Role of Account Management at ERCOT TAC Report to the ERCOT Board of Directors 2006 Accomplishments and 2007 TAC & Subcommittee Goals February 20, 2007

Role of Account Management at ERCOTTAC Report to the ERCOT Board of Directors

2006 Accomplishments and 2007 TAC & Subcommittee Goals

February 20, 2007

February 2007 TAC 2006 Accomplishments & 2007 Goals2

Technical Advisory Committee (TAC)

Functions of TAC (ERCOT Bylaws Section 5.2)

TAC shall: a. Through its subcommittees make such studies & plans as it

deems appropriate to accomplish the purposes of ERCOT, the duties of its subcommittees and policies of the Board,

b. Report the results of such studies & plans to the Board as required by the Board,

c. Review & coordinate the activities & reports of its subcommittees,

d. Make such recommendations to the Board as it deems appropriate or as required by the Board,

e. Perform such other duties as directed by the Board, and

f. Make recommendations regarding ERCOT expenditures and projects.


Technical Advisory Committee (TAC)

• TAC, comprised of stakeholders, makes recommendations to the

Board and is assisted by five subcommittees and the Transition Plan

Task Force (TPTF): – Commercial Operations Subcommittee (COPS) – Protocol Revisions Subcommittee (PRS)– Reliability and Operations Subcommittee (ROS) – Retail Market Subcommittee (RMS) – Wholesale Market Subcommittee (WMS)– Transition Plan Task Force (TPTF)

• Consumers are represented on all committees.

• Numerous task forces (temporary) and working groups (permanent)

reporting to these major subcommittees also meet regularly.

• Current TAC and subcommittee structure developed in 2000, with the

later addition of COPS and TPTF.


High Level TAC Goals for 2007

• Communications

• Oversight

• Reliability -- Market Interactions– Wholesale– Retail


TAC Goals for 2007 -- As Articulated by TAC Members

• Develop more in-depth communications to TAC and

stakeholders on reliability issues.

• Maintain focus on retail transactions processing, outages,

service degradation, and communications.

• Develop the appropriate level of stakeholder involvement in the

formation of the TRE & improve communications to the

stakeholders about TRE developments.

• Focus on improvements and clarity in the reserve margin

calculation.

• Improve the Cost Benefit Analysis process.

• Raise level of review of and input to transmission studies.

• Monitor ERCOT credit requirements of Market Participants.


TAC Goals for 2007 -- As Articulated by TAC Members (con’t)

• Oversight and synchronization of transition between zonal and

nodal PRRs.

• Nodal Implementation Oversight – identify the appropriate role

for the TAC stakeholders in oversight of & communications

related to nodal implementation.– Develop Market Readiness Criteria– Serve as initial body for appeals.– Develop and approve Performance Monitoring program.– Provide input to change requests.– Focus on market participant readiness—standards and

communications.


Protocol Revisions Subcommittee (PRS)

• Responsibilities:– Reviews and recommends action on formally submitted Protocol

Revision Requests (PRRs), Nodal Protocol Revision Requests (NPRRs) and System Change Requests (SCRs).

– Recommends to TAC assignments of Project Priority for each Guide Revision that requires a change to ERCOT’s computer systems or staffing.


Protocol Revisions Subcommittee (PRS)—2006 Accomplishments

• PRRs in 2006: 56 introduced, 40 approved, 2 withdrawn, 6

rejected, and 8 pending.

• NPRRs in 2006: 38 introduced, 30 approved, 2 rejected, and 6

pending.

• SCRs in 2006: 1 introduced and approved.

• Implementation of new Project Prioritization Process in

conjunction with 2007 ERCOT budget.– Resolved problem of balance among competing areas (e.g., the data

extracts problem).

• Developed process for handling Nodal transition period PRRs.

• Revised the manner in which projects that fall below the cut-

line should be addressed and presented to the Board.


Protocol Revisions Subcommittee (PRS): 2007 Goals

– Post-nodal Implementation Plan: Develop a procedure to handle Nodal Protocol Revision Requests that cannot be incorporated into initial nodal implementation.

– Incorporate value engineering benefits identified during nodal implementation.


Retail Market Subcommittee (RMS)

• Responsibilities:– Provides a forum for issue resolution in regards to retail market

matters directly affecting ERCOT and ERCOT Protocols. – Monitors Public Utility Commission (PUCT) rulings as they would

apply to retail markets and retail Market Participants and ensure that PUCT requirements are reflected in the Retail Market Guides, protocols and Texas Standard Electronic Transaction (Texas SET).

– Defines processes for changes to retail transactions, profiling, and competitive metering.


Retail Market Subcommittee (RMS): 2006 Accomplishments

– Implemented significant improvements to the Mass Transition Process:

• Developed interim manual process to expedite Mass Transition Processing: reduced number of days for POLR CR to submit Switch Request; reduced FASD from 6 to 3 days.

• PRR 660, Texas SET Transactional Solution for a Mass Transition Event.

– RMGRR031 update and clarification to IDR Installation Process for mandatory and optional IDR installations.

