1. 1 Yearly Project Prioritization Process Overview and New MO Projects Troy Anderson et. al. June 2007

2. 2 Project Prioritization History Pre-2006 1 PPL (Project Priority List) for the entire organization Created the concept of “capability” Allowed delivery teams to go below the cutline to maximize resource utilization 2006 - Creation of CARTs (Continuous Analysis & Requirements Teams) 5 PPLs (one per CART) created to support the reality that resource limitations are a critical factor in project planning and delivery Resource constraints within a CART are the most common delivery limitation Established funding allocation rules to help ensure that available funds are allocated to the most critical projects Established relationships between CARTs and market subcommittees to ensure market representation in the process

3. 3 Yearly Project Prioritization Process – Step 1 Each CART uses the current PPL as a starting point for planning the next year’s project list –Determine which projects will complete prior to year end These projects are not relevant for next year’s planning –Determine which projects will not complete by the end of 2007 Budget estimate completed for current year vs. next year spending Given a “0 – Previously Approved” priority on the new PPL Ranked in same order as current year PPL unless otherwise determined Use decimal rank (0.1, 0.2, etc.) –Work with the market to determine the following: Add new efforts that are likely to be undertaken in the next year –Based on market input, ERCOT will estimate the cost of new projects If any projects on the list should be deleted

4. 4 Yearly Project Prioritization Process – Step 2 Prioritizing and ranking the next year’s PPL –Determine proper priority for all projects See “Guiding Principles of Project Prioritization” for guidance –Rank projects within each priority Sort the rows within each priority in order of importance Highest “1 – Critical” item should be ranked “1” Number the rest of the list “2”, “3”, “4”, etc. until you reach the last item in the “4 – Medium” priority “Parking Lot” items are not ranked Decimal rankings (such as 3.5 and 4.5) are reserved for new projects or project re- rankings which occur over the course of the year –Agreement between market subcommittees and ERCOT CART members on project prioritization and rank is important because the same delivery resources are used to deliver similar projects

5. 5 Yearly Project Prioritization Process – Step 3 Determination of delivery capability by CART –Each CART analyzes estimated resource demands of the projects on the list to determine how many projects on the list can be addressed in the upcoming year –A “Resource Capability Line” is added to the PPL to indicate the projects that can be expected to be worked in the next year –Projects will move in relation to this line over the course of the year as new projects are added, budget estimates are revised, and projects are re-ranked

6. 6 Yearly Project Prioritization Process – Step 4 Stakeholder approval of next year’s project list – priority, rank and resource capability line –Market Seek market subcommittee approval of draft PPLs at June meetings Seek PRS approval at June meeting Seek TAC approval at July meeting –ERCOT Seek SRT (Strategic Review Team [ERCOT directors]) approval in June Seek EC (Executive Committee) approval in June –Board of Directors Seek Finance & Audit Committee and Board of Directors approval in August/September timeframe

7. 7 Yearly Project Prioritization Process – Step 5 Upon Board of Directors approval, the new PPL will become the current PPL to reflect the revised priorities and new additions to the CART plans As the end of the current year approaches, if it appears that project funding is running less than budget, CARTs may be encouraged to initiate projects scheduled to start in the next year

8. 8 Yearly Project Prioritization Process – Project Status Values Following are the project status values used on the PPL (in alphabetical order): –Below LineProject is below the cutline (not funded) –CancelledProject has been cancelled (budget will be zero) –ClosingProject has implemented deliverables but final accounting activities are still taking place –CompleteProject is complete and final cost is known –ExecutionProject is in the process of creating and installing the deliverables as assigned (follows Planning phase) –InitiationProject is just starting (PM assigned, initial documents are completed, etc.) –NewProject is newly added to the list –Not Yet StartedProject is above the line but has not yet been started –On HoldProject is temporarily on hold –PlanningProject is planning out the design of the deliverable(s) and resources required to implement

9. 9 COMS Extract, Report & Web Services Monitoring & Usage Statistics Jackie Ashbaugh

10. 10 Background This project provides research capabilities for Commercial Operations extract, report and web services data for internal business users, which include monitoring functionality and usage analysis capabilities. It consolidates and automates multiple manual efforts that occur today to monitor extract creations through market postings. Current methods provide limited reporting capability. For example: –RMC provides limited ability to report on download stats on TML. –Inquiries regarding points in the life cycle from creation to delivery for extracts and reports, the information must be pieced together from multiple systems and groups. –Usage and download statistics are not consistently available across extracts/reports/web services. COMS Extract, Report & Web Services Monitoring & Usage Statistics

11. 11 COMS Extract, Report & Web Services Monitoring & Usage Statistics Scope Consistent monitoring processes and usage statistics for Report, Extract, and Web Services for all systems. Develop business procedures for supporting COMS extracts, reports and web services ERCOT market SLA reporting Operational and Usage statistics ERCOT internal dashboard Budget $250k-$500k

12. 12 PRR-478 Use of Lagged Dynamic Samples for New Profiles Calvin Opheim June 11, 2007 PRR-478 Use of Lagged Dynamic Samples for New Profiles Calvin Opheim

13. Background This is a change to the method for creating Load Profiles allowing for the use of lagged dynamic samples for new profiles adopted subsequent to market open This project is necessary in order to enable wholesale settlement of Demand Response programs

