Configuration Guide for: Convergence Bidding Real Time Energy, Congestion and Loss Settlement / Date: 5/22/2010
Settlements & Billing
BPM Configuration Guide: Convergence Bidding Real Time Energy, Congestion and Loss Settlement
CC 6473
Version 5.0
Table of Contents
1.Purpose of Document
2.Introduction
2.1Background
2.2Description
3.Charge Code Requirements
3.1Business Rules
3.2Predecessor Charge Codes
3.3Successor Charge Codes
3.4Inputs – External Systems
3.5Inputs - Predecessor Charge Codes or Pre-calculations
3.6CAISO Formula
3.7Outputs
4.Charge Code Effective Dates
1.Purpose of Document
The purpose of this document is to capture the business and functional requirements for the ISO Real Time Convergence Bidding Settlements, Charge Code 6473.
2.Introduction
2.1Background
On September 21, 2006, FERC issued an Order directing “…the CAISO to file tariff language for our review for the implementation of convergence bidding within 12 months after the effective date of MRTU Release 1..” FERC recognized that, although convergence bidding was important, implementing it simultaneously with MRTU Release 1 would impede the Casio’s ability to timely implement MRTU. By implementing convergence bidding and other elements of Markets and Performance (“MAP”) in a phased approach following implementation of MRTU, the CAISO should be able to successfully balance the need to timely implement and stabilize the “base” MRTU design while gaining the benefits of adding market efficiencies within a reasonable time after MRTU Go Live.
Convergence bidding tends to cause DAM and RTM prices to move closer together, or "converge," thus the term convergence bidding. The narrowing of price differences between the two markets reduces incentives for under-scheduling Load in the DAM by reducing potential financial benefits for waiting until the RTM. In addition to reducing price disparity, convergence bidding also provides greater market transparency by providing bids that are explicit rather than implicit. Additionally, the increased market liquidity from convergence bidding can help mitigate the market power of physical suppliers. Some market participants can use convergence bidding as a risk management tool to hedge the possibility of a generator outage.
A bid in convergence bidding is defined to be either a Virtual Demand Bid or Virtual Supply Bid. A Virtual Demand Bid is a Bid submitted in the CAISO Day-Ahead Market that, if cleared in the Integrated Forward Market (IFM), represents a commitment to purchase Energy at the price determined in the Day-Ahead Market, and to sell the same quantity back at the price determined in the Real-Time Market. A Virtual Supply Bid is a Bid submitted in the CAISO Day-Ahead Market that, if cleared in the Integrated Forward Market, represents a commitment to sell Energy at the price determined in the Day-Ahead Market, and to buy the same quantity back at the price determined in the Real-Time Market.
2.2Description
This Charge Code, “CC 6473 – Real Time Convergence Bidding Energy Congestion and Loss Settlement”, provides for the settlement of Energy that has been awarded from Virtual Bids submitted in the Integrated Forward Market (IFM) by Scheduling Coordinators (SC) on the behalf of Convergence Bidding Entities.
Convergence Bidding RT payments and charges shall be calculated as follow:
- For a Virtual Demand Bid, the RT payment will consist of the DA Cleared MW multiplied by the RT LMP at the applicable PNodes/Aggregated PNodes.
- For a Virtual Supply Bid, the RT charges shall consist of the DA Cleared MW multiplied by the RT LMP at the applicable PNodes/Aggregated PNodes.
Virtual Bids may be submitted at any Eligible PNode or Eligible Aggregated PNode. If the node is internal, The RT Price is the simple hourly average of dispatch interval real time LMP at the Eligible PNode or Aggregated PNodes. If the node is a tie point, that is the HASP hourly LMP on that tie point.
A Virtual Supply Award in the Day-Ahead will require the seller to buy back the same quantity of supply at the same location at the Real-Time price. On the other hand, a Virtual Demand Award in the Day-Ahead will require the buyer to sell back the same quantity of demand at the same location at the Real-Time Price.
For a Virtual Supply Award for an import at a tie node, the charge shall be the product of the DA cleared MW multiplied by the hourly HASP LMP on that node; while for a Virtual Demand Award for an export at a tie node, the payment shall be the product of the DA cleared MW multiplied by the hourly HASP LMP on that node. The hourly HASP LMP at a node is the simple average of 15-min HASP LMPs at a node for the relevant Trading hour.
3.Charge Code Requirements
3.1Business Rules
Bus Req ID / Business Rule1 / The Settlement Amount per Trading Hour per SC for all its Virtual Bid Energy associated with a Convergence Bidding Entity is the net of the payments and charges for the Energy associated with all of the SC’s awarded Virtual Supply and Virtual Demand Bids segmentsover all Eligible PNodes/Aggregated PNodes for the Trading Hour.
