Report to TAC March 2010

In Brief Voting Items Voting Items GATF – WMS endorsed the recommendations of the GATF GATF – WMS endorsed the recommendations of the GATF WCATF – WMS endorsed Wind Plus Load Ratio Share proposal and directed WCATF develop appropriate NPRR language WCATF – WMS endorsed Wind Plus Load Ratio Share proposal and directed WCATF develop appropriate NPRR language NPRR 091 – Took 2 votes and endorsed NPRR 091 with changes to , in order to allow cost recovery for units using fuel oil. NPRR 091 – Took 2 votes and endorsed NPRR 091 with changes to , in order to allow cost recovery for units using fuel oil. WMS – endorsed minor change to procedures… WMS shall follow the election process as described in the TAC Procedures, Section III… when electing the WMS Chair and Vice-Chair. WMS – endorsed minor change to procedures… WMS shall follow the election process as described in the TAC Procedures, Section III… when electing the WMS Chair and Vice-Chair. Working Group Reports Working Group Reports CMWG, DSWG, QMWG – updates only no votes taken CMWG, DSWG, QMWG – updates only no votes taken MCWG MCWG CWG/MCWG merger into TAC Subcommittee with voting structure? CWG/MCWG merger into TAC Subcommittee with voting structure? “e” factor recommendation or discussion at April TAC “e” factor recommendation or discussion at April TAC WMS endorsed draft NPPR - DAM & Real-Time Market Default Allocation Changes with WMS corrections and any ERCOT staff clean-up WMS endorsed draft NPPR - DAM & Real-Time Market Default Allocation Changes with WMS corrections and any ERCOT staff clean-up

In Brief Working Groups (cont’) Working Groups (cont’) VCWG VCWG WMS endorsed standard cost option, directed VCWG to draft NPRR and provide recommendation regarding switching and escalation factors WMS endorsed standard cost option, directed VCWG to draft NPRR and provide recommendation regarding switching and escalation factors Task Forces Task Forces QSTF – WMS endorsed NPRR 207, as submitted, and requested review by ERCOT to determine if it can be done by TNMID QSTF – WMS endorsed NPRR 207, as submitted, and requested review by ERCOT to determine if it can be done by TNMID MIGTF - Interconnection Date for Protocol Considerations NPRR to be drafted by M. Bruce. Minimum Cost Planning Concept to be referred to RPG for inclusion in GENERATION INTERCONNECTION OR CHANGE REQUEST PROCEDURE MIGTF - Interconnection Date for Protocol Considerations NPRR to be drafted by M. Bruce. Minimum Cost Planning Concept to be referred to RPG for inclusion in GENERATION INTERCONNECTION OR CHANGE REQUEST PROCEDURE Other Activities Other Activities NPRR211 – Modify RUC Capacity Short Charge to Use Final Energy Trades – WMS recommended that PRS table to allow further discussion. WMS will discuss on March 24 and report back at the March PRS meeting NPRR211 – Modify RUC Capacity Short Charge to Use Final Energy Trades – WMS recommended that PRS table to allow further discussion. WMS will discuss on March 24 and report back at the March PRS meeting NPRR212 – Disputing Fuel Oil Price (FOP) Costs – WMS endorsed with Luminant comments and minor correction NPRR212 – Disputing Fuel Oil Price (FOP) Costs – WMS endorsed with Luminant comments and minor correction Nodal Reliability Must-Run (RMR) : ERCOT Created Three-Part Supply Offer – referred to QMWG Nodal Reliability Must-Run (RMR) : ERCOT Created Three-Part Supply Offer – referred to QMWG

TAC Voting Item Generation Adequacy Task Force Generation Adequacy Task Force WMS endorsed GATF recommendations: WMS endorsed GATF recommendations: LOLP Study Review/Load Forecasting/EILS and other LOLP Study Review/Load Forecasting/EILS and other CDR Inputs, Calculations and Format CDR Inputs, Calculations and Format Installed Capacity Assumptions – use RARF Installed Capacity Assumptions – use RARF New Unit Additions – affirmative declaration New Unit Additions – affirmative declaration Renewables – Wind: effective load carrying capability / Solar: RARF Renewables – Wind: effective load carrying capability / Solar: RARF Mothballed Capacity – no change Mothballed Capacity – no change DC Tie Capacity – no change DC Tie Capacity – no change Switchable Capacity - RARF Switchable Capacity - RARF Netting of Generation and Load – no change Netting of Generation and Load – no change Retired Capacity – introduce “pending unit requirements” line Retired Capacity – introduce “pending unit requirements” line CDR Format – move Summer and Winter Capacities closer to front CDR Format – move Summer and Winter Capacities closer to front

TAC Voting Item TAC Recommended Motion: Move to endorse WMS recommendation to adopt the GATF report recommendations.

