Weekly Cutover Market Call

http://nodal.ercot.com 1

Weekly Cutover Market Call

Weekly Update

November 24, 2010


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.

DISCLAIMER

All presentations and materials submitted by Market Participants or any other Entity to ERCOT staff for this meeting are received and posted with the acknowledgement that the information will be considered public in accordance with the ERCOT Websites Content Management Operating Procedure.


Full Market Trials Agenda

• General Updates and Reminders

• Cutover Updates by Functional Area

• Cutover Activity Review

• Question and Answers / General Discussion

ERCOT asks that Market Participants log into the WebEx session using their company name and then their name. This will allow ERCOT to take roll-

call offline


General Updates / Reminders


General Updates and Reminders

• Network Model Load Dates• 11/24/2010 – Completed as scheduled - Last update prior to Go-Live• 12/15/2010

• The Saturday 4:30 PM Market Call on 11/27/2010 will be canceled– Note that the 10:30 AM call on the same day will take place– Daily calls will resume as scheduled on Sunday 11/28/2010

• REMINDER: Listener URLs– If there are any changes to your Listener URLs, submit those to ERCOT no later than today– Send changes to the [email protected] email address

• REMINDER: Frequency of polling data from ERCOT systems– All MPs need to review the frequency of which they are downloading / programmatically accessing data

from ERCOT systems– ERCOT Support Teams are finding several MPs that are accessing reports at an unreasonable

frequency– For example, some Daily Reports (generated once in a 24-hour period) are being hit 150,000+ times /

daily by some QSEs– This will assist ERCOT in gauging post Go-Live performance and sizing / scaling of systems going

forward to support reasonable data access behavior– If there are questions on the frequency of a particular report, MPs can access the ERCOT Market

Information List (EMIL), currently posted at: (Under Key Documents): http://nodal.ercot.com/readiness/reports/index.html

• Revised ERCOT Business Practices Incorporating Guidance Related to Quick Start Generation Resource (QSGRs)

– Revisions may be reviewed at http://www.ercot.com/mktrules/bpm/

NOVEMBER 2010SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY

1 2 3 4 5 6

7 8 9 10 11 12 13

14 1510:00AM – Market Call

16 173:00PM – TSP Market Call

18 199:00AM –Market Call

20


2310:30AM / 4:30PM – Daily Market Call


25ERCOT HOLIDAY

26ERCOT HOLIDAY

2710:30AM– Daily Market CallNote that 4:30 PM Market Call canceled for this date


LFC Market Call 11:00AM – 5:00PM


*LFC Market Call


*LFC Market Call

* LFC Market Call – Beginning at 6:00AM on 11/29 and continuing through 11:59 PM on 12/1


DECEMBER 2010SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY

* LFC Market Call – Beginning at 6:00AM on 11/29 and continuing through 11:59 PM on 12/1 1


*LFC Market Call


39:00AM –Market Call

4:30PM – Market Call





8 9 109:00AM –Market Call

11




18


21 22 23ERCOT HOLIDAY

24ERCOT HOLIDAY

25






Day Ahead Market / Reliability Unit Commitment

DAM testing this week


• On average, 60 QSEs participated in DAM over this period


Submission Overview for Friday Nov 19

DAM submission overview• 64 QSEs participated for Op Day 11/20• Energy Bids totaled 10,445 to 16,038 MW per hr• Cleared 8,148 to 12,464 MW energy bids per hr• Cleared 17,794 to 22,043 MW net energy transactions per hr - 66% to 78% of the

forecasted load• Cleared 12,445 to 13,634 PTP bids per hr• Four major Load Zone prices ranged from $25.00 to $36.31


Submission Overview for Saturday Nov 20




Submission Overview for Sunday Nov 21




Submission Overview for Monday Nov 22




Submission Overview for Tuesday Nov 23



Binding Constraints in DAM


OD CONTINGENCY_NAME CONSTR_NAME Max Shadow Price

11/20/10SDUKNED8 DUKE_NEDIN2_1 4.67

11/23/10SSCUSUN8 MATA_PADR1_1 1.04

RUC testing this week


Verifiable costs for go-live


• Note that approved verifiable costs for go-live have been added to the market system– As of this morning, all TPOs for 12/1 will be validated against the

approved verifiable costs– TPOs submitted prior to this morning will be revalidated using the

verifiable costs during phase 2 on 11/30


Real Time Market / LFC

Real Time Market Update


•11/23 System Lambda at SWCAP for 104 intervals•BASE CASE W_TO_N• DBRAVAL8 E1_M1_1 – Binding 12 pm – 4pm; 6pm – 7pm• DGRSLNC5 6380_D_1• SORNLON8 SINTON_SKIDMO1_1• SSPUASP8 MATA_PADR1_1 – binding 12am – 3 am; 3pm – 9 pm

