11

WMS Report TO TACWMS Report TO TAC

March 2007March 2007

22

In BriefIn Brief

Three Working Group ReportsThree Working Group Reports Three Task Force ReportsThree Task Force Reports EILS DiscussionEILS Discussion Two staff reportsTwo staff reports

33

Working Groups & Task Working Groups & Task ForcesForces

Working Groups are standing and self Working Groups are standing and self directeddirected

Task Forces are ad hoc and take their Task Forces are ad hoc and take their assignments from the subcommitteeassignments from the subcommittee

Neither has a voting structure and Neither has a voting structure and may not speak for stakeholdersmay not speak for stakeholders

Minority positions are brought to the Minority positions are brought to the subcommitteesubcommittee

Have Antitrust responsibilitiesHave Antitrust responsibilities

44

Working Group & TaskforceWorking Group & TaskforceLeadershipLeadership

QMWG – Gary Miller & Ron WheelerQMWG – Gary Miller & Ron Wheeler CMWG – Jerry Ward & Marguerite WagnerCMWG – Jerry Ward & Marguerite Wagner DSWG – MaryAnne Brelinsky &Nelson NeaseDSWG – MaryAnne Brelinsky &Nelson Nease MWG – Dotty Disanto & Mark RollinsMWG – Dotty Disanto & Mark Rollins

GATF – Malcom Smith & Henry Durrwachter GATF – Malcom Smith & Henry Durrwachter  RTTF – Mark BruceRTTF – Mark Bruce

55

Working Group ReportsWorking Group ReportsQSEWG, CMWG & DSWGQSEWG, CMWG & DSWG

QSE managers did not meet but QSE managers did not meet but the chairman is working with the chairman is working with ERCOT staff to get more ERCOT staff to get more integrated with nodal projectintegrated with nodal project

Competitive Constraint Competitive Constraint determination draft NPRR is outdetermination draft NPRR is out

Updates on PUC Demand Side Updates on PUC Demand Side ProjectProject

Drafting a PRR on Laar TestingDrafting a PRR on Laar Testing

66

Task Force ReportsTask Force ReportsGATFGATF

Addressing point by point the Addressing point by point the inputs to the ERCOT Reserve inputs to the ERCOT Reserve calculationcalculation

Will develop a revised Will develop a revised methodology for the calculationmethodology for the calculation

Will recommend changes in the Will recommend changes in the format of the ERCOT CDR format of the ERCOT CDR summary pagesummary page

77

Task Force ReportsTask Force ReportsRTTFRTTF

Met twice and has developed a Met twice and has developed a matrix defining the universe of matrix defining the universe of options regarding how to options regarding how to address differences between address differences between early movers and late comers to early movers and late comers to a CREZ.a CREZ.

88

Discussion ItemDiscussion ItemNonSpin vs RPRSNonSpin vs RPRS

RPRS market impactsRPRS market impacts Dispatchablity of non-spin unitsDispatchablity of non-spin units General trade offsGeneral trade offs

No action takenNo action taken

99

EILSEILSCharge to WMS from PRSCharge to WMS from PRS

The benefit.The benefit. The cost based on the EILS The cost based on the EILS

PRRs.PRRs. Changes in Market since April Changes in Market since April

17, 200617, 2006

1010

Benefit of EILSBenefit of EILS

Larry Gurley moved that the benefit Larry Gurley moved that the benefit be defined by the calculation as be defined by the calculation as described in slide number 4 of the described in slide number 4 of the presentation, with the enumerated presentation, with the enumerated assumptions.  Clayton Greer assumptions.  Clayton Greer seconded the motion.  The motion seconded the motion.  The motion carried on a roll call vote, with five carried on a roll call vote, with five opposed and four abstaining.opposed and four abstaining.

1111

CalculationCalculation

The value provided by EILS is the The value provided by EILS is the avoided cost of the outage avoided cost of the outage prevented:prevented:

Value Value = Risk of outage * cost of outage= Risk of outage * cost of outage

= (1 event/15 yr) * ($6000/MWh * 1000MW = (1 event/15 yr) * ($6000/MWh * 1000MW * 4 hr)* 4 hr)

= = $1.6M/yr$1.6M/yr

1212

EILS BenefitEILS Benefit

EILS is to be used as the last step before firm load EILS is to be used as the last step before firm load shedshed

Firm load shed historically has occurred at a rate of 1 Firm load shed historically has occurred at a rate of 1 event every 15 yearsevent every 15 years

Assume that the firm load shed prevented would be Assume that the firm load shed prevented would be 1000MW (the maximum size of the EILS program)1000MW (the maximum size of the EILS program)

Assume that the value of lost load is $6,000/MWh Assume that the value of lost load is $6,000/MWh (slightly under the DOE value calculated for the (slightly under the DOE value calculated for the Northeast blackout)Northeast blackout)

