1. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 1 Workshop: 2-Hour Full-System Load Frequency Control (LFC) Testing (fka, EDS 3 R6.3 LFC testing) May 6, 2010

2. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 2 Antitrust Admonition 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, copies are available at the Client Relations desk. Please remember your ongoing obligation to comply with all applicable laws, including the antitrust laws.

3. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Workshop Agenda Agenda – Welcome & Admonition Test Overview & Set-up ICCP Data Submittals Test Step by Step Walkthrough EOCs, Inc/Dec Offers, and Output Schedules ERCOT Assessment and QSE Self Assessments Settlements Reminders

4. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC –Testing Workshop Test Overview & Set-up Stacy Bridges

5. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC –Test Overview & Setup Why? The Two Hour test will: –Provide a system-wide closed loop test using Nodal dispatch signals –Provide an opportunity to perfect switching Generation Resources from Zonal control to Nodal The switching sequence perfected during the 2-Hour LFC Test will be used as the switching template for the 8-Hour and 48-Hour LFC Tests ERCOT is anticipating approximately 30 minutes of nodal frequency control during the 2-Hour LFC Test –Test ERCOT’s ability to perform frequency control for a short period using LFC to calculate and dispatch Regulation –Test SCED’s ability to manage network congestion using the Nodal EMS Transmission Constraint Management application (TCM) –Provide a real-time full integration test of SCED and LFC generation dispatch

6. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC –Test Overview & Setup How? During the 2-Hour LFC Test: –Zonal and Nodal systems will continue to operate in parallel –Generation Resources will be switched by QSE portfolio from Zonal to Nodal and vice versa –SCED will provide Base Points and manage congestion –LFC will control frequency and provide Regulation dispatch instructions –TCM will be used for activating constraints for SCED –The market will settle in accordance with the provisions for EDS 3 R6.3 testing described in the Zonal Protocols (reference PRR 748, Settlement during EDS 3 LFC Testing):PRR 748 Section 6.8.2.3, Energy Payments Section 7.4.3.1, Balancing Energy Up from a Specific Resource Section 7.4.3.2, Balancing Energy Down from a Specific Resource

7. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Overview & Setup How? Two hours is an ERCOT estimate for the anticipated total time it will take to switch all QSE Resources to Nodal and then to switch them all back to Zonal Depending on the test progression or any unplanned conditions, the 2-Hour LFC Test may extend beyond the planned two hours The necessary Verbal Dispatch Instructions (VDIs) will be in place and extended as needed if the test exceeds the allotted two hours If the switching of QSEs to Nodal does not progress as expected, or if other unplanned circumstances arise, ERCOT may choose to end the test by switching all QSEs back to Zonal as soon as possible

8. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Overview & Setup Unit Commitment (Zonal system) Unit commitment will be managed in the Zonal system. For this reason it is crucial that the Zonal system continues to operate as normal in parallel with the Nodal system during the 2-Hour LFC Test SCED does not require RUC to be operating to produce Base Points. SCED will use Resources’ net MW, telemetered Resource Status Code, and telemetered Resource limits to determine availability for dispatch in Nodal If a unit is coming online or going offline in Zonal, the QSE must update their Energy Offer Curves (EOCs), Output Schedules, telemetered Resource Status Codes, and telemetered Resource limits in the Nodal system. Otherwise SCED may not be able to dispatch them accordingly

9. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Overview & Setup Regulation Deployment (Nodal system) Regulation will be deployed by the Nodal system from LFC –QSEs’ capability to receive and dispatch Regulation was tested in Market Trials Phase 4 testing It is important that QSEs telemeter the correct Regulation Responsibilities and Regulation Participation Factors –The accuracy of this data is critical for LFC to control frequency The Regulation Responsibilities in Nodal must reflect the QSE’s Zonal Regulation Obligation. QSEs must keep the Regulation Responsibilities up to date with each hour –Whenever a Resource is not able to respond to Regulation, the QSE must reallocate that Resource’s Responsibility to another Resource in the portfolio, if possible ERCOT will be tracking each QSE and their Resources’ MW output and comparing it to the Nodal Expected MW output, which is based on Updated Desired Base Point (UDBP) and Regulation Participation Factors

10. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Overview & Setup Regulation Deployment (Nodal system) QSEs must telemeter their 10-minute Zonal requirement in Nodal This will ensure the full amount of awarded Regulation is available to LFC for dispatch during the test ERCOT will honor the ten-minute ramp rate during the test by modifying the LFC Regulation calculation (ten instead of five minutes ramp) and by temporarily modifying the SCED-Up Ramp Rate (SURAMP) and SCED-Down Ramp Rate (SDRAMP) calculated by the Resource Limit Calculator (RLC) Therefore: SURAMP = Normal Ramp Rate – (Regulation Up AS Responsibility / 10) SDRAMP = Normal Ramp Rate – (Regulation Down AS Responsibility / 10) LFC will calculate Regulation to be deployed over a 10-minute ramp rate rather than a 5-minute ramp rate

11. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Overview & Setup Responsive Reserve Service (RRS) Deployment (Nodal and Zonal system) RRS communication was tested as part of the individual QSE testing in Market Trials Phase 4 –QSEs were deployed a Responsive Reserve Deployment MW value, which they used to update their Responsive Reserve Ancillary Service (AS) Schedules for individual Resources SCED will also be manually or automatically triggered to run “out of normal sequence” (not on the 5-minute time period) to dispatch new Base Points as soon as possible and help recover system frequency QSEs must make sure that their telemetered Responsive Reserve AS Responsibilities and Schedules for each of their Resources in Nodal are correct and reflective of their current Zonal Responsive Reserve Obligation

12. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Overview & Setup RRS Deployment (Nodal and Zonal system) Responsive Reserve will be deployed from Nodal Zonal will also continue to deploy Responsive Reserve This can be triggered manually by the operator or automatically (frequency < 59.91Hz) in either system If a QSE has not switched to Nodal, they should follow the Zonal deployment If a QSE has switched to Nodal, they must update the Responsive Reserve schedules and continue to follow their Nodal deployments.

13. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Overview & Setup Non-Spin Deployment (Zonal system) If required, Non-Spin will be deployed from the Zonal system during the 2-Hour LFC Test QSEs are requested to keep their telemetered Resource Status Codes, Non- Spin Responsibilities, and Non-Spin Schedules in Nodal reflective of their Zonal Non-Spin obligation After Zonal Non-Spin deployment, QSEs must also update their Nodal EOCs, Output Schedules, Telemetered Resource Status Codes, and Resource Limits in preparation for Resources coming online so that SCED can dispatch Resources appropriately once they become available

14. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – LFC Testing Workshop ICCP Data Submittals Dave Maggio

15. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – ICCP Data Submittals Market Participant EMS Data Submittals – RLC/LFC Support (Nodal=Zonal) –Resources Gross & Net MW (ICCP) –HSL/LSL (ICCP) –Resource Status Code (ICCP) –Regulation Responsibilities (ICCP) –Responsive Reserve AS Schedules and Responsibilities (ICCP) –Non-Spin Reserve Ancillary Service Schedules and Responsibilities (ICCP) –Resource Specific DSR Schedules and QSE DSR Load (ICCP) –Regulation Participation Factors (ICCP) –Combined Cycle Configurations (ICCP) –Ramp Rates (Resource Parameters data up to date) –Raise/Lower Block Status (ICCP) –Telemetry required for State Estimation Gross & Net MW/MVAR Unit Circuit Breaker status AVR Status Etc.

16. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – ICCP Data Submittals Market Participant EMS Wind Unit Data Note – Nodal Protocols Section 6.5.5.2, Operational Data Requirements, Paragarph (3): –For each Wind-powered Generation Resource (WGR), the QSE shall set the HSL to the output capability of the facility based upon all available units and the current measured wind speed (HSL must be equal to or greater than the latest telemetered net real power of the WGR) (http://nodal.ercot.com/protocols/2010/04/06/06-040110_Nodal.doc)http://nodal.ercot.com/protocols/2010/04/06/06-040110_Nodal.doc –HSL values for wind resources need to conform to this protocol during the LFC system-wide testing periods

17. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – LFC Testing Workshop Test Step by Step Walkthrough Dave Maggio

18. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Step by Step Walkthrough Prior to the Test Provide Real Time ICCP Data to Nodal Make sure all Generation Resources are ready to participate in the test Market Notices: –A Market Notice will be sent Friday, May 14, 2010 as a reminder of the upcoming 2- Hour LFC test to be conducted May 19-21 –A follow-up Market Notice will be sent two days prior to the actual test to confirm the specific date –A final Market Notice will be sent on the day of the test to confirm that the test will be conducted that day A hotline call will be made on the day of the test to communicate the start time of the test (approximately 3 hours prior to start) A WebEx conference will be provided to allow Market Participants to monitor the 2-Hour LFC Test —a Market Notice with WebEx details will be sent to Nodal Transition Project Managers the week of the test For the 3 hours prior to the test be ready to field troubleshooting calls Two hour prior to the test, ERCOT will stop using OC1 and will begin using OC3 A System Wide VDI will be issued immediately prior to the start of the test Examples of the Hotline/VDI scripts are provided on the next slide.

19. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Step by Step Walkthrough Example Hotline/VDI scripts to start the test: Typical Hotline Script: Informing QSEs of test start time –“This call requires everyone to remain on the line until it is complete. [QSE] I will be asking you for the repeat back. This is ERCOT operator [first and last name]. ERCOT will begin the Full System LFC, 2-hour test at [test start time]. At this time, a Hotline call will be made to issue a VDI to start the test. [QSE] please repeat this directive back to me. That is correct, thank you.” Typical Hotline Script: Issuing VDI to all QSEs to start test –“This call requires everyone to remain on the line until it is complete. [QSE] I will be asking you for the repeat back. This is ERCOT operator [first and last name]. ERCOT is issuing VDI [#] to begin the Full System LFC, 2-hour test. Each QSE will be contacted one at a time and given instruction on when to switch their system from Zonal to Nodal control. An additional Hotline call will be made when all QSEs have been successfully switched over to Nodal control. Hold the [interval ending time] Balancing Energy deployments until further notice. [QSE] please repeat this directive back to me. That is correct, thank you.”

20. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Step by Step Walkthrough During the Test Switching to Nodal one QSE at a time Evaluate QSE Nodal performance prior to switching the next QSE (this evaluation will determine whether to proceed with the test or to cancel) Place Hotline call to QSEs when all are successfully switched to Nodal control –The completion of the switchover will also be announced on the WebEx conference Conduct 15-30 minutes of system-wide Nodal operation (may vary depending on the time it takes to switch all QSEs) Switch back to Zonal one QSE at a time After all QSEs are switched back to Zonal, an additional 15 to 30 minutes will be allotted before ending the VDI Examples of the Hotline/VDI scripts are provided on the next slide.

21. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Step by Step Walkthrough Example Hotline/VDI scripts complete QSE switching to/from Nodal: Typical Hotline Script: Zonal-to-Nodal switch complete –“This call requires everyone to remain on the line until it is complete. [QSE] I will be asking you for the repeat back. This is ERCOT operator [first and last name]. At this time ERCOT has successfully switched all QSEs from Zonal to Nodal control. ERCOT will stay on Nodal control for approximately [#] minutes, after which, ERCOT will begin contacting QSEs one at a time to switch back to Zonal control. [QSE] please repeat this directive back to me. That is correct, thank you.” Typical Hotline Script: Nodal-to-Zonal switch complete; end VDI –“This call requires everyone to remain on the line until it is complete. [QSE] I will be asking you for the repeat back. This is ERCOT operator [first and last name]. [VDI #] will terminate at [state the time of termination]. At this time ERCOT has successfully switched all QSEs from Nodal to Zonal control. Begin following the [interval ending time] Balancing Energy deployments. [QSE] please repeat this directive back to me. That is correct, thank you.”

22. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Step by Step Walkthrough After the Test Provide Real Time ICCP Data to Nodal Analyze QSE & ERCOT Test Results Determine whether there is a need to repeat the test Provide ERCOT Test Analysis Conclusions in Real-Time Market call –Currently targeted for June the 4 Real-Time Market Call

23. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – LFC Testing Workshop Energy Offer Curves, Inc/Dec Offers, and Output Schedules Jeff Gilbertson

24. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – SCED/MMS Data Submittals Market Participant Data Submittals – –All On-line Resources must have an Energy Offer Curve, Output Schedule, or Output Schedule with Inc and/or Dec curves Requirement for LFC test is different than DAM (which is 80% / 120% of costs) Need to more closely reflect Zonal / BES such that Nodal deployment does not diverge too much from Zonal Energy Offer Curve –Should cover telemetered LSL/HSL range –Should reflect portion of BES carried by Resource in both MW and price Output Schedule –Should fall within telemetered LSL/HSL range –Should reflect expected MW output of Resource Inc/Dec Curve –Requires Output Schedule –Should reflect portion of BES carried by Resource in both MW and price –May require deviation from Zonal bids as Inc prices must be > Dec pricespoint

25. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – SCED/MMS Data Submittals Submittal Timeline –Current Operating Plan (COP) Inc/Dec curve requires COP submission with ONDSR or ONDSRREG status SCED uses telemetered Resource Limits and Status COP submission for next seven days is required by Protocols so it is good practice to submit COP COP submission may begin seven days before Operating Day COP may be updated anytime prior to the end of the Adjustment Period (one hour before start of Operating Hour)

26. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – SCED/MMS Data Submittals Submittal Timeline –Energy Offer Curve EOC submission may begin seven days prior to Operating Day EOC submission blocked for next Operating Day between 1000 and 1800 EOC may be updated after 1800 (beginning of Adjustment Period) to one hour prior to Operating Hour (the end of the Adjustment Period) Use a Reason Code (FUEL/OUT/DSCM) if updating for a DAM or RUC committed Resource to get around offer curve rejection, if needed; DAM/RUC testing is separate from LFC testing

27. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – SCED/MMS Data Submittals Submittal Timeline –Output Schedule Output Schedule submission may begin seven days prior to Operating Day Output Schedule may be updated until the end of the Adjustment Period OR the Operating Interval for DSR –Inc/Dec Offer Curves Inc/Dec Offer Curve submission may begin seven days prior to OD and ends at the end of the Adjustment Period Inc/Dec Offer Curve requires COP Resource Status of ONDSR or ONDSRREG Inc/Dec Offer Curve requires Output Schedule submission for SCED use –Inc/Dec Offer Curves both must cover LRL to HRL range –Inc and Dec curves are both monotonically increasing in price –Dec curve prices must be lower than Inc curve price at each MW –Offer Curve used by SCED is constructed by using Dec curve to the left of Output Schedule MW and Inc curve to the right of Output Schedule MW

28. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – SCED/MMS Data Submittals Submittal Timeline –Example timeframes for Operating Hour 5/19 12:00 pm – 1:00 pm 5/12 12:00 am – submission window for COP, Output Schedule, EOC, Inc/Dec begins 5/18 10:00 am – DAM deadline for 5/19. EOC submission window ends. 5/18 6:00 pm – Adjustment Period begins. EOC submission window re- opens. 5/19 11:00 am – End of Adjustment Period. COP, Output Schedule, EOC, and Inc/Dec submissions window ends (except Output Schedule for DSR) 5/19 12:00 pm – Start of Operating Hour. Output Schedule for DSR submission window ends.

29. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – SCED/MMS Data Submittals Market Participant Data Submittals – –Good Resource dispatch example Telemetry: HSL = 450; LSL=150; MW = 440 RLC: HDL = 450; LDL = 430 TPO covers 150 – 500 SCED BP = 450 MW; EOC price at 430MW = $20; LMP = $50 MW $20 $0 $ 150450 430 450

30. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – SCED/MMS Data Submittals Market Participant Data Submittals – –Bad Resource dispatch example Telemetry: HSL = 300; LSL = 100; MW = 150 RLC: HDL = 160; LDL=140 TPO covers 0 – 100 SCED BP = 140; TPO price at 140MW = $2250; LMP = $50 MW $-250 $2250 $0 $2250 $ 100300 140160

31. Lead from the front Texas Nodal Version 2.0 LFC – SCED/MMS Data Submittals Market Participant Data Submittals – –SCED Support (Nodal=Zonal) For Resources which provide no zonal Balancing Energy Services, provide an Output Schedule –The sum of your zonal resources not providing balancing energy needs to the equal the sum of your nodal output schedules –Zonal Balanced Energy Schedule on 15 min interval basis = Nodal Output Schedule on 5 min basis x 3 –Set telemetered Resource Status to “ONOS”

32. Lead from the front Texas Nodal Version 2.0 Output Schedule Example – Assumes all resources are not providing balancing services Output Schedule Key Points– - COP HSL/LSL surrounds OS MW - Sum of OS MW = Zonal Balanced Schedule Generation LFC – SCED/MMS Data Submittals Zonal Balanced Schedule IntervalQSELoad ZoneGeneration 00:00-00:15ABCNORTH400MW 00:15-00:30ABCNORTH350MW 00:30-00:45ABCNORTH400MW 00:45-01:00ABCNORTH450MW Telemetered COP IntervalQSEResource Resource StatusLSLHSL 00:00-01:00ABCXONOS100250 00:00-01:00ABCYONOS50100 00:00-01:00ABCZONOS100150 Output Schedule IntervalQSEResMWIntervalQSEResMW 00:00-00:05ABCX20000:30-00:35ABCX200 00:00-00:05ABCY7500:30-00:35ABCY75 00:00-00:15ABCZ12500:30-00:35ABCZ125 00:05-00:10ABCX20000:35-00:40ABCX200 00:05-00:10ABCY7500:35-00:40ABCY75 00:05-00:10ABCZ12500:35-00:40ABCZ125 00:10-00:15ABCX20000:40-00:45ABCX200 00:10-00:15ABCY7500:40-00:45ABCY75 00:10-00:15ABCZ12500:40-00:45ABCZ125 00:15-00:20ABCX15000:45-00:50ABCX225 00:15-00:20ABCY7500:45-00:50ABCY100 00:15-00:20ABCZ12500:45-00:50ABCZ125 00:20-00:25ABCX15000:50-00:55ABCX225 00:20-00:25ABCY7500:50-00:55ABCY100 00:20-00:25ABCZ12500:50-00:55ABCZ125 00:25-00:30ABCX15000:55-01:00ABCX225 00:25-00:30ABCY7500:55-01:00ABCY100 00:25-00:30ABCZ12500:55-01:00ABCZ125

33. Lead from the front Texas Nodal Version 2.0 LFC – SCED/MMS Data Submittals Market Participant Data Submittals – –SCED Support (Nodal=Zonal) For Resources which provide zonal Balancing Energy Services, provide an Energy Offer Curve –Start with Base MW with $ near expected MCPE (should be between first $ of UBES and DBES curves) –Using same prices from UBES curve, build EOC to right of initial point. Assign MW value = Base MW value + percentage of UBES MW range that would be deployed by Resource –Similarly, build DBES curve to the left of initial point. –Sum of (Max EOC MW – Initial point MW) for Resources should equal Max UBES MW –Sum of (Initial point MW – Min EOC MW) for Resources should equal Max DBES MW –Set telemetered COP Resource Status to “ON”

34. Lead from the front Texas Nodal Version 2.0 LFC – SCED/MMS Data Submittals –Start with Base MW with $ near expected MCPE (should be between first $ of UBES and DBES curve) Energy Offer Curve MW$/MW 20020