– Service Availability Agreement with ERCOT for documentation and development of Measurements Reporting Tool.

– SCR748 website enhancements to support ERCOT Outage Notifications.

– PUCT Project No. 29637 Standard Terms and Conditions--market process documentation and transaction process changes.

– 5 RMG process documentation updates; PRR672 relating to ERCOT transaction timing; & PRR693 specific to ERCOT processing of Priority MVI requests.


Retail Market Subcommittee (RMS): 2006 Accomplishments (con’t)

– PUCT Project No. 31416 amending 25.43 relating to the Provider of Last Resort:• Customer Information Repository process definition. • Old POLR to new POLR transition process definition. • Hosted POLR Workshop to inform and educate MP's on

process.• Implemented transactions based Mass Transition Process

enabling 5 day transition process (PRR 684, Mass Transition Process Necessary for PUC Rule 31416).

– At request of PUCT Staff, RMS hosted working group discussions relating to Advanced Meter Rulemaking and provided recommendations.

– Implementation of MarkeTrak Phase I.


Retail Market Subcommittee (RMS): 2007 Goals

– Complete and improve SCR745, Retail Market Outage Evaluation & Resolution, implementation and reporting.

– Update ERCOT Service Availability Agreement to be inclusive of service degradation Issues.

– Monitor implementation of SCR748, Website Enhancements for ERCOT Outage Notifications.

– Successful TX SET 3.0 implementation (July). – Define MarkeTrak Phase II enhancements & performance

monitoring. – Monitor PUCT activities: Advanced Metering, Performance

Measures, and Prepay rulemakings.– Priority Move-ins: Continue PRR672, Retail Market Timing

Necessary for PUCT Project 29637, effort to improve ERCOT throughput of 814_20 maintenance transaction enabling adds and deletes.


Reliability and Operations Subcommittee (ROS)

• Responsibilities:– Develops, reviews and maintains operating guides and planning

criteria. – Reviews ERCOT reports and procedures related to the reliable

operation of the ERCOT system in relation to system security and emergency operations, including:

planning assessment; blackout restoration procedures; coordination of protective relay settings; operational communication facilities; operating reserve obligations; emergency operations; abnormal system conditions; transmission interconnections to generation; coordination of outage schedules; and other activities.

– Reviews ERCOT Protocol revisions and performs Protocol-required reviews of ancillary service provisions and commercially significant constraints.


Reliability and Operations Subcommittee (ROS): 2006 Accomplishments

– In conjunction with WMS, addressed frequency control issue (Schedule Control Error (SCE) and governor response).• PRR 656, SCE Performance Charge, and PRR 661, SCE

Performance Enforcement Criteria, adopted and implemented.

• SCE scores have since improved. – Annual engineering work.

• The ROS evaluated several incidents including a detailed analysis of the April 2006 EECP event. As part of the review, the ROS modified the EECP procedures to alert the market sooner about potential emergency conditions (PRR 682, EECP Event Realignment).

– Fuel and winter issue review.• ERCOT staff updated the previous fuel and winter issue review.

The updated study confirmed the risk of outage in the event of a natural gas curtailment during winter weather.


Reliability and Operations Subcommittee (ROS): 2007 Goals

– Identify cost-effective strategies to minimize involuntary loss of load probability (EILS and successor issues).

– Improve communications to TAC on reliability issues and/or events.

– Establish the Texas Reliability Entity’s (TRE) standards drafting process (as outlined in the Texas RE Delegation Agreement).

– Review & analyze ERCOT System Operations, Emergency Electric Curtailment Plan (EECP) events & significant outages. • Develop changes to ERCOT Operating Guides, Protocols and

Standards.

– NMMS Conversion: support the conversion of the ERCOT network model for use in the nodal market.

– Identify compliance obligations for meeting NERC Standards and tasks delegated by ERCOT to entities via the ERCOT Protocols.


Reliability and Operations Subcommittee (ROS): 2007 Goals (con’t)

– Monitor Schedule Control Error (SCE) scores and related performance.

– Coordinate with WMS on Generation Adequacy Task Force (GATF) reserve margin criteria.

– Convert the existing ERCOT Operating Guides to conform to the new nodal market.


Wholesale Market Subcommittee (WMS)

• Responsibilities:– Helps ensure an efficient and nondiscriminatory wholesale market

for all Market Participants. – Reviews issues related to the operation of the wholesale market

in the ERCOT region and makes recommendations for improvement.

– Monitors Public Utility Commission of Texas rulings as they apply to wholesale markets and Market Participants.

– Provides input into the methodology of Commercially Significant Constraints, changes to Ancillary Services (AS) and the evaluation of Resource adequacy in the ERCOT region.

– Monitors the AS market operations and management of Zonal and Local Congestion.


Wholesale Markets Subcommittee (WMS): 2006 Accomplishments

– Frequency Control: Reviewed and reported on the associations between SCE and frequency control. Recommendations on 8 related PRRs. Established direction for SCE compliance and regulation cost reallocation.

