1. Loads in SCED Comments submitted by Luminant Energy Company, LLC

2. Objective: Maximize opportunities for load participation from eligible existing and future load resources Create an economically efficient method for price formation associated with Load Real-time (RTM) energy bids

3. Key Issues: The proposed five-minute response time to SCED instruction may discourage participation from existing load control programs All load resources should be treated equitability and comparable to traditional resources (where practical)

4. Key Issues: Performance metrics should be reasonable, repeatable, verifiable, and benchmarked at least seasonally. Program design should, to the extent practicable, accommodate price sensitive loads that would otherwise engage in passive response.

5. Equitable Treatment: Response expectations consistent with achievable current program standards All Load Resources must submit or accept a proxy RTM Energy Bid and be dispatched by SCED Restoration time should be consistent with current requirements for loads Performance Stds, M&V No punishment for “over- performance” from energy products Capacity values should be tested and verified no less than seasonally Tested and qualified LRs should be benchmarked against metered or calculated capacity EFFICIENT AND INCLUSIVE MARKET DESIGN FOR LOADS For improved participation and price formation, focus on equitable treatment and achievable standards

6. Detailed Approach: Response Expectations Issue: Existing load response programs (e.g. interruptible thermostats, pool pumps, water heaters, etc) may take longer than 5-minutes to provide response. Proposed Solution: Allow loads to submit their five-minute ramp rate to be achievable over ten-minutes. Consequence of no action: Existing load control programs will likely not participate in Loads in SCED v.1

7. Detailed Approach: Equitable Treatment RTM Energy Bids Issue: Current protocols allow certain loads to be dispatched by out- of-market instructions, potentially dampening prices during times of scarcity. Proposed Solution: All load resources should be required to submit or accept an ERCOT proxy assigned a Real-time Energy Bid. Consequence of no action: Loads dispatched by an out of market instruction will continue to lower prices, potentially when the marginal benefit of an additional MW is approaching VOLL

8. Load Resources providing RRS RRS by High-set UFR Offline/Online Non-Spin Must submit or accept proxy RTM Energy Bids consistent with existing floors and ceilings for generators, and retain dispatcher control / frequency response of ancillary services Detailed Approach: Equitable Treatment RTM Energy Bids

9. Example: Deployment of RRS with RTM Energy Bids, SCED Dispatch Upon EEA Level 2, Release RRS to SCED. RTM Energy Bids for RRS capacity released to SCED shall be consistent with the appropriate ceilings and floors RTM Energy Bids will be slightly above SWOC, randomly separated by a penny, to ensure timely deployment of loads, as needed, by SCED, before RRS provided by generation resources

10. Retaining Reliability Tools The ERCOT dispatcher will retain control of the release of RRS Capacity to SCED, and Loads providing RRS via high-set under- frequency relays will still deploy to a drop in system frequency, until such capacity is dispatched in an Energy Emergency Alert Level II.

11. Equitable Treatment of Loads: Recovery after deployment Current Nodal Protocols * allow loads providing Non- Spin and RRS up to three hours to resume consumption. Luminant’s proposal retains this restoration time, but further stipulates that the deployed load should contribute to price formation as if it were any other deployed resource in the RT offer stack. (Deployed load added back to GTDB) * Section 8.1.1.4.2 Paragraph (1) (d) & Section 8.1.1.4.3 Paragraph (3) (e)

12. Update to Generation to be Dispatched (GTBD) A decrease in load associated with a successful deployment of a load resource (analogous to a decrease in system demand) will decrease GTDB, and move the System Lambda down the system incremental cost curve. Luminant proposes adding back deployed load resources to the GTBD calculation to ensure efficient price formation.

13. Performance Standards / M&V For Loads submitting Energy Bids(with no A/S responsibility) and/or providing Non-Spin Luminant proposes Base Point Deviation Charges for failure to respond to SCED curtailment. Multiple instances of failing performance metrics (CLREDP) should result in a disqualification of that Controllable Load Resource.

14. Performance Standards / M&V For RRS Ancillary Service Resource Responsibilities: Luminant maintains that the current penalties are sufficient to ensure adequate response. These include: Disqualification for repeated non-performance Potential report to TRE for non-compliance / potential administrative penalties.

15. Performance Standards / M&V However, to accommodate “blocky” loads and Controllable Load Resources not independently metered from passive load on the same meter, Luminant suggests eliminating penalties for “over- performance” for all Controllable Load Resources.

16. Total Metered Load = Net Power Flow = Powertelem, = C Total Available Load Resource Capacity, = MPC-LPC, determined by algorithm Passive, non- curtailable load, calculated as C-B A B LPC Total Metered Load, = Net Power Flow, = Powertelem, = C MPC LPC B A Passive Load Decreases Performance Standards: Example 1 In this example, if passive load curtails consumption coincident with a deployment of a Controllable Load Resource (CLR), the metered response may suggest that the CLR “over-performed” to a SCED instruction. MPC

17. Total Metered Load, = Net Power Flow, = Powertelem, = C Total Available Load Resource Capacity, = MPC-LPC, determined by algorithm Passive, non- controllable load, calculated as C-B A B LPC Base Point MPC Performance Standards: Example 2 In this example, if a load over-performs to its Base Point, Luminant suggests that this load is not subject to Base Point Deviation Charges. Luminant believes that absent this change, “blocky” loads will be discouraged from participating in Loads in SCED. A B MPC LPC Curtailment achieved

18. Measurement and Verification Numerous existing aggregations of residential controllable load are not independently metered. Interruptible thermostats, pool pumps, and other aggregated residential loads depend on a time of day / seasonal algorithm to determine available and achieved capacity in real-time.

19. Measurement and Verification To attract participation from existing load control programs, Luminant suggests that: – Controllable loads providing Ancillary Services not independently metered from passive loads behind the same meter qualify based upon a seasonal demonstration of the efficacy of the calculated capacity values. – Qualified controllable loads providing Ancillary Services are accountable for satisfying Controllable Load Resource Energy Deployment Performance (CLREDP * ). Multiple failures to meet CLREDP standards shall disqualify a CLR. * Consistent with the recommendations in this presentation, Luminant proposed modifying the CLREDP standards to only penalize under-response

20. Summary: Luminant’s proposal, as presented, is designed to Maximize participation of existing load aggregations, while Actively contributing to efficient price formation.

21. Summary Specifically, to create an equitable market for loads, Luminant suggests: – Establish performance expectations and verification requirements such that existing programs can participate Allow M&V by algorithm, and seasonal verification Remove penalties for over-performance for all loads Maintain current penalty structure for non- performance by loads with an RRS Ancillary Service Resource Responsibility

22. Summary Specifically, to create an equitable market for loads, Luminant suggests: – Require all controllable load resources either submit or accept by proxy a RTM Energy bid and be dispatched by SCED. Allow dispatcher deployment, and SCED dispatch of all Loads providing Ancillary Services Retain restoration time for CLRs providing RRS, while counting that deployed load as a dispatched resource in GTDB

23. Questions?