06/19/2013– Proposed Policy Options for ERCOT System Adequacy

LCG Consulting (LCG) of Los Altos, California, in response to the recent ERCOT system adequacy and investment study, offers to evaluate the proposed policy options and perform long-term market studies to assess their impacts. The proposed options are summarized below.

Option 1 – Business as Usual Case: Energy-Only with Market-Based Reserve Margin
Option 2 – Make Whole Payment Case: Energy-Only with Adders to Support a Target Reserve Margin

Option 3 – RMR Unit and Scarcity Price Case: Energy-Only with Backstop Procurement at Minimum Acceptable Reliability
Option 4 – Capacity Market Case: Mandatory Resource Adequacy Requirement for LSEs
Option 5 – Forward Market for Capacity Case: Resource Adequacy Requirement with Centralized Forward Capacity Market Auction

LCG feels that the potential market design changes will inevitably affect the business strategy of many market participants and present opportunities to invest in new traditional or renewable generation to mitigate the expected generation inadequacy. LCG proposes to perform full network simulations of the ERCOT electric grid to forecast the trend of electricity prices and its impact on costs and revenues of the generation portfolio or load obligation.

LCG’s analysis would cover combination of the proposed policy options for the ERCOT nodal market for any time horizon. The cases will be developed in consultation with individual market participant and could be customized to meet their specific needs.

Standard deliverables of LCG study include forecasts of hub and load zone prices, LMPs at the specified buses, congestion, generator performance, and other additional mutually agreed output.

Please contact Julie Chien (julie.chien@energyonline.com) to schedule a discussion about such studies. LCG is also interested in hearing from you about your needs for other studies and modeling tools.

About LCG Consulting:
With more than 25 years of experience, LCG Consulting is a pioneer and market leader in modeling the competitive energy market. LCG offers a full range of consulting services and specialized software products for energy producers, suppliers and traders seeking to optimize resources in a cost effective fashion. Its UPLAN suite of models, which offers significant modeling flexibilities and capabilities, has been used extensively to conduct market operation simulations and studies for electrical systems throughout the world.

Contact: Julie Chien
LCG Consulting
julie.chien@energyonline.com
http://www.energyonline.com