February 25, 2011 Demand Side Working Group EILS Update Mark Patterson ERCOT, Manager Demand Integration

Demand Side Working GroupFebruary 25, 2011 February through May 2011 Procurement

February 2011 Business Hours 1

February 2011 Business Hours 2

February 2011 Business Hours 3

February 2011 Non-Business Hours

Procurement Trends (no. & avg. size of EILS Loads) EILS Loads include individual Loads and aggregations February 2011

Individual Site Participation Cumulative number of unique sites in EILS ID process February 2011

Demand Side Working GroupFebruary 25, 2011 February 2, 2011 Event

3:00am5:08am5:17am 5:43am9:05am ERCOT experienced communications challenges due to the rapidly-unfolding events J AN 31 F EB 1F EB 2 Issued OCN and Advisory Severe Weather Reserves below 3000 MW PUCT 3:21am Issued Watch Reserves Below 2500 MW Sent to Grid Alert List Issued OCN Winter Storm Warning PUCT a.m. Issued EEA Level 2A Reserves Below 1750 MW Sent to Grid Emergency List Issued EEA Level 3 Rotating Outages Sent to Grid Emergency List PUCT 6:05am 2:45am Issued Advisory Freezing Temperatures PUCT Report 3:05p.m. Issued OCN Operating Condition Notice Expected Freezing Temperatures PUCT OCN and Watch also include: Qualified Scheduling Entity Hotline Call Transmission Owner Hotline Call Postings on the Market Information System and ERCOT website

5:20am5:08am 7:15pm 1,804 MW Non-Spin deployed Restored 500 MW Restoration Complete A timeline of the emergency steps that were taken leading to rotating outages in ERCOT F EB 2 F EB 3, 10 AM EEA 2A ENDS & EILS RECALLED Issued Watch Reserves below 2,500 MW Issued EEA 2A Reserves below 1,750 MW Load Resources deployed Issued EEA 3 EILS deployed Firm Load Shed 1,000 MW 7:57am Restored 500 MW (3,500 MW out) 8:22am Restored 500 MW (3,000 MW out) 9:25am Restored 500 MW (2,500 MW out) 5:43am 6:04am Firm load shed 1,000 MW (2,000 MW total) 6:05am Frequency Hz 6:23am Firm Load Shed 2,000 MW (4,000 MW total) 6:59am Media Appeal issued Move to EEA 2B From EEA 3 New winter Peak Record 56,480 MW 2:01pm 11:39am Restored 500 MW (2,000 MW out) 12:04pm Restored 500 MW (1,500 MW out) 12:25pm Restored 500 MW (1,000 MW out) 12:49pm Restored 500 MW (500 MW out) Load Resources Recalled Move to EEA 2A From EEA 2B 3:14pm 4:30am1:07pm 1:57pm

The ERCOT System responded as expected

Demand Side Working GroupFebruary 25, 2011 New EILS Contract Period (RFP)

Demand Side Working GroupFebruary 25, 2011 New EILS RFP Today ERCOT will be filing a Petition for Emergency Rulemaking with the Public Utility Commission Subst. R (a)(2): – (2)Notwithstanding the foregoing, ERCOT may restructure the contract periods to facilitate additional load participation in EILS. ERCOT must publicly announce any changes to the contract period schedule described above at least 90 days prior to the next contract period start date. Petition will seek to remove the 90-day advance notice requirement

Demand Side Working GroupFebruary 25, 2011 This EILS RFP is provisional and this procurement may be cancelled by ERCOT at any step in the process prior to notification of awards. A decision by ERCOT to proceed with the procurement will be contingent on factors including but not limited to the following: – Approval by the Public Utility Commission of Texas (PUCT) of a change to PUCT Substantive Rule § (a)(2), – May require Approval by the ERCOT Board of Directors of a waiver of Nodal Protocols Section (2), – EILS MW capacity offers that are determined by ERCOT to be both sufficient to provide a viable operational tool for ERCOT to deploy in an Energy Emergency Alert and priced consistent with the reasonableness criteria

Demand Side Working GroupFebruary 25, 2011

Demand Side Working GroupFebruary 25, 2011 The Change Control process for the Technical Requirements and Scope of Work for the new Contract Period will be modified as follows: – the Market Participant review period for changes to the document will be less than 14 days. Otherwise the Change Control process will not change. GUIDELINES FOR New EILS PROCUREMENT

Demand Side Working GroupFebruary 25, 2011 QSEs may submit new EILS Loads or reconfigured aggregated EILS Loads to ERCOT for consideration using the EILS Load Identification (ELID) process as defined and adhering to the ELID deadlines set forth in the procurement schedule. GUIDELINES FOR New EILS PROCUREMENT (Cont’)

Demand Side Working GroupFebruary 25, 2011 QSEs may submit offers for the following: – EILS Loads assigned an ELID number through the process described in No. 2, above. – EILS Loads with valid, numbered ELIDs and baseline assignments from the original Feb.-May 2011 Contract Period procurement cycle. – EILS Loads with valid Reinstatement ELIDs that have successfully completed their reinstatement test and for which the suspension period has expired or will expire prior to April 1, Standard parameters relating to reinstatement offers apply. – Substituting EILS Loads that were providing EILS at the time of the Feb. 2-3 EILS deployment event. GUIDELINES FOR New EILS PROCUREMENT (Cont’)

Demand Side Working GroupFebruary 25, 2011 GUIDELINES FOR New EILS PROCUREMENT (Cont’) Availability and event performance will be evaluated independently of the original Feb.-May Contract Period.

February 25, 2011Demand Side Working Group Draft2 PROCUREMENT SCHEDULE Contract Period: April 1, 2011 through May 31, 2011 All deadlines are close of business U.S. Central Prevailing Time. DateAction Fri., Feb. 25, 2011 RFP ISSUED: ERCOT issues EILS Request for Proposal. Draft Technical Requirements & Scope of Work posted to EILS web page. EILS Load ID process begins — submittal of Resources for baseline assignment & capacity pre-screening Fri., Mar. 4, 2011ELID process closes (last day to submit ELIDs for new Loads. Mon., March 7, 2011Online meeting review of Technical Requirements comments (if requested). Fri., March 11, 2011 ERCOT communicates to QSEs completed baseline assignment and capacity pre- screening information for prospective EILS Loads. Mon., March 14, 2011 QSEs opting for EILS Self-Provision submit the EILS Notification of Self-Provision Form to ERCOT. Fri., March 18, 2011 OFFERS DUE: QSEs submit EILS Submission Forms with completed competitive Offers and/or Self-Provision Offers. ERCOT notifies Self-Providing QSEs of options for adjusted commitment levels. Tue., March 22, 2011 Self-Providing QSEs provide ERCOT with final Self-Provision commitment (this must occur within two Business Days of the communication to the QSE from ERCOT). Wed., March 24, 2011 ERCOT notifies awarded QSEs of EILS awards. ERCOT issues Market Notice with summary of EILS awards. Standard Form Supplements to QSE Agreements distributed to awarded QSEs. Wed., March 30, 2011Deadline for signed contracts to be returned to ERCOT. Fri., April 1, 2011First day of operation in the Contract Period. Tue., May 31, 2011Last day of Contract Period Tue., July 5, 2011Deadline for submitting NOIE or non-TDSP interval meter data to ERCOT Fri., July 15, 2011ERCOT provides unofficial availability and event performance data to QSEs Mon., July 25, 2011Deadline for QSEs to identify any discrepancies with ERCOT’s unofficial data Tue., Aug. 9, 2011Approximate Settlement statement posting date for this Contract Period