35. Lead from the front Texas Nodal Version 2.0 LFC – SCED/MMS Data Submittals –Using same prices on UBES curve, build EOC to right of initial point. Assign MW value = Base MW value + percentage of UBES MW range that would be deployed by Resource –Example below shows 50% UBES to be carried on Resource X Zonal UBES Bid MW$/MW 025 30 5035 Energy Offer Curve X MW$/MW 20020 20025 213 = 200 + 25*.530 225 = 200+50*.535

36. Lead from the front Texas Nodal Version 2.0 LFC – SCED/MMS Data Submittals –Similarly, build DBES curve to the left of initial point. –Example below shows 50% DBES to be carried on Resource X Zonal DBES Bid MW$/MW 020 2515 5010 Energy Offer Curve X MW$/MW 175= 200-50*.510 187= 200-25*.515 20020 20025 21330 22535

37. Lead from the front Texas Nodal Version 2.0 LFC – SCED/MMS Data Submittals Sum of (Max EOC MW – Initial point MW) should equal Max UBES MW (225-200) + (100-75) = 25 + 25 = 50 Energy Offer Curve XZonal UBES Bid MW$/MWMW$/MW 17510025 187152530 200205035 20025 21330 22535 Energy Offer Curve Y MW$/MW 5010 6315 7520 7525 8730 10035

38. Lead from the front Texas Nodal Version 2.0 LFC – SCED/MMS Data Submittals Sum of (Initial point MW – Min EOC MW) should equal Max DBES MW (200-175) + (75-50) = 25 + 25 = 50 Energy Offer Curve XZonal DBES Bid MW$/MWMW$/MW 17510020 187152515 200205010 20025 21330 22535 Energy Offer Curve Y MW$/MW 5010 6315 7520 7525 8730 10035

39. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – SCED/MMS Data Submittals Practice submittal – –Submit EOC reflecting Zonal/BES for Operating Day Thursday 5/13 –Demonstration spreadsheet will be posted to meeting page today –Contact jgilbertson@ercot.com if intention is to submit Inc/Decjgilbertson@ercot.com

40. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Workshop ERCOT Assessment & QSE Self Assessments Dave Maggio

41. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Assessments Assessment ERCOT will analyze the Test results to determine if adjustments/test repeats are needed before scheduling the next Full System LFC Test, based on: –Market Participation –Network Events –System Performance Note: ERCOT will provide analysis assistance in the form of answers to questions. It is the responsibility of each Market Participant to analyze its own test results from the 2-Hour LFC Test

42. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – LFC Testing Workshop Settlements Matt Tozer

43. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com Settlement – Review Approach for Live test Steps for LFC System Wide Test Settlement: Transactions will be settled according to the Zonal Protocols using Market Clearing Prices for Energy (MCPEs) calculated in the Zonal Market. See the following Zonal Protocol Sections: –6.8.2.3(2)(a) –6.8.2.3(5)(a) –7.4.3.1(1)(a) –7.4.3.2(a) All QSE VDI will be issued to define the “test period” –Test period starts when first QSE is brought under Nodal control and stops when last QSE is returned to Zonal Control Settlements will not calculate Uninstructed Resource Charges (URCs) during the “test period” –URC will not be calculated for hour before test period, during the test period, and the hour following the test period All QSEs will receive Schedule Control Error (SCE) exceptions during the test Settlements will replace Zonal Instructed Output levels for all units deployed in the Zonal Market for OOME and Local Balancing with integrated SCED Base Points

44. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com Base Point Integration - Formula Below is the formula that will be used to integrate SCED base points into 15 minute values used to settle OOME and Local Balancing AABP = * (∑ y ((BP y + BP y-1)/2 * TLMP y) / (∑ y TLMP y)) VariableUnitDefinition AABPMW Adjusted Aggregated Base Point — The Generation Resource ’ s aggregated Base Point NOT adjusted for Ancillary Service deployments, for the 15-minute Settlement Interval. BP y MW Base Point by interval — The Base Point for the Generation Resource at the Resource Node, for the SCED interval y. TLMP y second Duration of SCED interval per interval — The duration of the portion of the SCED interval y within the 15-minute Settlement Interval. ynoneA SCED interval in the Settlement Interval. The summation is over the total number of SCED runs that cover the 15-minute Settlement Interval. * NOTE: The average regulation instruction will not be factored into the base point in order to ensure similarity between the SCED base point and the Zonal calculated instructed output level.

45. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com Bill Determinant and Extract Details Settlements will determine which units received a Zonal unit specific instruction during System Wide LFC Tests Unit Specific instructions consist of the following Bill Determinants: –OOMIOL – OOME Instructed Output Level –OOMEVDI – VDI OOME Instructed Output Level –LEIOL – Local Energy Instructed Output Level Next, Settlements will request all SCED generated base points for the generation resources that received Zonal unit specific instructions Settlements will integrate the base points into 15 minute settlement values The integrated Base Points will replace the original OOMIOL, OOMEVDI and LEIOL values The updated values will be imported to the Settlement system before Initial Settlement Both the original and updated OOMIOL, OOMEVDI and LEIOL values will be found in MOS_METER_DATA worksheet of the Client Data Report When a combined-cycle Generation Resource receives SCED Base Points at the Combined Cycle Configuration level, Settlements will use GSSPLITSCA (Generation Splitting SCADA) to allocate the Combined Cycle SCED Base Points to the individual units that received the Zonal instruction. 6.8.2.3(2)(a)(i)

46. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com Settlement Disputes from System Wide LFC Testing If, after Initial Settlement, a QSE does not agree with the updated Instructed Output level or payment for OOME or Local Balancing Energy, a QSE may submit a settlement and billing dispute in accordance with the process outlined in Section 9.5, Settlement and Billing Dispute Process. 6.8.2.3(2)(a)(ii) In addition to the standard information required on the dispute form, the dispute should clearly reference the System Wide LFC Test and indicate the disputed Settlement Intervals involved in the test. 6.8.2.3(2)(a)(ii)

47. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Workshop Reminders Stacy Bridges

48. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Reminders Test Time & Date – The 2-Hour LFC Test will be conducted on May 19 th, 20 th or 21st The actual test will start no earlier then 11:00 AM Market Notices & Hotline Call: –A Market Notice will be sent Friday, May 14th –A follow-up Market Notice will be sent two days prior to the actual test –A final Market Notice will be sent on the day of the test –A hotline call will be made on the day of the test to communicate the start time of the test (approximately 3 hours prior to start) –A WebEx conference to allow Market Participants to monitor the 2-Hour LFC Test will be provided—a Market Notice with WebEx details will be sent to Nodal Transition Project Managers the week of the test

49. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Reminders Participation– All Generation Resources are required to participate in the test –Exceptions due to modeling issues Market Participants will need to ensure that all EOCs are submitted for the week of the test (week of May 17) –ERCOT will reach out to MPs that do not have their EOCs submitted by the beginning of the test week Test Results- ERCOT will analyze test results May 24 – June 2 Test results are targeted for discussion during the June 4 RT Market Call People – Each MP needs to have their experts on hand starting at 8:00 AM each possible test day (May 19 th, 20 th, and 21 st ) to support: –ICCP –EOCs, Inc/Dec Offers, and Output Schedules –LFC

50. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 50 LFC – Reminders Artifacts for the 2-Hour LFC Test The 2-Hour LFC Test Approach document and related artifacts are posted on the Readiness Center at http://nodal.ercot.com/readiness/mark ettrials/rtm/index.html http://nodal.ercot.com/readiness/mark ettrials/rtm/index.html Artifacts include: –2-Hour LFC Test Approach –Control Room Procedure for the Full System LFC Test –White Paper - Settlement of Phase 3 LFC Testing

51. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 51 Q&A Q&A / Open Forum

52. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Workshop Thank You MarketTrials@ercot.com