Resource Cost Working Group October 7, 2015 WMS Update

VCMRR010 - Alignment with NPRR714, Real-Time Make-Whole Payment for Exceptional Fuel Cost This Verifiable Cost Manual Revision Request (VCMRR) aligns the Verifiable Cost Manual with the provisions proposed by NPRR714. RCWG recommends WMS endorse VCMRR010 so that the VCMRR and NPRR714 will flow through the Stakeholder approval process and be implemented together.

NPRR732 - Alignment of Verifiable Cost Language Within Protocols Draft VCMRR - Alignment with NPRR732, Alignment of Verifiable Cost Language Within Protocols This Nodal Protocol Revision Request (NPRR) revises paragraph (11) of Section to describe how ERCOT will determine Resource costs in the event that a QSE or Resource Entity fails to file verifiable costs within thirty (30) days of a request to file such costs. A Verifiable Cost Manual Revision Request (VCMRR) is currently being drafted to align the Verifiable Cost Manual with the provisions proposed by NPRR732. Vote: NPRR 732

Fuel Cost Components in the Fuel Adder RCWG discussed the following process for appeals 1 when ERCOT denies verifiable costs as submitted. – First Level of Appeal: Review by an “ERCOT Verifiable Cost Appeals group” that is not part of the ERCOT verifiable cost team. – Second Level of Appeal: Review by the Unaffiliated Directors on the ERCOT Board. Continued discussion on the types of cost/fees that should be included in the Fuel Adder and whether inclusion of fixed costs is consistent with verifiable cost and resource mitigation methodology. 1 Section 12 of the VCM

General Update Discussing need for a coal Index price to – Determine exceptional fuel cost for coal-fired Resources – Possibly replace the $1.50 /MMBtu for solid fuel Reviewing draft NPRR to remove vendor fuel names for fuel indices from protocols. – Need to determine reasonable notice period to market participants prior to effective date of vendor change by ERCOT