EDS 3 R6.3 Testing Workshop EDS 3 Release 6.3 LFC Web Ex June 11, 2008 Texas Nodal Load Frequency Control (LFC) EDS 3 Release 6.3 LFC Web Ex June 11, 2008 http://nodal.ercot.com 1

LFC – R6.3: LFC Testing Workshop Agenda Welcome & Admonition Meeting Objective Test Overview & Set-up ICCP Data Submittals EOC, Inc/Dec Offers and OS’s Settlements ERCOT Assessment and QSE Self Assessments Release 6.3 Schedule http://nodal.ercot.com http://nodal.ercot.com 2

Antitrust Admonition ANTITRUST ADMONITION ERCOT strictly prohibits Market Participants and their employees who are participating in ERCOT activities from using their participation in ERCOT activities as a forum for engaging in practices or communications that violate the antitrust laws. The ERCOT Board has approved guidelines for members of ERCOT Committees, Subcommittees and Working Groups to be reviewed and followed by each Market Participant attending ERCOT meetings. If you have not received a copy of these Guidelines, copies are available at the Client Relations desk. Please remember your ongoing obligation to comply with all applicable laws, including the antitrust laws. http://nodal.ercot.com 3

LFC – R6.3: LFC Workshop Objective Jointly develop a test approach that will provide the necessary validation of the Energy Dispatch Methodology and Frequency Control during the first Total System Test (LFC Release 6.3) http://nodal.ercot.com 4

LFC – R6.3: LFC Testing Workshop Test Overview & Set-up Ken McIntyre http://nodal.ercot.com http://nodal.ercot.com 5

LFC – R6.3: Test Overview & Setup Why? The Two Hour test will provide the first system wide closed loop test using Nodal dispatch signals. It will provide an opportunity to perfect Generation Resource Switching from Zonal to Nodal for future LFC Phase 3 testing. Test ERCOT’s ability to perform frequency control for a short period using LFC to calculate and dispatch Regulation Test SCED’s ability to manage network congestion using the Nodal EMS Transmission Congestion Management application (TCM). The first real time full integration test of SCED and LFC generation dispatch. http://nodal.ercot.com 6

LFC – R6.3: Test Overview & Setup How? Zonal and Nodal systems continue to operate in parallel Generation resources will be switched by QSE portfolio from Zonal to Nodal and vice versa. A Zonal – Nodal – Zonal switching sequence will be predetermined by ERCOT SCED will provide Base Points and manage congestion LFC will control frequency and provide Regulation dispatch instructions TCM will be used for activating constraints for SCED Approved PRR 748 will be used for settlements http://nodal.ercot.com 7

LFC – R6.3: Test Overview & Setup How? 2 hours is an ERCOT estimate for the anticipated total time it will take to switch all QSE Resources to Nodal and switch all QSE Resources back to Zonal. Confirmed from LFC Phase 2 testing results. Depending on the test progression or any unplanned conditions, the test may extend beyond the planned 2 hours. The necessary VDI's will be in place and extended as needed if the test exceeds the 2 hours allotted. If the switching of QSE’s to Nodal is not progressing as expected, or other unplanned circumstances arise, ERCOT may choose to end the test by switching all QSE’s back to Zonal ASAP. http://nodal.ercot.com 8

LFC – R6.3: Test Overview & Setup Unit Commitment (Zonal system) Unit commitment will be managed in the Zonal system. For this reason it is crucial that the Zonal system continues to operate as normal in parallel with the Nodal system during the two hour test. SCED does not require RUC to be operating to produce Base Points. SCED will use Resource’s MW, Telemetered Status Code and Telemetered Limits to determine availability for dispatch in Nodal. If a unit is coming online or going offline in Zonal, the QSE must update their EOC, Output Schedules, Telemetered Resource Status Code and Resource Telemetered Limits in the Nodal system. Otherwise SCED may not be able to dispatch them accordingly. http://nodal.ercot.com 9

LFC – R6.3: Test Overview & Setup Regulation Deployment (Nodal system) Regulation will be deployed by the Nodal system from LFC. Each QSE’s capability of receiving and dispatching Regulation was tested in LFC Phase 2 testing. It is important that QSE’s telemeter the correct Regulation Responsibilities and Regulation Participation Factors. This is critical for LFC’s ability to control frequency. The Regulation Responsibilities in Nodal must reflect the QSE’s Zonal Regulation Obligation. QSE’s must keep the Regulation Responsibilities up to date with each hour and, if a Resource is not able to respond to Regulation, must reallocate that Resource’s Responsibility to other Resource in the QSE’s portfolio if possible. ERCOT will be tracking each QSE and their Resource’s MW output and comparing it to the Nodal Expected MW output which is based on UDBP and Regulation Participation Factors. http://nodal.ercot.com 10

