1. Discussion: Use of RAPs in system operations Kris Dixit 1

2. Goals of this presentation Better understand how RAPs are utilized by ERCOT system operations to manage grid reliability Discuss potential issues with divergence between the CRR markets and the DA/RT markets Discuss impacts to economic and reliability transmission planning 2

3. RAPs (Remedial Action Plans) Steps that ERCOT can take to reduce loading on a post contingency overloaded element in the event the contingency occurs Allows ERCOT to deactivate constraints that are protected by RAPs since there is no real reliability issue RAPs are generally defined as contingency constraint pairs. For example: 3

4. How ERCOT utilizes RAPs ERCOT operations looks at RAPs as applying to a contingency rather than a contingency constraint pair Accordingly if there is a different constraint for a given contingency, they apply the RAP even though the RAP was not initially designed for that constraint. – Ex: The DALNRYS5 RAP has been used to manage other constraints not listed in the RAP definition 4

5. Issues If we take the DALNRYS5 contingency, the outage of the Apollo auto is the action during the post contingency overload of the Apollo to Richardson East 138kV line. Depending on the direction of the flow on Apollo Auto, for that contingency the Apollo Auto has a meaningful LODF % on more than 100 lines. Planning Inconsistencies: – It is our understanding that ERCOT in its economic and reliability transmission planning uses contingency constraint pairs in accounting for RAPs. – If RAPs are being used as part of the contingency definition, should all possible combinations be considered when the RAPs are being used for transmission planning? – Should rate-payers be charged for planned transmission lines that resolve overloads that do not exist in real-time? CRR inconsistencies: – Should all possible combinations of RAP-constraint pairs be considered when running the CRR engine? – For example the Contingency constraint pair as part of DALNRYS5 RAP (Apollo to Richardson East 138kV line) was allowed to bind in the August 2012 CRR auction and generated a shadow price of $14,806/MWH for 186MWs. 5

6. In Conclusion We believe that ERCOT operations should have all the tools it needs to reliably manage the ERCOT grid. Expanding the use of RAPs to manage constraints other than the one in the original definition seems to be a reasonable utilization of existing tools However, we need to reconsider how RAP-constraint pairs are considered in transmission planning and the CRR engine to maintain consistency 6