be able to vew all the convergence bd results regardless how many SC IDs are nvolved. It also needs to be able handle the dfferent market clearng tmelne for convergence bds versus physcal bds. 4.5 Busness Process: Identfy and Resolve Post Market Data Issues Busness Requrements ID# BRQ030 BRQ031 Busness Feature The IFM wll pass results of the Day Ahead Market to the Market Qualty System (MQS) to ensure that data nputs, market results and resultng LMPs are vald. Ths wll nclude all convergence bds and ther cleared MWs. MQS wll produce corrected cleared convergence bd MW results and publsh the results to CMRI, OASIS and SaMC. Applcaton(s) Impacted IFM, MQS MQS, CMRI, OASIS, SaMC Note: Prce correcton for convergence bddng wll be the same as the DA correcton on Pnode/Apnode LMPs. No new functonalty s needed. Path to fle: Page 21 of 58

22 4.6 Busness Process: Manage Bllng and Settlements Busness Requrements ID# BRQ032 Busness Feature Vrtual Supply Bds and Vrtual Demand Bds shall be subject to a Convergence Bddng Transacton Fee. The fee shall be confgurable, based on FERC approval, and shall be based on a dollar amount per BID SEGMENT ($/Bd Segment Current proposed value s $0.005/bd segment). It s assessed per SC bass. One Convergence Bddng entty can map to multple SC IDs for submsson of convergence bds. 8 The transacton fee charged on the bd segments shall be credted back to the GMC charge ncurred on the cleared convergence bd. Applcaton(s) Impacted SaMC BRQ033 For more detal, please refer to secton 8.1 n the chapter 7 appendx C. The Settlements, Meterng and Clent relatons (SMCR) Charge wll be fxed at $ per month, per convergence bddng elgble SC ID for any SC wth an nvoce value other than $0.00 n the current Tradng month. SaMC BRQ034 A new Convergence Bddng GMC wll have a bllng determnant of $ per cleared gross MWh per SC ID. The rate s estmated to be between $0.065 and $0.085 per cleared gross MWh. The exact rate wll be establshed n the 2011 GMC Extenson stakeholder process begnnng January The revenue generated from the Convergence Bddng Charge wll be appled to the exstng Forward Schedulng Charge and Market Usage (Day Ahead) Charge. Revenues generated from the bd segment charge descrbed n BRQ032 wll be credted to the Convergence Bddng GMC charge. For more detal, please refer to secton 8.2 n the chapter 7 appendx C. SaMC 8 Current stake holder proposal uses $0.005 as the proposed amount per bd segment. Path to fle: Page 22 of 58

23 ID# BRQ035 BRQ036 Busness Feature SaMC shall contnue to receve the Pnode/Apnode LMP prces for both DA and Real-tme. SaMC shall produce daly and monthly settlement statements for all cleared convergence bds, based on the prce dfference between the RT and DA LMPs at the Pnode/Apnode where convergence bds are cleared. Convergence Bds that are cleared n the IFM shall be settled at the dfference between the DA LMP and the RT LMP. Ths shall be done by separately settlng the convergence bds n DA charge code versus RT charge code based on DA and RT LMPs accordngly. Ths s to allow the cost allocaton approprately n DA and RT. Applcaton(s) Impacted IFM, RTM, SaMC IFM, SaMC For a supply vrtual bd (ncludng mport for te), DA payment = DA cleared MW * DA LMP on that node; RT charge = DA cleared MW * RT LMP on that node; For a demand vrtual bd (ncludng export for te) DA charge = DA cleared MW * DA LMP on that node; RT payment = DA cleared MW * RT LMP on that node; For RT LMP, f a node s nternal, that s the Real-tme 5-mnute based LMP on that node. If a node s a te pont, that s the HASP hourly LMP on that te pont. Two new charge codes wll be created to settle convergence bds: 1.Day-Ahead convergence energy 2.Real-Tme convergence energy The settlement mpacts for the new charge code to settle Day- Ahead convergence energy wll be the same as charge type 6011 as far as allocaton of net payments and charges. The settlement mpact of the new charge code to settle Real-Tme convergence energy wll be the same as charge code 6475 (for nternal) and charge code 6051 (for nter-te). Path to fle: Page 23 of 58

