1 Next Steps to Reduce the RTM Settlement Timeline COPS Workshop August 29, 2013 Mandy Bauld ERCOT Director, Settlement & Retail Operations (512) ERCOT Update

2 Objectives Update: NPRR509 (Shortened RTM Settlement Timeline) Analysis of Possible Impacts of further reductions

3 NPRR509 - Assess Impacts to Data Availability and Accuracy 1.Availability of actual load data on Initial Settlement (ERCOT) –AMS –COMP_IDR –NOIE –NIDR 2.Known load data corrections not submitted prior to initial settlements (TDSPs) 3.Known EPS meter data issues not resolved prior to initial settlement (ERCOT) 4.Known markets/operations data issues not resolved prior to initial settlement (ERCOT) 5.Required manual settlement processes not completed for initial settlement (ERCOT) 6.Disputes with root cause traceable to an impact of shortened timeline (ERCOT) 7.Resettlements with root cause traceable to an impact of shortened timeline (ERCOT) Update: ERCOT is not aware of any related issues Update: Due to the 1-day acceleration of the data aggregation processes, there has been an increase in use of ERCOT-estimated data. ERCOT has not experienced any related operational issues.

4 NPRR509 - Assess Operational Impacts 1.Timeliness of ERCOT posting statements, invoices, and related data 2.Timeliness of QSE/CRRAH settlement operations 3.Increase in overtime hours (ERCOT and Market) 4.Increase in staffing levels (ERCOT and Market) 5.Required changes to business process and procedures (ERCOT and Market) 6.Required changes to systems and tools (ERCOT and Market) Update: ERCOT has executed activities timely and is not aware of any related issues Update: ERCOT is not aware of any issues specifically related to this reduction. However it was brought to attention that with the reduction to OD+9 from NPRR347 there began to be a lag of availability of calculated data for generation site ESI IDs, vs. other shadow settlement data. This is due to timing of the retail extracts (3-d look- back) and the shortening of the window between the data aggregation job and the statement approval (now 1 day.) Without subsequent change, the gap will remain at 3 days. Update: ERCOT has not been impacted by overtime hours and is not aware of any related issues Update: ERCOT did not require additional staffing and is not aware of any related issues Update: ERCOT implemented process changes and is not aware of any related issues Update: ERCOT implemented the necessary data configuration changes and is not aware of any related issues

5 Further Reduction – Possible Impacts OD+6 or OD+5: Less Impact –Under the most ideal scenario – weekday processing and no system issues – there are no notable issues –Anticipated not to require ERCOT system changes, but would need to confirm through the detailed impact analysis process –Would require ERCOT process and system configuration changes –Would require additional ERCOT staffing over combined weekend/holidays and possibly over 3-day weekends (same for TDSP/RE for support) to support MDAS activities –Would require additional ERCOT staffing over combined weekend/holidays, 3-day weekends, and potentially normal weekends in order to support manual settlement processes, OR would require those to be deferred to the next settlement iteration –Potential for implementation by next June2014

6 Further Reduction – Possible Impacts Less than OD+5: More Impact and More Questions –To fully understand impact, need direction on considerations. – Generally, this timeline: Would require additional ERCOT staffing over combined weekend/holidays and possibly over 3-day weekends (same for TDSP/RE for support) to support MDAS Would require additional ERCOT staffing over combined weekend/holidays and all weekends in order to support manual settlement processes, OR would require those to be deferred to the next settlement iteration Increases concerns about risk to untimely settlement if we have any issues. Risk and concern increases as the timeline decreases. Increases concerns about risk to untimely settlement under normal system operations, on a timeline less than OD+3 May require system changes (if there are additional protocol changes) TBD if could be done by June 2015

7 Further Reduction – Possible Impacts Per previous discussions, simply removing days from the posting timeline is likely only feasible down to OD+5. Even at OD+5 we need to address some questions. To further expedite the timeline, involve other considerations in order to understand the impact to ERCOT and Market Participants (anticipate that the reduction would be coupled with other changes): –Solve for missing EPS or IDR meter data (utilize telemetry or some default method?) –Pinpoint the specific activity that needs to settle faster (i.e., does all of RTM need to settle faster or just certain activity  risks and challenges vary accordingly) –What is the best approach to settle the identified activity faster? Modify timing of RTM Initial, incorporate a new RTM settlement iteration with just the necessary activity, or include the activity on a DAM statement? –If an additional RTM settlement iteration is needed, name it something other than RTM Initial (e.g., “prelim“ or “advisory”) and determine a new timeline for RTM Initial - minimizes impact on items that key off of the RTM Initial –Is the market comfortable with a “prelim” settlement run using more estimated data if a RTM Initial settlement is “just around the corner”? –Modify protocol language pre these decisions to capture new/changed calculations using the solution for the "missing" meter data, –Modify protocol language to incorporate changes in dispute rules regarding settlement using the solution for the "missing" data. –Determine if faster settlement should be based on the "OD + x calendar days, or the next business day" vs. the "OD = x BD" concept

8 Load Changes A narrow look at differences between Initial and final –Source data billdeterminant is LSEGUNADJ –Data points are daily total MWH –Analysis was limited to May & June 2013 and competitive IDR meters –Weather category load share percentages are approximately 88% NWS and 12% WS –%Change was calculated from daily total load volumes: (Final – Initial)/Initial –%Change at the ESI ID level could be much different than ERCOT-wide –%Change for a particular entity could be much different than ERCOT-wide –%Estimated was determined by dividing sum of methods IDE,IDP,IDPS (estimations) by sum of methods IDC, IDE,IDP,IDPS (actual & estimations) –Entities have capability of producing the same info with their individual data –Entities could also produce the same data on an interval-by-interval basis

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11 Weekday Impact

12 Weekend Impact – Normal Weekend

13 Weekend Impact – 3 Day Holiday Weekend

14 Weekend Impact – Weekend with Holiday

15 Example of “Homework”