1. Lead from the front Texas Nodal http://nodal.ercot.com 1 Texas Nodal Market Management System Requirement Documents November 7, 2006 Sai Moorty MMS Project Engineer

2. Lead from the front Texas Nodal http://nodal.ercot.com 2 Agenda - Tuesday  Introduction  MMS Requirements Documents  Upcoming White Papers  MMS Requirements Approval Plan  ERCOT contacts

3. Lead from the front Texas Nodal http://nodal.ercot.com 3 Introduction ERCOT and Vendor (ABB) Team started work together in July 2006. Sub teams formed for preparing requirements documents on the following major functional areas  Day-Ahead Market (DAM) and Supplementary Ancillary Service Market (SASM)  Reliability Unit Commitment (RUC)  Security Constrained Economic Dispatch (SCED)  Constraint Competitiveness Test (CCT)  Other Processes Market Management System (MMS) Requirements Documents have been written with reference to the May 2006 version of the Texas Nodal Protocols. Informal review (October 2006) by some Market Participants of DAM/SASM, RUC and SCED requirements documents.

4. Lead from the front Texas Nodal http://nodal.ercot.com 4 Introduction Where we are today Market Management System (MMS) Requirement Documents submitted for TPTF review and approval as compliant to the Texas Nodal Protocols of May 2006

5. Lead from the front Texas Nodal http://nodal.ercot.com 5 Introduction List of MMS Requirements Documents:  Texas Nodal Market Management Systems (MMS) Requirement Specification For Overall MMS System and Other Processes  Texas Nodal Market Management Systems (MMS) Requirement Specification For Day-Ahead Market (DAM) and Supplemental Ancillary Service Market (SASM)  Texas Nodal Market Management Systems (MMS) Requirement Specification For RUC  Texas Nodal Market Management Systems (MMS) Requirement Specification For SCED and Real-Time MMS Processes  Texas Nodal Market Management Systems (MMS) Requirement Specification For Constraint Competitiveness Test (CCT)

6. Lead from the front Texas Nodal http://nodal.ercot.com 6 MMS Requirements Documents Texas Nodal Market Management Systems (MMS) Requirement Specification For Overall MMS System and Other Processes Topics covered  Overview of MMS System  System Requirements, AS Deployment for Load Resources, DC Tie processes, COP monitoring/validation.  Operator Alerts, QSE Notification and MIS posting

7. Lead from the front Texas Nodal http://nodal.ercot.com 7 MMS Requirements Documents Texas Nodal Market Management Systems (MMS) Requirement Specification For Day-Ahead Market (DAM) and Supplemental Ancillary Service Market (SASM) Topics covered  Overview of DAM and SASM subsystems  Inputs and Outputs of the DAM and SASM subsystems  Processing of Market Participants submissions  DAM Processes (Credit check, AS insufficiency check, Oversold CRR determination, CRR Option derating, DAM Clearing)  AS evaluation in Adjustment Period  SASM Process  Mathematical Formulation presented in Appendix

8. Lead from the front Texas Nodal http://nodal.ercot.com 8 MMS Requirements Documents Texas Nodal Market Management Systems (MMS) Requirement Specification For RUC Topics covered  Overview of RUC subsystem  Inputs and Outputs of RUC  RUC modes (DRUC, HRUC, WRUC)  RUC Input processing  RUC Operator Controls  RUC processes  Mathematical formulation presented in Appendix

9. Lead from the front Texas Nodal http://nodal.ercot.com 9 MMS Requirements Documents Texas Nodal Market Management Systems (MMS) Requirement Specification For SCED and Real-Time MMS Processes Topics covered  Overview of Adjustment Period and Real-Time Operations related to MMS  Inputs and Outputs of SCED  SCED Input processing  SCED Process and Settlement Point Price Calculation  Mathematical formulation presented in Appendix

10. Lead from the front Texas Nodal http://nodal.ercot.com 10 MMS Requirements Documents Texas Nodal Market Management Systems (MMS) Requirement Specification For Constraint Competitiveness Test (CCT) Topics covered  Overview of CCT (Annual, Monthly, Daily)  Inputs and Outputs of CCT  CCT Processes

11. Lead from the front Texas Nodal http://nodal.ercot.com 11 Upcoming White Papers  Requirement Analysis of Real-Time Operations related to Load Frequency Control (LFC) and its interaction with Security Constrained Economic Dispatch (SCED) has raised issues.  Subsequent discussions between ERCOT, Vendors (AREVA and ABB) and Floyd Trefny (Consultant) resulted in decision to submit White Papers to TPTF for review.  The topics covered in the white papers primarily impacts the EMS Generation Subsystem. The main topics of the White Papers are listed below:  Responsive Reserve deployment and recall  Non-Spinning Reserve deployment and recall  Handling of inconsistent High Dispatch Limit (HDL) and Low Dispatch Limit (LDL)  Ramping of Base Points through telemetered desired generation  Resource Ancillary Service telemetry requirements

12. Lead from the front Texas Nodal http://nodal.ercot.com 12 Upcoming White Papers Potential impact of White Papers on MMS conceptual design are in the following areas:  Requirements related to use of Resource Ancillary Service telemetry  Responsive Reserve deployment and recall  SCED Ramp Rate Calculation  SCED Generation Requirement Important: While these whitepapers may affect MMS conceptual design, they do not affect the submitted MMS requirements documents or this review process. Planned next steps November 17, 2006: Planned submission of White Papers to TPTF November 27, 2006: TPTF comments on White Papers due to ERCOT November 28-30, 2006: Discussion on White Papers

13. Lead from the front Texas Nodal http://nodal.ercot.com 13 MMS Requirements Approval Plan 1.November 16, 2006: TPTF comments due to ERCOT  ERCOT would encourage comments to be submitted when ready  MMS team (ERCOT and Vendors) will be available for clarification 2.November 28, 2006: ERCOT presents status update on and possible discussion of TPTF comments. 3.December 1, 2006*: ERCOT submits updated MMS Requirements Documents and response to TPTF comments. 4.December 4, 2006*: TPTF approves MMS Requirements Documents *These items are target dates, and will be greatly dependent on the quantity of comments and magnitude of changes required.

14. Lead from the front Texas Nodal http://nodal.ercot.com 14 ERCOT Contacts Sai Moorty MMS Project Engineer smoorty@ercot.com (512) 431-9648 Brandon Whittle Lead, Real Time Market Operations bwhittle@ercot.com (512) 248-6588 Bill Peterson Coordinator bpeterson@ercot.com (512) 248-6663

15. Lead from the front Texas Nodal http://nodal.ercot.com 15 Questions & Answers