•11/24 System Lambda at SWCAP for 14 intervals•SBBSRCH5 1080__B – Binding 9am – 5pm•SSPUASP8 MATA_PADR1_1 – not binding

Real Time Market Update


•Prices between $20 and $50 when not dispatched to SWCAP region


Alert that checks if EOC/OS exists when COP shows ONLINE:“SCED-TWOHR-FAIL Two Hour Notification: Check FAILED due to missing Output Schedules/Energy Offer Curves for Resource: XXXXXXX, Hour: 13 and Date: 11/24/2010”


Full-System Test / Nodal Cutover: Timeline

• Test Timeline:

– ERCOT will conduct the Full-System Testing activities Nov 28 to Dec 1

• Switchover is scheduled to begin at 14:00 on Nov 28

– ERCOT is requesting that support staff be available by 11:00 Sun., Nov 28, to resolve issues leading into the 14:00 start time

• Once all QSEs have been switched to nodal control following the 14:00 start time, the ERCOT system will remain on nodal control through the conclusion of testing activities on 23:59 CST on November 30, 2010, and into the beginning of the first nodal go-live Operating Day that begins at 00:00 CST on December 1, 2010

• GREDP Results:– Individual GREDP results detailing the Nov 28 – 30 testing period will not be

distributed following the testing– The first Monthly Resource Energy Deployment Performance Report (EMIL

ID# NP8-501-ER) is scheduled to being publishing to MIS Certified on Jan 4, 2010


Full-System Test / Nodal Cutover: Communication Items

• Notices :– A Market Notice confirming the Nov 28, 14:00, start time was sent Nov 23– A follow-up Market Notice will be sent two days prior to the actual test to

confirm the date and start time– An additional Market Notice will be sent on Nov 28 to confirm the start time

• 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)

• An All-QSE VDI will be issued immediately prior to the start of the test– The VDI will be define the “test period” to begin when the first QSE is

brought under Nodal control and to end at 23:59:59 CST on Nov 30

• Market WebEx:

– A Market-facing WebEx will be provided during the following times:

• Nov 28 – 11:00 to 17:00 (six hours)

• Nov 29 – 06:00 to 23:59 (all day)

• Nov 30 – 00:00 to 23:59 (all day)

• Dec 01 – 00:00 to 23:59 (all day)


Full-System Test / Nodal Cutover: Timeline

Date Time Event

11/28 11:00 Open Market WebEx

11:30 Pre-test meeting for Nodal Support Staff

12:00 Hotline call by ERCOT Operators to announce the start time

Market Notice to be sent out with the cut-over start time

Operators to start using OC3s to manage congestion

14:00 Hotline call to QSEs/TOs to announce the start of cut-over

ERCOT Operators begin switching QSEs to Nodal control

14:45 All QSEs switched to Nodal control

Hotline call to announce that all QSEs are on Nodal control

17:00 Recess Market WebEx

18:00-18:30 ERCOT staff transitions from day-side to night-side support

11/29 06:00 Resume Market WebEx

06:00-06:30 ERCOT staff transitions from night-side to day-side support


11/30 06:00-06:30 ERCOT staff transitions from night-side to day-side support


12/1 00:00 Nodal Market Go-Live/VDI for QSEs to end

06:00-06:30 ERCOT staff transitions from night-side to day-side support


23:59 End Market WebEx


Full-System Test / Nodal Cutover: Switching Sequence

• Switching Sequence

– The switching sequence from previous testing will be leveraged for this testing

– This switching sequence is a guideline—the actual sequence may vary as needed to optimize reliability and manage congestion