LFC – R6.3: Test Overview & Setup Regulation Deployment (Nodal system) QSE’s must telemeter their 10 minute Zonal obligation in Nodal. This will ensure the full amount of awarded Regulation is available to LFC for dispatch during the test. ERCOT will honor the ten minute ramp rate during the test by modifying the LFC Regulation calculation (ten instead of five minutes ramp) and by temporarily modifying the RLC SURAMP and SDRAMP calculations. Therefore: SURAMP = Ramp Rate – (Regulation Up AS Responsibility / 10) SDRAMP = Ramp Rate – (Regulation Down AS Responsibility / 10) LFC will calculate Regulation to be deployed over a 10 minute ramp rate not a 5 minute. http://nodal.ercot.com 11

LFC – R6.3: Test Overview & Setup RRS Deployment (Nodal and Zonal system) Responsive Reserve was tested as part of LFC Phase 2 testing, whereby QSE’s were deployed a Responsive Reserve Deployment MW value with which the QSE updated their Responsive Reserve Schedules for individual Resources. SCED will also be manually or automatically triggered to run ‘out of normal sequence’ (not on the 5 minute time period) to dispatch new Base Points as soon as possible and help recover system frequency. QSE’s must make sure that their telemetered Responsive Reserve AS Responsibilities and Schedules for each of their Resources in Nodal are correct and reflect their current Zonal Responsive Reserve Obligation. http://nodal.ercot.com 12

LFC – R6.3: Test Overview & Setup RRS Deployment (Nodal and Zonal system) Responsive Reserve will be deployed from Nodal Zonal will also continue to deploy Responsive Reserve This can be triggered manually by the operator or automatically (frequency < 59.91Hz) in either system. If a QSE has not switched to Nodal, they should follow the Zonal deployment If a QSE has switched to Nodal, they must update the Responsive Reserve schedules and continue to follow their Nodal deployments. http://nodal.ercot.com 13

LFC – R6.3: Test Overview & Setup Non-Spin Deployment (Zonal system) If required, Non-Spin will be deployed from the Zonal system during the two hour test. QSE’s are requested to keep their telemetered Resource Status Codes, Non-Spin Responsibilities and Schedules in Nodal reflective of their Zonal Non-Spin obligation. After Zonal Non-Spin deployment, QSE’s must also update their Nodal EOC, Output Schedules, Telemetered Resource Status Codes and Resource Limits in the Nodal system in preparation for the Resource coming online. This will ensure that SCED can dispatch the Resource appropriately when it is available. http://nodal.ercot.com 14

LFC – R6.3: Test Overview & Setup Placeholder Dates Date First 2 Hour Test Test Form Due June 18th Test Week of June 23rd http://nodal.ercot.com http://nodal.ercot.com 15

LFC – R6.3: LFC Testing Workshop ICCP Data Submittals Ken McIntyre http://nodal.ercot.com http://nodal.ercot.com 16

LFC – R6.3: Data Submittals Market Participant EMS Data Submittals – RLC/LFC Support (Nodal=Zonal) Resources Net MW (ICCP) Resources Gross MW (ICCP) HSL, LSL (ICCP) HEL, LEL (ICCP) Resource Status Code (ICCP) Regulation Ancillary Service Schedules (ICCP) Responsive Reserve Ancillary Service Schedules and Responsibilities (ICCP) Non-Spin Reserve Ancillary Service Schedules and Responsibilities (ICCP) Resource Specific DSR Schedules and QSE DSR Load (ICCP) Regulation Participation Factors (ICCP) Combined Cycle Configurations (ICCP) Ramp Rates (RARF data up to date) Raise/Lower Block Status (ICCP) As called for in the Market Notice dated February 26, 2008. http://nodal.ercot.com 17

LFC – R6.3: Data Submittals Market Participant EMS Wind Unit Data Note – Section 6.5.5.2 Operational Data Requirements For each wind-powered Generation Resource the QSE shall set the HSL to the output capability of the facility based upon all available units and the current measured wind speed (HSL must be equal to or greater than the latest telemetered net real power of the wind-powered Generation Resource). (http://nodal.ercot.com/protocols/2008/05/06/06-050108_Nodal.doc) HSL values for wind resources need to conform this protocol for the LFC system wide testing periods http://nodal.ercot.com 18

