1. Application of High Sustainable Limit With PRR 666/676 WMS November 15, 2006 Ino Gonzalez ERCOT Settlements

2. Under Scheduled Capacity Charge USRP = Min{2 * USQRP * (PCOOMRP + LPCRP + PCRP)/ CapOOMRP, [(PCOOMRP + LPCRP + PCRP) * USQRP] / [Σ(USQRP)]} Where: USRP( $ ) Under Scheduled Charge by hour for the QSE. USQRP( MW ) Under Scheduled Quantity per QSE per hour PCOOMRP( $/hr ) Sum of all OOMC payments across ERCOT LPCRP( $/hr ) Sum of all Local RPRS payments across ERCOT PCRP( $/hr ) Sum of all Zonal/Capacity Insufficiency RPRS payments across ERCOT CapOOMRP( MW ) Sum of all Capacity (HSL) procured for OOMC or RPRS for the hourly interval

3. The CAP OOMRPi is defined as: “Sum of all Capacity (HSL) (MW) procured for OOMC or RPRS for the hourly interval” HSL is a 96 interval data cut but its values represent hourly MW quantities (EMMS R4). This allows the QSE representing the resource to update the HSL every 15 minutes. For the calculation of USRP, ERCOT will use an average HSL for the hourly interval value. Let’s look at an example =  Calculation of CapOOMRP

4. Sample Calculation of CapOOMRP Int8Int9Int10Int11Int12 514514 0 0 0 Hour 3 Hour Three HSL: 514 + 0 + 0 + 0 = 514 514 divided by 4 = 128.5 Quantity for CapOOMRP = 128.5

5. Utilizing Average HSL is consistent with: 1. OOMC Capacity Values Determination 2. Calculation of OOMC and Local RPRS Payments at the Load Sustainable Limit (LSL) Summary:

6. Questions?