The ERCOT Board approved the congestion zones for next year, 2001.
The ERCO= T Board accepted the 3 CSC 4 CM Zone model for use in commercial congestion=  management for 2002.
Effective date is January 1, 2002.
The three CSC's = are Graham-Parker 345 kV DCKT, Sandow-Temple 345 kV DCKT and STP-DOW 345 kV=  DCKT.
The four CM Zones are West02, North02, South02 and Houston02.
A po= wer point presentation along with a map is available at ftp://ftp.ercot.com= /CSCDATA/csc.htm.
=20  Current Congestion Cost and Outlook.
The congestion charges that have been=  incurred are 55.6 million or 137 million depending on the methodology used=  to calculate the charge.
If you look purely at the scheduled MWs then it i= s 137 MM based upon the ERCOT protocols.
The actual cost to redispatch and = clear congestion as of Sept. 22, 2001 was 55.6 MM.
Both obviously are very = high considering it is for one month of operation.=20 When the 20 MM trigger was hit August 14, 2001, ERCOT has 6 month by Protoc= ol and reaffirmed in the commission order to implement the full zonal model= .
This means that there will no longer be an uplift of interzonal congestio= n, rather a direct assignment of the charge.
The charge may be partially of= fset by the TCR that will be auctioned.
The PUCT has indicated an interest = to move to direct assignment prior to the development and implementation of=  a TCR instrument as a hedge.
I am chairing the congestion management work= ing group that is deciding the TCR issue and will be dealing with the local=  congestion issues when that trigger has been hit.
I will attach a copy of=  the current draft of the TCR white paper.
In short, the TCR is a financia= l option that can be purchased as hedge against zonal congestion.
There is=  no physical requirement for the TCR in that you do not have to physically = schedule to receive the benefit of the TCR.
There will be an auction on or=  about the 4th of February, 2002 and the full zonal implementation will tak= e place February 15, 2002.
The tentative schedule is as follows: ?=0910/5/01 - Distribute draft TCR White Paper ?=0910/22/01 - Review and edit draft TCR White Paper ?=0910/30/01 - Distribute TCR White Paper to WMS ?=0911/1/01 - WMS Meeting; vote on PRR ?=0911/8/01 - TAC Meeting ?=0911/19/01 - Board Meeting ?=0912/4/01 - ERCOT issues notice of TCR Auction ?=092/15/02 - First effective date of TCRs and direct assignment of CSC Con= gestion Costs =20 Capacity Auction.
The capacity auction workshops have begun to rework that=  capacity rule and problems experienced with the last round.
There was an = initial discussion on the problems that were experienced with credit and ho= w the standard was one-way and the buyers of capacity were left without rec= ourse.
There was a subsequent conference call with the credit professional= s to discuss the issues ( I did not participate) and there will be an addit= ional meeting on the 19th.
The purpose of the short-term meeting are to re= ctify issues such as credit and documents prior to the March and July 2002 = auctions.
Substantive issues such as the actual products, zone determinati= on and the auction process will be part of a rulemaking prior to the Septem= ber 2002 auction which includes annual products.=20  Protocol Implementation.
ERCOT is in the process of determining what shoul= d be included in the Phase II design which will begin January 2001.
There = is a priority list that is currently under review by ERCOT vendors to deter= mine lead times of Phase II items in an attempt to deliver Phase II items A= SAP.
Parviz Adib from MOD stressed that there are certain issues that the = PUCT expects to be addressed in Phase II.
Issues that do not require major=  system changes might still be doable in Phase II if the PRR Process is sta= rted immediately.
There is a placeholder in the Protocols related to BULs = and loads acting as resources.
Mechanism for Simultaneous Procurement of Ancillary Services.
The PUCT ha= s expressed concern that there could be price reversals associated with the=  ancillary services market (if it is assumed that the various ancillary ser= vices have different levels of value to the market).
The Board had approve= d a contingency plan to allow price modifications in the early markets, how= ever the plan has not been implemented.
The WMS discussed, at length, the = issue of simultaneously clearing all three markets - non-spinning, regulati= on, and responsive reserve.
A task force was formed to initially identify = the principles for developing a mechanism for simultaneous procurement of a= ncillary services issue.