LFC – R6.3: LFC Testing Workshop Test Step by Step Walkthrough Brian Barcalow http://nodal.ercot.com http://nodal.ercot.com 19

LFC – R6.3: SCED/MMS Data Submittals System Wide Test Step by Step – Prior to the Test Provide Real Time ICCP Data to Nodal Market Notification will be sent the preceding Friday via ENS and MIS as a reminder of the up coming test Hotline call will be made on the day of the test informing of the start time (approximately 3 hours prior to start) For a week prior to the test operate Zonal and Nodal in Parallel For the 3 hours prior to the test be ready for troubleshooting calls ERCOT will stop using OC1 2 hours prior to the test and use OC3 A System Wide VDI will be issued immediately prior to the start of the test http://nodal.ercot.com 20

LFC – R6.3: SCED/MMS Data Submittals Examples: Market Notification (ENS & MIS Postings) “ERCOT will be conducting LFC – R6.3 testing (2-Hour) during the week of June 23rd, QSEs will be notified by Hotline 3 hours prior to the start of the test.” Hotline Script: Informing of test start time “This is [Operator’s first and last name]. ERCOT will begin the EDS 3 LFC R6.3, 2-hour test at [test start time]. At that time, a Hotline call will be made to issue a VDI to start the test.” [Select a participant to repeat back the instruction] Hotline Script: Issuing VDI “This is [Operator’s first and last name]. ERCOT is issuing [state the VDI #] to begin the EDS 3 LFC R6.3, 2-hour test. Each QSE will be contacted one at a time and given instruction on when to switch their system from Zonal to Nodal control. An additional Hotline call will be made when all QSEs have been successfully switched over to Nodal control.” [Select a participant to repeat back the instruction] http://nodal.ercot.com 21

LFC – R6.3: SCED/MMS Data Submittals System Wide Test Step by Step – Actual Test Switching to Nodal one QSE at a time (order to be determined) Evaluate QSE Nodal performance prior to switching the next QSE (this evaluation will determine to proceed with the test or cancel) Place Hotline call to QSEs when all are successfully switched to Nodal control 15 minutes of system wide Nodal operation (may vary depending on the time it takes to switch all QSEs) Switch back to Zonal one QSE at a time (order to be determined, not necessarily exact reversal) All QSEs switched back to Zonal an additional 15 to 30 minutes will be allotted before ending the VDI. http://nodal.ercot.com 22

LFC – R6.3: SCED/MMS Data Submittals Example: Hotline Script: Zonal to Nodal switch complete “This is [Operator’s first and last name]. At this time ERCOT has successfully switched all QSEs from Zonal to Nodal control. ERCOT will stay on Nodal control for [approximate # of intervals or time (minutes)], after which, ERCOT will begin contacting QSEs one at a time to switch back to Zonal control.” [Select a participant to repeat back the instruction] Hotline Script: Nodal to Zonal switch complete; end VDI “This is [Operator’s first and last name]. At this time ERCOT has successfully switched all QSEs from Nodal to Zonal control. [VDI #] will terminate at [state the time of termination].” [Select a participant to repeat back the instruction] http://nodal.ercot.com 23

LFC – R6.3: SCED/MMS Data Submittals System Wide Test Step by Step – Post Test Provide Real Time ICCP Data to Nodal QSE & ERCOT Test Results Analysis Determination by ERCOT of need to repeat test Notice to Market of ERCOT Test Analysis Conclusions http://nodal.ercot.com 24

LFC – R6.3: LFC Testing Workshop Energy Offer Curves, Inc/Dec Offers and Output Schedules Jeff Gilbertson http://nodal.ercot.com http://nodal.ercot.com 25

LFC – R6.3: SCED/MMS Data Submittals Market Participant Data Submittals – All On-line Resources must have an Energy Offer Curve, Output Schedule, or Output Schedule with Inc and/or Dec curves Energy Offer Curve Should cover telemetered LSL/HSL range Should reflect portion of BES carried by Resource in both MW and price Output Schedule Should fall within telemetered LSL/HSL range Should reflect expected MW output of Resource Inc/Dec Curve Requires Output Schedule May require deviation from Zonal bids as first Inc price point must be > first Dec price point http://nodal.ercot.com 26

LFC – R6.3: SCED/MMS Data Submittals Submittal Timeline Current Operating Plan (COP) Output Schedule submission requires COP submission as OS MW values are validated against COP HSL and LSL in MMS Release 3 Inc/Dec curve requires COP submission with ONDSR or ONDSRREG status SCED uses telemetered Resource Limits and Status, so COP really only required for above cases for purposes of this test However, COP submission for next seven days is required by Protocols so it is good practice to submit COP COP submission may begin seven days before Operating Day COP may be updated anytime prior to the end of the Adjustment Period (one hour before start of Operating Hour) http://nodal.ercot.com 27

