ROS Meeting Minutes 2008 Q1

APPROVEDReliability and Operations Subcommittee (ROS) Meeting

ERCOT Austin – 7620 Metro Center Drive – Austin, Texas 78744Thursday, January 10, 2008 – 9:30am – 3:30pm

Attendance

Members:Armke, James Austin EnergyDillard, Jesse City of DallasGallaga, Loretta STECGarrett, Mark Direct EnergyGreen, Bob Garland Power & LightGreer, Clayton J AronHatfield, Bill LCRAHausman, Sean BP EnergyJones, Randy CalpineKunkel, Dennis AEP CorporationMcCann, James Brownsville PUBMcClellan, Suzi OPUCMcDaniel, Rex TNMPRankin, Ellis OncorRocha, Paul CenterPoint EnergyRyan, Marty NRG EnergyRyno, Randy Brazos Electric Power Coop.Samsel, Matt ExcelonShaw, Billy IPASweeney, Jason SUEZWilliams, Blake CPS Energy

Guests:Bailey, Robert NRG TexasBeauregard, Vance AEP Via TeleconferenceBogen, David OncorBoyle, Sean ExelonBrown, Jeff Coral PowerBruce, Mark FPL EnergyCollins, Bob Texas Regional EntityGoff, Eric ConstellationHelton, Bob IPAHenry, Mark Texas Regional EntityJaussaud, Danielle PUCTJonte, John CNPKeetch, Rick ReliantKlausman, Armin CNPKolodziej, Eddie Customized Energy SolutionsKremling, Barry Guadalupe Valley E.C.Lamarca, Jeff LuminantLane, Bob LuminantNelson, Stuart LCRA

ROS Meeting Minutes 2008 Q1

Owens, Frank TMPAPieniazek, Adrian NRG TexasPotts, Robert Texas Regional EntityReid, Walter Wind CoalitionThormahlen, Jack LCRA QSEWagner, Marguerite ReliantWard, Jerry LuminantZemanek, Jerry Oncor

ERCOT-ISO Staff:Adams, JohnAlbracht, BrittneyBoren, AnnBridges, StacyChai, RicsonChilders, BurkDumas, JohnFrosch, ColleenHuynh, ThuyKota, NagaKrein, SteveLasher, WarrenPatra, Pradeep

Unless otherwise indicated, all Market Segments were present for a vote.

Stuart Nelson called the meeting to order at 9:30 a.m.

Antitrust AdmonitionMr. Nelson directed attention to the displayed ERCOT Antitrust Admonition and noted the requirement to comply with the ERCOT Antitrust Guidelines. A copy of the guidelines was available for review. Mr. Nelson reviewed assigned proxies and designated alternative representatives for the day.

Approval of the Draft November 8, 2007 and December 6, 2007 ROS Meeting Minutes (see Key Documents) 1 Ellis Rankin moved to approve both the draft November 8, 2007 and December 6, 2007 ROS Meeting Minutes sets of draft minutes as posted. Randy Ryno seconded the motion. The motion carried unanimously.

December 2007 Technical Advisory Committee (TAC) Meeting UpdateMr. Nelson reported that TAC received reports on the ERCOT Hurricane Drill, the ERCOT Strategic Plan, and from the Distributed Generation Task Force (DGTF), and received notice of the Protocol Revision Subcommittee rejection of Protocol Revision Report (PRR) 703, Emergency Interruptible Load Service (EILS). Mr. Nelson also noted that Jerry Sullivan reported nodal is aligned with Protocols, and that while go-live is still set for December 1, 2008, a budget increase will be requested, and ERCOT staff will take on some programming responsibilities.

1 Key Documents referenced in these minutes may be accessed on the ERCOT website at:http://www.ercot.com/calendar/2008/01/20080110-ROS.html

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Mr. Nelson asked ROS members to introduce themselves, and noted that while he would not be able to participate in the 2008 ROS leadership election process, he requested that ROS members give consideration to Paul Rocha and Randy Jones for chair and vice chair, respectively. Mr. Nelson closed by thanking ROS members for the opportunity to serve as chair; Scott Helyer thanked Mr. Nelson for his leadership.