ZONAL to NODAL

No. QSE/sub-QSENo. QSE/sub-QSE No. QSE/sub-QSE No. QSE/sub-QSE

1 Nextera 21 Morgan SQ2 41 EDF SQ4 - Eagle SQ4 61 Optim2 Nextera SQ1 22 Morgan SQ3 42 ANP 62 Optim SQ13 Nextera SQ2 23 Morgan SQ4 43 IPA SQ1 63 PSEG SQ14 Nextera SQ3 24 Morgan SQ5 44 Formosa 64 PSEG SQ25 Nextera SQ4 25 Bull Creek 45 MP2 Energy 65 Garland6 FPL Keir 26 EC and R SQ3 46 J Aron SQ1 66 Garland SQ27 Luminant 27 Sweetwater 5 47 EC and R SQ6 67 Tenaska 8 Luminant SQ1 28 Pattern Gulf Wind 48 EC and R SQ7 68 TRQ1 9 Luminant SQ2 29 Fulcrum SQ2 49 Sherbino 69 TRQ4

10 Luminant SQ3 30 EC and R SQ1 50 Silver Star 70 TRQ7 11 CPS 31 EC and R SQ2 51 BPTX SQ1 71 TRQ9 12 CPS SQ1 32 EC and R SQ4 52 Barton Chapel 72 Rio Nogales 13 LCRA 33 EC and R SQ5 53 Duke 73 Exelon14 AEN 34 Invenergy SQ1 54 Edison Mission 74 Shell15 AEN SQ1 35 Invenergy SQ2 55 STEC 75 Shell SQ216 NRG 36 Invenergy SQ3 56 STEC SQ2 76 Constellation17 NRG SQ1 37 Invenergy SQ4 57 AEP 77 Oxy18 Direct 38 Invenergy SQ5 58 AEP SQ3 78 BTU 19 Direct SQ2 39 EDF - Eagle 59 Calpine 79 Suez20 Morgan SQ1 40 EDF SQ3 - Eagle SQ3 60 Brazos 80 Xtend Energy

81 IntelliGen Resources


Full-System Test / Nodal Cutover: Issues Management

• Issues Management:

– From Nov 28 to Dec 1, issues will be fielded by testing support staff and through the Market WebEx

– After Dec 1, issues will be fielded through the issues management process and during the twice daily market calls

• The issues management process is detailed in the slides for MRS #9 (http://www.ercot.com/calendar/2010/11/20101110-MT)


Full-System Test / Nodal Cutover: ONTEST Status

• If you plan to be ONTEST for unit testing:

– Confirm this intention with ERCOT by 4:00 pm the day prior to the Operating Day wherein ONTEST will be used

– Note: The Request for Unit Testing can be found at http://www.ercot.com/mktrules/guides/procedures/index

To Be ONTEST on this Date: Confirm by 4:00pm on:

Nov 28 Nov 27

Nov 29 Nov 28

Nov 30 Nov 29

Dec 1 Nov 30


Full-System Test / Nodal Cutover: Tuning Windows / Scenarios

• Market Participant Tuning Windows:

– Market Participant system-tuning windows:

• Notify ERCOT of proposed tuning window by sending an email to [email protected] by 12pm Sun., Nov 28, 2010

• ERCOT will confirm whether other QSEs are conducting tuning activities during the proposed time and will suggest a different time if needed

– Proposing that MPs do not perform tuning during the following test activities:

• ZonalNodal switchover activities

• Other QSE tuning windows

• No Operational Scenarios

– ERCOT is not planning to conduct any operational scenarios during the testing window

– Emergency Base Points and Non-Spin will be deployed as needed


Full-System Test / Nodal Cutover: EMBPs for Wind

• Emergency Base Points (EMBPs) for Wind– When EMBP is active, Wind Resources will be expected to follow their Base

Point– When EMBP is active and W2N is active

• WGRs may receive special instructions to hold their last base point (depending on whether the IROL is active)

• ERCOT expects that this instruction will come as a hotline call• For purposes of calculating GREDP, ERCOT does not consider the 5-

minute clock intervals during which EMBPs have been issued (see NP 8.1.1.4.1 (6)(b))

http://nodal.ercot.com

Full-System Test / Nodal Cutover: Deployments/AS Responsibilities

• Deployments:– During testing, QSEs will need to respond to SCED/Regulation/RRS/NSRS

deployments from nodal– QSEs will still need to commit units based on RPRS results during Operating

Days Nov 28th, 29th, and 30th

• AS Responsibilities for Dec 1:

