July 2008 CPS2 Waiver SDT Technical Workshop for Draft BAL-001-TRE-01 Judith A. James Reliability Standards Manager TRE

2 Overview of this presentation ●Background of SAR-003 and BAL-001-TRE-01 ●Process Overview ●The Team ●The Road Taken to this Draft ●The work product (draft standard)

3 ERCOT Waiver for CPS2  ERCOT requested a Waiver for CPS2.  Stating that it “does not believe that frequency control within its new single control area interconnection is less reliable as a result of non- compliance with the CPS2 Standard following its conversion.”  NERC granted the request November 21, 2002.

4 FERC NOPR on Mandatory Reliability Standards ●Docket No. RM , October 20, 2006 ●Paragraphs ●Paragraph 141 ERCOT’s Protocols concerning frequency control identify that the existing ERCOT approach to Interconnection frequency control is necessary to assure reliability in that interconnection. However, the existing waiver was filed prior to the formation of these procedures. ERCOT is both a single balancing authority and the smallest of the three Interconnections, approximately one tenth of the size of the Eastern Interconnection. As such, frequency control is more critical to its system reliability.

5 FERC Order 693 ● March 16, 2007 ●Paragraphs 309 to 315

6 Regional Standard Development ●Between March 16, 2007 and April 15, 2008, Texas RE was getting organized and getting the processes and procedures, as well as staff, ready for development of standards. ●Texas RE launched its Reliability Standards Tracking system in April ●Standard Authorization Request written by TRE April 15, ●SAR-003-TRE-01: FERC-Ordered Modification to ERCOT Waiver to R2 of BAL CPS2

7 Regional Standards Process Overview SAR Submitted RSC Evaluation and disposition of SAR RSC/ROS forms SDT SDT

8 Regional Standards Process Overview ( Cont.) SDT drafts standard RSC Evaluation Posting for Comments (where we are now with BAL-001-TRE-01) More work needed SDT responds to comments and considers modification to the draft standard

9 Regional Standards Process Overview ( Cont.) RSC recommends posting for vote RBB/BP Forward the package for TRE BOD approval Evaluation by NERC and approval by NERC BOT NERC filing to seek FERC approval Reject Remand

10 Standard Drafting Team Typically includes a member of the Texas RE staff and the originator in addition to the field Subject Matter Experts (SME) assigned by RSC/ROS Standard Drafting Team A team of technical experts assigned by RSC and approved by ROS Collectively have the necessary technical expertise and work process skills pertaining to the particular SAR subject Review stakeholders comments and consider modification to the draft standard Work on the technical aspect of the standard Report to RSC on the work progress and make appropriate recommendations as needed

11 Standard Drafting Team ●Team of Subject Matter Experts. ●Use their specific expertise to lead the development and refinement of the technical and detailed standards. ●Encourage and coordinate inter-industry examination and consensus. ●Ensure that Regional Standards are technically accurate, clear, enforceable, and provide an adequate level of reliability for the ERCOT Bulk Power System. ●Meetings of SDTs shall be open to all interested parties.

12 SAR-003 Standard Drafting Team Sydney Niemeyer*NRGInd. Generator Ananth Palani**OptimIOU Vann WeldonERCOTISO Ken McIntyreERCOTISO Howard IllianEnergy MarkConsultant Pam ZdenekBP Alternative EnergyInd. Generator *Chair **Vice-Chair

13 SAR-003-TRE-01: FERC-Ordered Modification to ERCOT Waiver to R2 of BAL CPS2  SAR written by TRE April 15,  Accepted by RSC on May 27,  SDT slate was nominated and accepted by ROS on June 12,  First team meeting July 10,  Team has met 14 times (full day meetings) in nine months.  Team has updated RSC about every other month.  Posted initial work product (rough draft) in December for RSC.  RSC approved final draft for public comment on March 4,  Draft posted for public comment March 16-April 14.

14 Meetings of SAR-003 SDT to Date ●2008 ●July 10 ●August 14 ●September 2 ●September 9-10 (PDCWG) ●September 16 ●October 3 ●October 23 ●November 21 ●December 5 ●2009 ●February 5 ●February 27 ●March 10 ●March 31 (Workshop)

15 SDT Work Product ●A draft Regional Standard consistent with the SAR on which it was based. ●An assessment of the impact of the SAR on neighboring regions and appropriate input from the neighboring regions if the SAR is determined to impact any neighboring region. ●Identification of any existing Regional Standard (or Protocols) that will be deleted, in part or whole, or otherwise impacted by the implementation of the draft Standard.

16 SDT Work Product (Cont.) ●Technical reports and/or work papers that provide technical support for the draft Regional Standard under consideration. ●Document the perceived reliability impact should the Regional Standard be approved. ●SDT is also responsible for developing all required compliance and performance elements and associated questions for a Comment Form. ●An implementation plan, including the nature, extent and duration of field-testing, if any.

17 Draft BAL-001-TRE-01 ●The SAR-003 Standard Drafting Team will now present the technical background and need for this standard. ●Your questions are appreciated, and the team will make every effort to answer them today. ●But don’t forget to formally comment using the Reliability Standards Tracking Site.