Rebecca Klein
Chairman
Brett A. Perlman
Commissioner
W. Lane Lanford
Executive Director
Public Utility Commission of Texas
______________________________________________________________________________________________________________________________
TO:
FROM:
DATE:
RE:
All Interested Parties
Eric S. Schubert, Market Oversight Division
July 28, 2017
Project 26376, Rulemaking Proceeding on Wholesale Market Design Issues in
the Electric Reliability Council of Texas, Draft Procedural Timeline for
Rulemaking
Attached is a draft procedural timeline for Project 26376, Rulemaking Proceeding on
Wholesale Market Design Issues in Electric Reliability Council of Texas. This timeline is
tentative and open to input from stakeholders. Note that this timeline presumes that the
Commission would implement major changes in the market design. If design changes are
not substantial, the timeline will be shorter than presented here.
As the timeline shows, the second workshop scheduled for December 2, 2002 (immediately
after the interest rate hearing by the Commission) will raise the issue of an ERCOT-run dayahead market. Stakeholder comments at the September 6, 2002 workshop indicated that
many market participants thought this issue to be important. In addition, ERCOT will be
instituting a relaxed balance schedule on or about November 1, 2002, which should inform
the discussion at the workshop.
MOD has decided to postpone the discussion of its proposal to directly assign local
congestion fees with the Commission to the third scheduled workshop in mid-January 2003
when the Commission will discuss the general topic of congestion management. In the
interim, MOD will ask ERCOT staff to calculate the level of local congestion costs if the
current protocols language concerning local congestion payments had been in place on July
31, 2001. The delay also will give the Congestion Management Working Group (CMWG) a
chance to develop the means to address local congestion associated with wind farms in the
Rio Pecos area for the year 2003. The CMWG is scheduled to report on this issue at the
ERCOT Wholesale Market Subcommittee in December 2002.
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Project No. 26376,
Rulemaking on Wholesale Market Design Issues in ERCOT
Draft Procedural Timeline
Rulemaking at the Commission: November 2002 – November
2003

Purpose: This proceeding will develop rules that will provide the market
design parameters for the ERCOT wholesale market.

Process:
o The Commission may spin off rulemakings when appropriate to
address individual market design elements separately or in subgroups.
o The Commission will hold workshops to allow Staff, ERCOT,
ERCOT stakeholders, and industry experts to discuss alternatives.
o When needed, Staff will publish questions to gather stakeholder input
and will prepare strawmen and draft rules for input and discussion.


Timeline:
o Educational workshop on market design issues (November 1, 2002)
o Workshop on an ERCOT-run day-ahead market (December 2, 2002,
after hearing on interest rates by the Commission)
 Current: Relaxed balanced schedule
 Proposed: Day-ahead market
o Workshop (January 15-16, 2003)
 Pros and cons of various existing and proposed market designs
in the U.S. and abroad
 Congestion management issues in ERCOT
 Zonal vs. nodal congestion management model
 MOD’s proposal to directly assign local congestion fees
o Workshops (Late January – Early March 2003)
 Risk management tools
 Resource plans and scheduling
 Other issues as deemed necessary
o Commissioners make threshold decisions on wholesale market design.
(March – April 2003)
 Long-term design of wholesale market
 Interim solutions to current problems
o Rule(s) written and approved at Commission (April 2003 – November
2003)
Protocol Revisions by ERCOT: June 2003 – June 2004
The Commission’s intent in the implementation phase is to generally let
stakeholders design the details of the market as long as the market design is
efficient and consistent with Commission rules and does not create gaming
opportunities or unfair advantages for some market participants.

This process can begin as soon as the Commission makes threshold decisions or
completes spin-off rulemaking proceedings. The implementation process at
ERCOT will overlap the Commission rulemaking process in order to ensure the
timely start of the redesigned market.
Software Development and Testing: March 2004 – March 2005





Software developers will convert Protocols language into software programs to
implement market design.
ERCOT staff will work with software developers and keep ERCOT
stakeholders and the Commission informed on the status of the software
development.
ERCOT staff will suggest technical changes to ERCOT stakeholders to address
problems arising from software development.
Market participants will modify the interfaces between their computer systems
and ERCOT software.
ERCOT staff will supervise testing of various software packages.
Market Participants’ Software Testing: March 2005 – September 2005

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ERCOT staff will supervise market testing of software and respond to questions
and concerns raised by market participants.
Market participants and ERCOT will test interfaces between ERCOT software
and the market participants’ computer systems.
Reports to ERCOT Board and Commission on the progress of market testing the
software.
ERCOT staff will suggest technical changes to ERCOT stakeholders to address
problems arising from market software testing.
New Market Design Fully Operational: October 2005


MOD believes new market design could be fully operational by June 2005
(about 30 months after rulemaking begins).
Operational date set in October 2005 to avoid market “teething” problems
during summer peak. Timeline was adjusted to meet the October 2005 target
date.