1. 1 Generator Telemetry and Market Prices WebEx Training July 28 th, 2015

2. 2 Antitrust Admonition ERCOT strictly prohibits Market Participants and their employees who are participating in ERCOT activities from using their participation in ERCOT activities as a forum for engaging in practices or communications that violate the antitrust laws. The ERCOT Board has approved guidelines for members of ERCOT Committees, Subcommittees and Working Groups to be reviewed and followed by each Market Participant attending ERCOT meetings. If you have not received a copy of these Guidelines, an electronic version is available at http://www.ercot.com/about/governance/index.html. Please remember your ongoing obligation to comply with all applicable laws, including the antitrust laws.

3. 3 Overview This information is being given to clarify QSE’s current Nodal Protocol telemetry requirements and the impact to market prices of correct and incorrect telemetry We will not be discussing settlements of these examples All examples and equations are based off current implemented language in the Nodal Protocols and Other Binding Documents except where noted otherwise

4. 4 Outline I.Status OFF telemetry a.Protocol review b.Examples II.RUC and ONOPTOUT telemetry a.Protocol review b.Examples III.Summary and Questions

5. 5 Status OFF telemetry, Protocol review 6.4.6Resource Status (1)ERCOT shall use the telemetered Resource Status for all applications requiring status of Resources during the Operating Hour, including SCED and Load Frequency Control (LFC). QSEs shall provide ERCOT with accurate telemetry of the current capability of each Resource including the Resource Status, Ramp Rates, HSL, and LSL. (2)ERCOT shall perform the following validations during the Operating Period: (a)Each QSE shall provide the Real-Time operating status of each Resource to ERCOT by telemetry using the status codes in the COP for Real-Time as described in Section 3.9, Current Operating Plan (COP); and (b)Five minutes before the end of each hour, ERCOT shall identify inconsistencies between the telemetered Resource Status and the Resource Status stated in the COP for that Resource in the next hour. On detecting an inconsistency, ERCOT shall provide a notice of inconsistent Resource Status to the QSE using the Messaging System.

6. 6 Status OFF telemetry The requirement for accurate telemetry includes a resource’s capability when telemetering a resource status of OFF. Incorrect telemetry when telemetry status is OFF can affect prices through the Operating Reserve Demand Curve value RTCST30HSL – Real-Time Generation Resources with Cold Start Available in 30 Minutes – The Real-Time telemetered HSLs of Generation Resources that have telemetered an OFF Resource Status and can be started from a cold temperature state in 30 minutes and discounted by the system-wide discount factor RTCST30HSL impacts the binding language in sections: Nodal Protocols section 6.7.4, Real-Time Ancillary Service Imbalance Payment or Charge Other Binding Document, Methodology for Implementing Operating Reserve Demand Curve (ORDC) to Calculate Real-Time Reserve Price Adder

7. 7 Status OFF telemetry RTCST30HSL impacts the processes described in detail in sections: Protocol section 6.7.4, Real-Time Ancillary Service Imbalance Payment or Charge Capacity counted toward the QSE’s AS Imbalance RTOFFCAP q =(SYS_GEN_DISCFACTOR * RTCST30HSL q ) + (SYS_GEN_DISCFACTOR * RTOFFNSHSL q )+ RTCLRNS q OBD section 2.2.1 Calculation of R s and R sns Capacity counted toward the R sns R sns = RTOLCAP + RTOFFCAP RTOFFCAP = RTCST30HSL + RTOFFNSHSL +RTCLRNS + RTOLNSRS OBD section 2.2, Determine PBMCL Capacity counted toward Hour-Ahead Reserves and SCED Reserves HA Reserve = RUC On-Line Gen COP HSL - (RUC Load Forecast + RUC DCTIE Load)+ RUC Off-Line Gen COP OFFNS Responsibility + RUC On-Line Load COP Non-Spin Responsibility + RUC On-Line Load COP Reg-Up Responsibility + RUC On-Line Load COP RRS Responsibility + OFF10 from COP + OFF30 from COP SCED Reserve = SCED On-Line Gen HSL-SCED Gen Base Point + SCED Off-Line Gen OFFNS Schedule + SCED On-Line Load Telemetry RRS Schedule + SCED On-Line Load Telemetry Reg-Up Responsibility + SCED On-Line Load Telemetry Non-Spin Schedule + OFF10 + OFF30

8. 8 Status OFF telemetry For Hour Ahead reserve, COP value at snapshot at the end of the adjustment period is used for the operating hour. Example: Operating Hour ending 12 would use COP snapshot taken for HRUC just after hour ending 10 Average of SCED values for operating hour ending 12 HE 12HE 11HE 10

