February 26, 2015 Technical Advisory Committee (TAC) Update to RMS Kathy Scott March 3, 2015 TAC Update to RMS 1

Board Update/TAC Procedures Amended NPRR638, Revisions to Certain Price Components of EAL: ◦ A lot of discussion held at the last Finance and Audit Committee meeting concerning Price Components of EAL, Bill Barnes (NRG) stated Credit Working Group will work on addressing TAC and Board F&A concerns and provide an update to TAC for Board update. Proposed TAC Procedures Amendment (Vote) – Unanimously Approved by TAC ◦ TAC_Procedures_Proposed_Revisions_DRAFT.doc TAC_Procedures_Proposed_Revisions_DRAFT.doc February 3, 2015TAC Update to RMS2

TAC 2015 Goals (Vote) ◦ Align TAC and Subcommittee Goals with the ERCOT Board of Directors’ strategic vision to work with ERCOT Staff to achieve the Board’s vision for ERCOT. ◦ Maintain market rules that support ERCOT system reliability and are consistent with PURA, PUC, and NERC Reliability Standards. ◦ Monitor resource adequacy and make improvements as necessary. ◦ Collaborate with ERCOT Staff on current trends in fuel prices and installed resource costs through market changes. ◦ Develop and implement needed market design corrections and improvements which are cost effective. ◦ Pursue the appropriate implementation of load participation. ◦ Pursue the appropriate implementation of emerging technologies. ◦ Implement Retail Market improvements and requirements. ◦ Facilitate market improvements necessary to leverage the capabilities of Advanced Metering Systems (AMS) in the retail market. ◦ Improve settlement processes to facilitate changes in the ERCOT market design. ◦ Collaborate with ERCOT Staff on the review of ancillary service needs and implement changes as necessary. ◦ Maintain market rules that support open access to the ERCOT markets and transmission network. ◦ Work with ERCOT Staff to develop Protocols and market improvements that support increased data transparency and data availability to the market. ◦ Work with ERCOT Staff to ensure appropriate credit and collateral rules exist or are created to facilitate market changes Goals were Unanimously Approved as amended by TAC March 3, 2015TAC Update to RMS3

2015 Strategic Objectives (Vote) Subsynchronous Oscillation (SSO) – ROS Loads in SCED Part 2 – WMS Outage Coordination Improvements – ROS Switchable Generation – WMS Distributed Energy Resources – WMS Real-Time Co-optimization – WMS Multi-Interval Real-Time Market – WMS Future Ancillary Services – TAC Smart Meter Texas Transition Project – RMS Review of Planning Processes – ROS Implementation of Outage Scheduler Revisions (NPRR219 and SCR783) – ERCOT There was No Project Prioritization or Vote taken on above list by TAC March 3, 2015TAC Update to RMS4

PRS Initiatives Nodal Protocol Revision Requests (NPRRs) ◦ NPRR654, Discontinue Ancillary Service Requirement Methodology Assessment Report  Unanimously Approved by TAC ◦ NPRR655, Discontinue Contingency List Changes Due to Weather Report  Unanimously Approved by TAC ◦ NPRR657, Discontinue Backup Control Plan Submittal Results, Dispatch Instructions Compliance Metrics, and Backup Control Plan Test Dates and Results Summary Reports  Unanimously Approved by TAC March 3, 2015TAC Update to RMS5

PRS Initiatives (cont.) ◦ NPRR661, Discontinue Posting Profile Data Evaluation Report  Unanimously Approved by TAC ◦ NPRR668, Updates to Texas SET Implementation Guide Process  NPRR668 tabled at TAC awaiting supporting TX SET Change Control Process Guide changes that is reference in the NPRR that is scheduled for voting at today’s RMS meeting. Tabling in February at TAC allows both documents to be in line for TAC approval on 3/26/15 and NPRR Board approval in April.  Motion to “Table” at TAC was Unanimously Approved by TAC ◦ NPRR676, Emergency Response Service (ERS) Offer Disclosure  Unanimously Approved by TAC with ERCOT’s comments ◦ NPRR677, Remove Outdated NERC Reference  Unanimously Approved by TAC March 3, 2015TAC Update to RMS6

Withdrawals and/or Tabled Revisions Request Previously Tabled at TAC (Possible Vote): ◦ NPRR642, Constraint Management During Energy Emergency Alerts  Continued to be “Tabled” at TAC awaiting NOGRR changes that supports this NPRR ◦ NOGRR136, Verifying QSE Capability to Operate in CFC  Unanimously Approved by TAC since NPRR646 already received Board approval. March 3, 2015TAC Update to RMS7

Wholesale Market Subcommittee (WMS) ◦ 2015 DAM Collateral Factors (Vote)  Unanimously Approved by TAC as recommended by ERCOT, WMS and Credit Working Group to stay with current DAM Collateral Factors. Reliability Operations Subcommittee (ROS) ◦ NOGRR132, Automatic Under-Voltage and Under- Frequency Load Shedding Protection Systems --Load Restoration (Vote)  Unanimously Approved by TAC March 3, 2015TAC Update to RMS8 WMS and ROS Initiatives

Commercial Operations Subcommittee ◦ LPGRR054, Alignment with NPRR661, Discontinue Posting Profile Data Evaluation Report (Vote)  Motion to “Table” LPGRR054 awaiting NPRR661 Approval at the April Board meeting. Motion was Unanimously Approved by TAC ◦ Unregistered Distributed Generation (DG) Report—  Load Zone North was reported to be just over 7,000 kW; Approaching the limit of 10 MW in any Load Zone which will trigger a reduction in the 1 MW DG registration threshold  TAC leadership asks COPS leadership to come back in March to TAC since a process may need to be developed of what is done when the registration hits the protocol limits. Retail Market Subcommittee (RMS): ◦ Update Only  to_TAC_02_26_15.ppt to_TAC_02_26_15.ppt March 3, 2015TAC Update to RMS9 COPS and RMS Initiatives

Ancillary Services Re-design Update Ancillary Services Re-design Update NPRR 667 Workshop scheduled 3/11/15 ◦ Purpose of Workshop: Facilitate additional discussion on issues identified in written comments and at the previous NPRR 667 Workshop (Jan. 30, 2015). The goals of this workshop are:  Prepare a list of “consensus” items for NPRR 667 discussion at PRS meeting (probably May); and  Tee-up other (non-consensus) issues and encourage Market Participants to provide written comments for PRS.  NPRR667 Workshop 2 Agenda and ERCOT Meeting Calendar Information can be found on the following links:  arch_11_2015__FAS_Workshop.docx arch_11_2015__FAS_Workshop.docx  March 3, 2015TAC Update to RMS10

Other Business Homework: ◦ TAC Leadership requests that members and attendees review NPRR638 to be prepared for TAC discussions on Thursday, March 26, 2015! March 3, 2015TAC Update to RMS11

Questions? 12March 3, 2015TAC update to RMS