Report to TACReport to TAC

February 2009February 2009

In BriefIn Brief 2009 Working Group Leadership2009 Working Group Leadership Working Group ReportsWorking Group Reports

CMWGCMWG DSWGDSWG MCWGMCWG VCWGVCWG

Staff reportsStaff reports Non-Implemented PRRs/2009 Project Priority List Non-Implemented PRRs/2009 Project Priority List

– PRR 601– PRR 601 PRR 800PRR 800 PRR 801PRR 801 SCR 754SCR 754

WMS 2009 GoalsWMS 2009 Goals

Working Group 2009 Working Group 2009 LeadershipLeadership

Congestion Management Working Group Congestion Management Working Group (CMWG)(CMWG)

Chair: Marguerite Wagner, PSEG TXChair: Marguerite Wagner, PSEG TX Vice Chair: Eric Goff, ReliantVice Chair: Eric Goff, Reliant

Demand Side Working Group (DSWG)Demand Side Working Group (DSWG) Chair: MaryAnne Brelinsky, Eagle Energy PartnersChair: MaryAnne Brelinsky, Eagle Energy Partners Co-Vice Chairs: Nelson Nease, BBRS; and Tim Carter, Co-Vice Chairs: Nelson Nease, BBRS; and Tim Carter,

ConstellationConstellation

Market Credit Working Group (MCWG)Market Credit Working Group (MCWG) Chair: Morgan Davies, CalpineChair: Morgan Davies, Calpine

Metering Working Group (MWG)Metering Working Group (MWG) Chair: Dottie DiSanto, STECChair: Dottie DiSanto, STEC Vice Chair: Mark Rollins, LCRAVice Chair: Mark Rollins, LCRA

QSE Managers Working Group (QMWG) QSE Managers Working Group (QMWG) Chair: David Detelich, CPS EnergyChair: David Detelich, CPS Energy

Verifiable Cost Working Group (VCWG)Verifiable Cost Working Group (VCWG) Co- Chairs: Heddie Lookadoo, NRG; and Ino Gonzalez, Co- Chairs: Heddie Lookadoo, NRG; and Ino Gonzalez,

ERCOTERCOT Vice Chair: Russell Lovelace, Shell EnergyVice Chair: Russell Lovelace, Shell Energy

Working Group ReportsWorking Group ReportsCMWGCMWG

ERCOT Competitive Constraint Test ERCOT Competitive Constraint Test (CCT) Tool Update(CCT) Tool Update Concerns about how market will get insight Concerns about how market will get insight

into ERCOT’s CCT activitiesinto ERCOT’s CCT activities Awaiting ERCOT response in MarchAwaiting ERCOT response in March

Quarterly Outage Tracking UpdateQuarterly Outage Tracking Update See next slideSee next slide

ERCOT Local Congestion ManagementERCOT Local Congestion Management IMM revealed at CMWG that most local IMM revealed at CMWG that most local

congestion is managed through OOMe – congestion is managed through OOMe – ineffective, operator intensive and impact ineffective, operator intensive and impact market pricingmarket pricing

Working Group ReportsWorking Group ReportsCMWG – Outage CMWG – Outage

TrackingTrackingLarge TSPs

Notice vs Number for Future Significant* Transmission Outages Data pulled on Jan. 5, 2009

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

1 10 19 28 37 46 55 64 73 82 91 100 109 118 127 136 145 154 163 172 181

Number of Outages

Ou

tag

e N

otif

ica

tion

in D

ays

Aggregated Small TSPs - 35%

AEP North - 7%

AEP South - 32%

LCRA - 49%

CNP - 23%

Oncor - 10%

* significant outage is defined as having a voltage greater than 138-kV and lasting more than 4 continuous days** Percentage compares what has been scheduled for the next 12 months versus what is expected for the next 12 months

Percentage**

Working Group ReportsWorking Group ReportsDSWGDSWG

Goals for 2009 – include reviewing LaaR and EILs Goals for 2009 – include reviewing LaaR and EILs performance standardsperformance standards

Load Resource Min Increment OfferLoad Resource Min Increment Offer WMS endorsed concept (one abstention)WMS endorsed concept (one abstention)

Concerns regarding system impact will be address once PRR is filed.Concerns regarding system impact will be address once PRR is filed. 4.4.7.2.1 (4)4.4.7.2.1 (4)

LaaR Registrations declining – likely due to economic LaaR Registrations declining – likely due to economic downturndownturn

834 MW of LaaR deployed December 16, 2008834 MW of LaaR deployed December 16, 2008

Working Group ReportsWorking Group ReportsMCWGMCWG

Provide WMS with input and Provide WMS with input and recommendations on issues of credit risk recommendations on issues of credit risk management, including but not limited to:management, including but not limited to: Credit risk mitigationCredit risk mitigation Credit impact of potential ERCOT Protocol or market Credit impact of potential ERCOT Protocol or market

design changesdesign changes Other areas of implementing best practice credit Other areas of implementing best practice credit

standardsstandards

MCWG Charter – unanimously approved MCWG Charter – unanimously approved by WMSby WMS