9. 9 Status OFF telemetry Example 1: An Intermittent Renewable Resource is telemetering OFF status QSE A for Hour Ending 01 has a Resource WGRA with an HSL = 50 MW In COP snapshot resource status is OFF and HSL = 0 MW Telemetering an OFF status and an HSL = 50 MW In Resource Asset Registration Form, or update from QSE submission, CST is 0.5 Hours

10. 10 Status OFF telemetry Example 1: An Intermittent Renewable Resource is telemetering OFF status Outcome: 50 MW counted toward the QSE’s AS Imbalance 50 MW counted toward the R sns which feeds into the Off-Line and On-Line Price Adder calculation 0 MW counted toward Hour-Ahead Reserves and 50 MW SCED Reserves, 50 MW reserve error for Loss of Load Probability Curve (LOLP) Telemetry Correction: For an IRR when telemetering a resource status of OFF the HSL must be zero –Note: NPRR 710 is proposing a change to set an IRR’s HSL to zero when telemetering a resource status OFF in ERCOT systems

11. 11 Status OFF telemetry, Examples Example 2: A Generation Resource with cold start time of 30 minutes or less and telemetering an OFF status QSE A for Hour Ending 01 has a Resource CTA with an HSL = 50 MW In COP snapshot resource status is OFF and HSL = 50 MW Telemetering an OFF status and an HSL = 50 MW In Resource Asset Registration Form, or update from QSE submission, CST is 0.5 Hours

12. 12 Status OFF telemetry, Examples Example 2: A Generation Resource with cold start time of 30 minutes or less and telemetering an OFF status Outcome: 50 MW counted toward the QSE’s AS Imbalance 50 MW counted toward the R sns which feeds into the Off-Line and On-Line Price Adder calculation 50 MW counted toward Hour-Ahead Reserves and SCED Reserves, zero reserve error for Loss of Load Probability Curve (LOLP) Telemetry Correction: None; COP submission and telemetry correct

13. 13 Status OFF telemetry, Examples Example 3: A Combine-Cycle Generation Resource has a configuration with a cold start time of 30 minutes or less and telemetering an OFF status QSE A for Hour Ending 01 has a Resource CCA with the following configurations Configuration 1: 1 CT x 0 ST HSL = 50 MWCST =.5 Hours Configuration 2: 2 CT x 0 ST HSL = 100 MWCST =.5 Hours Configuration 3: 1 CT x 1 STHSL = 100 MWCST = 1.5 Hours Configuration 4: 2 CT x 1 STHSL = 175 MWCST = 1.5 Hours In COP resource status is OFF for all configurations In Real-Time telemetering an OFF status a configuration of 1 and an HSL = 175 MW

14. 14 Status OFF telemetry, Examples Example 3: A Combine-Cycle Generation Resource has configurations with cold start times of 30 minutes or less and telemetering an OFF status Outcome: 175 MW counted toward the QSE’s AS Imbalance 175 MW counted toward the R sns which feeds into the Off-Line Price Adder calculation 100 MW counted toward Hour-Ahead Reserves and 175 MW counted toward SCED Reserves, 75 MW reserve error for Loss of Load Probability Curve (LOLP) Telemetry Correction: Telemetry values must be consistent Ramp Rates, HSL and LSL should match the telemetered combined cycle configuration number

15. 15 RUC and ONOPTOUT telemetry

16. 16 RUC and ONOPTOUT telemetry, Protocol review 5.5.2 Reliability Unit Commitment (RUC) Process (11)A QSE with a Resource that is not a Reliability Must-Run (RMR) Unit that has been committed in a RUC process or by a RUC Verbal Dispatch Instruction (VDI) may choose, at its sole discretion, to self-commit that Resource in lieu of the RUC instruction. The QSE must notify ERCOT of the intent to self-commit the Resource by either: (a)Setting the COP Resource Status to ONOPTOUT before the end of the Adjustment Period for the first hour of a contiguous block of RUC-Committed Hours that includes the RUC Buy- Back Hour. If an existing RUC instruction is extended by a later RUC instruction, all contiguous RUC- Committed Hours shall be treated as one block; or (b)Filing a dispute for the Forced Outage or Startup Loading Failure of another Resource under the control of the same QSE that occurred in an hour for which the Resource received a RUC instruction, subject to verification and approval by ERCOT. (12)If a QSE self-commits a Resource pursuant to the criteria in paragraph (11) above, then: (a)For purposes of Settlement, all hours in the contiguous block of RUC-Committed Hours that includes the RUC Buy-Back Hour shall be considered RUC Buy-Back Hours. If a contiguous block of RUC-Committed Hours spans more than one Operating Day, all contiguous RUC-Committed Hours within each Operating Day shall be treated as independent blocks and must be opted-out independent of each other; and (b)RUC Settlement compensation shall be forfeited in all RUC Buy-Back Hours.

