1. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 1 Workshop: 8-Hour Full-System Load Frequency Control (LFC) Testing (fka, EDS 3 R6.3 LFC testing) June 8, 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 8-Hour LFC Test will: –Provide a system-wide closed loop test using Nodal dispatch signals –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 –Use the same test procedure that was used for the 2-Hour LFC Test –Leverage the switching sequence that was perfected during the 2-Hour LFC Test –Provide for a longer period of nodal control –Provide for operational scenarios to exercise Emergency Base Point (EMBP) flags and Responsive Reserve Service (RRS) deployment/recall

6. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC –Test Overview & Setup How? During the 8-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? ERCOT is anticipating that it will take between 30 and 45 minutes to switch from Nodal to Zonal control Depending on the test progression or any unplanned conditions, the duration of the 8-Hour LFC Test may deviate from the planned test time The necessary Verbal Dispatch Instructions (VDIs) will be in place and extended as needed if the test exceeds the allotted time 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 LFC –Test Overview & Setup Support from the Market Participants Each MP needs to have their experts on hand during normal business hours (8:00 am – 5:00 pm) each business day during the week of the test During the day of the test, the hours of support will be extended to 7:00 am – 6:00 pm ERCOT staff will be contacting MPs during these hours as necessary in preparation for the test These experts must be able to support: –ICCP –EOCs, Inc/Dec Offers, and Output Schedules –LFC MPs should ensure that that their contact list is up to date http://nodal.ercot.com

9. 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 8-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

10. 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, Regulation Participation Factors, and Resource Statuses –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

11. 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

12. 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

13. 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 as required Additionally, RRS will be deployed in Nodal as a planned Operational scenario If a QSE has not switched to Nodal, they should follow the Zonal deployment –The QSE should also update the telemetered Responsive Reserve Schedule based on any Nodal RRS deployments received from ERCOT If a QSE has switched to Nodal, they must update the Responsive Reserve schedules and continue to follow their Nodal deployments

14. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Overview & Setup Non-Spin Deployment (Nodal and Zonal system) If required, Non-Spin will be deployed from the Nodal system during the 8-Hour LFC Test Zonal will also continue to deploy Non-Spin When Non-Spin is deployed in one system, ERCOT will select the same QSE/Resources for deployment in the other system 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 a 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 The QSE should also adjust the telemetered NSRS Schedule in the Nodal system to reflect the Nodal deployment

15. Lead from the front Texas Nodal Version 2.0 LFC – Test Overview & Setup: Quick Start Resources Deployment of Balancing Energy Service (BES) Capable NSRS for Quick Start resources during the LFC test –Prior to the resource being asked to come online in Zonal, the QSE should: telemeter a Non-Spin Schedule and Responsibility (NSSC and NSRS) of 0 telemeter a resource status showing the resource as offline; and telemeter an LSL of 0 –If the QSE receives an energy deployment in Zonal, the QSE should start that resource and telemeter a resource status of online (ON) as soon as they are capable –Once the resource is “ON” with net MW > 0, the resource will be available for SCED dispatch and the resource will be dispatched based on the energy offer curve –After the resource reaches it’s physical LSL, the QSE should reflect that value through the telemetered LSL and should leave it at that value –Once Zonal indicates that the resource should go offline, the resource should begin ramping down –When the resource goes offline, the QSE should update the telemetered resource status to offline and then change the telemetered LSL to 0 The QSE also has the option to not provide BES-Capable NSRS during the hours of the test

16. Lead from the front Texas Nodal Version 2.0 LFC – Test Overview & Setup: Congestion Management Manual dispatch instructions during the LFC test –Beginning two hours prior to the LFC test, ERCOT will stop using OC1s and OOMEs and plans to use OC3s to manage congestion The one exception to this is that ERCOT will continue to use OC1s for the W-N stability limit (non-thermal IROL for NERC) ERCOT has created and tested a constraint for this limit in the Nodal system which can be activated for SCED as needed and should provide similar dispatch to the OC1s –ERCOT may be required to use Zonal manual dispatch instructions to solve congestion –ERCOT will set the Nodal Base-Point to match the Zonal manual dispatch instruction –The QSE will continue to follow the Nodal Base Point if they are still under Nodal control

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

18. 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 Etc.

19. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 19 LFC – ICCP Data Submittals Market Participant EMS Wind Unit Data Note Set Real-Time telemetered HSL value to current MW output per (NP 6.5.5.2(3)) Additional detail was recently added to this protocol reference as part of NPRR 214 NPRR 214 If the Wind-Powered Generation Resource (WGR) is not being curtailed, the HSL should be set at the actual net output of the WGR In event of curtailment (i.e., a SCED instruction at least two MW lower than the unit’s current MW output), the HSL should be set at the capability that the facility would have if it were not being curtailed This estimate should be based on wind speed, power curves, and turbine availability The QSE shall set the HSL within one SCADA cycle after receiving a SCED Base Point Dispatch Instruction from ERCOT This will allow the QSE to more easily detect if the WGR must respond to a curtailment instruction

20. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 20 LFC – ICCP Data Submittals Common ICCP Issues Identified During the 2-Hour LFC Test  On/Off status incorrect for LBST/RBST points  Resource Status Codes (RSTs) coming in as SUSPECT  OFF RST being sent for units that were online and generating MW  RST of ON instead of ONREG being sent for units with REG Responsibilities  RST of ONREG being sent for units in hours where they had no REG Responsibility  Non-zero LSLs being sent for WGRs  HSLs for WGRS being set to capacity rather than un-curtailed MW output  MPs updating REG Responsibilities slowly  RegUp & RegDown Responsibilities switched for one another  AS Responsibilities not lining up between Nodal and Zonal (i.e., wrong AS Type or wrong MW value)

21. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 21 LFC – ICCP Data Submittals Raise and Lower Block Status Raise Block Status (RBST) and Lower Block Status (LBST) points are appropriately used to temporarily block Ancillary Service deployments when an unexpected situation occurs that limits a unit’s output capability RBST/LBST should be used for emergency situations only and should not be used as a standard operating procedure Incorrect use of these statuses affects the manner in which regulation is assigned

22. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 22 LFC – ICCP Data Submittals Resource Status (RST) set to NA The MMS-generated COP Consistency Check will generate an alert whenever the Resource Status (RST) in the COP is inconsistent with the RST telemetered in Real-Time Because MMS receives the Real-Time RST from the Resource Limit Calculator rather than from SCADA, the RST identified in the alert is sometimes “NA” RLC will automatically change the telemetered RST to NA when: The telemetered RST is 0 (RST=0 appears in EMS as “NA” but is not directly changed to NA by RLC) The telemetered RST indicates offline (OUT, OFFNS, OFF, and EMR) but MW> 0 a certain threshold If unit is generating but RST is OFF, SCED cannot see the unit When RLC changes such an RST to NA, SCED can see the unit and can dispatch it as an online Resource HDL and LDL are set to current output – SDRAMP*5. SCED sets the base point equal to these revised HDL/LDL The telemetered RST quality is stale/suspect The telemetered RST quality is good and is not in the range of valid RST codes per Nodal Protocols 6.4.5, Resource Status, or it is 0 When RST is NA, the HDL/LDL are set to MW output – SDRAMP*5, and the Base Point is set to HDL/LDL

23. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 23 LFC – ICCP Data Submittals RSTs to be used during Ramp-Up / Ramp-Down RST during Ramp-Up: Between 0 MW and LSL, the telemetered RST should indicate online status SCED will dispatch the Resource to its current output Between LSL and HSL, the telemetered RST should reflect unit activity per the Resource Status Codes provided in the Nodal Protocols RST during Ramp-Down (to OFF): Method #1 (Primary Method)- This method is useful for QSEs who are able to plan to submit an Output Schedule to ramp them offline during a future hour Between LSL and HSL, if it is desired that the Resource be ramped offline, the QSE should use an Output Schedule A corresponding RST (i.e., ONOS) should be telemetered so that SCED dispatches the Resource to its LSL based on the provided Output Schedule Note: It is possible for SCED to dispatch a Resource away from its Output Schedule Between LSL and 0 MW, the telemetered RST should indicate that the Resource is online SCED will dispatch the Resource to its current output

24. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 24 LFC – ICCP Data Submittals RSTs to be used during Ramp-Up / Ramp-Down (continued) RST during Ramp-Down (to OFF): Method #2- (Backup Method) useful for QSEs who may not have submitted an Output Schedule during the Adjustment Period Use RST of “ONTEST” to take unit out of pool of Resources available for dispatch by SCED This method is being suggested for purposes of the 8-Hour LFC Test and may not be the method used for nodal market go-live Between LSL and 0 MW, the telemetered RST should indicate that the resource is online SCED will dispatch the Resource to its current output

25. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC –Testing Workshop Operational Scenarios for the 8-Hour LFC Test Stacy Bridges

26. Lead from the front Texas Nodal Version 2.0 RTM / LFC Operational Scenarios Scenario: Issue EMBP Flags This operational scenario is a system-wide exercise to confirm that QSEs with Resources are capable of receiving EMBP –SCED failure will be simulated to the extent that the ERCOT Operator will enter an EMBP incremental MW value (based on the Generation to be Dispatched as required over the next five-minute interval) –Qualified Scheduling Entities (QSEs) will be sent these Base Points via telemetry, along with the system-wide EMBP status flag, and will be expected to respond the Base Points ERCOT will inform QSEs via hotline call regarding the start time for conducting this operational scenario ERCOT initially proposes implementing the Emergency Base Point scenario for at least 15-30 minutes –Duration of the scenario may be shortened or extended as deemed appropriate by the ERCOT –ERCOT may reach out to one or more Market Participants while the scenario is being exercised to confirm that the system-wide EMBP flag and incremental MW value are being received correctly http://nodal.ercot.com 26

27. Lead from the front Texas Nodal Version 2.0 RTM / LFC Operational Scenarios Scenario: Issue RRS Deployments Confirming that QSEs with Resources (Generation and Controllable Load) are capable of receiving and responding to RRS deployments. –Nodal Non-Spinning Reserve Service (NSRS) is out of scope for this scenario. –The testing of deployments for NSRS may be included as an operational scenario during the 48-Hour LFC Test in July 2010. SCED will continue to dispatch Base Points based upon the required Generation to be Dispatched and Energy Offer Curves (EOCs) ERCOT will inform QSEs via hotline call regarding the start time for conducting this operational scenario –QSEs will respond to the deployment instruction by updating their telemetered Ancillary Service (AS) Schedules for RRS to reflect the specified deployment amounts –QSEs will need to provide these updates back to ERCOT within one minute per Nodal Protocols Section 8 –Approximately 15 to 20 minutes following the RRS deployment instruction, ERCOT will recall RRS, and QSEs will respond by updating their telemetered AS Schedules for RRS to reflect the recall MW –As with the initial deployment, QSEs should provide the updates back to ERCOT within one minute http://nodal.ercot.com 27

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

29. 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, June 11, 2010 as a reminder of the upcoming 8- Hour LFC test to be conducted June 16-18 –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 2-3 hours prior to start) A WebEx conference will be provided to allow Market Participants to monitor the 8-Hour LFC Test —an email with WebEx details will be sent to Nodal Transition Project Managers the week of the test ERCOT and Market Participant staff should be available and ready to field troubleshooting calls during the 2-3 hours prior to the test 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

30. 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 calls as needed to announce start/end times, switching activities, and operational scenarios –Hotline calls will be announced on the WebEx conference as they occur Conduct operational scenarios Conduct approximately six hours of system-wide Nodal operation (duration 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 following slides.

31. 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, 8-hour test at [##:##]. At this time, a Hotline call will be made to issue a VDI to start the test. [QSE] please repeat this 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 [F-Date-##] to begin the Full System LFC, 8- 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. [QSE] please repeat this directive back to me. That is correct, thank you.”

32. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Step by Step Walkthrough Example Hotline/VDI scripts to 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 [6] hours. ERCOT will make an additional hotline call before contacting QSEs individually to begin switching back to Zonal control. [QSE] please repeat this back to me. That is correct, thank you.” Typical Hotline Script: To switch back from Nodal-to-Zonal control –“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]. Each QSE will be contacted one at a time and given instruction on when to switch their system from Nodal to Zonal control. An additional Hotline call will be made when all QSEs have been successfully switched back over to Zonal control. ERCOT will end the VDI at the completion of the LFC test. [QSE] please repeat this 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 F-Date-##] will terminate at [state the time of termination]. At this time ERCOT has successfully switched all QSEs from Nodal to Zonal control. [QSE] please repeat this directive back to me. That is correct, thank you.”

33. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Test Step by Step Walkthrough Example Hotline/VDI scripts to initiate and end EMBPs: Typical Hotline Script: Implementation of Emergency Base Points (LFC Control) –“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 test and implement Emergency Base Points at [##:##] though the Nodal system. ERCOT will make an additional hotline when returning to normal Nodal control. [QSE] please repeat this back to me. That is correct, thank you.” Typical Hotline Script: Ending Emergency Base Points (LFC Control) –“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 end Emergency Base Point deployments at [##:##]. [QSE] please repeat this back to me. That is correct, thank you.”

34. 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 –Initial analysis is scheduled to take place June 21 – July 2 per the Real- Time/LFC Market Trials handbook –Dates for reviewing the results with Market Participants will be identified in the Real-Time Market Calls Results will be reviewed on market calls and/or in workshops Determine whether there is a need to repeat the test Provide ERCOT Test Analysis Conclusions in Real-Time Market call and/or the 48-Hour LFC Test Workshop

35. 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

36. 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

37. 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)

38. 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

39. 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

40. 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 6/16 12:00 pm – 1:00 pm 6/9 12:00 am – submission window for COP, Output Schedule, EOC, Inc/Dec begins 6/15 10:00 am – DAM deadline for 6/16. EOC submission window ends. 6/15 6:00 pm – Adjustment Period begins. EOC submission window re- opens. 6/16 11:00 am – End of Adjustment Period. COP, Output Schedule, EOC, and Inc/Dec submissions window ends (except Output Schedule for DSR) 6/16 12:00 pm – Start of Operating Hour. Output Schedule for DSR submission window ends.

41. 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

42. 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

43. 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”

44. 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

45. 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”

46. 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

47. 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

48. 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

49. 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

50. 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

51. 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 June 16 – 18 –The Curve Creator tool is posted on Readiness at http://nodal.ercot.com/readiness/markettrials/rtm/index.html http://nodal.ercot.com/readiness/markettrials/rtm/index.html –Contact jgilbertson@ercot.com if intention is to submit Inc/Decjgilbertson@ercot.com

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

53. 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 8-Hour LFC Test

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

55. 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

56. 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.

57. 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)

58. 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)

59. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC –Testing Workshop Two-Hour Test Results Dave Maggio / Jeff Gilbertson

60. Lead from the front Texas Nodal Version 2.0 2-Hour LFC Test Results Activity Timeline for the 2-Hour LFC Test The test took place on 5/20/2010 At 8:10 am, ERCOT made a hotline call to announce the start time for the test ERCOT began requesting QSEs to switch from Zonal to Nodal control at 11:16 am The last QSE confirmed the switch from Zonal to Nodal control at 11:55 am There were 6 full 5-minute intervals during which all participating QSEs were on Nodal control The first QSE switched back to Zonal control at 12:28 pm All QSEs back on Zonal control at 12:54 pm 3 QSEs were not able to switch over control for this test http://nodal.ercot.com

61. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 61 2-Hour LFC Test Results Active Constraints Log Date Time Start Time End Log TypeLog Comments 5/20/201010:120:00OC3 Activated the OC3 for the contingency loss of the GBY-Gable and Hardy to Crocket 138kv will overload the Midtown to Garrott 138kv to 102% of its 317mva rating. In both Nodal and Zonal 5/20/201011:000:00OC3 Activated the OC3 for the contingency loss of the Bellaire Auto 2 overload the Auto #4 to 101% of its 600mva rating. Activated in both zonal and nodal. 5/20/201011:380:00OC3 De-activated the OC3 for the contingency loss of the GBY-Gable and Hardy to Crocket 138kv will overload the Midtown to Garrott 138kv to 102% of its 317mva rating. In both Nodal and Zonal For IE 1300. 5/20/201013:090:00OC3De-activated the OC3 for the contingency loss of the Bellaire Auto 2 overload the Auto #4 to 101% of its 600mva rating. Activated in both zonal and nodal. For IE 1300.

62. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 62 2-Hour LFC Test Results Nodal State Estimator Convergence

63. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 63 2-Hour LFC Test Results Frequency

64. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 64 2-Hour LFC Test Results CPS1 Score CPS1 Score (1 Min.) Average All in Zonal (900-1115)158.67 Transition to Nodal (1116-1155)114.87 All in Nodal (1156-1228)140.63 Transition to Zonal (1229-1254)138.49 All in Zonal (1255-1500)141.29

65. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 65 2-Hour LFC Test Results Zonal/Nodal Regulation and Nodal Generation/Load

66. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 66 2-Hour LFC Test Results Regulation and System Load

67. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 67 2-Hour LFC Test Results Regulation and System Frequency

68. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 68 2-Hour LFC Test Results GREDP Statistics for Generators Note: Only one WGR was curtailed during the test and the deployment was not followed Online Non-Wind Generators No. of Generators for which GREDP was scored during at least one interval155 No. of Generators for which GREDP was scored and that provided Regulation during at least one interval 51 Percent of Generators that met the X (5 MW) and Y (5%) for all intervals80.65% Percent of Generators which provided Regulation that met the X (5 MW) and Y (5%) for all intervals 78.43% Percent of Generators that failed the X (5 MW) and Y (5%) no more than one interval 84.52% Percent of Generators which provided Regulation that failed the X (5 MW) and Y (5%) no more than one interval 78.43%

69. Lead from the front Texas Nodal Version 2.0 2-Hour LFC Test Results GREDP Statistics for QSEs http://nodal.ercot.com QSEs No. of QSEs which have a Generator for which GREDP was scored during at least one interval 38 No. of QSEs which have a Generator for which GREDP was scored and that provided Regulation during at least one interval 22 Percent of QSEs who did not have a Resource that failed the X (5 MW) and Y (5%) 2 or more intervals 65.79% Percent of QSEs who did not have a Resource that provided Regulation and failed the X (5 MW) and Y (5%) 2 or more intervals 63.64%

70. Lead from the front Texas Nodal Version 2.0 2-Hour LFC Test Results http://nodal.ercot.com 70 Nodal SPPs ~$10 higher than Zonal MCPE except HB_HOUSTON, HB_BUSAVG, HB_HUBAVG

71. Lead from the front Texas Nodal Version 2.0 2-Hour LFC Test Results http://nodal.ercot.com 71 LZ_HOUSTON vs HB_HOUSTON price difference example calculation posted at http://www.ercot.com/calendar/2010/06/20100604-MT

72. Lead from the front Texas Nodal Version 2.0 2-Hour LFC Test Results http://nodal.ercot.com 72

73. Lead from the front Texas Nodal Version 2.0 2-Hour LFC Test Results http://nodal.ercot.com 73 2000 MW to spare before hitting $2250 Offer Cap Offer Cap MW considers telemetered Resource Status and Dispatch Limits

74. Lead from the front Texas Nodal Version 2.0 2-Hour LFC Test Results http://nodal.ercot.com 74 LMPs stable during test; price separation reflects binding/violating constraints

75. Lead from the front Texas Nodal Version 2.0 2-Hour LFC Test Results http://nodal.ercot.com 75

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

77. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com LFC – Reminders Test Time & Date – The 8-Hour LFC Test will be conducted on June 16 th, 17 th or 18 th The actual test will start no earlier then 10:00 AM Market Notices & Hotline Call: –A Market Notice will be sent Friday, June 11 to announce upcoming test –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 8-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

78. 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 June 14) –ERCOT will reach out to MPs that do not have their EOCs submitted by the beginning of the test week MP Support – Each MP needs to have their experts on hand during normal business hours (8:00 am – 5:00 pm) each business day during the week of the test During the day of the test, the hours of support will be extended to 7:00 am – 6:00 pm These experts must be able to support: –ICCP –EOCs, Inc/Dec Offers, and Output Schedules –LFC

79. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 79 LFC – Reminders Artifacts for the 2-Hour LFC Test The 8-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: –8-Hour LFC Test Approach –Control Room Procedure for the Full System LFC Test –White Paper - Settlement of Phase 3 LFC Testing

80. Lead from the front Texas Nodal Version 2.0 http://nodal.ercot.com 80 Q&A Q&A / Open Forum

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