Houston (Platts)--13Dec2012/153 pm EST/1853 GMT

Almost $80 million was spent on Electric Reliability Council of Texas 2014 congestion revenue rights involving about 326,089 MW of capacity, according to CRR auction data released Thursday.

Of that overall total, $39.7 million was for obligation CRRs, and about $39.4 million was for option CRRs.

An obligation CRR is a financial instrument that entitles a CRR owner to be charged or receive compensation when ERCOT's transmission grid experiences congestion in the day-ahead or real-time markets.

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With an option CRR, a purchaser is entitled to revenue if congestion occurs between a particular electricity source and a particular destination, but the buyer is not obligated to pay up if congestion occurs in the opposite direction.

The 2014 annual auction dollar amounts represent the sum of positive and negative CRRs, not the net. With negative CRRs, a market participant is paid to take on the risk of power flowing on a particular path in the direction opposite to that which is expected.

The positive dollars taken in by ERCOT in the 2014 auction totaled about $75.6 million, of which about $36.2 million was for obligation CRRs, and $39.4 million for option CRRs. The negative CRR value was about $3.4 million. The net positive effect was about $72.2 million.

In terms of capacity for both obligation and option CRRs in 2014, Luminant Energy acquired the greatest total, at 63,814 MW, which had a total value of about $9.8 million, which was also the highest out of the 58 bidders awarded CRRs in the 2014 auction.

After Luminant, the rest of the top five purchasers of both types of CRRs, in terms of dollar value, were Shell Energy at $8.9 million, NRG Power at $8.2 million, Constellation Energy at $7.1 million and Monolith Energy at $6.6 million.

In terms of physical capacity, the top purchasers of CRRs after Luminant were NRG, with 53,987 MW, at a cost of $8.2 million, of which $1.3 million was for negative obligation CRRs; Shell, with 28,512 MW, at a cost of $8.9 million, of which $415,223 was for negative obligation CRRs; Brazos Electric Power Cooperative, with 23,630 MW, at a cost of $4.5 million, of which $135,398 was for negative obligation CRRs; and CPS Energy, at 20,692 MW, at a cost of $2.1 million, none of which were negative obligation CRRs.

With negative CRRs, a market participant is paid to take on the risk of power flowing on a particular path in the direction opposite of that expected.

The largest number of CRRs for a single path acquired in the 2014 annual auction totaled 59,726 MW for the path from the North Hub to the North Load Zone at a cost of $5.4 million, none of which was paid for negative obligation CRRs.

The largest amount spent on CRRs for a single path in the 2014 annual auction was $14.1 million for 7,483 MW of capacity on the path from the West Hub to the West Load Zone, none of which were negative obligation CRRs.

--Mark Watson, markham_watson@platts.com
--Edited by Keiron Greenhalgh, keiron_greenhalgh@platts.com

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