QSE Qualification Guide
Overview to this Guide
This guide is intended to provide an overview of the qualification requirements and process for scheduling entities in the ERCOT market. The guide also references several documents that detail communications and testing requirements.
Qualified Scheduling Entity (QSE)
A QSE is a market participant that is qualified by ERCOT in accordance with ERCOT Protocol Section 16, Registration and Qualification of Market Participants, to submit Balanced Schedules and Ancillary Services bids and settle payments with ERCOT.
Entities who wish to participate in the ERCOT Wholesale Market must be qualified as a QSE or establish a relationship with a QSE to provide scheduling, bidding services and financially settle with ERCOT. ERCOT only accepts schedules and bids from QSEs. All financial settlement for the ERCOT wholesale market is between ERCOT and QSEs only.
Qualification as a QSE involves satisfaction of ERCOT Credit Requirements, as well as completion of a series of required activities and tests designed to demonstrate to ERCOT’s reasonable satisfaction that the organization is capable of performing the functions of a QSE while complying with the requirements of the ERCOT Protocols. Certain PUCT requirements may apply (see below).
The requirements for qualification are described in the ERCOT Protocols, specifically Section 16, Registration and Qualification of Market Participants. Precautions have been taken to assure that this guide is consistent with the ERCOT protocols. If any conflicts are identified, the language in the ERCOT Protocols shall prevail.
Levels of QSE Qualification
For administrative purposes ERCOT classifies QSEs in four (4) service levels. This is to ensure qualification commensurate with the types of services each QSE expects to perform in the market.
Level 1 Qualified to perform Inter-QSE trades only; does not have direct representation of Load Serving Entities or Resource Entities.
Level 2 Qualified to represent Load serving Entities; does not have direct representation of Resource Entities; may also perform level 1 activity.
Level 3 Qualified to represent Load Serving Entities and/or Resource Entities without providing Ancillary Services; may also perform level 1 and 2 activities.
Level 4 Qualified to represent Load Serving Entities and/or Resource Entities and provide Ancillary Services; may also perform level 1, 2 and 3 activities.
PUCT Requirements
While there are no registration requirements by the Public Utility Commission of Texas specific to qualification as a QSE, there may be certain PUCT registration and reporting requirements based on a QSE’s other business activities (e.g. activity as a Retail Electric Provider, etc.). These requirements can be found at the PUCT web site.
Costs
Registration: The registration fee is $500.
Security Deposit: QSEs may be required to post security in accordance with Section 16.2.5 (QSE Financial Security Requirements) of ERCOT Protocols.
Communications: Communications costs will apply depending on qualification level. More details on required equipment and costs are provided later in this guide.
Staffing and Financial Responsibility Requirements
(Excerpts from Protocols Section 16.2.2 QSE Qualification Requirements)
To meet minimum requirements for qualification by ERCOT a QSE must:
· Designate a representative who shall be responsible for operational communications and who shall have sufficient authority to commit and bind the QSE and Entities it represents;
· Maintain a twenty-four (24) hour, seven (7) day per week scheduling center with qualified personnel for the purposes of communicating with ERCOT for scheduling purposes and for deploying the QSEs Ancillary Services in Real Time. These personnel shall be responsible for operational communications and shall have sufficient authority to commit and bind the QSE;
· Be financially responsible for payment of settlement charges for those Entities it represents as set forth in Sections 6, 7 and 9 of these Protocols;
Estimated Time to Final Qualification
ERCOT’s qualification process for most QSEs takes 1-2 months. Additional time may be required depending on the level of qualification desired.
Levels 1 and 2. May take less than 1 month to complete registration and testing.
Levels 3 and 4. May take up to 4 months or longer, to allow for the procurement and installation of ERCOT-required communication equipment and Ancillary Service qualification.
What next after completion of Qualification tests?
Upon satisfaction of all requirements for the designated level, ERCOT will send a qualification letter to the applicant. The letter will specify the level at which the new QSE is qualified and note the date of commencement. ERCOT will also issue a production digital certificate to the QSE’s registered User Security Administrator (USA).
Reference Materials
For additional information about ERCOT registration and the ERCOT Wholesale Market, please review the following documents: ERCOT Protocols, ERCOT Market Guide, and Operating Guides.
Qualification Summary
By Qualification Level
QSE Levels 1-2
Estimated Timing: 1-2 months
Communication: Internet
Cost: $500 Registration fee
Registration Documents
· QSE Application for Registration form, including;
o Attachment A (Officers)
o Attachment B (Affiliate and other Registrations)
o Attachment C (Contacts)
o Attachment D (QSE Declaration of Subordinate QSEs)
o Attachment E (Represented Entities)
o Attachment F (Credit Application)
Market Operations (portal testing)
· Qualifcation test with ERCOT Market Operations using a test digital certificate
· XML upload of transactions is optional in the portal test
Site visit or Documentation in lieu of site visit
· Demonstrate to ERCOT’s satisfaction the applicant’s infrastructure and ability to perform the duties of a QSE
Final Qualification
· Letter indicating level of qualification and commencement date
QSE Levels 3-4
Estimated Timing: Up to 4 months or longer
Communication: ERCOT Wide Area Network (WAN)
Cost: -$500 Registration fee
-ERCOT Wide Area Network initial Equipment and Installation not to exceed $20,000 (ERCOT provides cost estimates and coordinates installation)
-Monthly WAN fee (not to exceed $865),
-Monthly WAN long-distance carrier fees range from $2,000-$6,000.
