Texas Administrative Code › Title 16 - ECONOMIC REGULATION › Part 2 - PUBLIC UTILITY COMMISSION OF TEXAS › Chapter 25 - SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS › Subchapter S - WHOLESALE MARKETS › Section 25.501 - Wholesale Market Design for the Electric Reliability Council of Texas

Current through Reg. 49, No. 28; July 12, 2024
(a) General. The protocols and other rules
				  and requirements of the Electric Reliability Council of Texas (ERCOT) that
				  implement this section shall be developed with consideration of microeconomic
				  principles and shall promote economic efficiency in the production and
				  consumption of electricity; support wholesale and retail competition; support
				  the reliability of electric service; and reflect the physical realities of the
				  ERCOT electric system. Except as otherwise directed by the commission, ERCOT
				  shall determine the market clearing prices of energy and other ancillary
				  services that it procures through auctions and the congestion rents that it
				  charges or credits, using economic concepts and principles such as: shadow
				  price of a constraint, marginal cost pricing, and maximizing the sum of
				  consumer and producer surplus.
(b)
				  Bilateral markets and default provision of energy and ancillary capacity
				  services. ERCOT shall permit market participants to self-arrange (self-schedule
				  or bilaterally contract for) energy and ancillary capacity services, except to
				  the extent that doing so would adversely impact ERCOT's ability to maintain
				  reliability. To the extent that a market participant does not self-arrange the
				  energy and ancillary capacity services necessary to meet its obligations or to
				  the extent that ERCOT determines that the market participant's self-arranged
				  ancillary services will not be delivered, ERCOT shall procure energy and
				  ancillary capacity services on behalf of the market participant to cover the
				  shortfall and charge the market participant for the services
				  provided.
(c) Day-ahead energy
				  market. ERCOT shall operate a voluntary day-ahead energy market, either
				  directly or through contract.
(d)
				  Adequacy of operational information. ERCOT shall require resource-specific bid
				  curves for energy and ancillary capacity services that it competitively
				  procures in the day-ahead or operating day, and ERCOT shall use these bid
				  curves or ex-ante mitigated bid curves to address market failure, as
				  appropriate, in its operational decisions and financial settlements.
(e) Congestion pricing.
(1) ERCOT shall directly assign all
				  congestion rents to those resources that caused the congestion.
(2) ERCOT shall be considered to have
				  complied with paragraph (1) of this subsection if it complies with this
				  paragraph. ERCOT shall settle each resource imbalance at its nodal locational
				  marginal price (LMP) calculated pursuant to subsection (f) of this section;
				  each load imbalance at its zonal price calculated pursuant to subsection (h) of
				  this section; and congestion rents on each scheduled transaction for a resource
				  and load pair at the difference between the nodal LMP at the resource injection
				  location calculated pursuant to subsection (f) of this section and the zonal
				  price at the load withdrawal location calculated pursuant to subsection (h) of
				  this section.