TAC Voting Item Wind Cost Allocation Task Force (WCATF) Wind Cost Allocation Task Force (WCATF) Two allocation methodologies were proposed for WMS Consideration Two allocation methodologies were proposed for WMS Consideration Wind Plus Load Ratio Share Proposal ( ENDORSED ) Wind Plus Load Ratio Share Proposal ( ENDORSED ) Wind generators receive a hedgeable ancillary service obligation for responsive reserves, non-spinning reserves, regulation up, and regulation down Wind generators receive a hedgeable ancillary service obligation for responsive reserves, non-spinning reserves, regulation up, and regulation down Wind generators can reduce the obligation by qualifying for “reliability credits” Wind generators can reduce the obligation by qualifying for “reliability credits” Incremental Allocation Proposal Incremental Allocation Proposal WMS also heard a presentation that advocated for no action to be taken regarding WCA WMS also heard a presentation that advocated for no action to be taken regarding WCA

TAC Voting Item WMS Motion WMS Motion WMS endorsed the Wind Plus Load Ratio Share proposal and directed WCATF to develop appropriate NPRR language WMS endorsed the Wind Plus Load Ratio Share proposal and directed WCATF to develop appropriate NPRR language Motion carries: 61.1% to 38.9% Motion carries: 61.1% to 38.9% TAC Recommended Motion: Move to endorse WMS recommendation to adopt the Wind Plus Load Ratio Share Proposal and direct WMS to draft protocol language.

TAC Voting Item NPRR 091 NPRR 091 WMS hosted Special Meeting to discuss and address recent comments to NPRR 091 WMS hosted Special Meeting to discuss and address recent comments to NPRR NPRR-28 Steel Group Comments091NPRR-28 Steel Group Comments 091NPRR-28 Steel Group Comments091NPRR-28 Steel Group Comments 091NPRR-27 REP Nodal Group Comments091NPRR-27 REP Nodal Group Comments 091NPRR-27 REP Nodal Group Comments091NPRR-27 REP Nodal Group Comments 091NPRR-25 Luminant Comments091NPRR-25 Luminant Comments 091NPRR-25 Luminant Comments091NPRR-25 Luminant Comments Commission Staff, ERCOT and the IMM were present and updated WMS on the status of potential need for changes under P.U.C. SUBST. R to allow for a temporary mitigated offer cap. Commission Staff, ERCOT and the IMM were present and updated WMS on the status of potential need for changes under P.U.C. SUBST. R to allow for a temporary mitigated offer cap. After a robust discussion a Motion was made to endorse NPRR 091 in form proposed by Steel group; this Motion Failed After a robust discussion a Motion was made to endorse NPRR 091 in form proposed by Steel group; this Motion Failed

TAC Voting Item NPRR 091 NPRR 091 A second Motion was made to endorse the concept of revising Section , Scarcity Pricing and Mitigated Offer Cap During Nodal Startup, in order to allow cost recovery for units using fuel oil; this Motion Passed A second Motion was made to endorse the concept of revising Section , Scarcity Pricing and Mitigated Offer Cap During Nodal Startup, in order to allow cost recovery for units using fuel oil; this Motion Passed Subsequent to the Special Meeting, Luminant filed comments to the NPRR which addressed the WMS recommendation and other options. Subsequent to the Special Meeting, Luminant filed comments to the NPRR which addressed the WMS recommendation and other options. comments The Commission met today. The Commission met today. WMS endorses changes to in the Luminant comments but defers on making a motion recommendation.

