1. Generation Adequacy Task Force Update to WMS September 14, 2011

2. Items Discussed: –ERCOT load forecast and possible scenarios to consider Proposed “Operational Assessment” format and components. –The Operational Assessment discussion at GATF included a review of the format and components of the CDR Is It really the GATF? GATF Meeting of Sept. 9, 2011

3. Calvin Opheim reviewed the various load forecast scenarios: How they are prepared and the underlying assumptions for each load scenario (e.g., weather, economics, jobs, etc.). At this time GATF did not make any specific recommended changes to the load forecasting techniques. However, GATF will continue to review the possibility of including a high and low case in the CDR. Depends on decisions made on Operational Assessment defined in the next slides. ERCOT load forecast and possible scenarios to consider

4. ERCOT Staff proposed a change to the CDR. (See ppt. presentation posted at the GATF Sept. 9 th meeting titled: CDR Changes for GATF_r2) Split the CDR into 2 different reports: –The current CDR format for years 2 through 10. –A “Seasonal Resource Adequacy Assessment” report for the prompt year. Proposed “Operational Assessment” format and components

5. Assumptions made initially for discussion at GATF: –The CDR would be issued in January for Year+1 to Year+10 e.g. January 2012 release would include 2013-2022 –A new report – the Seasonal Assessment of Resource Adequacy (SARA) – would be released in ~April 15 for Summer season and ~October 15 for winter season Long-term projections are necessarily based on less certain information than near-term projections –CDR would continue to be based on assumptions consistent with use of probabilistic target reserve margins, albeit some improvements are being analyzed –SARA would be based on the most current projections of input data; comparison would not be made to target reserve margin year. Procedural Changes Proposed

6. Approach –Deterministic, illustrating arange of potential values for uncertain inputs –Incorporate near-term forecasted data, where available –ERCOT independent assessment with flexible assumptions to address currently-relevant issues (e.g. CSAPR) SARA adequacy not based on target reserve margin, since uncertainties addressed deterministically in prompt year. Use 3 month-ahead weather outlook to develop base forecast –Possibly illustrate appropriately high range based on weather and economy (90 th percentile temps if base is normal, all time temps if base is above normal?) –Use latest EILS procurement quantities SARA

7. Resources – potential changes for SARA –Use capacities from CDR –Illustrate with and without planned generation –Reduced by planned maintenance outages –Illustrate range of forced outages –Reflect any uncertainty associated with drought, environmental restrictions, and other relevant factors that may arise over time –May be appropriate to look at this on monthly basis due to seasonal outages Use of the 13.75% planning reserve margin in this context is NOT APPROPRIATE Conceptual Differences from Long-term CDR Assumptions

8. Instead of a “Planning Reserve Margin”, perhaps the SARA would: –Calculate two risks: EEA Risk = Total Resources – High Demand – 90 th percentile forced outages – Operating Reserves from Generation Capacity Insufficiency Risk = EEA Risk + Demand Response –If both of these are positive, does that mean No Risk? No –Is this an acceptable / reasonable / useful measure of risk? SARA Format Ideas

9. Comparison of CDR and SARA - Discussion Only

10. Is it really the GATF? Isn’t this group really the CDRTF? The real question, with no answer from GATF: Do we need a place to consolidate all of the “pieces” under a single “resource adequacy” group? Post GATF Meeting Discusssion

11. Next Meeting: October 7 th Questions or Comments?