1 Follow Up Analysis of 2 vs. 3 Decimals ERCOT Load Profiling Department June 26, 2007

2 Follow Up Analysis of 2 vs. 3 Decimals The impact of using three decimal places varies across Profile Types and Weather Zones ERCOT applied the Monte Carlo simulation findings to the LRS Round 1 Sample results to assess the impacts The simulation indicated that the impact of three decimal places varies depending on the profile load in an interval and the precision of the load estimate Using three decimals in profiles can improve, degrade, or have no impact on an interval estimate If a random three decimal number between – is added to a 2-decimal estimate: 45% of the time the estimate would be improved 45% of the time the estimate would be degraded 10% of the time the estimate would be unchanged (because of adding a zero)

3 Follow Up Analysis of 2 vs. 3 Decimals Upper threshold for interval precision to get a probability ≥ 50% of improvement with three decimals All intervals < kWh are likely to benefit from three decimals No intervals ≥ kWh are likely to benefit from three decimals

4 Follow Up Analysis of 2 vs. 3 Decimals Percent of Intervals with probability of improvement with three decimals ≥ 50% Reshiwr, Reslowr, and Busnodem are candidates for using three decimals

5 Follow Up Analysis of 2 vs. 3 Decimals ERCOT suggests using three decimals only for the Profile Types and Weather Zones where this analysis supports it (Reshiwr, Reslowr, Busnodem) The random noise introduced by using three decimals for all Profile Types and Weather Zones could eliminate the benefit of being selective ERCOT settlement analysis supports this conclusion Applying three–decimal profiles to sampled tradedays resulted in UFE improvement for 49% of the intervals and degradation for 51% Random values were added to the two–decimal profiles to create three-decimal profiles and applied to the same tradedays, virtually identical UFE improvement results were obtained (48% improve 52% degrade) Across the board use of three decimals is equivalent to adding random values ERCOT suggests submitting an LPGRR to modify Reshiwr, Reslowr, Busnodem Profile Model Spreadsheets rather than approving language to apply three decimals across the board Future model specifications could incorporate the appropriate number of decimal places based on load magnitude and precision