Working Group Reports CMWG Presentation available at Presentation available at Main topics Main topics Operation of Phase Shifting Transformers Operation of Phase Shifting Transformers Yellow Jacket Phase Shifter In Service Date Yellow Jacket Phase Shifter In Service Date ERCOT Coordinating with AEP to optimize flows ERCOT Coordinating with AEP to optimize flows Constraint Competitiveness Test Status Constraint Competitiveness Test Status GOAL: recommendation of Competitive Constraints to April WMS GOAL: recommendation of Competitive Constraints to April WMS Next Meeting: March 09 and March 29, 2010 Next Meeting: March 09 and March 29, 2010

Working Group Reports DSWG Presentation available at Presentation available at

Working Group Reports DSWG EILS improvement group met on February 26 th EILS improvement group met on February 26 th Topics were: Topics were: Substitution rules Substitution rules Reinstatement procedures and timeline Reinstatement procedures and timeline Review baseline performance Review baseline performance Bidding processes Bidding processes Meter data submittal Meter data submittal Procurement schedule Procurement schedule Next DSWG Meeting is March 5 th Next DSWG Meeting is March 5 th

Working Group Reports QMWG Presentation available at Presentation available at Main Topics Main Topics Definition of WGR and implementation of PRR830 Definition of WGR and implementation of PRR830 WGRPP Forecast Accuracy Update WGRPP Forecast Accuracy Update Load Forecasting Accuracy Load Forecasting Accuracy Zonal RPRS unit de-selection Zonal RPRS unit de-selection Implementation of PRR811 Implementation of PRR811 Draft NPRR, WGR HSL update process (possible Vote) Draft NPRR, WGR HSL update process (possible Vote) SCR757, Real Time Wind Production by Zone SCR757, Real Time Wind Production by Zone Forecasting Ancillary Service Requirements Forecasting Ancillary Service Requirements Next QMWG Meeting: March 8 th Next QMWG Meeting: March 8 th

Working Group Reports MCWG Presentation available at Presentation available at Main topics Main topics NPRR 206 – ERCOT Board Action NPRR 206 – ERCOT Board Action WMS directed MCWG to define “e” factors with goal of April TAC and Board Meeting WMS directed MCWG to define “e” factors with goal of April TAC and Board Meeting MCWG and CWG – 1 credit subcommittee? MCWG and CWG – 1 credit subcommittee? WMS endorsed NPPR - DAM & Real-Time Market Default Allocation Changes – ERCOT reviewing WMS recommendation, NPRR should be submitted soon. WMS endorsed NPPR - DAM & Real-Time Market Default Allocation Changes – ERCOT reviewing WMS recommendation, NPRR should be submitted soon. Update on Short-Pay Fund - a subgroup has been set up to discuss and e Update on Short-Pay Fund - a subgroup has been set up to discuss and expectation is that a proposal will be available for WMS for March 2010 Next Meetings – March 8, 12 and 26 th

Working Group Reports VCWG Presentation available at Presentation available at Main Topics T he standard cost proposal, as presented by VCWG in the whitepaper, was endorsed and VCWG was directed to develop NPRR language, review hydro issue (should Hydro be with Coal or explicitly not RUC’d), review requests for additional technologies to be added to the proposal, make a recommendation to WMS on escalation factors for Standard Costs and options for switching from VC to SC and vice-versa. T he standard cost proposal, as presented by VCWG in the whitepaper, was endorsed and VCWG was directed to develop NPRR language, review hydro issue (should Hydro be with Coal or explicitly not RUC’d), review requests for additional technologies to be added to the proposal, make a recommendation to WMS on escalation factors for Standard Costs and options for switching from VC to SC and vice-versa. whitepaper Some minor changes were also made to the Manual for i) a change control process, ii) allow fuel from breaker close to LSL and iii) affidavit. Some minor changes were also made to the Manual for i) a change control process, ii) allow fuel from breaker close to LSL and iii) affidavit. Next Meeting: not scheduled at time of ppt Next Meeting: not scheduled at time of ppt

Working Group Reports VCWG Standard Costs 1. Options for Filing Verifiable Costs a) File Verifiable Costs. b) File with election of Standard O & M Costs by Technology. 1. Standard O & M per Startup by Technology - $ per Start 2. Standard O & M for Energy - $/MWH 3. Will have to provide Actual fuel flows, Heat Rate Curves, emissions rates, ect. c) Nodal Generics will be used for entities that do not elect option a or b.

Working Group Reports VCWG Standard Costs WMS endorsed $/MWH for standard O & M Costs.

