2018-052 DEC Operational PolicyDate: May 4, 2018 Report No. 2018-052
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Denton Energy Center (DEC) Market Operations
EXECUTIVE SUMMARY:
The overall fiscal objective for DME is to maximize the financial value of the Denton
Energy Center.
This means that DME’s energy schedulers will only offer the DEC to ERCOT at a price which
will recover all estimated fuel and variable costs. Possible exceptions to this pricing policy are
when the DEC must run for environmental and O&M tests, compliance with possible ERCOT
emergency declarations and/or other regulatory mandates, and if needed to provide local
transmission system reliability and support. (Actual exceptions are expected to be infrequent and
limited in scope.)
Attached is a high level summary of ERCOT Generating Unit Scheduling Protocols which
documents how ERCOT determines what generating units to run to meet its grid reliability
mandate.
STAFF CONTACT:
George F. Morrow, General Manager -- DME
940-349-8487
gmorrow@cityofdenton.com
Date: May 4, 2018 Report No. 2018-052
ERCOT Generating Unit Scheduling Protocols
Protocols are rules under which the grid operator (ERCOT) and all other entities operating
electric networks or generating units must follow.
The following bullet points summarize the protocols and procedures that are applicable to every
generating unit and generation owner/operator in ERCOT.
ERCOT is responsible for grid reliability. They do not control, or have responsibility for,
financial outcomes.
ERCOT manages and runs a computer simulation model (looking at 5 minute periods) to
determine the most reliable way to service the grid.
By 10 am each day (“Day-Ahead”), every generating facility must provide ERCOT its
generating unit parameters such as operating cost (fuel and consumables etc.) and other
relevant factors (such as min/max unit capability, min/max runtimes, “ramp” rates, etc.)
ERCOT can initiate an inquiry if it believes the reported unit costs are not reasonable.
At approximately 1 pm, ERCOT notifies each unit owner/operator of the results of their
simulation study which includes the obligation of generating units to run the next day.
In “Real-Time”, ERCOT makes adjustments to plant schedules as they deem necessary to
address changes occurring in real time for events such as unit trips, transmission line
outages, load changes, etc.
In addition, generation owners/operators can modify their unit parameters to reflect
changes in their situation with two hour notice to ERCOT.
ERCOT sends each generating unit a “Base Point” signal directing the unit
owner/operator to operate their plant at this Base Point (i.e. MW output level).
Base Point signals are sent by ERCOT to generators when the price at a generating
plant’s node (connection point to the grid) is at or above a unit’s offer price submitted by
the owner/operator.
Generating units must respond to the Base Point levels sent by ERCOT or face penalties.
Nodal prices are set by ERCOT based on their grid optimization in order to meet their
objective of keeping grid frequency at 60 HZ.
In summary, ERCOT will determine what generating units are needed during any period of time
to satisfy ERCOT’s reliability objective of maintaining the grid at 60 HZ. The AGC system
(automatic generator controls) of generating units will respond to the digital Base Point signals
sent by ERCOT in Real-Time. Owner/operators submit their operating cost and other relevant
information to ERCOT on a daily basis so the grid operator can ensure that units are not operated
at a loss.