1. SAR-003-TRE-001 FERC-Ordered Modification to ERCOT waiver CPS2 Prepared By Ananth Palani, EnergyCo

2. BAL-001-0 Real Power Balancing Control Performance Control Performance Standard 1 (CPS1) Control Performance Standard 2 (CPS2) Purpose of this standard To maintain steady-state frequency within defined limits by balancing demand and generation ftp://www.nerc.com/pub/sys/all_updl/standards/rs/BAL-001-0a.pdf

3. CPS2 Standard BAL-001-0 R2 Control Performance Standard 2 “Each Balancing Authority shall operate such that its average ACE for at least 90% of clock ten-minute periods (6 non-overlapping periods per hour) during a calendar month is within a specific limit, referred to as L10”

4. CPS2 Waiver ERCOT CPS2 Waiver was approved on November 21, 2002 by NERC ERCOT became a single control area when the Zonal Market started and is asynchronously connected to Eastern Interconnection. ERCOT cannot create Inadvertent Power flows or Frequency Error in other control areas. However, QSEs still calculate and comply with CPS2 ftp://www.nerc.com/pub/sys/all_updl/standards/sar/Waver_Control_Performance.pdf

5. FERC Order No 693 FERC finds that requirement in ERCOT Protocol Section 5.9 Frequency Response Requirement and Monitoring Is more stringent practice than CPS2 requirement However, FERC directed NERC to file a modification of the ERCOT regional difference to include the Protocol Section 5.9 This would be in line with FER Order No 693 “As with other new regional differences the commissions expects that the ERCOT regional difference will include Requirements, Measures, and Levels of Non-Compliance sections” http://www.ferc.gov/whats-new/comm-meet/2007/031507/E-13.pdf

6. SAR-003-TRE-001 Goal of this committee Is to come up with FERC directed modifications to ERCOT regional difference to include requirements concerning frequency response contained in the ERCOT Protocols section 5

7. Changes BAL-001 will be retired when BAL-007 goes into effective ERCOT Protocol Section 5.9 will be retired when ERCOT goes live with Nodal market

8. BAL-007 BAAL Balancing Authority ACE Limit CPM Control Performance Measure This Standard may or may not get approved. Even if it get approved it will take long time Regardless of the status of this BAL-007, we need to proceed ftp://www.nerc.com/pub/sys/all_updl/standards/sar/BAL-007- 011_clean_last_posting_30-day_Pre-ballot_06Feb07.pdf

9. Nodal Market Nodal Protocol Section 8 and Zonal Protocol Section 5 refer to requirements, measurement and non- compliance SAR must comply with both

10. Thanks Any Questions?