2008 Elections Brittney Albracht reviewed the proposed ROS Leadership election process:

1. Review proposed election process with ROS members. 2. Obtain vote on voting process to use (will require 67% for this vote). 3. Begin election process.

Election Process: Open floor for nominations for chair. Close nominations for chair. Vote on nominations for chair. Voting:

o Use ballots if more than one candidate. o One vote per ROS member. o Simple majority of the ROS members voting wins (51%).o If no simple majority is reached, take top two candidates and conduct another vote.

Continue until simple majority reached or acclamation of ROS. Open floor for nominations for vice chair. Close nominations for vice chair. Vote on nominations for vice chair (see voting above).

Mr. Helyer moved to approve the proposed ROS Leadership election process as proposed. Clayton Greer seconded the motion. The motion carried unanimously.

Ms. Albracht opened the floor for nominations.

Mr. Helyer nominated Paul Rocha for 2008 ROS Chair, provided that Mr. Rocha would accept the nomination. Martin Ryan nominated Mr. R. Jones for 2008 ROS Vice Chair, provided that Mr. Rocha would accept the nomination. Mr. Rocha and Mr. R. Jones accepted the respective nominations. Mr. Rankin moved that nominations cease. James Armke seconded the motion. There being no objections to nominations ceasing, Mr. Rocha was named 2008 ROS Chair, and Mr. R. Jones 2008 ROS Vice Chair by acclamation. ROS Voting Items (see Key Documents)Nodal Operating Guide Revision Request (NOGRR) 002, Nodal Operating Guides – Section 2, System Operations and Control Requirements Mr. Rocha presented a brief history of NOGRR002, reviewed recent Power System Stabilizer (PSS)/Unit Reactive Limit (URL) Task Force work, highlighted non-consensus items, and reviewed proposed ROS comments. Market Participants discussed ERCOT is specifying oscillations and modes, but not the settings, and that the distinction may need clarification; and that ERCOT could provide recommended settings, but that generators should modify based on field data and communicate back to ERCOT. John Dumas added that ERCOT Operations and Planning is comfortable with the language, as it requests units with PSS in service to keep PSS in service, and gives ERCOT latitude to know the status of the PSS and the Automatic Voltage Regulator (AVR), and to work with generators if ERCOT sees an issue on the grid.

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Market Participants discussed that the original Operating Guides require 5-year AVR testing per the North American Electric Reliability Corporation (NERC) Standard VAR002, Generator Operationfor Maintaining Network Voltage Schedules. Mr. R. Jones volunteered to lead a task force to consider AVR testing; Mr. Rocha requested entities with new machines be involved in the task force. Market Participants also discussed that 10 MW is in the Interconnection Procedure, and an increase requires an Impact Analysis; that ERCOT is the only Transmission Operator (TO) in ERCOT under FERC, but is also registered as a Transmission Service Provider (TSP); and that clarifying language is needed regarding coordination of firm Load shed.

Mr. Ryno moved to approve ROS comments for NOGRR002. Mark Garrett seconded the motion. The motion carried unanimously.

Mr. R. Jones noted that he would send an e-mail to the ROS exploder announcing the formation of a task force to address 5-year testing.

Nodal Protocol Revision Request (NPRR) 081, Automatic Voltage Regulator (AVR) StatusMr. Rocha reviewed the history of NPRR081, noted its remand to ROS from TAC and the recent work of the PSS/URL TF, and requested that ROS review recently proposed language and submit comments in preparation for a vote at the February 2008 ROS meeting.

Operating Guide Revision Request (OGRR) 204, Hotline Technology UpdateJack Thormahlen presented OGRR204 for ROS consideration, and noted that the Operations Working Group (OWG) recommended approval.

Mr. Rankin moved to recommend approval of OGRR204 as recommended by the OWG. Mr. Ryno seconded the motion. The motion carried unanimously.

