January 28, 2014 Technical Advisory Committee (TAC) Update to RMS Kathy Scott February 4, 2014TAC Update to RMS 1

ERCOT Board Update All NPRRs approved and submitted by TAC were approved by the Board during the Dec.10 th meeting Process for Finalizing the Load Forecast Methodology for the Capacity, Demand and Reserves (CDR) Report  The Board requesting additional market feedback on Methodology for the CDRs. In February the Board is expecting and will be receiving these 2014 TAC Goals that were unanimously approved by TAC on 1/28/14: February 4, 2014TAC Update to RMS2

TAC 2014 Leadership Vote Randa Stephenson- Chair ◦ Lone Star Transmission - IOU Segment Chris Brewster – Vice Chair ◦ City of Eastland – Consumer Segment ◦ Thank You to Kristi Hobbs for years of support and service to TAC, TAC Subcommittees and Market Participants!  Ann Boren will be replacing Kristi as Manager of Market Rules and Stakeholder Support. Kristi Hobbs also received a promotion to Director -- Congratulations to both Kristi and Ann!!!! February 4, 2014TAC Update to RMS3

2014 Subcommittee Leadership Vote Protocol Revision Subcommittee (PRS) ◦ Chair: John Varnell, Tenaska Power Services ◦ Vice Chair: Chris Lyons, Exelon Retail Market Subcommittee (RMS) ◦ Chair: Kathy Scott, CenterPoint Energy ◦ Vice Chair: Rob Bevill, Reliant Energy Power Supply Reliability and Operations Subcommittee (ROS) ◦ Chair: Bill Hatfield, Lower Colorado River Authority ◦ Vice Chair: Dana Showalter, E.ON Climate and Renewables Wholesale Market Subcommittee (WMS)  Chair: Seth Cochran, DC Energy  Vice Chair: Bob Helton, GDF Suez Energy Marketing TAC Unanimously Confirmed the 2014 Leadership February 4, 2014TAC Update to RMS4

PGRR031 – Follow-up Discussion December 3 rd TAC meeting ◦ PGRR031, Implement 95% Facility Rating Limit in the Planning Criteria (Vote) – A lot of discussion at TAC that required roll-call voting:  Motion to Approve PGRR031 as recommended by ROS originally Failed , but ERCOT re-evaluated their voting calculations where an error was discovered, after correcting the calculation error the motion was originally approved by TAC. January 28 th TAC meeting – PGRR031 the Sequel: ◦ With the voting confusion that occurred in December, TAC leadership gave members another opportunity to discuss this item and to determine if Comments (possible vote) should be provided to the ERCOT Board when it is considered:  Motion: Request “Tabling PGRR031 at the Board” to determine if projected cost and benefits are correct and/or if there are better ways to implement.  Roll Call Vote Taken : Motion Failed (12 in Favor – 16 Against) February 4, 2014TAC Update to RMS5

Previously “Tabled “ at TAC All the following were Unanimously Approved by TAC during the January 28 th meeting: ◦ NOGRR109, Revisions to Definition of Credible Single Contingency for Operations Planning (Vote) ◦ NOGRR110, Synchronization with NPRR529, Congestion Management Plan (Vote) ◦ Unanimously Approved by TAC ◦ NOGRR114, Synchronization with NPRR540, Clarification of Credible Single Contingency (Vote) ◦ Unanimously Approved by TAC ◦ NOGRR116, Synchronization with NPRR542, Clarification of the Use of Emergency Condition (Vote) February 4, 2014TAC Update to RMS6

PRS Initiatives and Votes Nodal Protocol Revision Requests (NPRRs) (Vote): ◦ NPRR503, Removal of Language Related to NPRR219- TAC Approved ◦ NPRR556, Resource Adequacy During Transmission Equipment Outage – TAC Unanimously Approved ◦ NPRR573, Alignment of PRC Calculation-TAC Unanimously Approved ◦ NPRR577, As-Built Clarification for Portion of WGR Group GREDP Evaluation - TAC Unanimously Approved ◦ NPRR580, Establishment of a Rolling CRR Balancing Account Fund- TAC Unanimously Approved ◦ NPRR581, Add Fast Responding Regulation Service as a Subset of Regulation Service – TAC Approved NPRR581 with a revised Impact Analysis (IA) stating between 20k-35k instead of 40k-50k ◦ NPRR591, As-Built Clarification and Corrections Related to NPRR568 and NPRR555 – TAC Unanimously Approved February 4, 2014TAC Update to RMS7

