This article puts forward a methodology for procuring flexible ramping products (FRPs) in the day-ahead market (DAM). The proposed methodology comprises two market passes, the first of which employs a stochastic unit commitment (SUC) model that explicitly evaluates the uncertainty and the intra-hourly and inter-hourly variability of net load so as to minimize the expected total operating cost. The second pass clears the DAM while imposing FRP requirements. The cornerstone of our work is to set the FRP requirements at levels that drive the DAM decisions toward the optimal SUC decisions. Our methodology provides an economic underpinning for the stipulated FRP requirements, and it brings forth DAM awards that reduce the costs toward the expected total cost under SUC, while conforming to the chief DAM design principles. By preemptively considering the dispatch costs before awarding FRPs, it can further avert unexpectedly high costs that could result with the deployment of procured FRPs. We conduct numerical studies and lay out the relative merits of the proposed methodology vis-à-vis selected benchmarks based on various evaluation metrics.

29 pages