1. Demand Response Status Report Calvin Opheim October 9, 2007

2. 2 2 Outline Current Option for Wholesale Settlement of Demand Response Future for Wholesale Settlement of Demand Response –Status of Protocol Changes (PRR-736) –Status of Operating Guide Changes (LPGRR-027) Current Issues Next Steps

3. 3 3 Current Option for Wholesale Settlement of Demand Response Today Wholesale Settlement of Demand Response requires the installation of an IDR meter –ERCOT settlement system can support up to 50,000 IDR meters before system performance starts degrading –ERCOT settlement system can not handle more than 200,000 IDR meters –While an available option for today, not a very robust solution –Can be cost prohibitive

4. 4 4 Future for Wholesale Settlement of Demand Response Stakeholder Process A lot of work has been performed by Market Participants and ERCOT creating language that supports Demand Response –Protocol Revision Request (PRR) 736 –Load Profiling Guide Revision Request (LPGRR) 027 Goal is to implement Demand Response in wholesale settlements by the summer of 2008 –Only includes energy settlements (Real-Time Energy Imbalance) –Does not include capacity payments (currently not included in Nodal Protocols)

5. 5 5 PRR-736 and LPGRR-027 Key Points Need a more timely approach for creating Demand Response load profiles than using load profile models Currently all load profiles are based on models –Need to determine sample –Requires approximately 2+ years worth of data to calibrate model –Can take years before the model is ready to use in Wholesale settlements

6. 6 6 PRR-736 and LPGRR-027 Key Points Establish the RLDP (Representative Lagged Dynamic Profile) language Lagged Dynamic Sampling –Need to determine sample –Data from the sample is used directly to create Demand Response profiles (i.e. no model is created) –Once data is collected and validated can be used to create Demand Response load profiles for use in Wholesale settlements –Much quicker option for implementing new load profiles

7. 7 7 PRR-736 and LPGRR-027 Key Points Unique Demand Response Profile for each REP Demand Response Program –REPs may have more than one Demand Response load profile –Settlement on the Demand Response load profile year round (not limited to when a Demand Response event occurs) Advanced Metering Infrastructure (AMI) –No truck roll required to install sample meters –Very easy to refresh the sample periodically –Reduces sample aging / bias problem

8. 8 8 Protocol Revision Request (PRR) 736 Revised Protocol language has been developed through the market stakeholder process PRR was drafted by the Profile Working Group (PWG) PRR was endorsed by Commercial Operations Subcommittee (COPS) in August Will be reviewed by Protocol Revision Subcommittee (PRS) in October If approved by PRS the next steps are determining the Cost Benefit Analysis (CBA) and the Impact Analysis (IA)

9. 9 9 Load Profile Guide Revision Request (LPGRR) 027 Load Profiling Guide language is being developed through the market stakeholder process Will be reviewed by Commercial Operations Subcommittee (COPS) in October

10. 10 PWG Recommendations Profile Working Group (PWG) will be providing a recommendation for a long-term solution –Involves changes to the switch process –Texas Set team to meet with representatives from the PWG and ERCOT to define the requirements PWG will also recommend a short-term solution to enable the Wholesale settlement of DR –The short-term solution is available as an option to bridge the gap until the Texas Set changes are implemented

11. 11 Current Issues How are ESI-ids on Demand Response Programs to be identified in the Profile ID? –Need to be associated with the corresponding Demand Response Load Profile for settlement purposes Switching of Demand Response ESI-ids, Move In, and Drop to POLR Are Demand Response Load Profiles Private or Public information? –Currently all load profiles are public information Other issues which have not been identified

12. Profile ID Review

13. 13 Profile IDs All ESI-ids are assigned a Profile ID Profile ID identifies which load profile is to be used in settlements

14. 14 Profile IDs Profile ID consists of: –Profile Group Code (BUS, RES, or NM) –Profile Segment Code (HILF, LOLF, MEDLF, NODEM, FLAT, LIGHT, HIWR, LOWR, or IDRRQ) –Weather Zone Code (COAST, EAST, FWEST, NCENT, NORTH, SCENT, SOUTH, or WEST) –Meter Data Type Code (IDR or NIDR) –Weather Sensitivity Code (NWS or WS) –TOU Schedule Code (NOTOU, TOU01, TOU02, …, TOU12, TOU13)

15. 15 Profile Ids - Examples Examples of valid Profile Ids: RESHIWR_COAST_NIDR_NWS_NOTOU RESLOWR_SCENT_NIDR_NWS_NOTOU

