1. Model load frequency Discussion John Adams January 5, 2010 Nodal Advisory Task Force

2. 2 What issues are we trying to address? Risks –Visits to CAISO and MISO have revealed that they believe ERCOT has underestimated the difficulties of supporting a Nodal Network model change because of its impact upon markets. Each of these markets load their market database once/quarter. –In the past, there was much less financial risk due to model errors, because prices were only influenced around 4 interfaces. W-N, N-S, N-H, S-H. –With Nodal; a model error anywhere in the system financially affects CRR holders, participants in the DAM, and participants in the Real time market. –Historically; ERCOT has encountered errors in network model loads, even after testing. Nodal Advisory Task ForceJanuary 5, 2010 ERCOT had considered supporting daily database loads in its Nodal design, and can support CIM case production at this periodicity. However, downstream acceptance of database loads at this interval is proving problematic.

3. 3 What issues are we trying to address? Process challenges: –In the past (zonal) it has taken ERCOT ~3 days to validate and load a database. –With nodal; ERCOT needs to add additional processes to examine market impacts of database loads. –Additional time between database loads adds complexity and risk to TSP’s processes. Program constraints: –Supporting daily database loads, combined with multi-day validation, may require multiple parallel validation and load infrastructures. The nodal program has not planned, specified or built such infrastructure. –ERCOT has not yet achieved a 3 day validation/load process in nodal Nodal Advisory Task ForceJanuary 5, 2010

4. 4 What issue are we trying to address? Protocol Requirements 3..10.1 Timeline for Network Operations Model Change Requests (1)ERCOT shall perform periodic updates to the ERCOT Network Operations Model. Market Participants may provide Network Operations Model updates to ERCOT to implement planned transmission and Resource construction one year before the required submittal date below. TSPs and Resource Entities must timely submit Network Operations Model changes pursuant to the schedule in this Section to be included in the updates... 3)TSPs and Resource Entities shall submit Network Operations Model updates at least three months prior to the physical equipment change. ERCOT shall update the Network Operations Model according to the following table: Nodal Advisory Task ForceJanuary 5, 2010

5. 5 Nodal Advisory Task Force Difficulties imposed on Transmission Operators by infrequent database changes If models are loaded only 10 times/year; the ability of TSP’s to model changes on the day they expect them to be energized will be limited. –TSP’s may schedule energization of new equipment to match ERCOT’s schedule or –TSP’s may submit Network Operations Model Change Requests (NOMCR’s) to install equipment early, and simultaneously enter outage schedules to take this equipment out of service. –Under some circumstances, when equipment is re-used for different topology; it will be impossible to model outages on the equipment during the construction process without interfering with accurate representation of interim topology. In these cases the absence of frequent model loads could require the introduction of non-existent switches to the model to produce accurate results. Management of these Pseudo switches is difficult. January 5, 2010

6. 6 Nodal Advisory Task ForceJanuary 5, 2010 What should drive this decision At this point; ERCOT does not fully understand the relationship between complexity, effort, days between loads, and data integrity

7. 7 Nodal Advisory Task Force ERCOT trying to achieve a Nodal market load schedule of 2 database loads/month in our test program. This is a compromise between the Nodal protocol requirement of 10 Database loads/year; and the original proposal of daily. ERCOT will develop further experience during 2010 with our model load process; and will report upon our progress in improving that process. In the absence of daily model loads; ERCOT is proposing we discuss rules specifying the following: 1.How we will model/manage Pseudo devices if needed (Current protocols only allow TSP’s to create pseudo devices) 2.If TSPs will provide telemetry for Pseudo devices. (Current protocols required all switching devices to be telemetered) 3.How pseudo devices shall be managed for CRR, DAM, etc. 4.Modifying the restrictions on Remedial Switching Actions to make it like the current Equipment Status Change January 5, 2010 Current Status

8. 8 Next Steps ERCOT –Continue to report to the market on the progress and support of the database load and timing process. –Propose business processes and timing for participant discussion. Market Participants –Facilitate feedback from Market Participants via NATF regarding development of a database load business process which minimizes risk and complexity for the entire participant base. Nodal Advisory Task ForceJanuary 5, 2010