Registration Documents
· QSE Application for Registration form, including;
o Attachment A (Officers)
o Attachment B (Affiliate and other Registrations)
o Attachment C (Contacts)
o Attachment D (QSE Declaration of Subordinate QSEs)
o Attachment E (Represented Entities)
o Attachment F (Credit Application)
ERCOT WAN installation
· Data Communications Testing
· Point-to-Point Voice Communications Testing
Real-Time Communications Testing
· ICCP
· RTU
Market Operations (API/XML) testing
· Approximately a one-hour test with ERCOT Market Operations using a test digital certificate
Site visit or Documentation in lieu of site visit
· Demonstrate to ERCOT’s satisfaction the applicant’s infrastructure and ability to perform the duties of a QSE.
Ancillary Services Qualification (Level 4 Only)
· Test for each of Balancing Energy, Regulation, Responsive, Non-Spin
Final Qualification
· Letter indicating level of qualification and commencement date
Step-by-Step Qualification Details
Upon receipt of Registration Documents, an Account Manager will be assigned who will coordinate the qualification process between ERCOT and the Market Participant. The Account Manager will contact the applicant’s Primary Authorized Representative to discuss the level of qualification and testing necessary to meet the applicant’s business needs.
STEP 1. Registration Documents (QSE LEVELS 1-4)
All forms listed should be completed and submitted to ERCOT Market Participant Registration as instructed on each document (click on links to download each form).
QSE Application for Registration Form
Includes company information, designation of primary representatives and banking information for Electronic Funds Transfers (EFT) for settlement.. Submit this form along with the $500 Registration Fee, and the following attachments as they apply;
Attachment A (Officers)
Designation of the officers of the company.
Attachment B (Affiliate and other Registrations)
Provides information of related affiliates, if any.
Attachment C (Contacts)
Provides information on additional business contacts.
Attachment D (QSE Declaration of Subordinate QSEs)
Provide information for sudividing the QSE into separate entities, if desired.
Attachment E (Represented Entities)
Identifies any entities the QSE intends to represent such as Load and Resource entities as well as the identification of Sub-QSEs, if any.
Attachment F (Credit Application)
Includes estimated daily generation and/or load (in average MWh), credit contact person, designation of which creditworthiness form the QSE intends to use, banking information and credit references. (ERCOT Creditworthiness Standards).
Standard Form QSE Agreement
See Section 22 (c) of ERCOT Protocols for a sample of this document. Upon receipt of QSE Registration Form, ERCOT will send an executable copy of the Standard Form QSE Agreement to the applicant. This Agreement should be executed as is, with no revisions. Two signed copies should be returned to: ERCOT Market Participant Registration , 7620 Metro Center Drive, Austin, Texas 78744.
STEP 2. CONNECTIVITY REQUIREMENTS (QSE LEVELS 1-4)
All data communication with ERCOT requires a Production Digital Certificate, which is issued at final Qualification. A Test Digital Certificate will be issued to the applicant upon receipt of Registration Documents.
Internet (LEVEL 1-2)
4
No Initial or Monthly Cost
Testing Required: Portal
4
Level 1 and 2 QSEs have (2) options to submit scheduling information to ERCOT:
- Enter transactions directly on the ERCOT portal (a.k.a. Texas Market Link or “TML”)
- Use XML language to upload schedules to the ERCOT portal. (Contact your ERCOT Account Manager for the “Participant Interface XML” document.)
Use of the internet does not require dedicated equipment, installation, or additional costs, as with the ERCOT Wide Area Network (WAN) (see below). Access to the ERCOT WAN by Levels 1 and 2 QSEs is allowed, but not required. Levels 1 and 2 qualification requires market functionality test on ERCOT portal only.
ERCOT recommends testing portal skills and/or system interface (such as XML upload) prior to the Portal Test (Step 3). The Account Manager can arrange testing on the Market Operations Test Environment (MOTE).
ERCOT WAN (LEVEL 3-4)
4
-Initial Cost: Not to exceed $20,000
-Monthly Cost: Not to exceed $865 + LD Carrier Cost
-Installation: 60 days from order
-Testing Required
4
Background: All QSEs representing Resources (Levels 3 and 4) will be required to communicate with ERCOT via the Wide Area Network (WAN), which supports dedicated transfer of data between ERCOT and Market Participants.