Working Group ReportsWorking Group ReportsVCWGVCWG

CAIR Rule – on-going CAIR Rule – on-going NPRR 167 – Options for Filing Verifiable CostNPRR 167 – Options for Filing Verifiable Cost

QSE or Resource – white paper being draftedQSE or Resource – white paper being drafted Affidavit in VC ManualAffidavit in VC Manual

Nodal Fuel Adder – NPRR to be drafted Nodal Fuel Adder – NPRR to be drafted FIP * 1.10 with a Deadband 1.Y - 1.10FIP * 1.10 with a Deadband 1.Y - 1.10 Y to be determined before Market Open by WMSY to be determined before Market Open by WMS Motion carries – two Munis opposeMotion carries – two Munis oppose

RUC Cancellation – NPRR to be draftedRUC Cancellation – NPRR to be drafted Cancellation should be paid on LRS on a dispute basisCancellation should be paid on LRS on a dispute basis Unanimous VoteUnanimous Vote

Working Group ReportsWorking Group ReportsVCWGVCWG

Nodal Verifiable Cost ManualNodal Verifiable Cost Manual New version posted and New version posted and

unanimously approved by WMSunanimously approved by WMS This is a live document that will change This is a live document that will change

as needed before and after market as needed before and after market open. Please review and provide open. Please review and provide comments.comments.

Other WMS activityOther WMS activity PRR601, 15 Minute Ramping for BES and PRR601, 15 Minute Ramping for BES and

Base Power ScheduleBase Power Schedule Ramping for the entire 15-minute interval will Ramping for the entire 15-minute interval will

allow more BES to be deployed and may tend to allow more BES to be deployed and may tend to reduce Regulation Service (RGS) deploymentreduce Regulation Service (RGS) deployment

Significant time can be saved by changing the Significant time can be saved by changing the start and end times of the ramp rate from a start and end times of the ramp rate from a decimal value (7.5) to an integer value (such as decimal value (7.5) to an integer value (such as 7). There are equally significant savings if the 7). There are equally significant savings if the before and after values are identical (such as before and after values are identical (such as 7/7).7/7).

ERCOT to file Urgent PRR using 7/7 (PRR ERCOT to file Urgent PRR using 7/7 (PRR 803)803)

Other WMS activityOther WMS activity PRR 800 – QSE Day-Ahead MetricPRR 800 – QSE Day-Ahead Metric

Not discussed at WMSNot discussed at WMS PRR 801 – Manual TCR AdjustmentsPRR 801 – Manual TCR Adjustments

WMS endorsed a revised PRR801WMS endorsed a revised PRR801 Require that the procedures used by ERCOT to Require that the procedures used by ERCOT to

manually adjust the quantity of monthly manually adjust the quantity of monthly Transmission Congestion Rights (TCRs) Transmission Congestion Rights (TCRs) auctioned be approved by TAC, and to clarify auctioned be approved by TAC, and to clarify that the forty percent (40%) cap on manual that the forty percent (40%) cap on manual adjustments made by ERCOT applies to the Total adjustments made by ERCOT applies to the Total Transfer Capability of each Commercially Transfer Capability of each Commercially Significant Constraint (CSC) for the month. Significant Constraint (CSC) for the month. WMS instructed ERCOT to prepare a draft WMS instructed ERCOT to prepare a draft procedure document for TAC review and procedure document for TAC review and approval prior to implementation of PRR 801.approval prior to implementation of PRR 801.

Motion carries with one IOU absentionMotion carries with one IOU absention

Other WMS activityOther WMS activity SCR754, WGRPP Forecasts SCR754, WGRPP Forecasts

Posted on Zonal TML Posted on Zonal TML Improves the management of grid Improves the management of grid

operations and practices due to operations and practices due to more reliable delivery of forecasts more reliable delivery of forecasts to WGR QSEs.to WGR QSEs.

Not posted for a vote – but WMS Not posted for a vote – but WMS Chair gave direction to proceed Chair gave direction to proceed hearing no objections from hearing no objections from members.members.

WMS 2009 GoalsWMS 2009 GoalsItemItem

WMS WMS input/direction input/direction

needed byneeded by

Nodal Market TransitionNodal Market Transition On-goingOn-going

Nodal Verifiable Cost MethodologyNodal Verifiable Cost Methodology On-going On-going (VCWG)(VCWG)

Approved Zonal PRRs – Analysis and Approved Zonal PRRs – Analysis and PrioritizationPrioritization Q1-Q2Q1-Q2

Consideration of timely, economic Consideration of timely, economic improvements to Zonal Marketimprovements to Zonal Market Before Q4Before Q4

Determine CSCs for 2010Determine CSCs for 2010 Q3 (CMWG)Q3 (CMWG)

Market Issues Related to:Market Issues Related to:Credit issuesCredit issues On-going (MCWG)On-going (MCWG)

EILS and AS MarketsEILS and AS Markets On-goingOn-going

Integrating advanced meters & other demand Integrating advanced meters & other demand response into Ancillary Service Marketsresponse into Ancillary Service Markets On-going (DSWG)On-going (DSWG)

Wind & related renewable technology integrationWind & related renewable technology integration On-going On-going (QMWG/RTWG)(QMWG/RTWG)