1 Demand Response – How Do We Get There?

2 Opt 1 – Misc. Debit Credit Opt 2 – Load Imbalance ERCOT Impacts Business / Systems RCC, EAA, CODIA, Settlements No system impacts Manual entry of debit / credit charges RCC, EAA, CODIA Lodestar code changes Market ImpactMarket defined event occurs Market submits list of ESI IDs ERCOT applies charges Market defined event occurs Market submits list of ESI IDs ERCOT applies data aggregation change RisksPRR may not get approved Resource – Nodal / Testing Environment – lockdowns for Nodal ValidationsManual ESI ID validation Program validation TBD Manual ESI ID validation Load research sampling – skinny version Timeline (best case) Urgent PRR timeline Where is it at in the process? Demand Response Task Force Short Term

3 Opt 3 – DR profile – in flight PRR736 Opt 4 – Lagged Dynamic -- approved PRR478 Opt 5 – Advanced Metering ERCOT Impacts Business / Systems RCC, EAA, CODIA Retail systems, Lodestar, EIS code changes RCC, EAA, CODIA Retail systems, Lodestar, EIS code changes RCC, EAA, CODIA Retail systems, Lodestar, EIS code changes Market ImpactTX SET change Load profile changes Extract changes TX SET change Load profile changes Extract changes TX SET change Extract changes RisksNodal Unknown ValidationsLoad research Load Research Timeline (best case) PRR urgent timeline Plus 150 day notice for new profile 2+ years Where is it at in the process? On hold at PRSOn the PPL since PRR was approved, rank / priority by market has been below line Project Scoping meetings underway through Long Term

4 Urgent PRR language (Protocol 21) - reminder 21.5Urgent Requests The party submitting a PRR may request that the PRR be considered on an urgent basis ("Urgent") only when the submitter can reasonably show that an existing Protocol is impairing or could imminently impair ERCOT System reliability or wholesale or retail market operations, or is causing or could imminently cause a discrepancy between a settlement formula and a provision of these Protocols. If a submitter requests Urgent status for a PRR, or upon a valid motion in a regularly scheduled meeting of the PRS and the PRS determines that such PRR: (1)requires immediate attention from TAC due to (a) serious concerns about ERCOT System reliability or market operations under the unmodified language or (b) the crucial nature of settlement activity conducted pursuant to any settlement formula; and (2)is of a nature that allows for rapid implementation without negative consequence to the reliability and integrity of the ERCOT System or market operations; then PRS may designate the PRR for Urgent consideration. The PRS shall consider the Urgent PRR at its earliest regularly scheduled meeting, or at a special meeting called by the PRS chair to consider the Urgent PRR. If approved, ERCOT shall submit an Urgent PRS Recommendation Report to the TAC within three (3) Business Days after PRS takes action. The TAC chair may request action from TAC to accelerate or alter the procedures described herein, as needed, to address the urgency of the situation. Notice of an Urgent PRR pursuant to this subsection shall be posted on the MIS. Any revisions to these Protocols that take effect pursuant to an Urgent request shall be subject to an ERCOT PIA pursuant to Section , ERCOT Impact Analysis Based on Technical Advisory Committee Recommendation Report, and ERCOT Board consideration pursuant to Section , ERCOT Board Vote.