1. PRS Workshop- NPRR755/NOGRR154 WAN communications of Critical Market Data and Agency-Only QSE Feb 29, 2016

2. 2 Outline Background of data communications over Wide Area Network Potential reliability issue to be addressed ERCOT next steps

3. 3 Zonal WAN Requirement Background Prior to Nodal Go-Live in 2010, Zonal Operating Guide requirement 8.3.1 called for wholesale operations to be conducted over the Wide Area Network (WAN), including for Voice, ICCP, API submissions* 8.3.1 ERCOT WAN (http://www.ercot.com/content/mktrules/guides/operating/2010/08/August%201,%202010%20Operating%20Guides.pdf)http://www.ercot.com/content/mktrules/guides/operating/2010/08/August%201,%202010%20Operating%20Guides.pdf In order to facilitate wholesale operations and frequency control as a single control area, ERCOT provides a wide area network (the ERCOT WAN). This communications network uses redundant, digital communications between ERCOT control centers and one (1) or more facilities at each QSE and TDSP. The ERCOT WAN has sufficient bandwidth capacity and speed to enable: Real Time (operational metering) data exchange for frequency control and transmission security Operational voice communications for both normal and emergency use. The ERCOT WAN supports both off-premise exchanges (OPX) with ERCOT’s control facilities and the ERCOT Hotlines. Data exchange to support applications programming interface routines. These include power scheduling, Operating Plans, Outage requests, Dispatch Instructions, posting of information and other applications. *Note: API references an Applications Programming Interface (API) which is a machine-to-machine interface. XML references eXtensible Markup Language (XML) which is the file format of the data delivered over the API

4. 4 Resource(s) Historical Zonal QSE communication QSE Telemetry over private network Resource(s) ERCOT WAN Voice, ICCP, XML-API WAN Voice, ICCP, XML-API QSE User of TML- MIS HTTPS:// WAN or Internet HTTPS:// WAN or Internet

5. 5 WAN Communications of Critical Market Data For both Nodal and Zonal QSEs with Resources were required to have WAN and to qualify XML communications over the WAN During Nodal transition, many QSEs had WAN and Internet connections, and ERCOT did not restrict delivery of API/XML submissions to only the WAN. Nodal Operating Guide requirements were not specific for identifying “critical market data” in Section 7.1(2) regarding WAN communications: –The MPLS network is provisioned with connectivity to each WAN participant. The primary purpose of the MPLS network is to facilitate Transmission Control Protocol/Internet Protocol (TCP/IP) connectivity between ERCOT and the market for critical market data, most notably Inter-Control Center Communications Protocol (ICCP) and Applications Programming Interface (API) data ERCOT recognized issue after Nodal stabilization and began working with QSEs to transition all XML submissions to WAN.

6. 6 Resource(s) Observed QSE Internet communication QSE Telemetry over private network Resource(s) ERCOT WAN Voice, ICCP WAN Voice, ICCP QSE User of MIS WAN or Internet- HTTPS:// Agent XML- API Agent XML- API Internet COP A/S Deployments A/S Offers

7. 7 WAN Communications of Critical Market Data Potential reliability issue to be addressed: –Recognition at ERCOT through security exercises that loss of the Internet and Resource-specific data can create reliability risks, and that Resource-specific data is critical to reliable operations, for both ICCP and API. Loss of Current Operating Plans removes hourly updates for resource availability and capacity Loss of A/S deployment notifications for deploying resources Loss of A/S offers if SASM needed to replace lost AS on system Loss of 3-Part Supply Offers where most A/S is linked to 3PSO (still run a Day- Ahead Market if internet is down to procure A/S) Loss of notifications indicating when there are COP or Telemetry errors observed Blackstart availability, Wind Prod Potential, etc –ERCOT wants to work with participants and effectively remove this risk and standardize the Resource-specific API/XML data over the Wide Area Network –Additionally ERCOT wants to set clear requirements where data is routed through a 3 rd party, that the third party is registered as an agent and Market Participant with ERCOT and compliant with all WAN requirements.

8. 8 Resource(s) Proposed QSE Internet communication QSE Telemetry over private network Resource(s) ERCOT WAN Voice, ICCP WAN Voice, ICCP QSE User of MIS WAN or Internet- HTTPS:// Agent- Only QSE Agent- Only QSE WAN XML-API WAN XML-API

9. 9 ERCOT Proposal ERCOT goal to ensure timely and secure Resource-specific data communications in ERCOT 1.NOGRR154 changes- All critical data API/XML submissions from QSEs with Resources to ERCOT shall be communicated via the WAN This approach would: –Ensure Resource data is always conveyed on most reliable platform –Achieve consistent operational expectations to/from ERCOT for Resource data –Ensure current and future Resource submission types are required via the WAN –Less susceptible to internet attacks (Heartbleed and other compromises) –Requirement of most other ISOs (security best practices) 2.NPRR755 changes- Creates new QSE registration (“Agent-Only QSE) which allowed third party providers of this data to register as Market Participants with ERCOT and ensure they conform to the same network communication requirements.

10. 10 ERCOT Proposal ERCOT path forward 1.ERCOT submitted NPRR755 and NOGRR154 to define the Resource-specific communications with clarifications and changes to be considered and Agent-Only QSE definition 2.ERCOT hosting this workshop to review details and receive input Review NPRR and NOGRR Discuss impacts to other supporting processes and documents, including: –WAN Application –WAN Agreement –NCI Contacts –Agency Agreement –QSE Application Form ERCOT introducing transparency and contacts into agreements for capturing people and pathways for Voice, ICCP, and XML 3.Most companies are currently compliant, and ERCOT would work on transitional timing for those that need to refine their processes and registration.