1. Price Responsive Load / Retail Demand Response 2013 Analysis Report Overview ERCOT Staff & Frontier Associates RMS Meeting August 5, 2014

2. 2 Why it’s important to understand retail DR & price response Impacts on the long term load forecast Return on investment in the advanced metering infrastructure Ability to track growth of these products is a key metric in measuring the success of the ERCOT retail market This project seeks to start quantifying Load response that occurs outside of ERCOT/TDSP operations – ergo, does not include: –Load Resources in Ancillary Services –ERS –TDSP Load Management Programs PUC Subst. Rule §25.505(e) (5): Load Serving Entities (LSEs) shall provide ERCOT with complete information on load response capabilities that are self-arranged or pursuant to bilateral agreements between LSEs and their customers. DR/Price Response Summary ReportAugust 5, 2014

3. 3 History of the 2013 data collection project Phase 1 – Survey –‘Your response to the survey will allow ERCOT to gain a better understanding of the amount of responsive Load and numbers of retail energy consumers actively responding to Load reduction signals.’ –Results presented in Aug. 2012 to RMS and DSWG Phase 2 – Data collection –REPs provided lists of ESI IDs enrolled in various DR/dynamic pricing products (snapshot June 15, 2013) –Separate survey to REPs collected event data –Phone calls with NOIEs reporting DR-type programs Phase 3 – Analysis –After data collection, evaluation of data Phase 4 – Report to Market DR/Price Response Summary Report We are here! August 5, 2014

4. 4 Data Evaluation ERCOT retained Frontier Associates for analysis and reporting –Jointly defined approach & data requirements –All data anonymized; Frontier signed NDA –Analyzed behavior by customers in products with significant enrollment (except for Time of Use) Goal: quantify potential demand reductions that can be expected from customers during events: –Wholesale price spikes (3 tiers) –Actual and potential 4CP intervals DR/Price Response Summary ReportAugust 5, 2014

5. 5 Product types & REP-reported enrollment Product (code) ESI IDs 6/15/13 Evaluated? Real-Time Pricing (RTP)4,105Y Block & Index (BI)22,947Y Peak Rebate (PR)1,877Y Other Load Control (OLC)10,071Y Other Voluntary DR Product (OTH)733Y Time of Use (TOU)117,570N1N1 Four Coincident Peak Advisory (4CP)10N2N2 Critical Peak Pricing (CPP)0N Financial Option (FO)0N DR/Price Response Summary ReportAugust 5, 2014 1 TOU products are incentives for long-term behavioral shifts rather than event-based demand response. We deemed analysis to be beyond the scope of this initial project and will revisit after 2014 reporting is in. 2 4CP response may be self-initiated or initiated in response to a signal from a third party; REP advisories are likely only a small subset of the total. Therefore, 4CP analysis (discussed later in this slide deck) was approached differently.

6. 6 Methodologies Frontier Associates used a variety of baseline analyses to try to quantify load reductions, including: –ERCOT ERS ‘Middle-8-of-10’ with event-day adjustment –Regression with event-day adjustment Pricing events (LZ SPPs) were grouped into 3 categories: –$300 - $999 MWh –$1,000 - $2,999 MWh –>$3,000 MWh Frontier’s 4CP analysis looked at aggregated load of ESI IDs in competitive choice areas connected at transmission voltage –319 total ESI IDs ERCOT Staff (C. Raish) conducted a separate 4CP analysis using a different (bottom-up) methodology -- same database plus certain distribution-connected loads DR/Price Response Summary ReportAugust 5, 2014

7. 7 Challenges & disclaimer Dearth of sustained high wholesale price events last summer –One interval at the SWCAP in all of 2013 REPs’ self-reported events often involved only a small subset of total enrolled customers 4CP response and price response have the potential to occur simultaneously –This was not an issue in 2013, but historically the two have coincided at times Product types are evolving and we’re still learning For these reasons, 2013 results should be considered a big step in the right direction, but not a definitive quantification of retail DR and price response capability in ERCOT DR/Price Response Summary ReportJuly 9, 2014

8. 8 Response to wholesale price spikes (>$3,000) DR/Price Response Summary ReportAugust 5, 2014 (1) Includes an estimate for industrials within NOIE service areas. Product typeEstimated MW responseNote Real-time Price + Block & Index232(1) NOIE Load Control200 Peak rebate0.5 Price response total432.5 Frontier Associates:

9. 9 Response during actual and potential 4CP intervals Customer typeEstimated MW responseNote IDR transmission-connected250(1) NOIE200(2) Other50(3) 4CP Total500 DR/Price Response Summary ReportAugust 5, 2014 Notes: (1) Analysis of aggregated load of transmission-connected customers in competitive choice areas. Historical baseline calculation yields an estimate of 251 MW. Regression analysis suggests a reduction of 201 MW on average over the past 5 years. (2) Based on a review of savings estimates reported by NOIEs (no independent data analysis). (3) Estimated value for industrials with IDR meters served at distribution voltage plus industrials within NOIE service areas. Frontier Associates:

10. 10 ERCOT’s additional 4CP analysis ERCOT (Carl Raish) conducted a more detailed analysis, identifying individual ESI IDs based on their behavior on near- and actual 4CP days –Both transmission- and distribution-connected IDR-metered Loads Notable: –Many Loads reduce usage during the entire day on a potential 4CP day –Slight majority of Loads concentrate on HE 1700 DR/Price Response Summary ReportAugust 5, 2014 Response typeTrans ESI IDsDist ESI IDsTotal All day681,2931,361 Peak hour only811,4271,508 Total1492,7202,869

11. 11 ERCOT’s additional 4CP analysis Distribution-connected IDR-metered Loads contributed an average of 127 MW of 4CP response in 2013 –27 percent of estimated total DR/Price Response Summary ReportAugust 5, 2014 4CP days 2013 Estimated MW response TransDistTotal 6/27315154469 7/31360138498 8/7369178547 9/333138369 Averages344127471

12. 12 Next steps: on to 2014 Timeline for 2014 data collection project –9/30: Snapshot date for REPs to capture ESI IDs enrolled in the various product types –11/1: REPs submit ESI ID list files to ERCOT –Oct./Nov.: ERCOT dialogue with participating NOIEs –11/15: REPs submit error-corrected files to ERCOT –11/15: ERCOT surveys REPs to gather REP-specific event information Continue looking at Time of Use enrollment –Most popular product type, but data analysis could be extremely complicated Different hourly pricing buckets (e.g., free nights, weekends) Start and stop dates become very important –What can we accomplish without asking REPs for a burdensome amount of new data? –More market discussion after 2014 data received DR/Price Response Summary ReportAugust 5, 2014

13. 13 Questions? ON OFF DR/Price Response Summary ReportAugust 5, 2014 pwattles@ercot.compwattles@ercot.com512/248-6578 craish@ercot.comcraish@ercot.com512/248-3876 jayz@frontierassoc.comjayz@frontierassoc.com512/372-8778 x103