LFC – R6.3: SCED/MMS Data Submittals Submittal Timeline Energy Offer Curve EOC submission may begin seven days prior to Operating Day EOC submission blocked for next Operating Day between 1000 and 1800 EOC may be updated after 1800 (beginning of Adjustment Period) to one hour prior to Operating Hour (the end of the Adjustment Period) There are rules for updating a DAM or RUC committed Resource, but DAM and RUC will not be performed during the testing window http://nodal.ercot.com 28

LFC – R6.3: SCED/MMS Data Submittals Submittal Timeline Output Schedule Output Schedule submission may begin seven days prior to Operating Day Output Schedule may be updated until the end of the Adjustment Period OR the Operating Interval for DSR Requires COP for validation Inc/Dec Offer Curves Inc/Dec Offer Curve submission may begin seven days prior to OD and ends at the end of the Adjustment Period Inc/Dec Offer Curve requires COP Resource Status of ONDSR or ONDSRREG Inc/Dec Offer Curve requires Output Schedule submission for SCED use Inc/Dec Offer Curves both start at 0 MW Inc is monotonically increasing in price; Dec monotonically decreasing Offer Curve used by SCED constructed by adding Dec curve to the left of Output Schedule MW and Inc curve to the right of Output Schedule MW http://nodal.ercot.com 29

LFC – R6.3: SCED/MMS Data Submittals Submittal Timeline Example timeframes for Operating Hour 6/23 12:00 pm – 1:00 pm 6/16 12:00 am – submission window for COP, Output Schedule, EOC, Inc/Dec begins 6/22 10:00 am – DAM deadline for 6/23. EOC submission window ends. 6/22 6:00 pm – Adjustment Period begins. EOC submission window re-opens. 6/23 11:00 am – End of Adjustment Period. COP, Output Schedule, EOC, and Inc/Dec submissions window ends (except Output Schedule for DSR) 6/23 12:00 pm – Start of Operating Hour. Output Schedule for DSR submission window ends. http://nodal.ercot.com 30

LFC – R6.3: SCED/MMS Data Submittals Market Participant Data Submittals – Good Resource dispatch example Telemetry: HSL = 450; LSL=150; MW = 440 RLC: HDL = 450; LDL = 430 TPO covers 150 – 500 SCED BP = 450 MW; EOC price at 430MW = $20; LMP = $50 450 430 $20 $ $0 MW 150 450 http://nodal.ercot.com 31

LFC – R6.3: SCED/MMS Data Submittals Market Participant Data Submittals – Bad Resource dispatch example Telemetry: HSL = 300; LSL = 100; MW = 150 RLC: HDL = 160; LDL=140 TPO covers 0 – 100 SCED BP = 140; TPO price at 140MW = $1000; LMP = $50 140 160 $1000 $999 $ MW $0 $-250 100 300 http://nodal.ercot.com 32

ERCOT Assessment & QSE Self Assessments LFC – R6.3: Test Workshop ERCOT Assessment & QSE Self Assessments Burton Kunz http://nodal.ercot.com http://nodal.ercot.com 33

LFC – R6.3: Assessments Assessment – ERCOT will analyze the Test results to determine if adjustments/test repeats are needed before scheduling the next R6.3 Test, based on: Market Participation Network Events System Performance Note: ERCOT will provide analysis assistance in the form of answers to questions. It is the responsibility of each market participant to analyze their own test results from the R6.3 Test . http://nodal.ercot.com http://nodal.ercot.com 34

LFC – R6.3: LFC Testing Workshop Settlements Mandy Bauld http://nodal.ercot.com http://nodal.ercot.com 35

R6.3 Settlement – Review Approach for Live test Steps for R6.3 Settlement: Transactions will be settled according to the Zonal Protocols using MCPEs calculated in the Zonal Market. See protocol sections: 6.8.2.3(2)(a) 6.8.2.3(5)(a) All QSE VDI will be issued to define the “test period” Test period starts when first QSE is brought under Nodal control and stops when last QSE is returned to Zonal Control Settlements will not calculate URC during the “test period” URC will not be calculated for hour before test period, during the test period, and the hour following the test period All QSEs will receive an SCE exception during the test period Settlements will replace Zonal Instructed Output levels for all units deployed in the Zonal Market for OOME and Local Balancing with integrated SCED base points http://nodal.ercot.com 36