16. 16 Profile IDs Examples of valid Profile Ids: RESHIWR_COAST_NIDR_NWS_NOTOU RESLOWR_SCENT_NIDR_NWS_NOTOU Profile Group Code

17. 17 Profile IDs Examples of valid Profile Ids: RESHIWR_COAST_NIDR_NWS_NOTOU RESLOWR_SCENT_NIDR_NWS_NOTOU Profile Segment Code

18. 18 Profile IDs Examples of valid Profile Ids: RESHIWR_COAST_NIDR_NWS_NOTOU RESLOWR_SCENT_NIDR_NWS_NOTOU Weather Zone Code

19. 19 Profile IDs Examples of valid Profile Ids: RESHIWR_COAST_NIDR_NWS_NOTOU RESLOWR_SCENT_NIDR_NWS_NOTOU Meter Data Type Code

20. 20 Profile IDs Examples of valid Profile Ids: RESHIWR_COAST_NIDR_NWS_NOTOU RESLOWR_SCENT_NIDR_NWS_NOTOU Weather Sensitivity Code

21. 21 Profile IDs Examples of valid Profile Ids: RESHIWR_COAST_NIDR_NWS_NOTOU RESLOWR_SCENT_NIDR_NWS_NOTOU TOU Schedule Code

22. Identifying Demand Response ESI-ids

23. 23 Identifying Demand Response ESI-ids Modify the Profile Group and Profile Segment Code: RESHnnnn_COAST_NIDR_NWS_NOTOU RESLnnnn_SCENT_NIDR_NWS_NOTOU Profile Group Code Profile Segment Code Where nnnn represents the ERCOT assigned Demand Response Program ID and the first four characters represent the Non-Demand Response Load Profile.

24. Texas Set Transaction Considerations

25. 25 Texas Set Transactions Profile ID is used in the following Texas Set transactions: –Switch, –Move-in, –Drop to POLR The option the market decides to implement for the identification of Demand Response ESI-ids could have system impacts to support these transactions –Impact may be to Market Participant systems, ERCOT systems or both –Impact to all REPS whether they offer a Demand Response program or not

26. 26 Texas Set Transactions Proposed Long-Term Solution: Modify the business logic in the 814_04 (Premise Information) so that: –All ESI-ids that are on a Demand Response program that switch have their profile ID that is passed to the gaining CR changed to a non-demand response load profile –This should minimize any required system changes to CRs who don’t offer Demand Response programs

27. 27 Texas Set Transactions Example: –ESI-id 123 is currently on a Demand Response Program for CR ABC –The profile ID for ESI-123 is RESH0001_COAST_NIDR_NWS_NOTOU –ESI-id switches to CR XYZ –The TDSP receives the 814_03 (Switch CR Notification) –The 814_04 (Premise Information) contains the Profile ID (RESH0001_COAST_NIDR_NWS_NOTOU) from the TDSP

28. 28 Texas Set Transactions Example continued: –The business logic for the 814_04 and/or 814_05 would need to be modified such that the profile ID for ESI-123 would be changed to the non-demand response profile ID (RESHIWR_COAST_NIDR_NWS_NOTOU) –The gaining CR would receive RESHIWR_COAST_NIDR_NWS_NOTOU as the profile ID on the 814_05 (Premise Information) Texas Set to begin work on defining these requirements

29. Are Demand Response Load Profiles Public or Private Information?

30. 30 Are Demand Response Load Profiles Public or Private Since Market Open, all load profiles have been classified as public information If Demand Response Load Profiles are classified as Private –Affects the data that is currently provided to the market –Who will receive the private data? REPs and QSEs? –Possible system changes for ERCOT –Possible system changes for Market Participants

31. CCET Pilot

32. 32 CCET Pilot ERCOT is participating in the CCET Demand Response Pilot –Benefits the market by identifying possible issues well in advance of the desired settlement implementation date –Allows Demand Response to be implemented sooner than by not participating in the Pilot

33. ERCOT Demand Response Project

34. 34 ERCOT Demand Response Project After PRR-736 and LPGRR-027 are approved, ERCOT will initiate a project to implement the wholesale settlement of Demand Response Programs Project funding (approx 500k) for this effort has been approved and the project has been added to the 2008 Project Priority List (PPL) Goal is implement required functionality to support wholesale settlement of Demand Response programs Implements energy only settlements (i.e., Nodal Protocols currently do not include capacity payments for load for Real- Time settlements)

35. 35 Conclusion Current market discussions underway Need Market Input at these meetings Decision will be reached through the ERCOT governance process System changes will be required for Market Participants and ERCOT –Amount of change will depend on the selected approach –Nodal resource constraints need to be considered

36. 36 Questions? ON OFF