June 26 and July 31, 2014 Technical Advisory Committee (TAC) Update to RMS Kathy Scott August 5, 2014 TAC Update to RMS 1

TAC and ERCOT Board Activities Policy Decision on RATF Price Reversal Mitigation Assignment (Vote)  May 29 th TAC Motion: Move to endorse “Compromise Proposal to Adjust Pricing through NPRR626 Type Methodology (as filed in NPRR626)” –  Unanimously Endorsed by TAC ◦ During the June Board meeting Commissioner Nelson stated her appreciation for all the work accomplished by the market in developing the ORDC recommendations.  NPRR 626, ORDC Price Reversal Mitigation Enhancements currently going through the ERCOT governance process. August 5, 2014TAC Update to RMS2

TAC and ERCOT Board Activities ERCOT Board Update ◦ Recommendation for PGRR031, Implement 95% Facility Rating Limit in the Planning Criteria (Possible Vote)  ERCOT has submitted new PGRR038 that requires ERCOT to report circuits that are loaded above 95% of their Facility Ratings in ERCOT’s annual Regional Transmission Plan.  New replacement PGRR038 for PGRR031 is going through the ERCOT governance process. PGRR031 still Tabled at the Board with ERCOT’s plans to request withdrawal. August 5, 2014TAC Update to RMS3

PRS Initiatives and Votes Nodal Protocol Revision Requests (NPRRs) ◦ NPRR608, Alignment of Transaction Timing to the PUCT Performance Measures - Unanimously Approved ◦ NPRR614, Clarification of Telemetered Value of HSL for Combined Cycle Generation Resources providing RRS - Approved with 2 abstentions ◦ NPRR616, Clarification of Notification for Undeliverable Ancillary Services- Unanimously Approved ◦ NPRR618, Market Notices for Resettlement Statements and True-up Settlement Timeline Changes - Unanimously Approved ◦ NPRR619, Minimum Quantity for DAM PTP Obligation Bids- Approved ◦ NPRR620, Collateral Requirements for Counter-Parties with No Load or Generation- Approved ◦ NPRR621, Counter-Party Specific Calculations for M1 Variable- Unanimously Approved ◦ NPRR622,, Replace Planning and Operations Information Website References with MIS - Unanimously Approved August 5, 2014TAC Update to RMS4

PRS Initiatives and Votes Nodal Protocol Revision Requests (NPRRs) ◦ NPRR593, Clarification of Generic Transmission Limit Posting Requirements – Unanimously Approved ◦ NPRR604, Modification to Submission Timeline for Changes to Emergency Operations and Weatherization Plans– Unanimously Approved ◦ NPRR615, PVGR Forecasting – Unanimously Approved ◦ NPRR624, Generation Resource Operational Designation Transparency – Unanimously Approved ◦ NPRR626, Reliability Deployment Price Adder (formerly “ORDC Price Reversal Mitigation Enhancements”) – Unanimously Approved ◦ NPRR628, Notification of Financial Impact of Settlement Disputes- – Unanimously Approved ◦ NPRR629, Removal of Black Start Plan Posting Requirement – Unanimously Approved August 5, 2014TAC Update to RMS5

PRS Initiatives and Votes Nodal Protocol Revision Requests (NPRRs) ◦ NPRR630, As-Built Clarifications to Settlements of ORDC – Unanimously Approved ◦ NPRR631, Corrections to Definition of Credible Single Contingency – U RGENT - Unanimously Approved ◦ NPRR622,, Replace Planning and Operations Information Website References with MIS - Unanimously Approved Other Binding Documents List (Vote): ◦ Addition of “ERCOT Business Practice - Manual Deployment and Recall of Responsive Reserve Service during Scarcity Conditions”  Unanimously Approved August 5, 2014TAC Update to RMS6

Wholesale Market Subcommittee (WMS) ◦ ERCOT Business Practice – Manual Deployment and Recall of Responsive Reserve Service during Scarcity Conditions Release of HASL (Vote) –  Unanimously Approved by TAC Reliability Operations Subcommittee (ROS) ◦ NOGRR129, Implement Operational Preparedness for Geomagnetic Disturbances (Vote)  Unanimously Approved with an implementation date of November 25, 2014 ◦ NOGRR131, Clarification for Generation Resources During EEA  Unanimously Approved ◦ PGRR036, Planning Market Data Transparency-Unanimously Approved ◦ PGRR038, Require ERCOT to Report Circuits Loaded Above 95% of Their Facility Rating - Approved with Option 1 as recommended by ROS and PLWG August 5, 2014TAC Update to RMS7 WMS and ROS Initiatives and Votes

RMS and COPS Initiatives and Votes Retail Market Subcommittee (RMS) Report * ◦ RMGRR122, Synchronization with NPRR608, Alignment of Transaction Timing to the PUCT Performance Measures (Vote)  Since RMGRR122 is a synchronization to NPRR608, RMS recommended and TAC approved “TABLING RMGRR122 at TAC” awaiting NPRR608 approval during the August Board meeting. Commercial Operations Subcommittee (COPS) ◦ Updates provided in both June and July TAC meetings August 5, 2014TAC Update to RMS8

Future Ancillary Services/TAC Workshop NPRR(s) Submission and Review Procedural Discussion ◦ Questions from July 25, 2014 TAC/Fast Workshop  When and how do we deal with Inertia?  Pay for Performance  Incorporation of real-time co-optimization  Impact on Hedging  Timing certainty  Cost Benefit package and timing  Should we pay the same MCPC for services that have different obligations and performance criteria? ◦ Develop RFP ◦ Specific Policy Questions due August 15, 2014 ◦ FAST/TAC Workshop August 25, 2014 (Bring ~MW requirements and options) ◦ TAC Meeting August 28, 2014 (Tee-up issues) ◦ Comments and Policy Question Reponses due October 1, 2014 ◦ Post revised NPRR November 1, 2014 ◦ CBA initiated on (NPRR) August 5, 2014TAC Update to RMS9

ERCOT Operations, Planning & IT Reports ◦ Project Status Updates Provided by ERCOT:  NPRR568, Real-Time Reserve Price Adder Based on Operating Reserve Demand Curve, Operational  NPRR589, Ancillary Service Offers in the Supplemental Ancillary Services Market, SASM Performance Update  ERCOT Business Practice – Manual Deployment and Recall of Responsive Reserve Service during Scarcity Conditions Release of HASL – Unanimously Approved  ERCOT Comments to NPRR621, Counter-Party Specific Calculations for M1 Variable – Unanimously Approved  Seasonal Adjustment Factor –Three votes taken all failed – ERCOT will consider TAC comments and make a decision by 7/1/14:  August 5, 2014TAC Update to RMS10

ERCOT Operations and Other Business Upgrade of Client Digital Certificates TAC Annual Structural and Procedural Review ◦ TAC Goals review scheduled on August 27, 2014 at 9:30 AM location ERCOT Met RM 206.  Review will be used to discuss and determine which goals map to Revision or Change Requests and other important market accomplishments for 2014  2014 TAC Goals and Matrix documents posted:  See key document 11 for 6/26 and document 12 for 7/31 meetings: August 5, 2014TAC Update to RMS11

Questions? 12August 5, 2014TAC update to RMS