Base Point Integration - Formula Below is the formula that will be used to integrate SCED base points into 15 minute values used to settle OOME and Local Balancing AABP = * (∑ y ((BP y + BP y-1)/2 * TLMP y) / (∑ y TLMP y)) Variable Unit Definition AABP MW Adjusted Aggregated Base Point—The Generation Resource’s aggregated Base Point NOT adjusted for Ancillary Service deployments, for the 15-minute Settlement Interval. BP y Base Point by interval—The Base Point for the Generation Resource at the Resource Node, for the SCED interval y. TLMP y second Duration of SCED interval per interval—The duration of the portion of the SCED interval y within the 15-minute Settlement Interval. y none A SCED interval in the Settlement Interval. The summation is over the total number of SCED runs that cover the 15-minute Settlement Interval. NOTE* The average regulation instruction will not be factored into the base point in order to ensure similarity between the SCED base point and the Zonal calculated instructed output level. http://nodal.ercot.com 37

Bill Determinant and Extract Details Settlements will determine which units received a Zonal unit specific instruction during Phase 3 LFC Testing Unit Specific instructions consist of the following Bill Determinants: OOMIOL – OOME Instructed Output Level OOMEVDI – VDI OOME Instructed Output Level LEIOL – Local Energy Instructed Output Level Next, Settlements will request all SCED generated base points for the generation resources that received Zonal unit specific instructions Settlements will integrate the base points into 15 minute settlement values The integrated base points will replace the original OOMIOL, OOMEVDI and LEIOL values The updated values will be imported to the Settlement system before Initial Settlement Both the original and updated OOMIOL, OOMEVDI and LEIOL values will be found in MOS_METER_DATA worksheet of the Client Data Report When a combined cycle Generation Resource receives SCED Base Points at the Combined Cycle Configuration Settlements will use GSSPLITSCA (Generation Splitting SCADA) to allocate the Combined Cycle SCED base points to the individual units that received the zonal instruction. 6.8.2.3(2)(a)(i) http://nodal.ercot.com 38

Settlement Disputes from EDS 3 R6.3 LFC Testing If, after Initial Settlement, a QSE does not agree with the updated Instructed Output level or payment for OOME or Local Balancing Energy, a QSE may submit a settlement and billing dispute in accordance with the process outlined in Section 9.5, Settlement and Billing Dispute Process. 6.8.2.3(2)(a)(ii) In addition to the standard information required on the dispute form, the dispute should clearly reference the EDS 3 R6.3 LFC test and indicate the disputed Settlement Intervals involved in the test. 6.8.2.3(2)(a)(ii) http://nodal.ercot.com 39

QSE Test Prep Summary LFC – R6.3: Test Workshop Burton Kunz http://nodal.ercot.com http://nodal.ercot.com 40

The Test will start at 7:00 AM The Test will end at 11:00 AM LFC – R6.3: Open Loop Test Test Time & Date – June 19th The Test will start at 7:00 AM The Test will end at 11:00 AM Please make sure that all ICCP Data Submittals are working in real time. ERCOT will be making contacts as needed to improve the quality of data submittals. http://nodal.ercot.com http://nodal.ercot.com 41

LFC – R6.3: Test Schedule Test Time & Date – June 25th, 26th or 27th The actual test will start at 11:00 AM Test Contacts Form – Each MP is required to provide a test form for the 6.3 test by June 18th. The form can be found on the Nodal Readiness Web Site. People – Each MP needs to have their experts on hand starting at 8:00 AM each possible test day (week of June 23rd) to support: ICCP Energy Offer Curves, Inc/Dec Offers and Output Schedules LFC http://nodal.ercot.com http://nodal.ercot.com 42

LFC – R6.3: Data Submittals Market Participant EMS Data Submittals – RLC/LFC Support (Nodal=Zonal) Resources Net MW (ICCP) HSL, LSL (ICCP) HEL, LEL (ICCP) Resource Status Code (ICCP) Ancillary Service Schedules and Responsibilities (ICCP) Resource Specific DSR Schedules and QSE DSR Load (ICCP) Regulation Participation Factors (ICCP) Combined Cycle Configurations (ICCP) Ramp Rates (using RARF data) Raise/Lower Block Status (ICCP) As called for in the Market Notice dated February 26, 2008. http://nodal.ercot.com 43

Thank you. LFC – R6.3: Test Workshop LFC@ercot.com http://nodal.ercot.com http://nodal.ercot.com 44