24 ID# BRQ037 Busness Feature Convergence bds, shall be allocated a porton of IFM and RUC uplft charges. 1.) IFM Ter 1 Uplft costs shall be allocated to vrtual demand. 2.) RUC ter 1 Uplft Costs shall be allocated to vrtual supply whch wll now nclude uplft costs for short-start unts commtted n Real-Tme resultng from a RUC schedule from the Day-Ahead market. 3.) No other uplft charges or payments wll be allocated to Convergence Bds. 4.) Under-Schedulng load penalty shall be removed upon mplementaton of convergence bddng. For more detals on tem 1 and 2, please refer to secton 7.4 n the chapter 7 appendx C. Applcaton(s) Impacted IFM, RUC, SaMC Path to fle: Page 24 of 58

25 ID# BRQ038 Busness Feature CRR payment adjustment s needed to deter the potental use of convergence bddng to ncrease congeston revenue rghts (CRR) payments. There are two applcatons nvolved: 1.A new applcaton or a new module wthn exstng applcaton needs to be dentfed to calculate the daly CRR payment adjustment amount per SC IDs that are mapped to CBs (that are also CRR Enttes), whch wll roll up to the SC. Ths applcaton needs to access the market nter-medate data such as shft factors, constrant flow MWs, constrant shadow prce, etc. Some of these are currently only avalable n save case and some of them are not. It also has to access CRR data. Regardless of whch applcaton does ths, the essental part of ths mplementaton s to have the market applcaton to store and provde all necessary data from DA and real-tme; Applcaton(s) Impacted SaMC, to-be dentfed Applcaton, IFM/RTM The supportng IFM/RTM data s descrbed n chapter 6 Appendx B, secton 6.3. Ths calculaton must be performed on a daly bass for each trade day no later than T+5 (to comply wth the payment acceleraton calendar). It also must support the re-calculaton for a gven trade day after ntal settlement. All adjustment results and selected supportng data need to be publshed to SaMC. 2.SaMC needs to take that and adjust the CRR payment accordngly. For detal of CRR adjustment calculaton, please refer to chapter 6 appendx B. 4.7 Busness Process: Manage Credt Busness Requrements Path to fle: Page 25 of 58

26 Please refer to the lnk n reference for requrement of credt management system. Ths system s expected to deployed and used n lne wth convergence bddng functonalty. 4.8 Busness Process: Manage Convergence Bddng Certfcaton and Interface wth Schedulng Coordnators Busness Requrements ID# BRQ039 BRQ040 Busness Feature The CAISO shall certfy enttes that desre to submt convergence bds. Such enttes must execute a Convergence Bddng Entty Agreement and ether be (or become) Schedulng Coordnators or utlze the servces of an exstng Schedulng Coordnator. The Schedulng Coordnator per the tarff assumes the fnancal responsblty as between the CAISO and the SC. The Schedulng Coordnator must utlze SC IDs that map to Convergence Bddng Enttes that have executed the Convergence Bddng Entty Agreements.. The CAISO shall develop approprate tranng tools for use by both nternal busness unts (Customer Servces), Convergence Bddng Enttes and ther Schedulng Coordnators to prepare for mplementng Convergence Bddng. MF MF Applcaton(s) Impacted 4.9 Busness Process: Manage Data Storage Needs from DMM Busness Requrements ID# Busness Feature Busness Unt(s) Affected Applcaton(s) Impacted BRQ049 DMM has provded data needs to support market montorng needs for convergence bddng. The market data needed are descrbed n chapter 6 Appendx B. Department of Market Montorng (DMM), Market Servces Path to fle: Page 26 of 58