– Confirmed the effectiveness of the Simultaneous Selection of Ancillary Services introduced in the end of 2005.

– Established participant training for EMMS 4 and RPRS operations and settlement.

– Resolved lingering issues associated with ancillary services re-qualification.

– Established and approved QSE performance metrics.– Resolved issues associated with large negative bids by LAARs for

Responsive Reserve Service.– Commented on and rewrote the Economic Transmission Planning

Criteria.


Wholesale Markets Subcommittee (WMS): 2006 Accomplishments (con’t)

– Explained and reported on BENA and all of its components and provided tools for individualized participant reporting.

– Developed a report and established a market direction related to real time co-optimization.

– Reviewed market design issues associated with the April 17th event.

– Recommended new zones, CSCs, and CREs for 2007.– Analyzed the performance of RPRS and ultimately recommended

approaches to change it (PRR 674 and PRR 676).– Analyzed and reported on ERCOT’s request for an Emergency

Interruptible Load Service (EILS). Produced 4 PRRs and forwarded recommendations to TAC.

– Reviewed methodologies for determining reserve margin calculation (recommended expected in early 2007).


Wholesale Market Subcommittee (WMS): 2007 Goals

– Identify cost-effective strategies to minimize involuntary loss of load probability (EILS and successor issues).

– Complete review of revised ERCOT reserve margin calculation methodology and make appropriate recommendation to TAC.

– Resolve the issue of Renewable Production Potential (RPP) & Uninstructed Resource Charge (URC).

– Examine settlement of Ancillary Services for multiple markets.– Examine Implementation of CREZ & Resource Adequacy/Market

Power Rules.– Evaluate the capacity value of distributed generation.– Determine the verifiable and minimum-energy costs for the Nodal

Market.


Commercial Operations Subcommittee (COPS)

• Responsibilities:– Addresses the processes through which ERCOT market data is

translated into financial settlements. – Helps improve commercial operations by integrating the retail

variance and wholesale market settlements processes, including dispute resolution.

• Commercial operations include the application of load profiles, data aggregation, data extract variances; transmission congestion rights settlements; qualified scheduling entity settlements; invoicing; and dispute

resolution. – Addresses the settlements calendar; settlement-related

performance metrics and tracking; market participant data needs for shadow settlements; and the market's overall needs for data extracts, delivery and presentation.


Commercial Operations Subcommittee (COPS): 2006 Accomplishments

– An ad hoc task force created to review TPTF working documents as they relate to data and financial settlement processes (now formalized in the Settlements and Data Aggregation Working Group (SDAWG).

– Worked with RMS to transition PWG into COPS and maintain timely completion of Annual Validation Process.

– Worked through process to change “Settlement Invoice Due Date” from 16 Calendar Days to 5 Business Days.

– The PWG completed implementation of new profile determinants.– Updated “Commercial Operations Market Guide” and established a

structured revision process (similar to other guides).– ECCP Communication Plan -- updated/refined template and

processes.– Recommendation to PRS regarding “discontinuing interest charges

for defaulting entities at time of uplift.”


Commercial Operations Subcommittee (COPS): 2006 Accomplishments (con’t)

– The DEWG co-sponsored with ERCOT a successful web services training – 60 participants.

– The DEWG updated the Extract and Report Matrix – up to date matrix of all reports and extracts produced by ERCOT on website.

– “Screen Scraping” – MPs’ concern that ERCOT “policies” conflict with MPs’ need to access information – MIS group under TPTF is aware of market concerns and added this issue to their log.

– The DEWG monitored progress of implementation and performance issues of data and extracts.

– The UFE Task Force analyzed the historical trends in volatility and magnitude of UFE, yielding a better understanding of the drivers of UFE.


Commercial Operations Subcommittee (COPS): 2007 Goals

– Focus on nodal implementation & changes in market processes.

– Plan, organize, monitor, and assist, the COPS working groups assigned specific tasks as they relate to nodal activity.

– Revisit dispute timelines & settlement process.

– Settlements & Data Aggregation Working Group (SDAWG):

• Resolve nodal settlement timelines & accounting processes.

• Monitor and comment on all relevant TPTF working documents as they relate to the financial & settlement processes; suggest Protocol language changes as required.

• Work through implementation process as nodal progresses.

– COPS Communication Working Group (CCWG):

• Continue developing the Commercial Operations Market Guide.

• Monitor unplanned outage communication process and templates.


Commercial Operations Subcommittee (COPS): 2007 Goals (con’t)

– Profiling Working Group (PWG):• Ongoing effort to improve determinants.• Complete implementation of new profile determinants on

time and on budget.– Monitor process, timelines, market issues– Ensure data is correct– Provide oversight of Annual Validation Process– Review, Monitor, and Suggest Improvements to Profiling

Process– Data Extracts Working Group and UFE Task Force:

• Inactive until needed.

Documents

Role of Account Management at ERCOT TAC Report to the ERCOT Board of Directors 2006 Accomplishments and 2007 TAC & Subcommittee Goals February 20, 2007