1. SBBH Flag Implementation QMWG October 11, 2011

2. 2 SBBH Flag - Background SBBH Flag - Background: –The SBBH acronym stands for “SCED Base Point Below HDL” –The SBBH flag was implemented per NPRR285.NPRR285 –The SBBH Flag went into production the week of May 16 –Settlements began using SBBH flag on June 1 –The SBBH logic runs once per SCED interval

3. 3 SBBH Flag – Protocol Requirements SBBH Flag - Protocol Requirements: –NP 6.5.7.4(d) - At the close of each SCED run, ERCOT uses ICCP to provide a “Flag indicating SCED has dispatched a Generation Resource below HDL used by SCED” –NP 6.5.7.9 (7) - “An IRR must comply with Dispatch Instructions when receiving a flag signifying that the IRR has received a Base Point below the HDL used by SCED”

4. 4 SBBH Flag – Logic SBBH Flag – Logic (three pieces): SBBH = TRUE if BP < HDL –The SBBH flag is set to TRUE if the Base Point generated by SCED is less than the HDL that was used in SCED –The BP < HDL can occur due to congestion, but it can also occur due to factors other than congestion (detailed in following slides) SBBH = TRUE if HDL is manually overridden –For a WGR, SBBH = TRUE if HDL is overridden –For a non-WGR, SBBH = TRUE if LDL is overridden and the unit is at LDL OR if HDL is overridden and the unit is at HDL SBBH = TRUE if congestion flag is manually set –The SBBH implementation allows the SBBH flag to be set manually from an Operator display –Currently, the approved operating procedures do not account for manual setting of the SBBH flag –To date, no SBBH flags have been set manually

5. 5 SBBH Flag – Conditions when BP < HDL The BP < HDL condition may occur when: –RST = OFF or OUT SBBH = TRUE can occur when RST = OFF or OUT because SBBH logic and HDL/LDL calculations continue to run when RST = ONTEST Units should ignore SBBH = TRUE while RST = OFF or OUT –RST = ONTEST SBBH = TRUE can occur when RST = ONTEST because SBBH logic and HDL/LDL calculations continue to run when RST = ONTEST Units should ignore SBBH = TRUE while RST = ONTEST –While RST = ONTEST, the Base Point is set equal to the telemetered MW output at the time of the SCED snapshot –ERCOT does not issue dispatch instructions to ONTEST units unless the instructions are related to NP Section 8 testing, congestion management, or emergency operations –If an ERCOT needs to dispatch an ONTEST unit, the Operator will communicate appropriate instructions to remove the unit from ONTEST status; thereafter, the SBBH flag will apply

6. 6 SBBH Flag – Conditions when BP < HDL (continued) The BP < HDL condition may occur when: –There is congestion –The unit is marginal Whenever a unit is dispatched to a $/MW on its Energy Offer Curve (EOC) that is between its HDL and LDL, the Base Point will be less than HDL –The HDL used in SCED is less than.01 MW There is an HDL threshold in SCED of.01 MW such that if the HDL used in SCED is less than.01 MW, then the SCED Base Point is set equal to 0 MW As a result, when the telemetered HSL for a WGR is between 0 MW and.01 MW, then HDL <.01 MW, resulting in Base Point = 0 MW and SBBH = TRUE If SBBH = TRUE is caused by HSL.01 MW

7. 7 SBBH Flag – Conditions when BP < HDL (continued) The BP < HDL condition may occur when: –The EOC submitted for a WGR does not extend the full range up to the HSL that is telemetered during the Operating Hour When the HSL for a WGR is telemetered in Real-Time as a value that is higher than the highest MW submitted in WGR’s EOC, then the proxy curve used in SCED will be extended up to the telemetered HSL (NP 6.5.7.3 (3) (c)) For such proxy curves, the MW breakpoint at HSL is priced at the highest price on the curve As a result, if the LMP is lower than the highest price on the proxy curve, then the unit will be dispatched to a MW point lower than HSL/HDL, which will result in BP < HDL and SBBH = TRUE WGRs can avoid this condition by submitting full-range EOCs

8. 8 SBBH Flag – Conditions when BP < HDL (continued) The BP < HDL condition may occur when: –No EOC was submitted for the WGR If no EOC is submitted for a WGR unit, or if an Output Schedule is submitted instead of an EOC, then SCED will use a proxy curve that is based on the telemetered HSL/LSL (NP 6.5.7.3 (3) (d)) This type of proxy curve is essentially an output schedule intended to dispatch the unit to its current telemetered output For such curves, there is a very slight slope between the MWs associated with the lowest price and the highest price on the curve For such curves, when the LMP is below the highest price on the curve, the SBBH logic will see a difference of 0.01 MW between the Base Point and the HDL due to the decimal precision that is used for the comparison WGRs can avoid this condition by submitting EOCs A System Change Request (SCR) would need to be submitted to decrease the decimal precision that is currently used for the BP- to-HDL comparison