1. CMWG Update to WMS 7-15-12 Report of CMWG Meeting of 8-13-12 M Wagner Edison Mission Marketing & Trading

2. 2% Shift Factor Cut Off – WMS Directive Modified Section 3.3 of Shadow Price Cap OB Document—added a sentence: “ERCOT shall not employ a shift factor cutoff in dispatch which is greater than 0.0001.” CMWG recommends forwarding document to TAC for endorsement (and sending to BOD for approval).

3. Issues Raised in 2011 State of Mkt Rept Overmitigation in SCED (P 30 of Exec Summ) – Short Term—stakeholders will work on Draft NPRR incorporating IMM proposal/IMM presentation to be developed for discussion at CMWG next month Based on changing mitigated curve of affected resources to what was called “capped and bounded prime”: Max (MOC, Ref1 + MOC * 0.01) – Long Term—send issue to METF Constraint Activiation (P 51 ) – Still going on (loading above 100% but not active and no RAPs, etc.) but less frequent in 2012 than 2011 – Implementation of NPRR 393 posting in mid 2013 will allow ERCOT Operators to put in reasons in for not activating – ERCOT working on NPRR to eliminate constraint relaxation requirement in EEA

4. Is ERCOT Using RAPs to Control Outside Contingency/Constraint Pair for which Defined? Remedial Action Plans (RAPs) defined for specific constraint/contingency pair(s) Allows ERCOT to run system at higher loading than would w/o RAP because RAP institutionalizes plan of action for contingency if loading reaches 15 min level If RAPs are used to control outside of definition (is this occurring?)—market has limited insight into what is going on

5. RAP Discussion Ct’d Communication Issue Pricing issue—when RAPs are used, constraints may not be activated—yet Transmission Planning tries to come up with upgrades to eliminate RAPs Upgrades are not reliability driven—because RAP solves loading issue Without pricing history, how can projects be justified economically? Even though there are RAPs, should constraint be activated, to create market solution?

6. W—N DA Limit Aug 5-7 DA limit dropped (relative to RT) noticeably – There was a calculation error in process for developing DA limits—has been fixed – Process: Some averaging of 30 day lookback of RT management level of W—N relative to actual limit used to develop DA limits for 2 days forward Discussion on fact that W—N is derated DA but N—H is not, ERCOT committed to developing data on W—N capability vs actual flows

7. Does WMS need a list for 2013 developed before the updated protocol language can be implemented which may not be until Q1 2013? – If yes, need to develop alternative methodology – If yes and want in time for annual CRR auction— needs to have WMS recommendation for 9/6 TAC – If no, do we want to designate any constraints competitive for 2013 prior to implementation of new language? – If no, potentially could sync up definitions with new CRR auction methodology in Q1 2013 Constraint Competitiveness Test for 2013—WMS Decision Points

8. Constraint Competitiveness Test for 2013 ERCOT not able to implement revised CCT by end of year. Does WMS want a list of Competitive Constraints for 2013 based on “alternative method”? 3.19 Constraint Competitiveness Tests (1) The Technical Advisory Committee (TAC) shall consider the results of the Constraint Competitiveness Tests (CCTs) and other relevant factors in reaching its determination as to whether or not a Transmission Element pair should be determined to be a Competitive Constraint. Any contingency/limiting Transmission Element pair not designated as a Competitive Constraint shall be deemed to be a Non-Competitive Constraint. (2) The appropriate TAC subcommittee may develop an alternative list through the analysis described below for determining Competitive Constraints.

9. ERCOT developed an interim method – CMWG discussed options for ECI threshold—support for keeping annual threshold same as existing values in protocols Model to use for test—should it be multiple models or single model? SSWG or CRR Model (CMWG did not oppose using CRR Model) – Gray boxed recommends 12 monthly models vs. interim proposal to use single peak monthly case (WMS decision point) Overloadability test– should line that cannot be overloaded be deemed automatically competitive or noncompetitive— or should the Pivotal Player tests be done first and then overloadability test? Constraint Competitiveness Test for 2013