ERCOT Staff or its contractors will design, install, monitor and manage the ERCOT Private WAN. ERCOT will pay for all costs associated with each WAN connection and pass those actual costs to the Market Participant.
The costs will be determined case-by-case, based on the communication options selected and bandwidth requirements of the Market Participant.
ERCOT WAN Site, Equipment and Pricing Survey
The Account Manager will forward WAN site surveys (Attachment C, D and E). These documents will provide ERCOT with contact information, desired installation options and bandwidth needs. These forms should be completed and returned to the Account Manager.
Wide Area Network (WAN) Agreement
The Account Manager will prompt ERCOT Market Participant Registration to send an electronic copy of the applicable ERCOT WAN Agreement to the applicant. The Agreement should be executed as is, with no revisions. The executed Agreement should be returned to: Market Participant Registration, 7620 Metro Center Drive, Austin, Texas 78744.
WAN cost estimate, Order and Installation
Based on the surveys, ERCOT will provide a cost estimate. The Account Manager will await approval from the applicant prior to ordering equipment and installation. Allow 60 days for installation after the date of order.
Frame Relay Connectivity Test (data transfer)
Upon installation of the Frame Relay, contact the Account Manager to schedule the one-hour Connectivity Test with ERCOT Telecommunications, as described in Section 3 of the QSE Qualification Testing document (available from your Account Manager).
Point to Point Installation (voice transfer)
Voice communication installation options are identified in the Pricing Survey The Account Manager will forward the Pricing Survey to applicant. Contact the Account Manager to schedule the maximum hour-long test (the test generally takes only a few minutes).
STEP 3. REAL-TIME COMMUNICATIONS (LEVELS 3-4)
QSEs representing Resources use either ICCP or RTU communication protocols for real-time communications with ERCOT.
ICCP Technical Test
The scripts and scorecards for ICCP Technical and Resource Specific tests are located in Sections 5 and 6 of the QSE Qualification Testing document.
Data to be submitted to ERCOT via ICCP must follow the ICCP standards listed in the ERCOT Operating Guide, Section 8. The applicant test administrator must have good working knowledge of ICCP logic and protocol, as well as his or her own EMS. The applicant should coordinate ICCP and RTU testing through the Account Manager.
RTU Testing
The test scripts and scorecards for the RTU/DNP Technical and Resource Specific tests are located in Sections 7 and 8 of the QSE Qualification Testing document.
Same as Section 5. Also, the applicant must provide RTU information to ERCOT. Contact information for Resource sites provided as needed.
STEP 4. MARKET OPERATIONS TESTING (LEVELS 1-4)
Portal Connectivity / Functionality Testing Requirement (Levels 1-2)
Test items for the Portal Market Operations test are located in Section 11.7 of the QSE Qualification Testing document. The Account Manager will schedule the Portal Test with ERCOT Market Operations Personnel. It will be completed in the test environment using the Test Digital Certificate. Upon completion, ERCOT Market Operations will forward a scorecard to the Account Manager.
Level 1-2 QSEs must qualify using ERCOT’s portal (Texas Market Link). The Account Manager can also coordinate the testing of XML upload tools for those QSEs who wish to use XML uploads to send their data to ERCOT rather than the Texas Market Link. ERCOT recommends testing portal skills and/or XML functionality prior to the Portal Test. The Account Manager can arrange for preliminary applicant tests.
API/XML Connectivity / Functionality Testing Requirement (Levels 3-4)
Applicants using the ERCOT WAN are required to complete API/XML testing. Section 9 of the QSE Qualification Testing document lists all testing items for the API/XML test.
The Account Manager will schedule the API/XML Test with ERCOT Web Service Support and ERCOT Market Operations Personnel. It will be completed in the test environment using the Test Digital Certificate and generally lasts about one hour. QSEs that complete the programmatic interface tests are automatically qualified to use the ERCOT Texas Market Link.
STEP 5. SITE VISIT OR DOCUMENTATION IN LIEU OF SITE VISIT (LEVELS 1-4)
Site Visit
Per Protocols, to become qualified as a QSE, applicants must “Allow ERCOT, upon reasonable notice, to conduct a site visit for verification of provided information.” Section 2 of the QSE Qualification Testing document details information that must be available during the site visit.
QSE 24x7 Communication Plan
The alternative to a site visit is to provide documentation in lieu of a site visit (minimum documentation detailed in Section 2.3 of the QSE Qualification Testing document).
STEP 6. ANCILLARY SERVICES QUALIFICATION (LEVEL 4 ONLY)
To qualify to offer Ancillary Services in the ERCOT market, QSEs must complete performance tests for each service. When ready to perform each test, the applicant must coordinate with the Account Manager to arrange the test(s). The test requirements are detailed in Section 10 of the QSE Qualification Testing document.
Testing window requirements: