1. Proposal to Modify ERS Time Periods 2014 DSWG Goal #10 Presented to: Demand Side Working Group

2. 2 Align ERS time periods with the seasonal and hourly changes in the risk of entering into an EEA –Winter Peaks, currently winter peak hours (less than 2% of the annual hours) requires to contract for all NBHs for both the Oct- Jan and Feb-May standard contract terms (≈43% of the annual hours) Optimize the allocation of ERS expenditure dollars Purpose of Proposed Changes

3. 3 Option 1 & 2 Two options were presented during the February 18, 2014 WebEx meeting and again during the August 27, 2014 DSWG meeting. A common concern from DSWG was that both options would introduce unnecessary confusion during the Standard Contract Terms and put providers at risk during deployments DSWG requested that ERCOT develop a third option that would keep the time period definitions consistent across Standard Contract Terms

4. 4 Option 3 Features: 1.Modify time periods within each SCT to enable better alignment with the risk of ERS deployments 2.New time period that targets morning winter peak hours before the existing Business Hours 1 Time Period and extending Business Hours 3 to 10 pm. 3.Time Periods would be consistent across all SCTs 4.No change to the SCTs ERCOT recommends implementation at the beginning of the 2016 ERS Budget year (initiate for the Feb-May 2016 SCT) Changes would only require a 90 day notice and modifications to the Technical Requirements & Scope of Work document Would NOT require PUC Rule change, NPRR, or redefinition of the ERS budget year

5. 5 Option 3 details Time Period NameTime Period Hours Business Hours 0 Hours Ending 0600 – 0800 (5:00:00a.m. to 8:00:00a.m.) Monday through Friday except ERCOT Holidays Business Hours 1 Hours Ending 0900 - 1300 (8:00:00a.m. to 1:00:00p.m.) Monday through Friday except ERCOT Holidays. Business Hours 2 Hours Ending 1400 - 1600 (1:00:00p.m. to 4:00:00p.m.) Monday through Friday except ERCOT Holidays. Business Hours 3 Hours Ending 1700 - 2200 (4:00:00p.m. to 10:00:00p.m.) Monday through Friday except ERCOT Holidays. Non-Business HoursAll other hours

6. 6 Questions