27 4.10 Busness Process: Metrcs and Performance Crtera The CAISO expects Convergence Bddng to be transparent n runnng the DA Market, that s, the DA Market and all assocated systems wll be able to operate accordng to the tmelnes defned n the Tarff Busness Requrements ID# BRQ04 6 Busness Feature The System Operatons Department and relevant systems shall be able to contnue operatng the Day Ahead Market accordng to the exstng tmelnes specfed n the BPM for Market Operatons once Convergence Bddng s mplemented. That s, the use of Convergence Bddng shall not prevent the CAISO from closng the DA market at 10:00am and clearng the DA Market by 1:00 p.m. daly. Applcaton(s) Impacted IFM, SIBR, OASIS, CMRI 4.11 E-Taggng Tme Requrements Durng the Convergence Bddng stakeholder process, the ISO commtted to consder new e-taggng requrements or some other mechansm to ensure that the ISO can dfferentate between physcal and fnancal (mplct or explct vrtual) bds on the ntertes. The fnal proposal seeks to ensure that an mplct vrtual bddng strategy s more costly than mplementng the same fnancal strategy through an explct vrtual strategy va convergence bddng. The fnal proposal can be found at: The fnal proposal wll mplement the followng: 1) No changes to the exstng ISO e-tag tmng requrements. 2) Insttute a HASP Reversal Settlement Rule that removes prce arbtrage gans for reversed MW wth no supportng e-tag 3) Apply the CRR Settlement Rule to all DA schedules that are reversed n the HASP run. 4) Apply Real Tme uplft charges to IFM mports whch are decremented n the HASP Usng the above measures, the ISO seeks to ensure that ncentves, penaltes, and costs provde approprate economc sgnals to dscourage mplct vrtual bddng on the ntertes once the ISO mplements Convergence Bddng. Exceptons: Interte schedules that are ETC, TOR or CVR are exempt from the HASP Reversal Settlement Rule and the CRR Settlement Rule. Path to fle: Page 27 of 58

28 E-Taggng Requrement: The current NERC/WECC e-taggng requrement s that all schedules must be tagged 20 mnutes pror to the operatng hour. Ths busness requrement specfcaton does not change that requrement. The ISO proposes to allow flexblty to market partcpants to contnue to use the NERC/WECC tmelne for submttng an e-tag. Schedulng coordnators can avod the HASP Reversal Settlement Rule f ther full Day Ahead Schedule s e-tagged at some pont. HASP Reversal Settlement Rule: The ISO wll determne the hghest tagged value for a Resource ID and compare that value to the Day Ahead Schedule. If the value s equal to or greater than the Day Ahead Schedule, the HASP Reversal Settlement Rule wll not apply. For an IMPORT: f the HASP prce s greater than the DA prce, the rule does not apply. The rule apples to un-tagged mports when the DA prce s greater than the HASP prce. The ISO wll charge schedulng coordnators the postve dfference between the Day Ahead and HASP prces for any un-tagged quanttes. For an EXPORT: f the HASP prce s less than the DA prce the rule does not apply. The rule apples to un-tagged exports when the DA prce s less than the HASP prce The ISO wll charge schedulng coordnators the postve dfference between the HASP and Day Ahead prces for any un-tagged quanttes Busness Requrements for HASP Reversal Settlement Rule Busness Requrements for HASP Reversal Settlement Rule: Manage Real Tme Market Pror to Close of Market Bddng ID# Busness Feature Applcatons(s) affected BRQ051 The hghest, smultaneous approved tagged MW value per resource ID, by the NERC/WECC e-taggng requrement of T- 20, must be captured for mplementaton of the HASP reversal settlement rule CAS Busness Requrements for HASP Reversal Settlement Rule: Manage Bllng and Settlements ID# Busness Feature Applcatons(s) affected BRQ052 For Import schedules, f the DA LMP s less than the HASP LMP, the rule does not apply For Export schedules, f the DA LMP s greater than the HASP LMP, the rule does not apply SaMC Path to fle: Page 28 of 58