It was suggested that a consultant be hired to de= velop Protocol language once the principles are identified.
The first task=  force meeting was cancelled and has not been rescheduled.
=20  Demand-Side Task Force.
Jay Zarnikau reported on activities of the Demand-= Side Task Force that is addressing Balancing Up Load (BUL) Market Issues an= d other demand-side issues.
The PUCT expects the full functionality to be = in place on January 1, 2002.
The DSTF met last on October 1st (third meeti= ng).
The DSTF completed a draft status report on Demand-Side Resources and=  Demand Responsiveness.
It was noted that the work of the DSTF is not comp= lete and has not been approved by any ERCOT Committee or the Board.
Howeve= r, ERCOT was required to file a report on these issues in the STF Report.
= The report reviews the policy considerations that have prompted interest in=  the demand side of ERCOT's market, reviews the PUCT's directive, reviews t= he role of demand-side resources in ERCOT's markets, and identifies the iss= ues and impediments that the DSTF is presently addressing.
It also summari= zes the options discussed by the DSTF to date.
The PUCT staff has suggeste= d that ERCOT hire a consultant, such as Eric Hirsch, to provide more resour= ces for this effort.
The group expects to wrap up BUL issues and address d= irect load control issues at its next meeting.
Unit Specific Deployments.
At the next WMS meeting October 24, 2001, there=  will be a discussion regarding unit specific deployments and ERCOT will di= scuss the issues and the difficult that participants are having to meet the=  ramp rates of the deployments.
The WMS will develop a list of issues and = case studies for ERCOT to discuss.
The WMS also briefly discussed PRR 282 = related to defining OOME as an Instructed Deviation.

ERCOT Update
The ERCOT Board approved the congestion zones for next year, <NUMBER>.
The ERCO= T Board accepted the <NUMBER> CSC <NUMBER> CM Zone model for use in commercial congestion= management for <NUMBER>.
Effective date is January <NUMBER>, <NUMBER>.
The three CSC's = are Graham-Parker <NUMBER> kV DCKT, Sandow-Temple <NUMBER> kV DCKT and STP-DOW <NUMBER> kV= DCKT.
The four CM Zones are West00, North00, South00 and Houston00.
A po= wer point presentation along with a map is available at <URL> /CSCDATA/csc.htm.
=<NUMBER> Current Congestion Cost and Outlook.
The congestion charges that have been= incurred are <NUMBER> million or <NUMBER> million depending on the methodology used= to calculate the charge.
If you look purely at the scheduled MWs then it i= s <NUMBER> MM based upon the ERCOT protocols.
The actual cost to redispatch and = clear congestion as of Sept. <NUMBER>, <NUMBER> was <NUMBER> MM.
Both obviously are very = high considering it is for one month of operation.=<NUMBER> When the <NUMBER> MM trigger was hit August <NUMBER>, <NUMBER>, ERCOT has <NUMBER> month by Protoc= ol and reaffirmed in the commission order to implement the full zonal model= .
This means that there will no longer be an uplift of interzonal congestio= n, rather a direct assignment of the charge.
The charge may be partially of= fset by the TCR that will be auctioned.
The PUCT has indicated an interest = to move to direct assignment prior to the development and implementation of= a TCR instrument as a hedge.
I am chairing the congestion management work= ing group that is deciding the TCR issue and will be dealing with the local= congestion issues when that trigger has been hit.
I will attach a copy of= the current draft of the TCR white paper.
In short, the TCR is a financia= l option that can be purchased as hedge against zonal congestion.
There is= no physical requirement for the TCR in that you do not have to physically = schedule to receive the benefit of the TCR.
There will be an auction on or= about the 0th of February, <NUMBER> and the full zonal implementation will tak= e place February <NUMBER>, <NUMBER>.
