September 25 and October 23, 2014 Technical Advisory Committee (TAC) Update to RMS Kathy Scott October 28, 2014 TAC Update to RMS 1

TAC & ERCOT’s Antitrust Review In 2015 should ERCOT continue to provide Annual Antitrust Training? ◦ TAC Comment and Action Items:  ERCOT will discuss their 2015 Antitrust Training Plans and provide their update to TAC prior to the December TAC meeting.  ERCOT will also take their 2015 Antitrust Training Plans to ERCOT’s Board HR and Governance Committee for recommendation review. October 28, 2014TAC Update to RMS2

9/25/14 - PRS Initiatives Nodal Protocol Revision Requests (NPRRs) ◦ NPRR617, Energy Offer Flexibility– Approved with 1 Abstention ◦ NPRR643, Clarification of MIS Postings for Outages Upon Implementation of SCR774 (Urgent) – Unanimously Approved ◦ NPRR644, Operating Reserve Demand Curve Phase 2 Revisions – Unanimously Approved PRS Goals: Unanimously Approved  Process NPRRs and SCRs (Section 21 requirement).  Facilitate and make recommendations for Project Priorities.  Consider requests and assignments from the ERCOT Board and TAC in a timely and diligent manner.  Review Other Binding Documents (OBDs) annually for elimination or incorporation into Protocols/Market Guides. October 28, 2014TAC Update to RMS3

10/23/14 - PRS Initiatives Nodal Protocol Revision Requests (NPRRs) ◦ NPRR595, RRS Load Resource Treatment In ORDC  Approved with 3 Abstentions ◦ NPRR640, As-Built Clarification of Load Resource Participation in SCED and Non-Spin Qualification  Unanimously Approved ◦ NPRR647, CRR Auction Shadow Price Transparency  Approved with 1 Opposed ◦ NPRR612, Reduction of Cure Period Subsequent to Event of Default  Approved with ERCOT’s 8/12/14 comments with a planned implementation of April 2015 System Change Requests (SCR) ◦ SCR781, MP Online Data Entry Market Requirements  Unanimously Approved October 28, 2014TAC Update to RMS4

10/23/14 - PRS Initiatives (cont.) Market Training: ◦ PRS discussed the potential of forming a Market Training Working Group to address market training needs:  Feedback from Market Participants attending PRS is a standing working group wasn’t necessary, instead hold workshops when necessary to discuss market training needs and provide ERCOT with workshop’s feedback.  TAC Leadership requested that PRS Leadership provides notice to all TAC Subcommittee’s listserv of any PRS’ Training Workshop(s) location, date and time. October 28, 2014TAC Update to RMS5

Withdrawals and/or Tabled Revisions Request for Withdrawal (Vote) ◦ NPRR340, Introduction and Definition of Duration-Limited Resources (formerly “Unannounced HSL test for Duration-Limited Resources”)  Question from TAC: “  Why is this no longer needed?”  Should this be referred to WMS to determine if there is no longer a need for this prior to voting on withdrawal request?  TAC Rejected the Withdrawal Request and referred NPRR340 to WMS for further investigations and recommendation to TAC. October 28, 2014TAC Update to RMS6

Wholesale Market Subcommittee (WMS) ◦ Letter of Credit Issuer Limits for ERCOT Creditworthiness Standards (Vote) - Unanimously Approved ◦ CRR Activity Calendar (Vote) - Unanimously Approved Reliability Operations Subcommittee (ROS) ◦ RRGRR003, Modifications to Improve Wind Forecasting – URGENT (Vote) Unanimously Approved ◦ RRGRR004, Steam Pressure Curve Information for Implementation of Regional Reliability Standard BAL-001-TRE-1 – U RGENT (Vote) Unanimously Approved ◦ Voltage Reduction Report ( Discussion):  This shouldn’t be mandatory for TDSPs’ participation also any policy developed from this report should come from the Commission.  Concerns voiced that TDSPs would be engaging in Market activities with potential Wholesale implications.  Action Item: Request was made to refer this report to WMS for discussion of Market Impacts and, if possible, to develop Cost Benefit Analysis (CBA). October 28, 2014TAC Update to RMS7 WMS and ROS Initiatives