2 / Virtual Supply Bids and Virtual Demand Bids, as their names imply, are virtual in the sense that they are not backed-up by a physical supply resource or physical demand. (Fact)
3 / A Virtual Demand Bid is defined to be a Bid submitted in the CAISO Day-Ahead Market that, if cleared in the Integrated Forward Market (IFM), represents a commitment to purchase Energy at the price determined in the Day-Ahead Market, and to sell the same quantity back at the price determined in the Real-Time Market.
4 / A Virtual Supply Bid is defined to be a Bid submitted in the CAISO Day-Ahead Market that, if cleared in the Integrated Forward Market, represents a commitment to sell Energy at the price determined in the Day-Ahead Market, and to buy the same quantity back at the price determined in the Real-Time Market.
5 / This Charge Code shall be calculated daily on an hourly basis.
6 / The total settlement amount for Virtual Awards per Trading Hour of the Real-Time market for a particular SC representing a Convergence Bidding Entity (CBE) shall be determined as the sum of the Virtual Supply Award settlement amount and the Virtual Demand Award settlement amount for the SC over the Trading Hour.
7 / The CAISO will charge each Scheduling Coordinator with Virtual Supply Awards at an Eligible PNode or Eligible Aggregated PNode an amount equal to the simple hourly average of the Dispatch Interval Real-Time LMPs at the Eligible PNode or Eligible Aggregated PNode multiplied by the MWhs of Virtual Supply Awards
8 / The CAISO will pay each Scheduling Coordinator with Virtual Demand Awards at an Eligible PNode or Eligible Aggregated PNode an amount equal to the simple hourly average of the Dispatch Interval Real-Time LMPs at the Eligible PNode or Eligible Aggregated PNode multiplied by the MWhs of Virtual Demand Awards
9 / For adjustments to the Charge Code that cannot be accomplished by correction of upstream data inputs, recalculation or operator override, Pass Through Bill Charge adjustment shall be applied.
10 / The currently specified Charge Code configuration shall calculate the CAISO totals for the overall Virtual Award Energy, Congestion and Loss Settlement Amount by Scheduling Coordinator (SC)in the Trading Hour.
3.2Predecessor Charge Codes
Charge Code/ Pre-calc NameNone
3.3Successor Charge Codes
Charge Code/ Pre-calc NameCC 6477 – Real Time Imbalance Energy Offset
CC 6774 – Real Time Congestion Offset
3.4Inputs – External Systems
Input Req ID / Variable Name / Description1 / DispatchIntervalRealTimeEligibleNodeLMP j’mdh / Received from the PNode Clearing payload, the input represents the Real Time Dispatch Interval LMPfor Energy at Eligible PNode or Aggregated PNode j’.
2 / BAHourlyDAVirtualAwardNodalQuantity BA’aj’y’mdh / The input provides the DA Virtual Award cleared Energy quantity in association with Business Associate B, , Aggregated PNode type A’, bid type a, Eligible PNode/Aggregated PNode j’, Node Location Type y’Trading Month m, Trading Day dand Trading Hour h. (MW)
3 / PTBChargeAdjustmentBANetHourlyDAVirtualAwardAmountBJmdh / PTB adjustment variable for the currently configured Charge Code, amount per Business Associate B, PTB ID J, for Trading Hour h. ($)
4 / DispatchIntervalRTFinancialNodeMCCPrice j’hif / The Marginal Cost of Congestion (MCC) for financial node j’ that cleared in the Real Time market for Trading Hour h, Settlement Interval i, Dispatch Interval f. ($/MWh)
These are mapped from Pnode and APnode MCC prices for Energy in the Real Time Market.
IFM/RTM applications is expected to provide the base data for this. Whenever the financial source is not a PNode or an APNode such as a
Trading Hub, then for data mapping purposes, special derivation of this value will be done by an upstream system.