The tentative schedule is as follows: ?=<NUMBER>/<NUMBER>/<NUMBER> - Distribute draft TCR White Paper ?=<NUMBER>/<NUMBER>/<NUMBER> - Review and edit draft TCR White Paper ?=<NUMBER>/<NUMBER>/<NUMBER> - Distribute TCR White Paper to WMS ?=<NUMBER>/<NUMBER>/<NUMBER> - WMS Meeting; vote on PRR ?=<NUMBER>/<NUMBER>/<NUMBER> - TAC Meeting ?=<NUMBER>/<NUMBER>/<NUMBER> - Board Meeting ?=<NUMBER>/<NUMBER>/<NUMBER> - ERCOT issues notice of TCR Auction ?=<NUMBER>/<NUMBER>/<NUMBER> - First effective date of TCRs and direct assignment of CSC Con= gestion Costs =<NUMBER> Capacity Auction.
The capacity auction workshops have begun to rework that= capacity rule and problems experienced with the last round.
There was an = initial discussion on the problems that were experienced with credit and ho= w the standard was one-way and the buyers of capacity were left without rec= ourse.
There was a subsequent conference call with the credit professional= s to discuss the issues ( I did not participate) and there will be an addit= ional meeting on the 00th.
The purpose of the short-term meeting are to re= ctify issues such as credit and documents prior to the March and July <NUMBER> = auctions.
Substantive issues such as the actual products, zone determinati= on and the auction process will be part of a rulemaking prior to the Septem= ber <NUMBER> auction which includes annual products.=<NUMBER> Protocol Implementation.
ERCOT is in the process of determining what shoul= d be included in the Phase II design which will begin January <NUMBER>.
There = is a priority list that is currently under review by ERCOT vendors to deter= mine lead times of Phase II items in an attempt to deliver Phase II items A= SAP.
Parviz Adib from MOD stressed that there are certain issues that the = PUCT expects to be addressed in Phase II.
Issues that do not require major= system changes might still be doable in Phase II if the PRR Process is sta= rted immediately.
There is a placeholder in the Protocols related to BULs = and loads acting as resources.
Mechanism for Simultaneous Procurement of Ancillary Services.
The PUCT ha= s expressed concern that there could be price reversals associated with the= ancillary services market (if it is assumed that the various ancillary ser= vices have different levels of value to the market).
The Board had approve= d a contingency plan to allow price modifications in the early markets, how= ever the plan has not been implemented.
The WMS discussed, at length, the = issue of simultaneously clearing all three markets - non-spinning, regulati= on, and responsive reserve.
A task force was formed to initially identify = the principles for developing a mechanism for simultaneous procurement of a= ncillary services issue.
It was suggested that a consultant be hired to de= velop Protocol language once the principles are identified.
The first task= force meeting was cancelled and has not been rescheduled.
=<NUMBER> Demand-Side Task Force.
Jay Zarnikau reported on activities of the Demand-= Side Task Force that is addressing Balancing Up Load (BUL) Market Issues an= d other demand-side issues.
The PUCT expects the full functionality to be = in place on January <NUMBER>, <NUMBER>.
The DSTF met last on October 0st (third meeti= ng).
The DSTF completed a draft status report on Demand-Side Resources and= Demand Responsiveness.
It was noted that the work of the DSTF is not comp= lete and has not been approved by any ERCOT Committee or the Board.
Howeve= r, ERCOT was required to file a report on these issues in the STF Report.
= The report reviews the policy considerations that have prompted interest in= the demand side of ERCOT's market, reviews the PUCT's directive, reviews t= he role of demand-side resources in ERCOT's markets, and identifies the iss= ues and impediments that the DSTF is presently addressing.
It also summari= zes the options discussed by the DSTF to date.
The PUCT staff has suggeste= d that ERCOT hire a consultant, such as Eric Hirsch, to provide more resour= ces for this effort.
The group expects to wrap up BUL issues and address d= irect load control issues at its next meeting.
Unit Specific Deployments.
At the next WMS meeting October <NUMBER>, <NUMBER>, there= will be a discussion regarding unit specific deployments and ERCOT will di= scuss the issues and the difficult that participants are having to meet the= ramp rates of the deployments.
The WMS will develop a list of issues and = case studies for ERCOT to discuss.
The WMS also briefly discussed PRR <NUMBER> = related to defining OOME as an Instructed Deviation.
issues trigger hit defining oome approved congestion zones specific deployments ercot presentation process determining csc gestion costs kv dckt sandow copy current draft