Assume that an event lasts approximate 4 hoursAssume that an event lasts approximate 4 hours Assume that EILS can be used in ALL firm load shed Assume that EILS can be used in ALL firm load shed

eventsevents Assume that the performance of EILS is quick enough Assume that the performance of EILS is quick enough

to prevent ERCOT from requiring firm load shed as wellto prevent ERCOT from requiring firm load shed as well

1313

Additional BenefitAdditional Benefit

May help avoid the ERCOT SHEDS May help avoid the ERCOT SHEDS FIRM LOAD headline**FIRM LOAD headline**

This is a real objective of the program. This is a real objective of the program. How do we put a value on it?How do we put a value on it?

** ROS does not seem to think it will help. [ROS motion]

ROS does not believe that EILS program as it has been defined in PRR705is an effective reliability tool, and suggests that other tools that aremore effective, or revisions to PRR705 that would make it effective, canbe developed with further study as has been tasked for ROS to do.

DiscussedBut not includedIn WMS motions

1414

Costs of EILSCosts of EILS

Larry Gurley moved that the cost of the EILS Larry Gurley moved that the cost of the EILS PRR be defined at $100,000 (or less) for cost PRR be defined at $100,000 (or less) for cost of implementation, with a $20 million annual of implementation, with a $20 million annual cap ($17 million for the first year), with many cap ($17 million for the first year), with many unquantifiable costs associated with market unquantifiable costs associated with market inefficiencies.  Clayton Greer seconded the inefficiencies.  Clayton Greer seconded the motion.  The motion carried on voice vote, motion.  The motion carried on voice vote, with four opposed and one abstention with four opposed and one abstention (Investor Owned Utility segment.)(Investor Owned Utility segment.)

1515

Cost of the EILS PRRsCost of the EILS PRRsTo ERCOTTo ERCOT

702: Assuming complexities removed, potentially 702: Assuming complexities removed, potentially $50K-$100K; otherwise, will require capital project $50K-$100K; otherwise, will require capital project for for settlementsettlement changes. changes.

703: Assuming complexities removed, potentially 703: Assuming complexities removed, potentially $50K-$100K; otherwise, will require capital project $50K-$100K; otherwise, will require capital project for for operationaloperational changes. changes.

704: Assuming complexities removed, potentially 704: Assuming complexities removed, potentially $50K-$100K; otherwise, will require capital project $50K-$100K; otherwise, will require capital project for for settlementsettlement changes. changes.

705: $50K-$100K under O&M budgets of affected 705: $50K-$100K under O&M budgets of affected departments.departments.

1616

Cost of the EILS PRRsCost of the EILS PRRsTo ConsumersTo Consumers

Comments filed on PRR 702 include a Comments filed on PRR 702 include a discussion of a $43.8 M Capdiscussion of a $43.8 M Cap

PRR 705 has a $20M CapPRR 705 has a $20M Cap

1717

Changes in the Market Since the April 17, 2006 Changes in the Market Since the April 17, 2006 EventEvent

Larry Gurley moved to accept the changes Larry Gurley moved to accept the changes listed on slide number 8 of the presentation, listed on slide number 8 of the presentation, and to add more effective use of the RPRS tool, and to add more effective use of the RPRS tool, including load participation, enhanced non-spin including load participation, enhanced non-spin procurement procedures, passage of PRR 701, procurement procedures, passage of PRR 701, and elimination of MCSM and the shame cap. and elimination of MCSM and the shame cap.  Clayton Greer seconded the motion.  The  Clayton Greer seconded the motion.  The motion carried on voice vote with one motion carried on voice vote with one abstention (Municipal segment.)abstention (Municipal segment.)

1818

Changes in Market since Changes in Market since April 17, 2006April 17, 2006

Forecasting Model refinementsForecasting Model refinements Terminating Modified Competitive Solution Method Terminating Modified Competitive Solution Method

and Shame Capand Shame Cap Terminating CSC congestion constraint on BES MCPETerminating CSC congestion constraint on BES MCPE Revised EECP and Alert process and proceduresRevised EECP and Alert process and procedures Raised offer capRaised offer cap More effective use of RPRS toolMore effective use of RPRS tool Load participationLoad participation Enhanced Non-Spin procurement proceduresEnhanced Non-Spin procurement procedures Passed PRR 701, stranded capacityPassed PRR 701, stranded capacity

1919

EILSEILS

WMS understands that there is more WMS understands that there is more to do to be responsive to PUC to do to be responsive to PUC requests for solutions.requests for solutions.

WMS is open to suggestions from WMS is open to suggestions from TAC regarding how to proceed with TAC regarding how to proceed with developing long term solutions.developing long term solutions.