May 29, 2014 Technical Advisory Committee (TAC) Update to RMS Kathy Scott June 3, 2014 TAC Update to RMS 1

TAC Workshop (5/29/14) Review of ORDC Impacts and Price Reversal Concerns- ERS/Load acting as Responsive Reserve/RUC. ◦ Augmented ORDC:  NPRR627, Augmented ORDC to Include Reliability Factor Methodology  Changes to Other Binding Document - Methodology for Implementing Operating Reserve Demand Curve (ORDC) to Calculate Real-Time Reserve Price Adder  TAC members agreed to refer this discussion to WMS and ROS for a recommendation to PRS for their June 12 th meeting. June 3, 2014TAC Update to RMS2

TAC Workshop (5/29/14) Compromise Proposal to Adjust Pricing through NPRR626 Type Methodology (as filed in NPRR626): ◦ Adjust RT SPP through adder that reflects the impact of: a ) 0 to LSL RUC energy; b) Deployed ERS with a 10 hour return; c) Online RMR energy and emergency capacity acquisitions under Protocol Section (2); d) Deploy Load Resources other than Controllable Load Resources ◦ Adder calculated by adding a 3 rd SCED run that considers a), b), c) and d) MWhs and comparing the difference in price to the 2 nd SCED run. ◦ Adder paid to all available online Resources as proposed in NPRR626 as filed. ◦ For Load Resources other than Controllable LRs insert a proxy bid to buy to curtail at a linear curve starting at $300/MWh to $700/MWh.  A Stakeholder review will occur using the best available data for the proxy bid to buy price points. ◦ Raise RUC Energy Offer Floor to $1,500.00/MWh June 3, 2014TAC Update to RMS3

TAC and ERCOT Board Activities TAC Leadership Elections (Possible Vote) ◦ Due to Randa Stephenson’s change in employment from Lonestar Transmission Company (IOU) segment to LCRA (MOU) segment required TAC to revote and approve Randa as Chair of TAC Policy Decision on RATF Price Reversal Mitigation Assignment (Vote) ◦ TAC Workshop recommendation developed on 5/29/14 (slide 3) ◦ Motion: Move to endorse “Compromise Proposal to Adjust Pricing through NPRR626 Type Methodology (as filed in NPRR626)” – ◦ Unanimously endorsed by TAC June 3, 2014TAC Update to RMS4

TAC and ERCOT Board Activities ERCOT Board Update ◦ All NPRRs were approved that were submitted to the Board ◦ Board Procedures and Policies (Vote)  Unanimously Approved by TAC. This item will be discussed by the Board’s HR and Governance Committee on June 9th.  ◦ 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 will be going through the ERCOT governance process and a request to withdraw PGRR031 will be submitted to the Board by ERCOT.  No Action was required of TAC during the May 29 th meeting. June 3, 2014TAC Update to RMS5

PRS Initiatives and Votes Nodal Protocol Revision Requests (NPRRs) ◦ NPRR605, Ancillary Service Make-Whole Payments Under a Watch – U RGENT  M OTION TO A PPROVE A S A MENDED BY ERCOT C OMMENTS F AILED 15(Y) 13(N) 2(A) ◦ NPRR606, Removal of Risk Management Verification Fee  Unanimously Approved by TAC ◦ NPRR607, Short-Term System Adequacy Report Posting Modification  Unanimously Approved by TAC ◦ NPRR609, ERCOT System Administration Fee and User Fees  Unanimously Approved by TAC ◦ NPRR610, Eliminate Late Fees and Late Fee Invoices - Approved ◦ NPRR612, Reduction of Cure Period Subsequent to Event of Default  ERCOT requested Tabling for a month for additional review and comments  Motion to TABLE – Unanimously Approved by TAC ◦ NPRR613, Clarification of Fuel Adder into the Mitigated Offer Cap  Unanimously Approved by TAC June 3, 2014TAC Update to RMS6

Wholesale Market Subcommittee (WMS) ◦ Other Binding Document, Requirements for Aggregate Load Resource Participation in the ERCOT Markets (Vote)  Motion to Approve as amended by ERCOT’s comments was Unanimously Approved by TAC Reliability Operations Subcommittee (ROS) ◦ Update only- No voting items this month Commercial Operations Subcommittee (COPS) ◦ Update only- No voting items this month June 3, 2014TAC Update to RMS7 WMS/ROS/COPS Initiatives and Votes

RMS Initiatives and Votes Retail Market Subcommittee (RMS) Report * ◦ RMGRR121, Clarification of Inadvertent Gain Processes (Vote) ◦ This Retail Market Guide Revision Request (RMGRR) adds language to the Retail Market Guide to clarify best business practices when processing inadvertent gain issues in MarkeTrak.  Unanimously Approved by TAC  With TAC’s Approval allowed these process changes to be implemented and available to the Competitive Market as of June 1, 2014:  Updated RMG: June 3, 2014TAC Update to RMS8

ERCOT Operations, Planning & IT Reports NPR568, Real Time Reserve Price Adder Based on Operating Reserve Demand Curve (ORDC), Update: ◦ April - May 2014  ERCOT Internal Testing is complete  Sign-off is complete ◦ June 1 st - Go Live Still on TARGET!!!! June 3, 2014TAC Update to RMS9

ERCOT Operations, Planning & IT Reports ERCOT Independent Review of the Leander-Round Rock RPG Project (Possible Vote) ◦ Unanimously Approved by TAC Loss of Load Probability (LOLP) Update and Posting Calendar ◦ 2015 Season LOLP Calendar updates will be posted in September for market review. Calendar will show season and year the data was collected to go into these values. Corrections to the Assignments of Loads to NOIE and Competitive Load Zones in the Network Operations Model ◦ When reviewing Load Zone issue affecting SU transition, ERCOT found inconsistency in Load Zone assignments currently existing across several load zones. Investigations produced a list of 109 MW that need to be shifted either in or out of competitive load zones that ERCOT will update by July ◦ ERCOT feels they have done exhaustive research and feel they have identified all areas where corrections are warranted. ERCOT doesn’t feel these changes require resettlements because the impact is to pricing. Data monitoring is being implemented by ERCOT to prevent reoccurrence of this issue in the future. June 3, 2014TAC Update to RMS10

Questions? 11June 3, 2014TAC update to RMS