14. 14 Market Benefits Allowing the use of lagged dynamic samples for new profiles will provide three important benefits to the market: –The time lag between approving a new profile and being able to settle ESI IDs using the new profile will be significantly reduced –New profiles are expected to be subject to significant population change as new ESI IDs are identified for inclusion in the profile; lagged-dynamic samples will accommodate these changes more quickly, accurately and efficiently than is possible with adjusted static models –Use of lagged dynamic samples will allow the market to audit ESI IDs being assigned to new profiles and will create an incentive for CRs using the profile to limit the inclusion of ESI IDs to those appropriate to the profile

15. 15 Impact Analysis / Cost Estimate Lodestar will require system enhancements to introduce lagged dynamic samples, including creation of dynamic samples, as well as processes/coding for the automation of scripts and statistics. ERCOT Profiling staff will test and maintain the new profiles as they are developed. The estimated cost is < $100k

16. 16 Questions? ON OFF

17. 17 PRR-385 Changes for Implementation of Direct Load Control (DLC) Calvin Opheim

18. Background Modify language in Protocols to better represent how Direct Load Control (DLC) will be implemented in ERCOT Procedural changes to implement DLC programs. The requested changes include: –Removing detailed DLC implementation information from the Protocols and moving them into the Load Profiling Guides –Modifying language to be consistent with the revisions made with respect to profiling ESI IDs in DLC programs –Coinciding with revisions in Load Profiling Guides Revision Request (LPGRR 2003-001) –LRPRR has language which outlines the process for bidding DLC demand reductions into the BUL market –Minor wording changes

19. 19 BUL Background Balancing Up Loads are loads registered to bid into BES market –Enabled by PRR 302, 419, 448 & PIP 112 (2003) Individual BULs must be IDR-metered (telemetry not required) When a BUL is dispatched and load is shed, QSEs representing BULs receive: –Energy-imbalance payment in normal Settlement –Additional payment = MCPC in the non-spin market for that interval

20. 20 BUL Background (continued) Individual BUL compliance is evaluated on a baseline developed from the load’s performance over prior 10 “like” days (enabled) BUL program for individual loads is available but currently unsubscribed BUL will go away entirely upon launch of Texas Nodal

21. 21 BUL Background -- DLC Direct Load Control programs were viewed as the vehicle for smaller customers to participate in the ERCOT Balancing Energy market While developing Protocols for DLC Settlement (2002-03), PWG also developed Protocols to enable DLC to provide BUL service Project to enable DLC Settlement, including BUL participation, did not make the PPL cut-line due to lack of a sponsoring REP –Language has been gray-boxed since 2003

22. 22 BUL Background -- DLC PRR-385 defines an algorithm for determining DLC baseline –DLC baseline is based on proxy day (if available) or profile DLC Settlement can be enabled without the BUL provisions –Including BUL in the project would increase scope and require significant additional coding

23. 23 CCET Demand Response Pilot A group of Market Participants and ERCOT are participating in a demand response pilot which begins during the summer of 2007 Two goals of this effort are to: –Enable wholesale settlement of demand response programs in ERCOT –Evaluate and recommend an algorithm for quantifying the amount of demand reduction (which includes the determination of a baseline methodology). The recommendations from the pilot concerning baseline methodology may be different than language included in PRR-385

24. 24 ERCOT Recommendation ERCOT Staff recommends excluding BUL-specific elements from DLC Settlement project

25. 25 Market Benefits The requested changes will allow demand response programs to be appropriately profiled and ERCOT systems to properly process demand response programs

26. 26 Impact Analysis / Cost Estimate Possible impact to retail systems depending on how Demand Response program participants are identified in the Profile ID. –For example, can the existing TOU/NOTOU segment of the Profile ID be expanded to include the identification of demand response programs (i.e., like DR001, DR002). Lodestar system changes The estimated cost is < $500k

27. 27 Questions? ON OFF

28. 28 MOCART Project ERCOT System throughput for IDR Jackie Ashbaugh

29. 29 ERCOT System throughput for IDR Background PUCT and Market discussions indicate increased utilization of interval data in wholesale settlements. Influx of interval data would substantially increase the demand on the ERCOT retail market transaction processing systems and the wholesale settlement systems with respect to both processing (bandwidth) and storage. Based on extrapolations of current system processing times, ERCOT estimates that 200,000 IDR meters is the maximum number of IDR meters ERCOT’s system can support. ERCOT anticipates degradation in service once ERCOT must process fifteen minute interval meter data from approximately 50,000 or more ESI IDs.

30. 30 ERCOT System throughput for IDR Scope Incremental increases in IDR processing capability for ERCOT systems by: –Reviewing IDR data loading /reporting / storage process –Reviewing the Information Life Cycle Management Strategy for Paper Free & L* –Reviewing the impact to Market Participants for extracts. –Gaining insights on system enhancements necessary for future increases in IDR processing capability. Budget $100k-$250k

31. 31 Calvin Opheim June 11, 2007 Distributed Generation/Small Renewables Raj Rajagopal

32. 32 Distributed Generation/Small Renewables Background TX SET changes related to small renewables. Project currently on the RO and MO PPL. RO developing the requirements and scope of this project. Scope There will be a impact to the MO PPL only if settlement changes are necessary as a result of this effort. Budget RO pipe line will manage the budget and the project. COPS and will be updated on progress. RO Budget: $250k-$500k. No Budget on the MO PPL.