REQUEST FOR PROPOSALS FOR A CONTRACTOR TO ACT AS THE INDEPENDENT MARKET MONITOR FOR THE ERCOT REGION

Agency: State Government of Texas
State: Texas
Type of Government: State & Local
NAICS Category:
  • 541611 - Administrative Management and General Management Consulting Services
Posted Date: Aug 13, 2019
Due Date: Oct 9, 2019
Solicitation No: 49245
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REQUEST FOR PROPOSALS FOR A CONTRACTOR TO ACT AS THE INDEPENDENT MARKET MONITOR FOR THE ERCOT REGION

Project Number: 49245
Open Date: 10/09/2019 10:00 am, CT


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PUBLIC UTILITY COMMISSION OF TEXAS
REQUEST FOR PROPOSALS
FOR A CONTRACTOR TO ACT AS THE INDEPENDENT MARKET
MONITOR FOR THE ERCOT REGION
Public Utility Commission of Texas
William B. Travis Building
1701 North Congress Avenue
Austin, Texas 78711
Closing Time and Date:
October 9, 2019
10:00 a.m., Central Time
RFP Number: 473-19-00007
Project Number: 49245
NIGP Class Item: 918-32
Table of Contents
SECTION 1 INTRODUCTION ____________________________________________________ 3
SECTION 2 DEFINITIONS ______________________________________________________ 3
SECTION 3 STATEMENT OF WORK ______________________________________________ 4
SECTION 4 ELIGIBILITY AND EVALUATION CRITERIA _______________________________ 12
4.A. EEO and HUB Statement _______________________________________________________ 12
4.B. Minimum Eligibility Requirements _______________________________________________ 12
4.C. Evaluation Criteria ____________________________________________________________ 13
4.D. Texas Vendor Preference ______________________________________________________ 13
4.E. References __________________________________________________________________ 13
SECTION 5 SCHEDULE AND PROCESS ___________________________________________ 13
5.A. Anticipated Schedule__________________________________________________________ 14
5.B. PUCT Contact Person __________________________________________________________ 14
5.C. Process for Asking Questions____________________________________________________ 14
5.D. Process for Submitting Proposals ________________________________________________ 15
5.E. PUCT’s Standard Process for Selecting Vendors _____________________________________ 16
SECTION 6 REQUIRED COMPONENTS AND FORMAT _______________________________ 17
6.A Components _________________________________________________________________ 13
6.B. Format Requirements _________________________________________________________ 22
SECTION 7 CONDITIONS _____________________________________________________ 23
7.A. Irrevocable Offer _____________________________________________________________ 23
7.B. Proposals are the Property of the PUCT ___________________________________________ 23
7.C. Public Information Act Notice ___________________________________________________ 24
7.D. Publicity ____________________________________________________________________ 24
7.E. No Proposal Costs Reimbursed __________________________________________________ 24
7.F. Contract Terms and Conditions __________________________________________________ 24
7.G. Vendor Performance Tracking System ____________________________________________ 24
ATTACHMENT A – PUCT’s Standard Terms and Conditions ___________________________ 25
ATTACHMENT B – ERCOT’s Supplemental Terms and Conditions ______________________ 44
PUCT RFP 473-19-00007
Page 2 of 47
SECTION 1 INTRODUCTION
The Public Utility Commission of Texas (PUCT or Commission) is issuing a Request for Proposals
for an independent market monitor (IMM) for the wholesale electricity market in the Electric
Reliability Council of Texas, Inc. (ERCOT) power region from any qualified, interested persons.
The IMM, including a director and his or her staff, must have the qualifications needed to
effectively carry out the market monitoring functions prescribed by the Public Utility Regulatory Act
(PURA),1 and by PUCT Substantive Rules. The IMM will contract with both the PUCT and ERCOT,
with the PUCT approving, overseeing, and supervising the IMM.
Background Information
PURA § 39.1515(a) charges ERCOT with contracting with an entity selected by the PUCT to act
as the PUCT’s wholesale electric market monitor to detect and prevent market power abuse,
market manipulation and recommend measures to enhance the efficiency of the wholesale market.
The IMM operates under the supervision and oversight of the PUCT.2
The IMM will be responsible for monitoring the wholesale electricity market in the ERCOT
power region, including all markets for energy, ancillary capacity services, and congestion revenue
rights, as well as monitoring all aspects of ERCOT's operations that affect supply, demand, and the
efficient functioning of the competitive wholesale electricity market.
SECTION 2 DEFINITIONS
As used in this RFP, the following terms have the meanings specified:
1) Commission ” means the governing body of the PUCT.
2) Contractor” or “IMMmeans the person, organization, business entity, or other entity
that is selected for the contract contemplated by this RFP.
3) May” means “is authorized to.”
4) Proposer” means “a person, organization, business entity, or other entity that submitted
a proposal.”
5) PUCT” means “the Public Utility Commission of Texas, an agency of the state of
Texas.”
6) Vendor” means “a person, organization, business entity, or other entity that has been
