September 12, 2019
Since we wrote the initial article about DAMAP and RTORSGP guidelines in 2009, it has been our most popular post. MISO rules have changed since then (e.g, the dispatch bands disappeared, and MISO replaced some eligibility checks with the Performance and Rate factors), and we decided the article was due for an update.
Most generation operators in MISO have probably been in this situation: MISO has kept the unit at the low limit for hours, the LMP finally picks up, but the unit seems to take forever to get to the top! To help, MISO created the Day-Ahead Margin Assurance Payment (DAMAP) and the Real-Time Offer Revenue Sufficiency Guarantee Payment (RTORSGP). To put it simply, they compensate generation owners affected by (a) price volatility and (b) the fact that RT operation, unlike DA, is rate-limited.
DAMAP and RTORSGP can be substantial payments. They are most likely to be large when a unit would be most profitable operating at the DA BP, but the RT dispatch cannot ramp there fast enough.
When you expect to receive DAMAP or RTORSGP, it is critical to ensure that your unit is eligible, and that the PVMWP Performance and Rate factors remain high. However, MISO rules can be tricky and this is not always easy! Keep the guidelines below in mind to help ensure that your units receive DAMAP and RTORSGP and maximize your revenue.
It is important to remember that failure to meet the eligibility criteria below for DAMAP or RTORSGP in any 5-minute dispatch interval will make the unit ineligible for the entire hour. Although many offer parameters are hourly values, they can be changed on the 5-minute level through RTOE overrides.
In addition to following the Hourly Guidelines above for the offer values, it is important to avoid units being labeled Non-Dispatchable (ND). A unit is ineligible for DAMAP or RTORSGP if it is ND for four consecutive dispatch intervals in an hour. (Note that, when manually re-dispatched, being labeled ND does not make a unit ineligible for DAMAP.) The following actions can help avoid MISO labeling the unit ND:
Other Things to Keep in Mind
A unit doesn’t earn DAMAP if it is dispatch constrained by the UDS maximum limit, and it doesn’t earn RTORSGP if it is dispatch constrained by the UDS minimum limit. In such a case, however, it will be ineligible for only that single 5-minute interval.
Note that the above guidelines apply only to units committed in DA; RTORSGP for units committed in RT follows slightly different rules. Also, note that it’s not only units with high LMPs that could earn DAMAP; sometimes, units that are cleared at the bottom can earn money from this settlement category and would benefit from remaining eligible.
In addition to preserving eligibility, it is important to maximize the PVMWP Performance and Rate Factors to maximize DAMAP and RTORSGP, which are both multiplied by each of these factors.
Look for an upcoming newsletter elaborating on these factors.
Information in this post is provided only as an overview, and it should not be construed to provide operational advice or consulting. For more information about DAMAP and RTORSGP eligibility rules and calculations, you can find the Post Operating Processor 5 Minute Calculation Guide (BPM 005 - Market Settlements) and Attachment D (BPM 002 - Energy and Operating Reserve Markets) at MISO's web site. Sections D.8.1.2 and D.8.2.2 of the Post Operating Processor explain RTORSGP and DAMAP eligibility, respectively. Section E.17 of the Post Operating Processor and Section 3.16 of Attachment D explain Dispatchability and Fixed Dispatch, respectively. These rules may have changed since this writing; the BPMs used as a guide for this writing are archived here.
PCE is a consulting and software development company with expertise in market rules and optimizing market operations. If you are exploring how to reduce lost DAMAP/RTORSGP or maximize your company’s profit from market operation, please contact us at +1 (614) 799-0300 or EnergyMarketConsulting@pce-co.com.