17. 17 RUC and ONOPTOUT telemetry, Protocol review 6.5.7.3.1 Determination of Real-Time On-Line Reliability Deployment Price Adder (1)The following categories of reliability deployments are considered in the determination of the Real-Time On-Line Reliability Deployment Price Adder: (a)RUC-committed Resources with a telemetry Resource Status of ONRUC;……. (2)The Real-Time On-Line Reliability Deployment Price Adder is an estimation of the impact to energy prices due to the above categories of reliability deployments. For intervals where there are reliability deployments as described in paragraph (1) above, after the two-step SCED process and also after the Real-Time On-Line Reserve Price Adder and Real-Time Off-Line Reserve Price Adder have been determined, the Real-Time On-Line Reliability Deployment Price adder is determined as follows: (a)For RUC-committed Resources with a telemetered Resource Status of ONRUC and for RMR Resources that are On-Line, set the LSL, LASL, and LDL to zero.

18. 18 RUC and ONOPTOUT telemetry, Protocol review SCED will calculate a Reliability Deployment Price Adder if a SCED resource telemeters resource status of ONRUC Currently, ONOPTOUT has to be shown in the COP before the end of the adjustment period for the first hour of a contiguous block of RUC committed hours to opt-out of RUC settlement for any hours of the RUC block

19. 19 Status ONRUC and ONOPTOUT telemetry Example 4: A 400 MW resource, with an LSL of 100 MW, was committed by a RUC process and communicated by ERCOT at 13:20 for Hour Ending 16-18 QSE A updates COP at 13:45 for its RUC committed resource to reflect ONRUC for hours ending 16-18 In Real-Time telemeters a resource status of ONRUC for hours ending 16-18 Outcome: SCED Energy Offer Curve for resource will be set from zero to HSL at greater of the submitted EOC and the RUC floor of $1500 / MWh SCED will calculate a Reliability Deployment Price Adder and the Energy Offer Curve’s for RUC committed resources will be extended from LSL to zero at greater of first point on the resource’s EOC or the RUC floor of $1500 /MWh and the RUC resources LSL, LASL and LDL will be set to zero Telemetry Correction: None; QSE A accurately updated COP and real-time telemetry

20. 20 Status ONRUC and ONOPTOUT telemetry Example 5: A 400 MW resource, with an LSL of 100 MW, was committed by a RUC process and communicated by ERCOT at 13:20 for Hour Ending 16-18 QSE A updates COP at 13:45 for its RUC committed resource to reflect ONRUC for hours ending 16-18 In Real-Time telemeters a resource status of ON Outcome: No Energy Offer Curve check/adjustment for RUC floor No Reliability Deployment Price Adder since the resource telemetry was ON and not ONRUC Telemetry Correction: QSE A accurately updated it’s COP but should have telemetered a resource status of ONRUC

21. 21 Status ONRUC and ONOPTOUT telemetry Example 6: A resource was not committed by an RUC process for Hour Ending 16-18 QSE A COP show resource status of ON for hours ending 16-18 In Real-Time telemeters a resource status of ONRUC Outcome: SCED Energy Offer Curve for resource will be set from zero to HSL at greater of the submitted EOC and the RUC floor of $1500 / MWh SCED will calculate a Reliability Deployment Price Adder and the Energy Offer Curve’s for RUC committed resources will be extended from LSL to zero at greater of first point on the resource’s EOC or the RUC floor of $1500 /MWh and the RUC resources LSL, LASL and LDL will be set to zero Telemetry Correction: QSE A accurately showed an ON status in it’s COP but should have telemetered a resource status of ON and not ONRUC in real-time

22. 22 RUC and ONOPTOUT telemetry, Protocol review Example 7: A resource was committed by an HRUC process for Hour Ending 16-18 communicated by Verbal Dispatch Instruction at 14:05, after the adjustment period QSE A can not update its COP after the end of the adjustment period for HE16 so the resource status of ON is shown for hours ending 16-18 In Real-Time telemeters a resource status of ONRUC Outcome: SCED Energy Offer Curve for resource will be set from zero to HSL at greater of the submitted EOC and the RUC floor of $1500 / MWh SCED will calculate a Reliability Deployment Price Adder and the Energy Offer Curve’s for RUC committed resources will be extended from LSL to zero at greater of first point on the resource’s EOC or the RUC floor of $1500 /MWh and the RUC resources LSL, LASL and LDL will be set to zero Telemetry Correction: QSE A accurately reflected its resource status in it’s COP and real-time telemetry

