1. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 1 RT Energy Settlements Mini Market Examples Formulas

2. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 2 RT Payment for DC Tie imports Flow Diagram

3. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 3 RT Payment for DC Tie imports RTDCIMPAMT = (-1) * RTSPP * (RTDCIMP * ¼ ) Paid on scheduled volume Used to pay QSEs who bring energy onto the grid

4. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 4 RT DC Tie Charge for Exports under Oklaunion Exemption Flow Diagram

5. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 5 RT DC Tie Charge for Exports under Oklaunion Exemption RTDCEXPAMT = RTSPP * (RTDCEXP * ¼) Only used to charge exports that are using the Oklaunion Exemption Amounts should not exceed generation that supplies the load for Oklaunion

6. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 6 RT Payment for Block Load Transfers Flow Diagram

7. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 7 RT Payment for Block Load Transfers BLTRAMT = (-1) * RTSPP * BLTR Used to pay QSEs who have BLT agreements for moving load to the region that is not under emergency conditions

8. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 8 RT Congestion Payment / Charge for Self-Schedules Flow Diagram

9. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 9 RT Congestion Payment / Charge for Self-Schedules RTCCAMT = (RTSPP sink – RTSPP source ) * (SSQ * ¼) Used to pay /charge QSE for moving power from one point to another

10. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 10 RT Energy Imbalance Flow Diagram

11. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 11 RT Energy Imbalance RTEIAMT = (-1) * (GSPLITPER * NMSAMTTOT) + RTSPP * [(SSSK * ¼) + (DAEP * ¼) + (RTQQEP * ¼) – (SSSR * ¼) – (DAES * ¼) – (RTQQES * ¼) – RTAML + RTMGNM Used only when point is a Resource Node Used only when point is a Load Zone Sigma is the sum of the Resources for the GSPLITPER values Used to pay / charge a QSE for imbalances at all points of scheduled activity

12. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 12 Base Point Deviation Flow Diagram

13. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 13 Base Point Deviation (Over Generation) BPDAMT = MAX (0, RTSPP) * MAX [0, (TWTG – ¼ * MAX(((1 + 5%) * AABP), (AABP + 5 MW)))] Used to charge a QSE for over-generating, the greater of 5% or 5 MW is allowed as a tolerance

14. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 14 Base Point Deviation (Under Generation) BPDAMT = MAX (0, RTSPP) * MIN (1, KP) * MAX {0,{MIN [((1 – 5%) * ¼ (AABP)), ¼ * (AABP – 5 MW)] – TWTG}} Used to charge a QSE for under-generating, the greater of 5% or 5 MW allowed as a tolerance KP is a Settlement Point Price co-efficient. Currently value is 1.

15. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 15 Base Point Deviation for an IRR If AABP > HSL – 2 MW, then BPDAMT = 0 Else, BPDAMT = MAX (0, RTSPP) * MAX (0, TWTG – (¼ * AABP) * ( 1 + 10%)) Used to charge an Intermittent Renewable Resource for over-generation Base Point Deviation will be summed and appear as one Charge Type on Settlement Statement

16. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 16 Base Point Deviation - Exceptions Special rules for RMR (exempt, 6.6.5.3), QF (depends on existence of EOC, 6.6.5.3), DSR (various, 6.4.2.2) Other operational rules affect whether charge is valid for an interval or for a QSE (ex. Frequency, see 6.6.5.1)

17. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 17 Base Point Deviation Payment LABPDAMT = (-1) * BPDAMTTOT * LRS Used to allocate results of Base Point Deviation charges to QSEs with load This will most likely be a payment back to QSEs with load

18. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 18 RMR Charge Types Flow Diagram

19. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 19 RMR Standby Payments RMRSBAMT = (-1) * RMRSBPR RMRSBPR = RMRMNFC / MH * (1 + RMRIF * RMRCRF * RMRARF) Used to pay QSE with an RMR agreement for non- fuel costs for their RMR unit RMRIF is the incentive factor for non-fuel costs. Currently at 10%. RMRCRF is the reduction factor if RMR unit does not meet capacity requirements RMRARF is the reduction factor if RMR unit does not meet its availability requirements

20. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 20 RMR Payment for Energy RMREAMT = (-1) * [((FIP + RMRCEFA) * RMRSUFQ / RMRH) * RMRSUFLAG + (((FIP + RMRCEFA) * RMRHR + RMRVCC) * RTMG)] Used to pay QSE with RMR agreement for energy needed to run unit Sigma used to sum intervals for RMRHR and RTMG RMRVCC = (RMRMFCOST + RMREAMT ) / RTMG Sigma used for summing all hours for RMREAMT, and for all intervals for RTMG

21. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 21 RMR Payment for Energy (cont) FIP is the Fuel Index Price for Natural Gas RMRCEFA is the Fuel Adder used for incorporating the transportation of natural gas to unit RMRVCC is the variable cost component used to adjust to the actual fuel costs of the unit RMREAMT in the RMRVCC formula is used to back out the payment made to the QSE for the unit from the previous Settlement Statement.

22. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 22 RMR Adjustment Charge RMRAAMT = (-1) * ( (RTMG * RTSPP) + EMREAMT + RUCMWAMT + RUCCBAMT + RUCDCAMT + VSSVARAMT + VSSEAMT) Used to charge back to the QSE with an RMR agreement all payments for other services for that unit Sigmas inside outermost parenthesis are to sum for intervals First sigma is to sum for all Resource Nodes and second sigma is to sum for all Resources

23. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 23 RMR Charge for Unexcused Conduct RMRNPAMT = $10,000 * RMRNPFLAG Used to charge QSE with RMR agreement for an unexcused conduct event on a daily basis

24. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 24 RMR Service Charge LARMRAMT = (-1) * (RMRSBAMTTOT - RMRDAESRTVTOT + RMREAMTTOT + RMRAAMTTOT – (RMRDAEREVTOT + RMRDAMWREVTOT) + RMRNPAMTTOT / H) * HLRS Used to allocate to QSEs with load the costs of the RMR service Includes payments from the Day-Ahead Market that are NOT paid to the QSE for the RMR units This is an hourly charge

25. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 25 Voltage Support Service An Ancillary Service that is required to maintain transmission and distribution voltages on the ERCOT Transmission Grid within acceptable limits.

26. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 26 Voltage Support Service Flow Diagram

27. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 27 Voltage Support Service Payments (Lag) VSSVARAMT = (-1) * VSSVARPR * VSSVARLAG Used to pay a QSE providing Lagging Voltage Support VSSVARLAG = MAX[0, MIN( ¼ * VSSVARIOL, RTVAR) – ( ¼ * (HSL * 0.32868))] Used to take the lesser of the instruction or the lagging voltage provided and compare to voltage being provided VSSVARPR is $50.00 / installed kvar or $2.65 for MVar

28. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 28 Voltage Support Service Payments (Lead) VSSVARAMT = (-1) * VSSVARPR * VSSVARLEAD Used to pay a QSE providing Leading Voltage Support VSSVARLEAD = MAX{0, [ ¼ * (HSL * 0.32868 * (-1)) – MAX(( ¼ * VSSVARIOL), RTVAR)]} Used to take the lesser of the instruction or the lagging voltage provided and compare to voltage being provided VSSVARPR is $50.00 / installed kvar or $2.65 for MVar

29. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 29 Lost Opportunity Payment VSSEAMT = (-1) * MAX(0, RTSPP * MAX( 0, ( HSL * ¼ - RTMG)) – ( RTICHSL – RTVSSAIEC * ( RTMG – LSL * ¼ ))) Used to pay a QSE who provides ERCOT-directed voltage support in lieu of energy Used to calculate the back-out amount to result in the lost energy amount RTICHSL = RTHSLAIEC * ( ¼ * HSL – ¼ * LSL) Used to calculate the whole amount of dollars available over the expanse of the operating capability

30. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 30 Lost Opportunity Payment Diagram Lost opportunity Payment

31. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 31 Voltage Support Charge LAVSSAMT = (-1) * ( VSSVARAMTTOT + VSSEAMTTOT) * LRS Used to allocate the payments for voltage support to the QSEs with load

32. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 32 Black Start Service Flow Diagram

33. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 33 Black Start Capacity Payment BSSAMT = (-1) * BSSPR * BSSARF Used to pay QSEs with Black Start agreements for their readiness to supply the service BSSARF is the availability reduction factor based on the availability of the unit throughout the year

34. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 34 Black Start Capacity Charge LABSSAMT = (-1) * BSSAMTTOT * HLRS Used to allocate the payments for Black Start to the QSEs who have load This is an hourly charge

35. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 35 Emergency Energy Flow Diagram

36. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 36 Payment for Emergency Power Increase Directed by ERCOT EMREAMT = (-1) * EMREPR * EMRE Used to pay QSEs who respond to emergency power requests from ERCOT EMREPR = MAX (0, EBPWAPR – RTSPP) Used to calculate the difference between the Emergency Price and the Real Time Price EMRE = MAX (0, MIN(AEBP, RTMG) – ¼ * BP Used to calculate the lesser of the requested or supplied increase and comparing that to the non- emergency base point

37. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 37 Charge for Emergency Power Increases LAEMREAMT = (-1) * EMREAMTTOT * LRS Used to allocate payments to QSEs who supply emergency energy to QSEs who have load

38. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 38 Real Time Revenue Neutrality Allocation

39. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 39 Real Time Revenue Neutrality Allocation If the Day-Ahead Market Executes: LARTRNAMT = (-1) * ( RTEIAMTTOT + BLTRAMTTOT + RTDCIMPAMTTOT + RTDCEXPAMTTOT + RTCCAMTTOT + RMRDAESRTVTOT + RTOBLAMTTOT * ¼ + RTOPTAMTTOT * ¼ + RTOPTRAMTTOT * ¼ ) * LRS Used to allocate all unallocated amounts to QSE with load

40. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 40 Real Time Revenue Neutrality Allocation If the Day-Ahead Market does not execute: LARTRNAMT = (-1) * ( RTEIAMTTOT + BLTRAMTTOT + RTDCIMPAMTTOT + RTDCEXPAMTTOT + RTCCAMTTOT + RMRDAESRTVTOT + NDRTOBLAMTTOT * ¼ + NDRTOPTAMTTOT * ¼ + NDRTOPTRAMTTOT * ¼ + NDRTOBLRAMTTOT * ¼ + NDRTFGRAMTTOT * ¼ ) * LRS Used to allocate all unallocated amounts to QSEs with load

41. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 41 ERCOT Administration Fee

42. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 42 ERCOT Administration Fee ESCAMT = LAFF * RTAML Fee charged to cover ERCOT expenses Sigma is the sum over all settlement points for a QSE

43. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 43 RT Energy Settlements Questions

44. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 44 RMRSBAMT – CRF! If (RMRTCAPA + RMRTCAP) RMRCCAP Then RMRCRF = 1 Otherwise RMRCRF = Max [0, 1 – 2 * (RMRCCAP – RMRTCAP) / RMRCCAP]

45. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 45 RMRSBAMT – ARF! If (RMRHREAF RMRTA) then RMRARF = 1 Otherwise, RMRARF = Max [0, 1 – (RMRTA – RHREAF) * 2] If (RMREH < 4380) then RMRHREAF = 1 Otherwise, RMRHREAF =(RMRAFLAG) / 4380

46. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 46 Net Metering Agreement Examples

47. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 47 Net Metering Agreement Examples

48. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 48 Net Metering Agreement Examples