– On Nov 30, ERCOT will update regulation calculations in LFC/RLC

• The LFC regulation calculation will be updated to honor 5-minute ramping

• The RLC calculations for SCED Up/Down Ramp rate will be updated to honor 5-minute ramping

– ERCOT will make these updates at approximately 23:50 on Nov 30

– QSEs will be expected to update their telemetered AS Responsibilities, including Reg-Up and Reg-Down, to reflect DAM awards for HE 01:00 of Dec 1

• Telemetry updates should be made no sooner than 15 seconds and not later than 4 seconds prior to 00:00

http://nodal.ercot.com

Full-System Test / Nodal Cutover: Settlements

• Settlements:– As with previous testing, transactions during the Nov 28 – 30 test window 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)

– An All-QSE VDI will be issued immediately prior to the start of the test• The VDI will be define the “test period” to begin when the first QSE is

brought under Nodal control and to end at 23:59:59 CST on Nov 30– Settlements will not calculate Uninstructed Resource Charges (URCs) during

the test period (including the hour before the test period)– All QSEs will receive Schedule Control Error (SCE) exceptions during the test


Credit Update

Treasury

• Collateral and invoice payments received are posted same day

– Collateral and invoice payments received before 12:00 noon will be included for the ACL available for the next day’s DAM (e.g. received by noon Monday will be reflected in Tuesday’s DAM ACL)

– Collateral and invoice payments received after 12:00 noon will be included for the next day’s Credit Reports and the following day’s ACL (e.g. received after noon Monday will be reflected in Wednesday’s DAM ACL)

• Collateral reimbursement requests will generally be processed the next business day

– Beginning December 1, refunds of collateral will be principal only (interest will not be included)

– Interest will be paid semi-annually rather than in conjunction with each collateral refund


Treasury

• On a due date, if an invoice payment has not been received, ERCOT plans to send out an e-mail reminder to

• QSE/CRRAH authorized rep and back up • CP authorized rep and back up• Credit contact and back up

Note: Please be sure that ERCOT has updated contact information for your company – notices will be an automated process and will use the information in ERCOT’s Registration System.


• ERCOT continues to publish Credit Reports and ACLs daily, including non-business days

• CMM is now the system of record for Zonal credit requirements

• Total Potential Exposure (TPE) uses a) Zonal data and b) binding Nodal data.

– No non-binding Nodal data (e.g. practice DAM runs) are included in the TPE calculations. Collateral included will be actual collateral held.

– Some Zonal data will be included at a summary level only (e.g. AIL) or as adjustments (e.g. payment of Zonal invoices)

• CRR invoice payments were received and posted

Note: If you have not already, please validate your Credit Reports. Please send questions to [email protected] with a cc: to [email protected] .

CMM - Credit


CMM - Credit

Shadow price caps approved for managing transmission congestion

The board voted unanimously to approve shadow price caps and power balance penalties as recommended by the stakeholder committee process. As required by nodal protocols, ERCOT staff developed a methodology for setting maximum shadow prices for network constraints and power balance penalties under nodal. The shadow price caps – a market tool for managing transmission congestion on the grid – were used during the nodal market trials and performed as expected, ERCOT staff said.

ERCOT staff also noted that the shadow price methodology could allow prices to go above the current offer cap of $2,250 per megawatt-hour, as established by the PUC. The PUC-established offer price cap is scheduled to go to $3,000 per MWh, approximately two months after the nodal market go-live.

Excerpt from press release on the November 16th Board Meeting

For full discussion see http://www.texasadmin.com/ercot.shtml


CMM - Credit

• ERCOT systems require that all load requirements for an entity be met. In Nodal, load requirements can be met through

a) Energy Trades– Must be confirmed

b) the Day Ahead Market (DAM),

c) Generation Resources that your QSE represents or through the

d) Real Time (RT) market.

Any load requirements not met through Energy Trade purchases, the DAM or your own Resources, will be met out of the RT market.

– If an entity is a net buyer in the RT market in a period of high prices, exposure may escalate rapidly.

• Entities that intend to not be active in the RT market should ensure that their load requirement is met elsewhere

• Entities that intend to be net purchasers from the RT market, need to ensure that they have adequate liquidity to meet collateral requirements timely as exposure increases.