Other Activities NPRR211: Modify RUC Capacity Short Charge to Use Final Energy Trades NPRR211: Modify RUC Capacity Short Charge to Use Final Energy Trades PRS referred NPRR211 to WMS to allow for further time to work on revisions and additional discussion at the March 2010 WMS meeting, and requested that WMS report back at the March 2010 PRS meeting. PRS referred NPRR211 to WMS to allow for further time to work on revisions and additional discussion at the March 2010 WMS meeting, and requested that WMS report back at the March 2010 PRS meeting. NPRR212 Disputing Fuel Oil Price (FOP) Costs NPRR212 Disputing Fuel Oil Price (FOP) Costs WMS endorsed NPRR212 as amended by the 2/15/10 Luminant Energy comments and as revised by WMS. There was one opposing vote from the Consumer Market Segment. WMS endorsed NPRR212 as amended by the 2/15/10 Luminant Energy comments and as revised by WMS. There was one opposing vote from the Consumer Market Segment.

Inactive Task Force Joint ROS/WMS Multiple Interconnection of Generation Task Force (MIG TF) Joint ROS/WMS Multiple Interconnection of Generation Task Force (MIG TF) TF has be disbanded TF has be disbanded WMS Action to be taken: WMS Action to be taken: Market Participant Notification Period (Transmission outage) Market Participant Notification Period (Transmission outage) ROS ROS Interconnection Date for Protocol Considerations Interconnection Date for Protocol Considerations Mark Bruce shall draft protocols to introduce generation operation date. The generation operation date shall define what the generation unit is expected to do, and the Interconnection Date would define the requirements of equipment at the point of interconnection. Existing resources reconnecting to a different line would be grandfathered to the date of the original interconnection. Mark Bruce shall draft protocols to introduce generation operation date. The generation operation date shall define what the generation unit is expected to do, and the Interconnection Date would define the requirements of equipment at the point of interconnection. Existing resources reconnecting to a different line would be grandfathered to the date of the original interconnection. Planning Concept Endorsement Planning Concept Endorsement Option – B - Minimal Cost - As a default view TSPs would try to minimize the cost of Transmission, (ERCOT process does not change regarding optimization). Option – B - Minimal Cost - As a default view TSPs would try to minimize the cost of Transmission, (ERCOT process does not change regarding optimization). TO BE DRAFTED BY RPG TO BE DRAFTED BY RPG

WMS 2010 Goals Item [WMS to set prioritization]Item [WMS to set prioritization]WMS input/direction needed byWMS input/direction needed by Nodal Market TransitionNodal Market TransitionOn-going Market Participant Readiness Market Participant Readiness TCR to CRR Transition TCR to CRR Transition Nodal Protocol Tracebility Nodal Protocol Tracebility Nodal Parking Deck Nodal Parking Deck Nodal Test Evaluation Nodal Test Evaluation Nodal Verifiable Cost MethodologyNodal Verifiable Cost MethodologyOn-going (VCWG)On-going (VCWG) Consideration of necessary Zonal Market changesConsideration of necessary Zonal Market changesBefore Q2Before Q2 Review of Generation Adequacy in ERCOTReview of Generation Adequacy in ERCOTQ1 (GATF)Q1 (GATF) Market Issues Related to:Market Issues Related to: Credit issuesCredit issuesOn-going (MCWG)On-going (MCWG) EILSOn-going (DSWG)On-going (DSWG) Reliability & A/S Dispatch Impacts on Energy MarketsReliability & A/S Dispatch Impacts on Energy MarketsOn-going Market Event EvaluationMarket Event EvaluationOn-going Adv. meters & other demand response in A/S and Energy MarketsAdv. meters & other demand response in A/S and Energy MarketsOn-going (DSWG)On-going (DSWG) Wind & related renewable technology integrationWind & related renewable technology integrationOn-going (various WG)On-going (various WG) Criteria in Nodal for supplying A/S, Energy and Capacity MarketsCriteria in Nodal for supplying A/S, Energy and Capacity MarketsOn-going (WMS)On-going (WMS) Integration of Quick Start Resources into NodalIntegration of Quick Start Resources into NodalQSTF Power Storage DevicesOn-going (TBD) LaaR Responsive Reserve Performance Penalty On-going (DSWG)On-going (DSWG)