The Wholesale Market Subcommittee Update Prepared for the September 25th TAC meeting

Letter of Credit Issuer Limits for ERCOT Creditworthiness Standards WMS endorsed the limits – They are determined by the long-term issuer rating and the Tangible Net Worth of the Issuer – Reviewing the limits is performed at least yearly – ERCOT’s posted presentation provides statistics regarding the limits This is a voting Item for TAC recommendation – The limits need Finance and Audit Committee approval

TAC Assignment List Update WMS Assignments From The TAC Date AssignmentStatus 8/28/14 11/3/11 - NPRR181, FIP Definition Revision, tabled QMWG will start discussions at their next meeting 8/27/14 Maintenance/Improvement of operational checklist for Resource interconnection Discussion ongoing at QMWG and will also be taken up at the Joint ROS/WMS meeting on October 6th 4/24/14 Evaluate concerns with bringing RUC units earlier than required because of start-up failures Conduct a review of the RUC process in the newly created RUC Task Force. Optimize market based tools and minimize RUC. 2/24/14 Related to NPRR598, Clarify Inputs to PRC and ORDC – address additional ORDC enhancements including addressing bandwidth oscillations QMWG review to be conducted on operational data during emergency conditions. 2/27/14 Related to NPRR582, Refinements to Testing ERS – address testing requirements for all Resources. QMWG review ongoing 9/5/13 Review steps ERCOT utilizes in the CDR load forecasts ERCOT’s analysis of incorporating ERS, Load Resources providing RRS, energy efficiency, and distributive generation in ongoing (~Fall 2014)

Structural review TAC directed WMS to combine the RATF responsibilities into the GATF WMS Chair’s understanding is that this would entail an update to the GATF charter WMS members raised some concern over combining the groups

Load Resources in SCED Update The LRIS version 2 subgroup continues to work on proposals to facilitate direct participation in the real-time market by DR QSEs – TAC endorsed LMP – volumetric G on 10/6/2011 – The DSWG and LIS Subgroup have identified issues with LMP-VG requires assignment of the estimated curtailment back to the specific customer. Estimation of load drop for many individual loads (esp. residential) is near impossible Need to expand residential DR Requires LSEs to bill customers for consumption that didn’t occur. PUCT action likely required

Load Resources in SCED Update The LMP - $G approach is the leading alternative – Many details to work though What is a fair proxy for the purchase price representative of retail energy price? How often to change LMP-G REP specific or ERCOT-wide Process for qualifying and managing ALRs