CMM - Credit

Example

Zonal ZonalERCOT

Volume

% of Total Vol

ERCOT Price

ERCOT Exposure per day

Total load Bilateral 900 BES 100 100 50 5,000$ Total 1,000 100 10% 5,000$

Nodal - indicative "steady state" Nodal ERCOT volume

ERCOT price

ERCOT Exposure

Total load Energy Trades 500 Generation Resources your QSE represents 100 Day Ahead Market 300 300 45 13,500$ Real Time Market 100 100 50 5,000 Total 1,000 400 40% 18,500$

Nodal - Market Trials (not indicative) Nodal ERCOT volume

ERCOT price

ERCOT Exposure

Total load Energy Trades 300 Generation Resources your QSE represents 100 Day Ahead Market 300 300 45 13,500$ Real Time Market 300 300 500 150,000 Total 1,000 600 60% 163,500$


DAM - Credit

• DAM credit parameters are set as they will be set for Go Live

– DAM is currently using the 90th percentile for both the “uth” parameter and the RT DA spread (as approved by the BOD)

• DAM historical values used for credit constraints

• “e” factors are set to 1/0/1

– Will be effective through operating day - December 14th

– Notices go out by two methods• E-mail to CP authorized rep and back up and CP Credit contact and back up

is the primary communication tool• Written notices went out by regular mail

• CPs desiring “favorable treatment” should complete and return the Request for Change in “e” Factor Treatment Form to [email protected]


Go Live

• CMM Go Live – Key Dates– Monday, November 29th - Send ACL for initial binding DAM (afternoon) (TPE

excludes zonal invoice published on November 29th )– Tuesday, November 30th - Initial binding DAM - “e” factors set at 1/0/1

- Credit Report include zonal invoice published on Nov 29 th

– Wednesday, December 1st – “Go Live”

• CMM Go Live – General– See Appendix for detail of how exposure components will be addressed.

• December 1-3 - “ramp up" for DALE - multiply the UDAA by a factor of five (5) each day until the first DAM invoice is published.

• December 4-5 (Sat/Sun) - discount DALE by 25% since the first DALE is calculated on a weekend. DALE will be calculated at 100% beginning with Credit Reports posted Monday, December 6, 2010 and ACLs sent Monday evening for Tuesday, December 7, 2010.

• See slide on expected impact of ACP on FMM in FCE calculation

– If a Counter-Party believes that their Zonal ADTE is not representative of their anticipated Nodal RT activity, they can provide an estimate of anticipated RT activity and ERCOT will consider revising their ADTE.



Cutover Update

MP Activities / Impacts• Available Credit Limit is locked for

CRRAHs• CRRAHs can submit disputes

against CRR Auction Invoice via the API or MIS

• CRRAHs can receive postings on MIS

• QSEs can begin DAM Bid submission (15 submission items)

• Market checkpoint calls begin to facilitate issues and readiness

• Daily Market Conference Bridge starts 11/23

Functional AreaSettlementsCreditCongestion Revenue RightsDisputesMarket Management

May June July Aug Sept Oct Nov Dec

Cut-Over Monthly Outlook – November

Key Cut-Over Activities for November 2010• (11/8/2010 12:00pm) Credit: Collateral Posting Deadline

(Dec Auction)• (11/8/2010 5:00pm) CRR: Credit Lock for Dec CRR

Auction• (11/9/2010 – 11/11/2010) CRR: December CRR Auction

Bid Open/Close• (11/12/2010) CRR: December CRR Auction Executes• (11/15/2010) CRR: December CRR Auction Results

published• (11/16/2010) Settlements: December CRR Auction

Invoice published• (11/16/2010) Disputes: Dispute submitted to ERCOT for

CRR Invoice• (11/19/2010) Credit: Payment Due for December CRR

Auction Invoices• (11/22/2010) Settlements: Payments to CRRAH (Dec

Auction)• (11/24/2010) Model: Network Model Load • (11/24/2010) Market Submission Opens (COPs required for

12/1/2010)• (11/29/2010) Credit: ERCOT to Publish ACL for the initial

Day-Ahead Market execution by ERCOT


Cut-Over Update – Go-Live Sequence of Events

Date Action Comments

11/15/2010 – 11/29/2010ERCOT Initiates “Soft Launch” to Nodal Market Go-Live

ERCOT will run non-binding DAM, RUC daily per Nodal protocol timelines. RTM will remain Open Loop, but continue to publish base points and LMPs. Note that credit will be set high on 11/15