PRS Initiatives and Votes Nodal Protocol Revision Requests (NPRRs) (Vote): ◦ SCR774, Enhancement to Outage Scheduler and Reports- TAC Unanimously Approved ◦ SCR775, Posting Results of Real-Time Data in a Display Format – TAC Approved with 1 No Vote and 5 Abstentions. ◦ SCR777, Bilateral CRR Interface Enhancement- TAC Unanimously Approved ◦ SCR778, Exposure Calculations for NOIE Options Linked to RTM PTP Obligations- TAC Unanimously Approved February 4, 2014TAC Update to RMS8

ROS Initiatives and Votes Reliability and Operations Subcommittee Report * ◦ Unanimously Approved by TAC:  Revised ROS Procedures (Vote)  NOGRR123, Revisions to Misoperations Reporting Requirements (Vote)- Approved as amended  NOGRR125, Minimum Notice for Coordinated Reactive Testing (Vote)  PGRR033, Dynamics Flat Start Cases Preparation (Vote) February 4, 2014TAC Update to RMS9

WMS/COPS/RMS Initiatives & Votes Wholesale Market Subcommittee Report* ◦ VCMRR001, Submission of Fuel Costs (Vote) – TAC unanimously Approved Commercial Operations Subcommittee Report* ◦ No January meeting, therefore, no update provided this month Retail Market Subcommittee Report* ◦ Unanimously Approved by TAC:  RMGRR116, Updates to the Process for Acquisition Transfer Events (Vote) – Approved as Amended by TAC  RMGRR118, Customer Chooses to Receive Non-Standard Metering Services (Vote) – Supports PUCT Project  RMGRR119, Texas SET Cleanup of the Retail Market Guide (Vote) December 18, 2013TAC Update to RMS10

RMS TAC Update (cont.) Retail Market Subcommittee Report* ◦ Mass Transition Update :  Volume limitations are still being discussed by TX SET to determine if additional options are available to increase ESI ID throughput volumes higher than 75,000 ESI IDs per day  Discussions concerning 2-Calendar Days vs. 1-Calendar Day for the Mass Transition Requested Date concluded:  2-Calendar Days complies with PUCT Subst. Rule 25.43(o) “REP obligations in a transition of customers to POLR service” – Item (16) that states:  “ In a mass transition event, the ERCOT initiated transactions shall request an out-of-cycle meter read for the associated ESI IDs for a date two calendar days after the calendar date ERCOT initiates such transactions to the TDU”  TX SET’s Consensus: The MORE time Gaining REPs have to prepare to receive these ESI IDs lessens the RISK the market may experience post mass transition event completion. February 4, 2014TAC Update to RMS11

ERCOT Operations, Planning & IT Report Protocol Required Annual Review: ◦ Section , Energy Offer Curve for RUC- Committed Resources:  “The Technical Advisory Committee (TAC) shall review the market impacts of the dollar value for energy for Generation Resources committed by the RUC process for RUC-Committed Intervals every January.” ◦ ERCOT provided TAC with a summary report of 2013 activities compared to 2012 to address this protocol requirement, also TAC referred this agenda item to WMS for discussion and recommendations. February 4, 2014TAC Update to RMS12

ERCOT Operations, Planning & IT Report NPR568, Real Time Reserve Price Adder Based on Operating Reserve Demand Curve, Update:  January – April 2014  Planning Phase Complete  Requirements Complete  Design Complete  Development Underway  Creation of Test Plans and Scripts  April – May 2014  ERCOT Internal Testing  May 2014  Market Readiness  June 1 st - Go Live!!!!  February 4, 2014TAC Update to RMS13

Review of Credit Initiatives ERCOT Credit provided the following update to TAC concerning proposed changes to the credit collateral processes at ERCOT: ◦ In the first phase, (5) New NPRRs will be provided to PRS sponsored by ERCOT Credit and the Credit Working Group, please be prepared to provide stakeholder comments when and where necessary! February 4, 2014TAC Update to RMS14

Questions? 15February 4, 2014TAC update to RMS