SAR-003-TRE-001

FERC-Ordered Modification to ERCOT waiver CPS2

Report to RSC

SAR-003 First Meeting

First Meeting was held on July 10th 2008 Sydney Niemeyer - NRG - Chair Ananth Palani – EnergyCo – Vice Chair Farzaneh Tafreshi made presentation on SAR

process Ananth Palani made presentation on CPS2 waiver Kenneth McIntyre of ERCOT and Nick Henry of

FERC (via Phone) were also present Very poor Industry participation

Key point of the meeting

Goal of the committee Impact of possible retirement of BAL-001 after BAL-

007 goes into effect BAL-007 eliminates CPS2 for all BA’s in all Interconnections.

Impact of ERCOT Protocol Section 5.9 retirement when ERCOT goes live with Nodal market

Discussion on “Non-applicability of CPS2 to ERCOT” in place of “CPS2 Waiver for ERCOT”

Next Meeting

Next Meeting will be held at Austin on August 14th 2008 Two paths were identified to complete assignment:

We will do analysis on protocol 5.9 to see our compliance Develop requirements, measures and levels of non-compliance.

Prove non-applicability of CPS2 to a single Balancing Authority Interconnection.

CPS2’s purpose was to limit a BA’s burden on neighboring BAs. CPS1 is a much more difficult performance measure to pass in a single BA

Interconnection due to the BA’s ACE is always in the same direction as the frequency error (constant frequency control mode) and therefore their CPS1 score can never be greater than 200. BA’s in multiple BA Interconnections can have CPS1 scores that are virtually limitless above 200 which helps “average out” poor performance periods.

Discuss and set tentative timeline for this group

Thanks

Any Questions?