Technical Advisory Committee Commercial Operations Subcommittee Update to TAC Debbie McKeever COPs Chair 2011

2011 COPs Leadership Debbie McKeever, Chair Ken Riorden, Vice Chair

COPs Working Group Activities in Progress CCWG Working to ensure the COPMG and other documentation supporting Commercial Operations accurately reflects Market processes PWG Continuing work to ensure Profiles are maintained and/or established to meet Market processes and changes including completing all annual profiling activities SEWG Developing Settlement Algorithms User Guide, responding to Market needs for Settlement Extract issues, providing updates/education as needed. 3

COPs Three Major Accomplishments Revised and created new major sections of the Commercial Operations Market Guide (COPMG) in support of Nodal settlement processes. Creation of the Nodal Settlements Algorithms Document as a first draft to the eventual Nodal Settlements Handbook/Guide. Round 2 Load Research Sample Collections and Evaluation resulting in no Load Profile refresh due to AMS implementation and Nodal implementation

SEWG Settlement Observations – Post Nodal

SEWG Major Accomplishments Creation of the draft Nodal Settlement Algorithms Guide Market Readiness training for Nodal Settlements Completed the Report and Extracts Issues tracking report that ERCOT provides to us monthly

Settlement Observations- Load Zone Market Prices Arithmetic Average Adjusted SPP HoustonNorthSouthWest On-Peak$32.06$32.37$30.95$29.49 Off-Peak$26.94$27.28$26.48$21.54 Average$29.45$29.77$28.63$24.70 HoustonNorthSouthWest On-Peak$56.54$56.66$56.09$48.24 Off-Peak$30.87$30.92$30.74$28.72 Average$40.38$40.46$40.13$35.95 December 2010 January 2011

Settlement Observations- Load Zone to Hub Meeting Title (optional)Date Load Zone/HUB RTSPPPeriod:Dec-10 Location Average Zone over HUB Comparison Location RTSPP Average Row LabelsAverage RTSPPLocationAverage RTSPPZone over HUB Delta HB_HOUSTON$29.41LZ_HOUSTON$29.45HB_HOUSTON$29.41$0.03 HB_NORTH$29.82LZ_NORTH$29.77HB_NORTH$29.82-$0.05 HB_SOUTH$28.71LZ_SOUTH$28.63HB_SOUTH$28.71-$0.08 HB_WEST$23.41LZ_WEST$24.70HB_WEST$23.41$1.29 LZ_HOUSTON$29.45 LZ_NORTH$29.77 LZ_SOUTH$28.63 LZ_WEST$24.70 LZ_AEN$29.33 LZ_CPS$28.96 Market Wide Avg$28.22

Cost to Serve Load (December 2010, based on RTM Settlements) –AS seems within Zonal values where price per MWh is $1.11with the premium for Responsive Reserve at $0.68 –BPD Uplift charges are a credit to Loads at less than $0.01 per MWh, total BPD charges to resources through is approximately $140K –RUC Uplift Charge is negligible (~$2K), meaning that most all of the RUC is being assigned to Loads that are short in the market RUC Capacity Shortfall Charges have averaged over $45 K per day, total of over $1.1 M to date –Revenue Neutrality uplift to Loads currently an expense of $0.46/MWh SEWG will evaluate the drivers of Revenue Neutrality Settlement Observations- Cost to Serve Load December

Cost to Serve Load (January, based on RTM Settlements through 1/10/2011) –AS seems within Zonal values where price per MWh is $1.14 –BPD Uplift charges are a credit to Loads at less than $0.01 per MWh, total BPD charges to resources through is approximately $100K –RUC Uplift Charge trends as in December negligible –Revenue Neutrality uplift to Loads currently an expense of $0.27/MWh appears to be decreasing, still needs explanation SEWG will evaluate the drivers of Revenue Neutrality Settlement Observations- Cost to Serve Load December

