NPRR627  Augmented ORDC to Include Reliability Factor Methodology

The Nodal Protocol Revision Request (NPRR) introduces the reliability factor which will be used to augment the ORDC to place a higher value on Real-Time operating reserves during defined periods of increased system risk to adequately price the increased risk; and provides the process for modifying the methodology used to determine the reliability factor. The price after the addition of the Real-Time On-Line Reserve Price Adder to Locational Marginal Prices (LMPs) approximates the pricing outcome of Real-Time energy and Ancillary Service co-optimization since the Real-Time On-Line Reserve Price Adder captures the value of the opportunity cost of reserves based on the defined ORDC and adjusted for the reliability factor. The reliability factor methodology requires ERCOT to provide advance notice prior to modifying the reliability factor for an Operating Day and advance posting of the reliability factor for the applicable Operating Day to the Market Information System (MIS). The timing values are represented as "X" and will be determined through the stakeholder process prior to approval of this NPRR.