There are several items worth noting regarding the ERCOT's methodology:

Regulation Reserve Requirements (RGRS).  ERCOT has determined that 600 MW of 
Reg up and down will be adequate for 95% of the hours during the year, if 
historic patterns hold and if balancing energy is deployed properly.  During 
what ERCOT considers to be "high stress" periods, they will increase their 
normal RGRS requirement by a multiple of 2-3.  The initial start-up of the 
single control area will  be considered "high stress" and ERCOT will purchase 
2-3 what is necessary to cover the inexperience of the operators.  This will 
be the practice until ERCOT is comfortable with the single control area (or 
until market participants complain about the high cost of A/S).  The high 
stress option will remain available for the first year of operations.
Non-Spinning Reserve Requirements (NSRS).  ERCOT proposes to a methodology of 
purchasing NSRS only when projected risk of insufficiency is higher than 
normal, or large amounts of spinning reserve are not projected to be 
available online based on resource plans..  This boils down to where the 
temperature is projected to be greater than 92 degrees, less than 32 degrees 
Fahrenheit or uncertain and when spinning reserves less than 4600 MW are 
projected.  Here is the process:
  1. Review the weather forecast for the next day and see if it differs 
significantly from the current day.
  2. If the next day forecast is &similar8 to the current day forecast, and 
the current day forecast high temperature is <92, and the current    day low 
temperature is greater than 32 degrees, and the current day generation plan 
shows >4600 MW of spinning reserve online    all day long, and the current 
month is not April, May, or October, THEN no NSRS is considered to be 
required all day for the next    day.
  3. Else: Purchase NSRS using the following:
  ? If the current month is April, May or October, then purchase NSRS in 
amounts equal to the largest unit online for the hours     projected within 
80% of peak hour.
  ? If today,s and tomorrow,s ERCOT high temperature is projected above 92 
degrees, then purchase NSRS in amounts equal to the    largest unit online 
for the hours projected warmer than 92 degrees.
  ? If tomorrow,s low temperature forecast is projected below 30 degrees, 
then purchase NSRS in amounts equal to the largest unit    online for the 
projected morning load pickup hours and hours projected within 80% of peak 
hour.
   Purchase amounts of NSRS equal to the largest unit online for hours in 
which the Day Ahead operator estimates spinning reserves    online will drop 
lower than 4600 MW.
Replacement Reserve Requirements (RPRS).  The requirement will be set at the 
amount of RPRS required to resolve supply inadequacy, CSC, and OC (local) 
congestion simultaneously.  There will be procurement of RPRS if the resource 
plans indicate capacity inadequacy based on the QSE scheduled load  with the 
ERCOT projected load.  If the ERCOT projected load is greater than the QSE 
scheduled load and capacity available in the resource plan does not cover the 
difference, then there is a capacity inadequacy problem.  If the CSC flows 
based on the QSE schedules are greater than the limits, then the CSC problems 
are recorded.  Then a transmission contingency analysis will be run to 
identify OC constraints.  If the flows are greater than the limits, the OC 
flow values are recorded.  When there are insufficient RPRS bids for ERCOT to 
resolve its reliability and security concerns, ERCOT may choose to request 
OOM capacity or to use RMR units.  ERCOT will use the scheduling pricing 
dispatch (SPD) to determine which OOM and RMR units should be selected and 
when to discontinue OOM/RMR service.
Balancing Energy Requirement.  ERCOT's goal for balancing energy is (1) to 
use BES so that regulation service in either direction is not depleted, (2) 
to minimize net energy in regulation, and (3) to provide frequency control 
when frequency is high, especially during minimum load intervals.  ERCOT will 
use a two-step approach to calculate balancing energy service needs.  Step 
one will be to clear the balancing energy service market resolving 
load-generation balances and Zonal congestion (local congestion is ignored).  
Step two is to determine the balance energy service needs to resolve local 
congestion as well as generation-load balance and zonal congestion.   The 
desired result of step two is to minimize the cost of local congestion which 
will be an uplift to the market.
Balancing Energy Down Bid Percentage Requirement.  This will be used for 
congestion management and frequency control (to correct for high frequency).  
ERCOT will evaluate the export amount of each congestion management zone and 
transmission transfer capability between CM Zones.  If the export amount is 
greater than the calculated transfer capability of a CM Zone, then the 
difference between these two values is the potential congested MW, or the 
total MW of DES Down bids needed for clearing Zonal Congestion.  Also 
sufficient down bid percentage requirement will be determined by ERCOT.  
Market rules dictate that by 0600 of the day ahead QSEs will be notified of 
this percentage requirement for BES down bids by Congestion Zone.
Responsive Reserve Requirement (RRS).  The RRS requirement is set at 2300 MW 
for all hours under normal conditions.  Interruptible responsive reserve 
cannot exceed 25% of the QSE total requirement. 