Commercial Operations Subcommittee (COPS) ◦ LPGRR052, Change to Oil and Gas Assignment Process (Vote) - Unanimously Approved ◦ COPMGRR037, Market Notification for Adhoc Invoices and COPMG Cleanup (Vote) - Unanimously Approved Retail Market Subcommittee (RMS) ◦ RMGRR124, New REP Operating Rule 13, CSA Bypass Code (Vote) Unanimously Approved ◦ RMGRR125, Updates to Transition Process – Contact Information and Cleanup of Timelines (Vote) Unanimously Approved with ERCOT’s 9/18/14 edits October 28, 2014TAC Update to RMS8 COPS and RMS Initiatives

Ancillary Services Methodology 10/23/14 TAC Recommendation as follows: Ancillary Services Methodology presented to TAC (as presented by ROS/WMS and as modified by the Luminant comments ), 2.Using 20% adjustment factor *, 3.Do not transfer any of calculated NSRS amount to RRS, 4.Revisit the NSRS procurement methodology; 5.Amounts published annually are fixed amounts, not advisory, 6.Amounts are calculated using 70th percentile of cases in each particular bin, 7.Load Resources remain limited to providing a maximum of 50% of RRS, 8.Make changes to Regulation as recommended by ERCOT, 9.Effective date of RRS and Non-Spin changes to be effective June 1, 2015: 10.Regulation change to be effective January 1, 2015 but remainder of 2014 AS Methodology remains in effect until June 1, Periodic WMS review of results. The above recommendations were Unanimously Approved by TAC! October 28, 2014TAC Update to RMS9

Future Ancillary Services Activities Update on FAST/TAC Workshop 3 ◦ Procurement Methodology PFR/FFR (Possible Vote)  Motion: Approved – CBA Only for the Procurement Scenario ◦ Clearing and Pricing of Ancillary Services (Possible Vote)  Motion: Perform the CBA based upon the FAS proposal and ERCOT will share slide deck on pricing proposal with vendor – Approved with 2 Abstentions  NPRR needed by November 1, 2014 – Market comments due by October 15, 2014 ◦ Review of Timeline:  RFP Date: 09/17/2014  Optional Notice of Intent to Propose Due: 09/22/2014  Vendor Questions Due: 09/25/2014  Response to Vendor Questions Posted: 10/01/2014  Vendor Proposals Due: 10/09/2014 at 2 p.m.  Vendor Presentations WebEx only –NOT onsite: TBD the week of 10/27/2014  Anticipated Contract Award: 11/03/2014  Anticipated Contract Start Date: 12/01/2014 Note: Plans are to award contract NLT 11/13/14 with contract start date NLT 12/1/14 October 28, 2014TAC Update to RMS10

ERCOT Operations, Planning & IT Reports ◦ Multi-Interval of SCED/Real-Time Co- Optimization of Ancillary Services Whitepaper Update  TAC referred to WMS for discussion and to develop a recommendation for TAC consideration. ◦ Frontera Plant Move-Out  Assessing the Reliability Impacts is Completed  ERCOT’s Frontera Plant Move-Out Study is posted to Key Documents #11: ◦ Rio Grande Valley Rotating Outages on10/8/14  4:47PM – 6:29 PM: ERCOT instructed the TSPs to reduce system demand by 200 MW due to voltage concerns on transmission systems in area and to protect the Valley region from the risk of an uncontrolled blackout situation. Additional power was imported from the power grid in Mexico to help address transmission system issues. October 28, 2014TAC Update to RMS11

Questions? 12October 28, 2014TAC update to RMS