1. 1 WMS Report TO TAC January 2007

2. 2 In Brief Two Working Group Reports Two Working Group Reports Two Task Force Reports Two Task Force Reports One PRR proposal (PRR701) One PRR proposal (PRR701) Protocol Discussion by the IMM Protocol Discussion by the IMM Retired two Task Forces and created one Retired two Task Forces and created one Discussed Emergency Interruptible load Discussed Emergency Interruptible load

3. 3 Working Group Reports CMWG Third Quarter report on congestion Third Quarter report on congestion Review of CSC flow control by operations Review of CSC flow control by operations Update on Competitive Constraint determination due in January Update on Competitive Constraint determination due in January

4. 4 Working Group Reports DSWG Progress report on goals Progress report on goals Status of the PUC work on Demand Side Status of the PUC work on Demand Side Issues of LaaR participation in RRS Issues of LaaR participation in RRS

5. 5 PRR 701 Enabling of Stranded Capacity During Alerts Concept surfaced during EILP discussions. Concept surfaced during EILP discussions. Not responsive to TAC & PUC request Not responsive to TAC & PUC request WMS supported it on its own merit WMS supported it on its own merit Comments filed in support Comments filed in support In the PRS process now In the PRS process now

6. 6 ERCOT Staff Presentations IMM lead discussion on potential market confussion regarding sections 6.4.2(5) RPRS and 6.5.10(10) OOMC

7. 7 Task Force Reports Emergency Interruptible Load Task Force (EILTF) Emergency Interruptible Load Task Force (EILTF)

8. 8 EILTF Background Sept. 15 – ERCOT proposes Emergency Interruptible Load program Sept. 15 – ERCOT proposes Emergency Interruptible Load program Oct. 6 – TAC charges WMS to develop EIL PRR Oct. 6 – TAC charges WMS to develop EIL PRR Oct. 18 – WMS creates EILTF to develop EIL product as a new Ancillary Service Oct. 18 – WMS creates EILTF to develop EIL product as a new Ancillary Service Oct. 31-Nov. 27 – EILTF or its subgroups (app. 40 participants) meet 10 times to develop draft PRRs creating EILS Oct. 31-Nov. 27 – EILTF or its subgroups (app. 40 participants) meet 10 times to develop draft PRRs creating EILS

9. 9 WMS Discussion and Action EILTF presented 4 draft PRRs EILTF presented 4 draft PRRs Options A and B – capacity models Options A and B – capacity models Options C and D – energy models Options C and D – energy models Other issues discussed Other issues discussed Tradeoff between low cost and effective participation Tradeoff between low cost and effective participation Tradeoff between high participation and ease of administration Tradeoff between high participation and ease of administration Need for EILS vs. other approaches Need for EILS vs. other approaches

10. 10 WMS Discussion and Action Motion to focus on energy-only design Motion to focus on energy-only design Motion carried – 75.6% in favor Motion carried – 75.6% in favor Motion to file Option D Motion to file Option D Motion carried – 86.3% in favor Motion carried – 86.3% in favor WMS directed EILTF to file PRR 703, but did not endorse PRR 703. WMS directed EILTF to file PRR 703, but did not endorse PRR 703.

11. 11 PRR 703 EILS created as new EECP Step 3 EILS created as new EECP Step 3 Loads volunteer to interrupt during emergency conditions for an offer price Loads volunteer to interrupt during emergency conditions for an offer price EILS deployed after LaaRs but before firm load shedding EILS deployed after LaaRs but before firm load shedding Last EILS offer cleared sets MCPE for both loads and resources Last EILS offer cleared sets MCPE for both loads and resources EILS offers subject to system HCAP EILS offers subject to system HCAP EILS dispatched via hotline call to QSEs EILS dispatched via hotline call to QSEs

12. 12 PRR 703 Qualification / Performance Qualification / Performance Must be able to communicate one-minute usage data to ERCOT Must be able to communicate one-minute usage data to ERCOT Must be able to reduce load within 10 minutes to 95% of the offered amount struck by ERCOT Must be able to reduce load within 10 minutes to 95% of the offered amount struck by ERCOT Must have IDR meters Must have IDR meters Offers in 1MW increments only Offers in 1MW increments only

13. 13 PRR 703 Qualification / Performance Qualification / Performance Must be able to communicate one-minute usage data to ERCOT Must be able to communicate one-minute usage data to ERCOT Must be able to reduce load within 10 minutes to 95% of the offered amount struck by ERCOT Must be able to reduce load within 10 minutes to 95% of the offered amount struck by ERCOT Must have IDR meters Must have IDR meters Offers in 1MW increments only Offers in 1MW increments only

14. 14 PRR 703 Implementation Implementation EILTF envisions largely manual implementation process to accommodate ERCOT’s requested April 1 effective date EILTF envisions largely manual implementation process to accommodate ERCOT’s requested April 1 effective date EILS stack can be composed on spreadsheet EILS stack can be composed on spreadsheet MCPE can be manually set following EILS deployment MCPE can be manually set following EILS deployment EILS deployment is by phone call EILS deployment is by phone call

15. 15 Other PRRs PRR 702 filed by supporters of capacity- model design developed in EILTF but rejected by WMS PRR 702 filed by supporters of capacity- model design developed in EILTF but rejected by WMS ERCOT PRR to be filed soon ERCOT PRR to be filed soon ERCOT expressed concern whether stakeholders will approve either EILS option ERCOT expressed concern whether stakeholders will approve either EILS option ERCOT expressed concern whether either EILS option can be implemented by April 1. ERCOT expressed concern whether either EILS option can be implemented by April 1.

16. 16 ERCOT EILS PRR EILS procured by ERCOT in 4-month increments (2-month initial period) EILS procured by ERCOT in 4-month increments (2-month initial period) Provides capacity payment Provides capacity payment Paid as bid, no clearing price Paid as bid, no clearing price Propose cap of $X/yr for total EILS cost Propose cap of $X/yr for total EILS cost Some load flexibility to schedule unavailability Some load flexibility to schedule unavailability

17. 17 Jan. 18 PRS Preview PRR 701 PRR 701 Alternative/supplement to EILS? Alternative/supplement to EILS? PRR 702 PRR 702 Capacity model Capacity model PRR 703 PRR 703 WMS-endorsed energy only model WMS-endorsed energy only model ERCOT PRR ERCOT PRR Bilateral contract capacity payment model Bilateral contract capacity payment model