11/15/2010Credit posts ACLs and TPEs for non-binding DAM

For Operating Day 11/15 credit will be manually set to high limits

11/16/2010 First Credit Operating Day 11/16 Credit reflects actual limits

11/17/2010Market now able to submit transactions for first Nodal Operating Day (T-14d)

12/01 Operating Day open for Market submissions

11/24/2010QSEs with Resources required to submit 7 days of rolling COPs

12/01 required on 11/24

11/28/2010 2:00 PM – 11/28/2010 3:00 PM

Generation and Frequency Control switched to Nodal systems for final LFC test

QSEs will begin following Nodal base pointsSettlements will continue to be Zonal

11/28/2010 2:00 PM – 11/30/2010 11:59:59 PM

QSEs remain on Nodal Control while settling Zonally during the LFC test

11/29/2010Last Non- Binding DAM for operating day 11/30


Cut-Over Update – Go-Live Sequence of Events (11/30/2010)

Time Action Comments

up to 10:00 Bids and Offer submission QSE submit bids and offers

10:00 Close DAM

10:00 Execute Dam Clearing Process

13:30 Approve DAM results Day Ahead results posted to MIS

13:30-14:30 Submit Post DAM COP updates

14:30 Close for RUC

14:30 Begin Execution of DRUC

16:00 Approve DRUC Results

16:00 Post DRUC Results

18:00 HRUC Begins Hourly Runs



Questions


Appendix

Approach for establishing the initial exposure in CMM

A Estimated Aggregate Liability (EAL)- "Core" collateral calculation

Highest ADTE - estimate of historical and projected RT activity (See Note)

Soft start - Zonal invoices will be uploaded into CMM for soft start and ADTE calculations will be based on those Zonal invoices. (6 weeks initially; 9 weeks ultimately) Go Live - Zonal invoices will continue to be uploaded and will continue to drive this component while Nodal invoices roll in. Zonal invoices will "roll off" over time.

OUT - outstanding historical activity (invoiced and estimated)

Nodal invoices - Soft start - Non-binding invoices WILL NOT be included. Binding invoices WILL be included. Go Live - Binding invoices WILL be included.

Zonal invoice Soft start - Zonal invoices will be included. Go Live - Zonal invoices will be included.

Payments Soft start and Go Live - Payments of Zonal invoices that include Initial statements will be reflected the day after they are received as an OIA adjustment. Payments of Zonal invoices that include only Final, Resettlement or True Up statements will be posted the day after the due date. Payments of Nodal invoices will be reflected the day after they are received.

TCR Credits Soft Start - through November 30th TCR credits will be reflected as OIA adjustments Go Live - TCR credits will be reflected as OIA adjustments through invoice date December 16th, expected to be paid December 27th.

http://nodal.ercot.com 47http://nodal.ercot.com 47


Key Components For "Soft Start" and Go Live

UDAA - Unbilled Day Ahead (an estimate of DAM activity prior to an invocie being generated).

Soft start - Non-binding DAM activity (including UDAA) WILL NOT be included in TPE. Go Live - Binding DAM activity WILL be included in TPE beginning with the binding DAM run on November 30. UDAA will be updated daily thereafter. NOTE: ERCOT will "ramp up" for DALE using UDAA as it did in the 168-hour test (so DALE won't hit as a "lump sum" with the first invoice). To "ramp up,", ERCOT will multiply the UDAA by a factor of 5 each day (for the first three days - December 1-3) until the first DAM invoice is published.

DALE - projected forward DAM activity Soft start - Non-binding DAM activity WILL NOT be included. Go Live - No DALE calculation December 1-3 since no DAM invoices have been published. DALE will be calculated using the first DAM invoice and will appear on Credit Reports beginning Saturday, December 4, 2010. Note: Since the first DALE impact will occur on a Saturday, ERCOT will discount the DALE by 25% for Saturday and Sunday, December 4 and 5, 2010. DALE will be calculated at 100% beginning with Credit Reports posted Monday, December 6, 2010 and ACLs sent Monday evening for Tuesday, December 7, 2010.

IEL - Initial Estimated Liability Used as needed for CPs not active in the Zonal market or for new sub-QSEs



Key Components For "Soft Start" and Go Live

B Aggregate Incremental Liability (AIL)- Reasonableness test for ADTE for RT activity Soft start - Zonal BES data will be uploaded and

used as a proxy for RT activity. Zonal bilaterals will be used as a proxy for Energy Trades. Only summary level Zonal data is available. Go Live - Summary level Zonal data will be used through operating day November 30, 2010. Nodal data will roll in as it occurs. Zonal data will roll off over time.

