1. ERS Update Presented to: Demand Side Working Group December 5, 2014

2. 2 Payment Reduction for Availability and Test Results

3. 3 Summary of Payment Reductions * Testing – ERSTESTPF will be set to 1 if the Resource subsequently passes an event during the SCT

4. 4 Upcoming Schedule

5. 5 Upcoming Schedule Review Important ERS Dates: –December 1, 2014 - Start of ERID –December 15, 2014 – Settlement for June-Sept 2014 –January 5, 2015 – Last day to submit ERID –January 19, 2015 – Offers due –On or before January 26, 2015 – Award notification –Before February 1, 2015 – Procurement Results The Final Feb-May 2015 Procurement Schedule can be found at the link below: http://www.ercot.com/services/programs/load/eils/index http://www.ercot.com/services/programs/load/eils/index

6. 6 ERS Time Period Changes

7. 7 ERS Time Period Changes – Stakeholder Feedback Rank 1 = 4 pts, 2 = 3 pts, 3 = 2 pts, and 4 = 1pt

8. 8 ERS Time Period Changes Time Period NameTime Period Hours Business Hours 1 Hours Ending 0600 – 0800 (5:00:00a.m. to 8:00:00a.m.) Monday through Friday except ERCOT Holidays Business Hours 2 Hours Ending 0900 - 1300 (8:00:00a.m. to 1:00:00p.m.) Monday through Friday except ERCOT Holidays. Business Hours 3 Hours Ending 1400 - 1600 (1:00:00p.m. to 4:00:00p.m.) Monday through Friday except ERCOT Holidays. Business Hours 4 Hours Ending 1700 - 1900 (4:00:00p.m. to 7:00:00p.m.) Monday through Friday except ERCOT Holidays. Business Hours 5 Hours Ending 2000 - 2200 (7:00:00p.m. to 10:00:00p.m.) Monday through Friday except ERCOT Holidays. Business Hours 6All other hours New ERS Time Periods to become effective at the beginning of the Feb-May 2016 Standard Contract Term

9. 9 Risk Factors for ERS Budget Year 2015

10. 10 December 2004 (cold south, warm north; dry throughout) January 1994 (cold, especially north; dry north, central, coast, wet south and west) February 2002 (very cold; dry) March 2001 (very cold; wet) April 2004 (cold, wet) May 2004 (cold south and coast, warm north and west; wet south and coast, dry north and west) Winter Weather Forecast for ERCOT

11. 11 Risk Factor Assessment for ERS BY 2015

12. 12 Expenditure Limit Allocation Table for BY 2015

13. 13 WS ERS Update

14. 14 VDI Start: 15:24:15Average MW Reduction: 19.6 MW VDI Stop: 17:02:00Average PM Dry Bulb: 98.3 ⁰

15. 15 VDI Start: 16:42:39Average MW Reduction: 15.7 MW VDI Stop: 18:17:56Average PM Dry Bulb: 96.3 ⁰

16. 16 VDI Start: 16:03:26Average MW Reduction: 16.7 MW VDI Stop: 18:31:06Average PM Dry Bulb: 95.6 ⁰

17. 17 VDI Start: 15:26:43Average MW Reduction: 21.3 MW VDI Stop: 17:48:22Average PM Dry Bulb: 96.4 ⁰

18. 18 VDI Start: 16:13:03Average MW Reduction: 12.1 MW VDI Stop: 17:32:25Average PM Dry Bulb: 97.2 ⁰

19. 19 Other Performance Findings Site Growth During Contract Period Three Loads were offered: One Load met criteria for payment reduction Other two Loads met normalized peak reduction targets but had performance in the 80 – 85% range Actual PM dry bulb was about 3 ⁰ below normal All three Loads exceeded target number of sites

20. 20 WS Baseline Findings Two Loads were base-lined with control groups –No day-of-adjustment was needed or applied –Good fit between actual and baseline was realized One Load was base-lined with regression baseline –Modified Day-of-adjustment method was applied The standard method (2 hour window beginning 3 hours before VDI) was modified to improve accuracy Adjustment factor for each interval calculated for – interval1 to (interval of VDI Start – 4) –(interval of VDI Stop + 8) to interval 96 Best-fit parabola relating adjustment factor to interval number used to interpolate adjustment factors for the event –The modified method did a better job of accounting for what appeared to be load shifting associated with programmable thermostat control

21. 21 WS Baseline Findings Two other baseline methods were investigated for the regression baseline Load: –Customers participating in the Load on non-test but similar- weather days Identifying similar weather days was problematic Load shapes did not end up being very similar –Matching non-participating customers on the test days Matched on day-use first and then on interval-by-interval use Significant computing resources required to find matching customers With a somewhat limited search, the “best” matching customers did not have the same degree of programmable thermostat load shifting as the WS ERS Load Plan is to work on approaches that allow widening the search and to evaluate the results for the other two WS ERS Loads