RMR Settlement Example

Transcription

1 RMR Settlement Example Bob Logan Senior Market Design Specialist New York Independent System Operator ICAPWG August 25, 2015 KCC New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY

2 Agenda Current Settlement Structure Settlement Terms RMR Settlement Structure Settlement Example New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 2

3 Standard Market Settlements Generators MWh Market MWh Load $ Market Revenue for produced MWh and capacity sold $ Pays for consumed MWh and capacity purchased $$$ $$$ NYISO New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 3

4 New Settlement Terms Market Revenues are all the revenues the RMR Generator would have earned in the NYISO-Administered Markets if it was eligible to receive market rates. These include energy, ancillary services and capacity payments. Market Loads pay Market Revenues. The Market Loads that are responsible for paying an RMR Generator s Market Revenues are the same Market Loads that would pay if the RMR Generator was not an RMR Generator. RMR Loads are the loads, as determined by NYISO to be the beneficiaries of the RMR Generator, that are responsible for paying an RMR Generator its Availability and Performance Rate (APR) and variable costs New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 4

5 Market Settlements RMR Loads (as identified by NYISO) pay the RMR Generator its APR plus variable costs variable costs = Energy and Ancillary Offers (consistent reference levels) + VSS and Black Start Costs with NYISO Settlements will pay the RMR Generator and charge the RMR loads daily Market revenues attributed to the generator will be credited to the RMR loads (Energy + Ancillary Services + ICAP Revenues) Costs allocated to RMR loads are equal to: [(Avoidable Costs + Availability Incentive earned + Performance Incentive earned) + variable costs] - (Energy + Ancillary Services + ICAP Revenues) Energy, Ancillary Services and ICAP Revenues will be calculated daily Availability and Performance Incentives will be paid periodically and are not addressed here New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 5

6 Market Settlements with RMR contract Market Loads $ Pay for consumed MWh RMR Generator MWh Market MWh RMR Loads $ Receives APR + variable costs MWh Other Generators $ Pay APR + variable costs $ Markets Revenue $$$ $$$ NYISO $ Credited RMR Generator s Market Revenue New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 6

7 Settlement Example: Assumptions The RMR Generator is a Zone A Coal Plant The market revenues for the RMR Generator are illustrative for years 2015, 2016 and 2017 The RMR costs are allocated 91% to Zone A, 8% to Zone C and 1% to Zone E for this example 2014 Actual Loads are 15.5 for Zone A, 15.3 for zone C and 7.0 for Zone E, in units of million MWh There is no assumed load growth in these zones for years New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 7

8 Settlement Example: APR and Variable Costs This is the annual APR rate and Variable Costs for the RMR Generator, in millions of dollars Coal Unit RMR Contract Year Fixed O & M $ 14.8 $ 13.8 $ 14.3 Cap Ex 2015 $ 13.1 $ 13.1 $ 13.1 Cap Ex $ 7.8 $ 7.8 Cap Ex $ 7.5 Total Avoidable Costs (RMR/YR) $ 27.9 $ 34.7 $ 42.7 APR Incentive (Max 10% of RMR/YR Value) $ 2.8 $ 3.5 $ 4.3 Total RMR APR Rate * $ 30.7 $ 38.1 $ 46.9 Variable Costs $ 19.8 $ 17.8 $ New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 8

9 Settlement Example RMR Loads Allocation This is the annual market revenues offset, in millions of dollars, and RMR loads cost, in millions of dollars, for the RMR contract years Market Revenues Energy $ 10.3 $ 10.3 $ 13.4 Ancillary - Reserves $ 1.0 $ 0.8 $ 0.7 Ancillary- Voltage Support $ 0.8 $ 0.8 $ 0.8 ICAP Revenues $ 6.2 $ 6.4 $ 6.5 Total $ 18.3 $ 18.2 $ 21.3 RMR Loads Cost $ $ $ Zone A RMR Loads Cost $ $ $ Zone C RMR Loads Cost $ 2.58 $ 3.02 $ 3.47 Zone E RMR Loads Cost $ 0.32 $ 0.38 $ 0.43 Zone A RMR Loads (million MWh) Zone C RMR Loads (million MWh) Zone E RMR Loads (million MWh) Zone A RMR Loads Rate ($/MWh) $ 1.89 $ 2.21 $ 2.55 Zone C RMR Loads Rate ($/MWh) $ 0.17 $ 0.20 $ 0.23 Zone E RMR Loads Rate ($/MWh) $ 0.05 $ 0.05 $ New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 9

10 RMR Invoicing Details The APR rate and variable costs will be calculated daily and invoiced for the normal billing periods ( weekly, initial monthly, 4 month adjustment and final bill ) The performance incentive will be calculated monthly and invoiced on the initial monthly, 4 month adjustment and final bill The availability incentive will be calculated at the conclusion of every capability period and invoiced on the first month after the completion of the calculation New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 10

11 New York Independent System Operator, Inc. All Rights Reserved. DRAFT FOR DISCUSSION PURPOSES ONLY 11