NPRR1086  Recovery, Charges, and Settlement for Operating Losses During an LCAP Effective Period

This Nodal Protocol Revision Request (NPRR) aligns the Protocols with the order amending 16 TAC § 25.505 in Project No. 51871 (51871 Order), which modifies the value of the Low System-Wide Offer Cap (LCAP) by eliminating a provision that ties the value of LCAP to the natural gas price index, and adding a provision that ensures that a Resource Entity (through its Qualified Scheduling Entity (QSE)) can recover its actual marginal costs when a scarcity pricing situation occurs while the LCAP is in effect (LCAP Effective Period). An LCAP Effective Period occurs when the Peaker Net Margin (PNM) during a calendar year exceeds a threshold of three times the cost of new entry for new generation plants. During an LCAP Effective Period, the System-Wide Offer Cap (SWCAP) will be set to the LCAP for the remainder of the calendar year.