3.5Inputs - Predecessor Charge Codes or Pre-calculations
Input Req ID / Variable Name / Predecessor Charge Code/ Pre-calc ConfigurationNone
3.6CAISO Formula
3.6.1BAHourlyRTVirtualSupplyOrDemandAwardEnergySettlementAmountBj’amdh=
BAHourlyRTVirtualSupplyAwardEnergySettlementAmountBj’amdh+
BAHourlyRTVirtualDemandAwardEnergySettlementAmountBj’amdh
Where
3.6.2BAHourlyRTVirtualSupplyAwardEnergySettlementAmountBj’amdh=
(BAHourlyDAVirtualAwardNodalQuantity BA’aj’y’mdh*
HourlyIntervalRealTimeEligibleNodeLMP j’mdh)
Where a = ‘SUP’ and y’‘TIE’
3.6.3BAHourlyRTVirtualDemandAwardEnergySettlementAmountBj’amdh=
(BAHourlyDAVirtualAwardNodalQuantity BA’aj’y’mdh*
HourlyIntervalRealTimeEligibleNodeLMP j’mdh)
Where a = ‘DMND’ and y’‘TIE’
Where
3.6.4HourlyIntervalRealTimeEligibleNodeLMPj’mdh= Average(DispatchIntervalRealTimeEligibleNodeLMPj’mdhif)
3.6.5Where
CAISOHourlyRTVirtualSupplyOrDemandAwardEnergySettlementAmountmdh =BAHourlyRTVirtualSupplyOrDemandAwardEnergySettlementAmountBj’amdh
3.6.6Where
CAISOHourlyRTVirtualSupplyOrDemandAwardCongestionSettlementAmountmdh=(BAHourlyRTVirtualSupplyAwardCongestionSettlementAmountBj’amdh + BAHourlyRTVirtualDemandAwardCongestionSettlementAmountBj’amdh)
3.6.7Where
BAHourlyRTVirtualDemandAwardCongestionSettlementAmountBj’amdh=
(BAHourlyDAVirtualAwardNodalQuantityBA’aj’y’mdh* HourlyRTFinancialNodeMCCPricej’h)
Where a = ‘DMND’ and y’‘TIE’
3.6.8Where
BAHourlyRTVirtualSupplyAwardCongestionSettlementAmountBj’amdh =
(BAHourlyDAVirtualAwardNodalQuantityBA’aj’y’mdh* HourlyRTFinancialNodeMCCPricej’h)
Where a = ‘SUP’ and y’‘TIE’
3.6.9Where
HourlyRTFinancialNodeMCCPricej’h= Average (DispatchIntervalRTFinancialNodeMCCPricej’hif)
3.7Outputs
OutputID / Name / Description1 / In addition to the outputs below, all inputs are required to be accessible for review by analysts and report on Settlement statements.
2 / BAHourlyRTVirtualDemandAwardEnergySettlementAmountBj’amdh / The hourly settlement amount for DA Virtual Demand Award cleared Energy quantity in association with Business Associate B, Aggregated PNode type A’, bid type a, Eligible PNode/Aggregated PNode j’, Node Location Type y’ and Trading Hour h.
3 / BAHourlyRTVirtualSupplyAwardEnergySettlementAmountBj’amdh / The hourly settlement amount for DA Virtual Supply Award cleared Energy quantity in association with Business Associate B, Aggregated PNode type A’, bid type a, Eligible PNode/Aggregated PNode j’, Node Location Type y’ and Trading Hour h.
4 / BAHourlyRTVirtualSupplyOrDemandAwardEnergySettlementAmountBj’amdh / The Total hourly settlement amount for DA Virtual Supply and Demand Award cleared Energy quantity in association with Business Associate B, Aggregated PNode type A’, bid type a, Eligible PNode/Aggregated PNode j’, Node Location Type y’ and Trading Hour h.
5 / CAISOHourlyRTVirtualSupplyOrDemandAwardEnergySettlementAmountmdh / The CAISO hourly settlement amount for DA Virtual Supply and Demand Award cleared Energy quantity in Trading Hour h.
6 / HourlyIntervalRealTimeEligibleNodeLMPj’mdh / Average Hourly Real Time LMPfrom the PNode Clearing payload, the input represents the Real Time Dispatch Interval LMP by Business Associate Band for Energy at Eligible PNode or Aggregated PNode j’.
7 / CAISOHourlyRTVirtualSupplyOrDemandAwardCongestionSettlementAmountmdh / The CAISO net total congestion revenues from cleared DA virtual Supply and Demand Awards assessed at RT prices for Trading Month m, Trading Day d, Trading Hour h. ($)
8 / BAHourlyRTVirtualSupplyAwardCongestionSettlementAmountBj’amdh / Business Associates BA net total congestion revenues from virtual Supply Awards assessed at RT prices for Trading Month m, Trading Day d, Trading Hour h.
9 / BAHourlyRTVirtualDemandAwardCongestionSettlementAmountBj’amdh / Business Associates BA net total congestion revenues from virtual Demand Awards assessed at RT prices for Trading Month m, Trading Day d, Trading Hour h.
10 / HourlyRTFinancialNodeMCCPricej’h / Average Hourly Real Time MCC from the PNode Clearing payload, the input represents the Real Time Dispatch Interval MCC by Business Associate Band for Energy at Eligible PNode or Aggregated PNode j’.
4.Charge Code Effective Dates
Charge Code/Pre-calc Name / Document
Version / Effective Start Date / Effective End Date / Version Update Type
Convergence Bidding Real Time Energy, Congestion and Loss Settlement (CC 6473) / 5.0 / 2/01/11 / Open / Configuration Impacted
CAISO, 2018 / Page 1 of 11