NPRR 511 and QSGR MOC ERCOT Settlements Meeting Title: WMS Date: March 13, 2013

QSGR Settlement

QSGR: Decision on ME & Fuel Adder NPRR485 allowed for all resources to submit for verification actual fuel purchases to be included as a “fuel adder” to the MOC; however, this language was grey boxed until system implementation. NPRR485 changed the “Variable O&M” for QSGRs to include a minimum energy component and the “fuel adder” based on verified fuel by resource. Because ERCOT manually updates the MOC for the QSGR, the stakeholders decided ERCOT should include the “fuel adder” for QSGR. ERCOT requests a decision from stakeholders: What should be included in the MOC for the QSGR that is online with base points and receives a manual Override from the ERCOT operator to hold to an output level for reliability? Option 1: IHR + O&M (like non QSGR resources) Option 2: IHR + O&M + Min energy + fuel adder (proposed)

QSGR: Decision on Override NPRR511 proposed that QSGR under ERCOT operator control be compensated under with the variable O&M removed. The stakeholders approved this at PRS In reviewing ERCOT Operator desk procedures it was discovered that if the Operator needs a QSGR that is not receiving base points to come online for solving a contingency or voltage support, they are Overriding LDL to a level greater than or equal to LSL. ERCOT requests a decision from stakeholders: How should ERCOT compensate the QSGR that is not online with base points and is needed online at LSL by the ERCOT operator for reliability? Option 1: Manual Override (Emergency Energy payment) Option 2: Deploy Non-Spin (not Emergency Energy payment) Option 3: RUC VDI (RUC)

QSGR: Decision on Amortization The Verifiable Cost manual currently amortizes the Variable O&M into the QSGR IHR (MOC) each month based on the higher of Minimum online time per RARF; or, 2 hours; or, the average actual online time of the QSGR per 20 days in the month prior to the effective month. Proposed VC Manual change requests that the average actual online time be reduced by any hours that the QSGR has a manual override or is deployed for Non Spin. (This will increase the MOC) ERCOT requests a decision from stakeholders: Should ERCOT reduce the online hours used in the amortization of the variable O&M for any hours that the QSGR is online with a manual override or due to Non-Spin deployment? Option 1: No change continue with all online hours Option 2: Remove hours when online due to manual override and no base points Option 3: Remove hours when deployed for Non-spin Option 4: Remove hours for Option 2 & 3