Profiling Working Group

PWG LPGRRs in process  Impact Analysis reviewed at the PWG meeting on January 26, 2010 for LPGRR042 - Updating of Weather Sensitivity Assignment, Suspension of Annual Validation for Advanced Meters, Addition of Load Research Sampling Documents, and Removal of Unused TOUS Codes;  Synchronizes the LPG with:  NPRR271- Synchronization to PRR850, Weather Responsiveness Determination for Interval Data Recorders;  NPRR250, Suspension of Annual Profile ID Validation with Advanced Meter Deployment;  Remove unused TOUS codes to improve the efficiency of ERCOT and Market Participant systems; and  Adding Load Research Sampling information.  LPGRR draft built with LPGRR042 as base language to be reviewed by PWG January 26, 2010 to build Appendix D language for Distributive Generation (DG) Load Profile Models per NPRR208, Registration and Settlement of Distributed Generation (DG) Less Than One MW. 12

PWG 2010 Major Accomplishments 13  NPRR208 Registration and Settlement of Distributed Generation (DG) Less Than One MW  LPGRR036 Delete Document Control Section  LPGRR037 Replace Wording Truncated from LPGRR035  LPGRR038 Revisions for Texas Nodal Market Implementation and Synchronization with PRR821, Update of Section 21, Process for Protocol Revision  LPGRR039 Revisions for Texas Nodal Market Implementation Part Two  LPGRR040 Administrative Changes for October 1, 2010 Load Profiling Guide  LPGRR041 Distributed Generation (DG) to Sync with NPRR208 Language Effective on Nodal Go-Live  Annual Validation of Profile ID Assignments for 2010  Annual UFE Analysis for Lowest STD DEV - Lowest Mean - Lowest Medium - less positive since 2005  Round 2 Load Research Sample Collections and Evaluation resulting in no Load Profile refresh due to AMS implementation and Nodal implementation  UFE Allocation Evaluation resulting in no change

Cops Communications Working Group

COPS Communications Working Group (CCWG) Activities in Progress CCWG received approval from COPS to create a Commercial Operations Handbook o The Handbook will mirror the COPMG section titles, however the information will reside in one document or the other COPMGRR023, Creating Section 6, Commercial System Model and subsection 8.3 Settlement Detail o COPS approved the withdrawal of COPMGRR023 o Withdrawal request presented to TAC today o Revision request content will be included in the Commercial Operations Handbook Commercial Operations Market Guide (COPMG): o Continue to add content to the COPMG 15

TAC Voting Item COPs request withdrawal of COPMGRR023; Creating Section 6, Commercial System Model and subsection 8.3 Settlement Detail

COPS Communications Working Group (CCWG) 2010 Accomplishments 17 Created major sections of the Commercial Operations Market Guide (COPMG) in support of Nodal settlement processes. The COPMG Nodal sections went live December 1, Created the COPMG Outline Change History document and procedures to review the Guide quarterly to ensure accuracy. Worked with Amy Apodaca, ERCOT Web Content Coordinator, to review and recommend Really Simple Syndication (RSS) Feeds that would be useful to Market Participants. Expanded the communication guidelines to include Market Participant notification process. Reviewed and submitted comments on NPRR253, CRR Balancing Account Invoice and Settlement and Billing Dispute Process. Recommended to COPS that a Commercial Operations Handbook be created and maintained at the subcommittee level.

COPS Communications Working Group (CCWG) 2010 Accomplishments, Continued COMPGRRs –COPMGRR016, Update to Section 12, Renewable Energy Credits due to PRR808 –COPMGRR017, Creating Section 8.2, Settlement Statements and Invoices –COPMGRR018, Updates to References of IDR and/or IDR Meter due to the proposed definition of IDR Meter in PRR845 –COPMGRR019, Revisions for Texas Nodal Implementation and Synchronization with PRR821 –COPMGRR020, Creating Subsection 10.3, Unregistered Distributed Generation Reports –COPMGRR021, Market Participant Market Notice Process –COPMGRR022, Update Section 10, Extracts and Reports –COPMGRR023, Creating Section 6, Commercial Model and subsection 8.3, Settlement Detail 18

Thank You