C Future Credit Exposure (FCE)- Forward value of CRRs held Soft start - Calculated as per Nodal Protocols -

Go Live - CRR Obligations - Calculated as per Nodal Protocols.

Note: If a Counter-Party believes that their Zonal ADTE is not representative of their anticipated Nodal RT activity, they can provide an estimate of anticipated RT activity and ERCOT will consider revising ADTE appropriately.


Go Live – FMM calculation

Weight Soft Start ACP DAM ACP DAM ACP DAM ACP DAM

W1(ACP) 25% ACP 25% 0% 25% 0% 25% 0% 25% 0%W2(Today) 10% ACP 10% 10% 10% 10%W3(Five Day) 20% ACP 16% 4% 12% 8% 20% 20%W4(Previous Month) 45% ACP 45% 0% 45% 0% 45% 0% 45% Total 100% 100% 86% 14% 82% 18% 70% 30% 25% 75%

Note: Values are established for CRRs in the FMM calculation as follows:

DAM runs and DASPP available for both Source and Sink – uses DASPPs

DAM runs and DASPP is not available for either Source or Sink or both – uses ACP

DAM did not run and RTSPP available for both Source and Sink – uses RTSPPs

DAM did not run and RTSPP not available for either Source or Sink or both – uses ACP

Expected impact of ACP on FMM calculation during Go LiveGo Live (Dec 1) Go Live (Dec 31) Go Live (Jan 1)Go Live (Dec 2)


Cut-Over Update – Go-Live Sequence of Events

Date Action Comments

11/15/2010 – 11/29/2010ERCOT Initiates “Soft Launch” to Nodal Market Go-Live

ERCOT will run non-binding DAM, RUC daily per Nodal protocol timelines. RTM will remain Open Loop, but continue to publish base points and LMPs. Note that credit will be set high on 11/15

11/15/2010Credit posts ACLs and TPEs for non-binding DAM

For Operating Day 11/15 credit will be manually set to high limits

11/16/2010 First Credit Operating Day 11/16 Credit reflects actual limits

11/17/2010Market now able to submit transactions for first Nodal Operating Day (T-14d)

12/01 Operating Day open for Market submissions

11/24/2010QSEs with Resources required to submit 7 days of rolling COPs

12/01 required on 11/23

11/28/2010 2:00 PM – 11/28/2010 3:00 PM

Generation and Frequency Control switched to Nodal systems for final LFC test

QSEs will begin following Nodal base pointsSettlements will continue to be Zonal

11/28/2010 2:00 PM – 11/30/2010 11:59:59 PM

QSEs remain on Nodal Control while settling Zonally during the LFC test

11/29/2010Last Non- Binding DAM for operating day 11/30


Cut-Over Update – Go-Live Sequence of Events (11/30/2010)

Time Action Comments

up to 10:00 Bids and Offer submission QSE submit bids and offers

10:00 Close DAM

10:00 Execute Dam Clearing Process

13:30 Approve DAM results Day Ahead results posted to MIS

13:30-14:30 Submit Post DAM COP updates

14:30 Close for RUC

14:30 Begin Execution of DRUC

16:00 Approve DRUC Results

16:00 Post DRUC Results

18:00 HRUC Begins Hourly Runs


Cut-Over Monthly Outlook – Go-Live Sequence of Events

• Key Zonal Notes for 11/30/2010 and 12/01/2010– QSEs will maintain:

• Balancing Energy Offers through Operating Day 12/01/2010– Submitted on 11/30 for OD 12/1

• Resource Plans through Operating Day 12/01/2010– Maintained continuously through 12/01 to reflect actual Resource Plan

• Zonal Outages effective on Operating Day 12/01/2010– Examples: Actual Start / End, Forced Outages, etc

– On 11/30/2010 ERCOT will run:• Zonal Ancillary Service Market

– Zonal awards will be published• Zonal RPRS

– Run as a study only– Zonal commitments will not be published

– Zonal prices will not be generated for 12/01/2010– No Zonal Submissions or Markets for Operating Day 12/02/2010 or

later– Note that all Zonal systems (ERCOT and MP) must remain in place

until 1/1/2011