For the initial start-up period of the market, ERCOT will have the tendency 
to over buy ancillary services while the are "adjusting" to the single 
control area.


Thane Thomas Twiggs
Enron Corp
1400 Smith Street
Houston, Texas 77002

713-853-3199 Voice
713-408-4463 Mobile
713-646-8272 Fax
877-968-8967 Digital Pager or 8779688967@skytel.com
----- Forwarded by Thane Twiggs/ENRON_DEVELOPMENT on 04/10/2001 04:59 PM -----

	Thane Twiggs
	04/10/2001 03:42 PM
		 
		 To: Doug Gilbert-Smith/Corp/Enron@ENRON, Clint Dean/Corp/Enron@Enron, Smith 
L Day/HOU/ECT@ECT, Eric Saibi/Corp/Enron@ENRON, Mike Curry/Enron@EnronXGate, 
Martin Lin/Contractor/Enron Communications@Enron Communications, Ron 
McNamara/NA/Enron@Enron, Thane Twiggs/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, 
Jean Ryall/NA/Enron@ENRON, Michelle Parks/Enron@EnronXGate, Christi L 
Nicolay/HOU/ECT@ECT
		 cc: 
		 Subject: ERCOT Ancillary Services Methodology

The attached file was large so I will provide the link to the ERCOT website.  
If  you cannot down load and would like a hard copy, let me know. 

http://www.ercot.com/currents.htm  -- It is under Ancillary Services 
Methodologies.

Thane Thomas Twiggs
Enron Corp
1400 Smith Street
Houston, Texas 77002

713-853-3199 Voice
713-408-4463 Mobile
713-646-8272 Fax
877-968-8967 Digital Pager or 8779688967@skytel.com
----- Forwarded by Thane Twiggs/ENRON_DEVELOPMENT on 04/10/2001 03:38 PM -----

	Thane Twiggs
	04/10/2001 03:04 PM
		 
		 To: Doug Gilbert-Smith/Corp/Enron@ENRON, Clint Dean/Corp/Enron@Enron, Smith 
L Day/HOU/ECT@ECT, Eric Saibi/Corp/Enron@ENRON, Mike Curry/Enron@EnronXGate, 
Martin Lin/Contractor/Enron Communications@Enron Communications, Ron 
McNamara/NA/Enron@Enron, Thane Twiggs/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, 
Jean Ryall/NA/Enron@ENRON, Michelle Parks/Enron@EnronXGate, Christi L 
Nicolay/HOU/ECT@ECT
		 cc: 
		 Subject: ERCOT Ancillary Services Methodology

Attached is the proposed ERCOT ISO methodology for determining A/S 
Purchases.  The methodologies will be presented to the ERCOT Board for 
approval April 17, 2001.




Thane Thomas Twiggs
Enron Corp
1400 Smith Street
Houston, Texas 77002

713-853-3199 Voice
713-408-4463 Mobile
713-646-8272 Fax
877-968-8967 Digital Pager or 8779688967@skytel.com