selected for or entered into a contract with a Texas state agency.”
7) Vendor Performance Tracking System” means “the system the Texas Comptroller of
Public Accounts is required to provide under Section 2262.055, Texas Government Code,
for evaluating vendor performance.” The Vendor Performance Tracking System is
located at: http://txsmartbuy.com/vpts
1 Public Utility Regulatory Act, Tex. Util. Code Ann. §§ 11.001-66.016.
2 PURA § 39.1515(d)
PUCT RFP 473-19-00007
Page 3 of 47
SECTION 3 STATEMENT OF WORK
I. Overview
A. Introduction. Subject to the PUCT’s supervision and oversight, the Contractor will
act as the Independent Market Monitor (IMM) for the Electric Reliability Council
of Texas (ERCOT) Region. Contractor will be responsible for monitoring the
wholesale electricity market in the ERCOT power region, including all markets for
energy, ancillary capacity services, and congestion revenue rights, and monitoring
all aspects of ERCOT’s operations that affect supply, demand, and the efficient
functioning of the competitive wholesale electricity market. The amount of work
required fluctuates and Contractor will be required to complete many tasks on an
as-needed basis, as described in more detail in this Statement of Work. Estimates
provided in this Statement of Work are provided for proposers’ convenience only,
and are not intended to limit the services Contractor will be expected to provide in
any way. The tasks, duties, and responsibilities of the Contractor will include the
following:
B. Market Knowledge.
1. Contractor must hire an IMM Director and staff to carry out the day-to-day
monitoring functions specified in this Contract.
2. The IMM Director must be knowledgeable and keep that knowledge
current regarding market monitoring in an electricity market.
3. The Contractor, IMM Director, and staff must promptly become familiar
with the ERCOT Protocols (“Protocols”) and all PUCT Rules and Texas
statutes relating to the wholesale electricity market, including, but not
limited to, wholesale market design and operations, restrictions on the
existence and abuse of market power, and market monitoring. The
Contractor must also be familiar with the enforcement authority, policies,
and procedures of the PUCT.
C. Detection and Prevention of Manipulation and Assessment of Market Power in
ERCOT Wholesale Markets. The Contractor must develop and refine tools to
gather and analyze information and data as needed for its market monitoring
activities and actively monitor the wholesale electricity market in the ERCOT
power region, under the direction of the PUCT, including the following:
1. Continuously monitor the wholesale power market through the use of
market screens and indices to identify any abnormal wholesale market
events and potentially anticompetitive behavior;
2. Conduct market power tests, monitor structural indicators of market power,
and conduct other analyses related to market power determination;
PUCT RFP 473-19-00007
Page 4 of 47
3. Analyze events that fail the screens and indices, potentially anti-
competitive behavior, and other abnormal activities and market events
through the use of computer simulation and advanced quantitative tools as
necessary, and initiate informal discussion of events with ERCOT and
PUCT staff and market participants, if appropriate;
4. Conduct investigations of specific market events when anomalies are
discovered and prepare reports to PUCT regarding same; and
5. Coordinate with the PUCT and ERCOT to develop procedures for the
coordination of investigative activities among the Contractor, ERCOT, and
PUCT, and for PUCT approval of investigations that require significant
resources.
D. Evaluation of Wholesale Market Operations, Current Protocols and Proposed
Changes to the Protocols. The Contractor must continuously evaluate the operation
of the wholesale electricity market and will assist PUCT and ERCOT by developing
recommendations for enhancing the competitiveness and efficiency of ERCOT
administered markets. The Contractor will:
1. Develop, refine, and regularly monitor market performance measures to
evaluate market participants’ compliance with ERCOT Protocols;
2. Evaluate whether ERCOT manages the markets it administers in
accordance with the Protocols;
3. Assess the effectiveness of ERCOT’s management of the energy, ancillary
capacity services, and congestion rights markets, and evaluate the
effectiveness of congestion management and system operations by
ERCOT;
4. Analyze the Protocols and proposed changes to the Protocols to identify
potential reliability impacts, opportunities for strategic manipulation, and
other economic inefficiencies;
5. Attend ERCOT stakeholder meetings relating to current market issues and
changes in market design;
6. Interact with market participants to better understand their operations and
market behavior; and
7. Recommend measures to enhance market efficiency and improve market
design.
E. Reporting Obligations and Enforcement Support. The PUCT is responsible for
enforcement activities and prosecutions, as discussed in further detail below under
the headings “PUCT Enforcement Support” and “PUCT Supervision.” Contractor
must assist and support the PUCT in its enforcement and prosecution obligations by
promptly developing informative reports and supporting PUCT enforcement
PUCT RFP 473-19-00007
Page 5 of 47

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