23. 23 Status ONRUC and ONOPTOUT telemetry Example 8: A 400 MW resource, with an LSL of 100 MW, was committed by a RUC process and communicated by ERCOT at 13:20 for Hour Ending 16-18 QSE A updates COP at 13:45 for its RUC committed resource to reflect ONOPTOUT for hour ending 18 In Real-Time telemeters a resource status of ONOPTOUT Outcome: No Energy Offer Curve check/adjustment for RUC floor No Reliability Deployment Price Adder since the resource telemetry was ON and not ONRUC QSE opted out of RUC settlement for RUC committed resource because hour ending 18 is part of a contiguous block of RUC committed hours Telemetry Correction: QSE A accurately updated it’s COP and real-time telemetry

24. 24 Status ONRUC and ONOPTOUT telemetry Example 9: A 400 MW resource, with an LSL of 100 MW, was committed by a RUC process and communicated by ERCOT at 13:20 for Hour Ending 16-18 QSE A updates COP at 13:45 for its RUC committed resource to reflect ONOPTOUT for hours ending 16-18 In Real-Time telemeters a resource status of ONRUC Outcome: SCED Energy Offer Curve for resource will be set from zero to HSL at greater of the submitted EOC and the RUC floor of $1500 / MWh SCED will calculate a Reliability Deployment Price Adder and the Energy Offer Curve’s for RUC committed resources will be extended from LSL to zero at greater of first point on the resource’s EOC or the RUC floor of $1500 /MWh and the RUC resources LSL, LASL and LDL will be set to zero QSE opted out of RUC settlement for RUC committed resource but RTRDP was calculated Telemetry Correction: QSE A accurately updated it’s COP but it’s telemetered resource status should have been ONOPTOUT not ONRUC

25. 25 Status ONRUC and ONOPTOUT telemetry Example 10: A 400 MW resource, with an LSL of 100 MW, was committed by a RUC process and communicated by ERCOT at 14:20 for Hour Ending 16- 18 QSE A can not update its COP after the end of the adjustment period for HE16 so the resource status of ON is shown for hours ending 16-18 In Real-Time telemeters a resource status of ONRUC Outcome: Can not ONOPTOUT due to RUC commitment after the end of the adjustment period SCED Energy Offer Curve for resource will be set from zero to HSL at greater of the submitted EOC and the RUC floor of $1500 / MWh SCED will calculate a Reliability Deployment Price Adder and the Energy Offer Curve’s for RUC committed resources will be extended from LSL to zero at greater of first point on the resource’s EOC or the RUC floor of $1500 /MWh and the RUC resources LSL, LASL and LDL will be set to zero Telemetry Correction: QSE A’s COP and real-time telemetry were correct

26. 26 Status ONRUC and ONOPTOUT telemetry *Post NPRR679 implementation Example 11: A 400 MW resource, with an LSL of 100 MW, was committed by a RUC process and communicated by ERCOT at 14:20 for Hour Ending 16- 18 QSE A can not update its COP after the end of the adjustment period for HE16 so the resource status of ON is shown for hours ending 16-18 In Real-Time telemeters a resource status of ONOPTOUT Outcome: QSE can ONOPTOUT due to RUC commitment after the end of the adjustment period by telemetering ONOPTOUT No Energy Offer Curve check/adjustment for RUC floor No Reliability Deployment Price Adder since the resource telemetry was ONOPTOUT and not ONRUC QSE opted out of RUC settlement for RUC committed resource Telemetry Correction: QSE A’s COP and real-time telemetry were correct

27. 27 Summary Generators are expected to telemeter resource capability even when Resource Status is OFF –This can affect the ORDC Reserves, ORDC LOLP calculation and the QSE’s AS imbalance calculation RUC trigger for the Reliability Deployment Price Adder is if telemetered resource status of any SCED resource is ONRUC Currently, ONOPTOUT has to be shown in the COP before the end of the adjustment period for the first hour of a contiguous block of RUC committed hours to opt-out of RUC settlement for any hours of the RUC block NPRR679 currently on the PPL for March of 2016 release

28. 28 Questions and Additional Information Client Services for Market Participants –512-248-3900 ClientServices@ercot.com ClientServices@ercot.com ERCOT market training –Basic Training Program http://www.ercot.com/services/training/course/52#overview –Market Settlements 301 http://www.ercot.com/services/training/course/44#overview –Operating Reserve Demand Curve eLearning http://www.ercot.com/services/training/course/107