1. Wind ELCC Calculation Comparisons and ERCOT’s NERC LTRA Capacity Forecasts GATF Meeting, June 24, 2014

2. 2 Summer Season Wind ELCC Calculation Comparisons

3. 3 Wind ELCC Calculation Comparisons Two peak-hour averaging methods –“Annual Top 20 Peak Hours” approach (NPRR 611): For top 20 peak hours for a given year, divide the sum of all unit HSLs by the sum of the installed capacities. –“Summer Daily Peak Hours” approach: Sum the HSLs for summer peak season days for hours ending 15:00-18:00, where the summer peak season = June 1 through September 30; divide the sum of the HSLs by the sum of the installed capacities. Multi-year averaging: –Computed average annual wind ELCC for several time periods: Two years, 2012-2013 Three years, 2011-2013 Four years, 2010-2013 Five years, 2009-2013 ERCOT-wide vs. regional breakdown, Coastal and Non- coastal. Note: All calculations use units that are commercially operating as of January 1 of the given year.

4. 4 Annual ELCC Variability for the Two Peak-hour Averaging Methods, Summer Non-coastal Summer Daily Peak Hour Method Annual Top 20 Peak Hour Method

5. 5 Summer Daily Peak Hour Method Annual Top 20 Peak Hour Method Annual ELCC Variability for the Two Peak-hour Averaging Methods, Summer Coastal

6. 6 Annual ELCC Variability for the Two Peak-hour Averaging Methods

7. 7 Wind ELCC Computation Comparison Table below compares (1) the two methods of selecting peak hours, (2) different averaging periods, and (3) regional disaggregation vs. ERCOT wide:

8. 8 Yearly ELCC Averaging Comparison

9. 9 Capacity Forecasts for the 2014 NERC Long Term Reliability Assessment

10. 10 LTRA Resource Categories Existing-Certain –“Where energy-only markets exist, unit must be a designated market resource eligible to bid into the market” Planned, Tier 1 –“Resource construction is underway or complete (not in commercial operation)”, or –“Resource has been designated or approved by a market operator and an Interconnection Service Agreement has been signed” Planned, Tier 2 –...“Generation Interconnection has been requested”, and apply a confidence factor up to 50% Planned, Tier 3 –“Capacity that does not meet the requirements of Tier 2”, and apply a confidence factor up to 10%

11. 11 How ERCOT Addresses Each Resource Category Existing-Certain –Includes CDR (1) operational resources, (2) hydro capacity contribution, (3) PUN capacity contribution, (4) available switchable capacity, (5) summer/winter available mothball capacity –DC tie capacity contribution treated as imports –Unavailable mothball capacity is categorized as “Existing-Other”, and contributes to NERC’s Prospective Planning Reserve Margin Planned, Tier 1 –All CDR-eligible new resource capacity Planned, Tier 2 –Derived and applied (1) annual commercial operation success rates to capacity in the interconnection request queue that is not CDR- eligible, and (2) assumptions concerning timing of those capacity additions through 2024; approach summarized in the next few slides. Planned, Tier 3 –Derived and applied a 5% annual commercial operation success rate to ERCOT’s list of “conceptual” projects

12. 12 Project Commercial Operations Success Rates Data pulled from ERCOT’s GINR database on May 14, 2014

13. 13 Operations Success Rates by Interconnection Study Phase Derived annual operations success rates reflecting each project’s status in the interconnection study queue Interpretation: –19% of projects with a signed IA will enter commercial operations in any given year during the 10-year LTRA assessment period –13% of projects in the FIS phase will enter commercial operations in any given year during the 10-year LTRA assessment period –5% of projects in the SS phase will enter commercial operations in any given year during the 10-year LTRA assessment period

14. 14 Planned Tier 2 Capacity Derivation Applied study phase retention rates to applicable project capacity for years 2015-2018 (no projects have CODs beyond 2018). This new capacity totals 2,681 MW by 2018. Assumed that 19% of all non-CDR-eligible capacity in the interconnection request queue was eventually placed in service by 2024; this amount is 4,905 MW. –Deducting capacity additions for years 2015-2018 leaves 2,224 MW to allocate to years 2019 through 2024; assumed that this amount was distributed equally (371 MW for each year). Reasonableness check: LTRA Planned Tier 1 and 2 capacity more than keeps pace with the CDR load increase from 2015 through 2024 –Need 9,254 MW by 2024 to keep pace with the CDR forecasted load increase plus make up for DT Deely plant loss in 2019. –LTRA Planned Tier 1 plus Tier 2 totals 10,555 MW.

15. 15 Planned Tier 2 Capacity Derivation Table below shows year by year derivation of the Planned Tier 2 confidence factors and resulting capacity amounts

16. 16 LTRA Capacity Summary The table below is an extract of the LTRA data form showing the resource capacity section; the data is considered “draft”. Final data is due June 27, 2014.