1. NPRR605 Ancillary Service Make-Whole Payments Under a Watch

2. Scenario DA market fails to clear needed AS ERCOT announces a Watch SASM is announced SASM fails to clear needed AS ERCOT would need to RUC units for AS – This process is not new – Operational procedure indicates that uncommitted units would be dispatched first If there are no uncommitted units, ERCOT will need to assign AS to self-committed units

3. QSE Expectation Self-commit Resource to provide energy 100MW Load 100MW QSE expectation is that there is no exposure to significant volatility

4. Why NPRR is needed Under ORDC: – Ancillary service assignment to an on-line resource would replace energy output with AS output Compensation for energy is LMP plus adder Compensation for AS is only the adder

5. 2014 Summer Self-commit Resource to provide energy 100MWLMP 90MW$9000 Ancillary Service assignment Ps 10MW$2000 (When LMP reaches the SWOC of $7000, the adder should be $2000) Load LMP 100MW$9000