29 BRQ054 For IMPORTS, f the hghest tagged schedule, as captured n SaMC BRQ051, s less than the DA Schedule, Subtract the DA schedule from the HIGHEST recorded tagged value. Multply ths value tmes (DA LMP HASP LMP) for amount to be reversed. Ths rule does not apply to the qualfed schedules usng ETC/TOR/CVR BRQ055 For EXPORTS, f the hghest tagged schedule, as captured SaMC by BRQ051, s less than the DA Schedule, subtract the DA schedule from the HIGHEST recorded tagged value. Multply ths value tmes (HASP LMP DA LMP) for amount to be reversed. Ths rule does not apply to the qualfed schedules usng ETC/TOR/CVR BRQ056 Apply reversal charge to HASP Energy Settlement (cc 6051) SaMC Busness Requrements for HASP Reversal Settlement Rule Integraton Layer: ID# Busness Feature Applcatons(s) affected BRQ057 Make avalable the hghest tagged MW value, as calculated n BRQ051, to SaMC. CAS/SaMC CRR Settlement Rule appled to Interte HASP Reversals For all DA schedules that are reduced n the HASP process, the CRR Settlement rule wll apply. The e-taggng requrement does not apply to ths rule Busness Requrements for CRR Settlement Rule Manage the Market Qualty System ID# Busness Feature Applcatons(s) affected BRQ058 For all Day Ahead schedules that are not changed n HASP MQS process DO NOT apply the CRR Settlement rules. The followng rules do not apply to the qualfed schedules usng ETC/TOR/CVR BRQ059 For each DA IMPORT schedule that s greater than the HASP MQS schedule, subtract the HASP schedule from the DA schedule and convert to a Vrtual Supply bd to be consdered n the CRR Settlement Rule process BRQ060 For each DA EXPORT schedule that s greater than the HASP schedule, subtract the HASP schedule from the DA schedule and convert to a Vrtual Demand bd to be consdered n the CRR Settlement Rule process. MQS Real Tme Bd Cost Uplft Oblgaton All DA mport schedules that are reduced n the HASP process, the reduced MW amount wll be ncluded n the calculaton of the Real Tme Bd Cost Uplft Oblgaton. Path to fle: Page 29 of 58

30 Busness Requrements for Bd Cost Recovery Manage Bllng and Settlement ID# Busness Feature Applcatons(s) affected BRQ061 For all DA Import Schedules that are reduced n the HASP, the reduced MW wll be consdered an oblgaton n the calculaton of Real Tme Bd Cost Uplft oblgaton. SaMC 4.12 Data Release and Accessblty - Phase 2 The Phase 2 of the Data Release and Accessblty effort focused on addtonal postng requrements related to the Convergence Bddng Project. In the stakeholder process, addtonal publc data postngs were commtted to. These reports are n addton to the reports dentfed n BRQ 028 of the Convergence Bddng Busness Requrements Specfcatons. The Draft Fnal Proposal (DFP) can be found at: Phase 2 dentfed two addtonal data releases: Nodal Data Release and a Day Ahead Market Summary Report Nodal Data Release: The ISO wll post, at the end of a Trade Day, the Net Cleared MW value for convergence bds on all Convergence PNodes/Apnodes. More specfcally, net cleared vrtual quanttes by node that cleared the Day-Ahead Market for trade day January 15th would be posted the mornng of January 16th after all hours of the real-tme market are closed for the 15th. When calculatng net cleared vrtual quanttes, the conventon must be Supply Less Demand. Under ths conventon, postve net cleared vrtual quanttes wll ndcate Net Vrtual Supply, whereas negatve net cleared vrtual quanttes wll ndcate Net Vrtual Demand at a gven node. A value of zero net cleared vrtual quanttes at a gven node wll ndcate ether (1) no vrtual bds submtted at that node, or (2) vrtual supply and demand netted to zero. For example, f one or more Vrtual Demand Bds were submtted at Pnode X n HE10 that total 30 MW, and one or more Vrtual Supply Bds were submtted at Pnode X n HE10 that total 75 MW, the net cleared vrtual quantty at Pnode 1234 at HE10 would be 75 MW Supply less 30 MW Demand = 45 MW Net Vrtual Supply Busness Requrements for Nodal Data Release Busness Requrements for Nodal Data Release Manage Market Results Postng for Convergence Bds: ID# Busness Feature Applcatons(s) affected BRQ062 The NET cleared MW of vrtual bds wll be calculated for every CB PNodes/Apnodes per trade hour wthn the trade day, IFM Path to fle: Page 30 of 58