CRR Update Dave Maggio CMWG July 18, 2014

CMWG 7/18/ Transaction Limit Utilization Metrics Discussion on Special “One-Time” Auctions of CRRs Upcoming CRR Activities Discussion Items

CMWG 7/18/ Transaction Limit Utilization Metrics Discussion on Special “One-Time” Auctions of CRRs Upcoming CRR Activities Discussion Items

CMWG 7/18/ Long-Term Auction Sequences (LTASs) –Limit of 2000 transactions per CRRAH –During the first 11 LTASs, 50 unique CRRAHs have submitted more than 1900 transactions for an Auction 29 parent companies for those 50 CRRAHs –For a given LTAS, between 19% and 34% of CRRAHs are submitting more than 1900 transactions Transaction Limit Utilization

CMWG 7/18/ Monthly Auctions –Limit of 7500 transactions per CRRAH –For Jan. ‘13 thru Jul. ‘14, 11 unique CRRAHs have submitted more than 7400 transactions for an Auction 8 parent companies for those 11 CRRAHs –Historical activity suggests that there is likely more interest in increasing the limit for LTASs An increase for the LTASs could impact the Monthly Auctions due to potential baseload increases Transaction Limit Utilization

CMWG 7/18/ Assumptions for analysis looking at current transaction limit utilization and potential impacts of increasing those limits: –If a CRRAH submitted more than 1900 transactions in a LTAS, their behavior would change to reflect the new limit –If a CRRAH submitted more than 7400 transactions in a Monthly Auction, their behavior would change to reflect the new limit –Potential impacts to total baseload transactions should be considered Transaction Limit Utilization

CMWG 7/18/ Scenarios analyzed: –Baseline: 2000 and 7500 –Scenario 1: 2500 and 7500 –Scenario 2: 3000 and 7500 –Scenario 3: 2500 and 8000 The number of baseload transactions for each scenario was adjusted using the % increase in the transaction limit –i.e. for a Seq. 3 Auction under scenario 1, Baseload_new = (2500/2000) * Baseload_orig –The baseload for Seq. 4 Auctions was not adjusted Transaction Limit Utilization

CMWG 7/18/ Transaction Limit Utilization Baseline – LTAS (2000)

CMWG 7/18/ Transaction Limit Utilization Baseline – Monthly (7500, 2000 in LTAS)

CMWG 7/18/ Transaction Limit Utilization Scenario 1 – LTAS (2500)

CMWG 7/18/ Transaction Limit Utilization Scenario 1 – Monthly (7500, 2500 in LTAS)

CMWG 7/18/ Transaction Limit Utilization Scenario 2 – LTAS (3000)

CMWG 7/18/ Transaction Limit Utilization Scenario 2 – Monthly (7500, 3000 in LTAS)

CMWG 7/18/ Transaction Limit Utilization Scenario 3 – LTAS (2500)

CMWG 7/18/ Transaction Limit Utilization Scenario 3 – Monthly (8000, 2500 in LTAS)

CMWG 7/18/ Transaction Limit Utilization Metrics Discussion on Special “One-Time” Auctions of CRRs Upcoming CRR Activities Discussion Items

CMWG 7/18/ Protocol section 16 makes reference to special, one-time CRR Auctions that ERCOT could run in the case of: –CRR repossession due to a uncured Payment Breach –CRR forfeiture due to a missed CRR Auction due date Although the option of the one-time CRR Auction has not been needed, ERCOT has been reviewing how the process would be managed One-Time CRR Auctions

CMWG 7/18/ Highlights of the one-time CRR Auction process: –Interested CRRAHs would be made aware of the one-time auction using CRR Market User Interface Operator Messages and Market Notices –The complete portfolio of repossessed/ forfeited CRRs would be offered as a package –Bids for the CRR portfolio would be sent in by a CRRAH’s Authorized Rep and reviewed by ERCOT’s CRR and Credit team One-Time CRR Auctions

CMWG 7/18/ Some questions that are being worked through are: –Options for invoicing the awarded CRRAH for the one-time CRR Auction –External communication of one-time CRR Auction results –Assignment of individual CRR value for distribution of the CRR Auction revenue One-Time CRR Auctions

CMWG 7/18/ Transaction Limit Utilization Metrics Discussion on Special “One-Time” Auctions of CRRs Upcoming CRR Activities Discussion Items

CMWG 7/18/ Business as usual for the auctions and allocations –Results for August and the 4 th sequence of the 3 rd Long-Term Auction Sequence just posted CRR changes in the queue: –Oracle upgrade occurred at the end of June –SCR 769 in R4 (7/28-8/1) –NPRR 586 in R5 (9/22-9/26) –NPRR 455, SCR 777, SCR 779 Upcoming CRR Activities