OGRR206, Black Start Satellite Phones Mr. Thormahlen presented OGRR206 for ROS consideration, and noted that the OWG recommended approval. Mr. Rankin moved to recommend approval of OGRR206 as recommended by the OWG. Mr. Ryno seconded the motion. The motion carried unanimously.

PRR750, Unannounced Generation Capacity TestingMr. Dumas presented PRR750 for ROS for consideration, and briefly reviewed the history and proposed language of PRR750. Market Participants discussed whether High Sustained Limits (HSLs) should include heating time; that Protocols do no require HSLs to reflect what can be reached within an operating hour; that HSLs should not be reduced because of a testing requirement; and that to move away from use of the Discount Factor (DF) requires increased accuracy at lower levels.

Market Participants also discussed that they approve of the concept of unannounced testing; that metrics may need to be adjusted; that ERCOT Operations always needs to know what units can really provide within a certain amount of time; that unannounced testing should fully take the place of seasonal testing; and that potential unintended consequences need further exploration. Market Participants noted that though there are details that remain to be addressed, in general, PRR750 improves reliability.

Mr. Rankin moved to endorse PRR750. Mr. Ryno seconded the motion. Market Participants discussed that reliability may not be coordinating with compliance; that entities risked failing metrics; and that the metrics should be suspended while testing in underway.

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Mr. Rankin amended the motion to include a recommendation that PRR750 be field tested before compliance requirements are enacted. Mr. Ryno seconded the amendment. Market Participants discussed that metrics are in the Protocols and could be problematic to suspend; that PRR750 was an avenue to suspend metrics; and that a method would be needed to audit the quality of information.

Mr. Rankin withdrew the amended motion to allow ROS more time to review PRR750 and provide comment. Mr. Ryno acknowledged the withdrawal.

Market Participants discussed that PRR750 will go to the Protocol Revision Subcommittee (PRS), but that PRS looks to ROS on the technical matters; that PRR750 had already received Urgent status so that ERCOT may begin testing before the summer season; that it is incumbent for parties with concerns to send comments to PRS; and that extensive revising at PRS is difficult.

Mr. Rocha was disinclined to form a task force, and concluded that he would be in communication with Kevin Gresham to offer further assistance if needed. There were no objections.

ERCOT Operations ReportDecember Monthly ReportMr. Dumas reviewed the December 2007 monthly ERCOT Operations report, and noted that Loads Acting As Resource (LaaRs) are tripped when a Disturbance Control Standard (DCS) event is approached, that rate of frequency recovery is never known, that recovery sometimes stalls, and that nodal contemplates separating LaaRs into two stacks. Market Participants discussed that entities may have excess generation already online with no way to dispatch it, and that instructing generators to stop and additional 500MW is easier than telling Load to interrupt; and that the procedures should be reconsidered even before the advent of nodal.

Mr. Dumas reported that a SIR has been written to post maximum capacity, but that nodal has taken all resources, and the scheduled March 2008 roll-out may be further delayed should system issues develop.

Wind Power Survey UpdateMr. Dumas reviewed responses to the wind power survey, noting that all entities have now reported, and that some follow-up was needed for response clarification. Market Participants discussed whether ERCOT received responses adequate to establish requirements for Winder Interconnection Agreement refinements; that the PUCT has stated that wind cannot vary from the Standard Generation Interconnect Agreement (SGIA), but that eventual approval is given if the generator and TSP agree, as an effort to remove barriers to market entry; that the Resource Asset Registration Form (RARF) for nodal provides some clarification, if completed properly; and that many wind operators have large learning curves.

Mr. Dumas added that ERCOT is moving as quickly as possible to have AWS Truwind in house, and that the wind survey is the beginning of more education on wind capabilities.

ROS Working Group ReportsDynamics Working Group (DWG)Vance Beauregard reviewed the DWG report, and noted that Tony Hudson and David Milner would service as 2008 Chair and Vice Chair respectively.

Network Data Support Working Group (NDSWG)David Bogen reported that 2008 tasks for nodal transition would be reviewed at the upcoming NDSWG meeting.

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OWGJohn Jonte requested clarification on OGRR198, Firm Load Shed Implementation Time Periods, and its remand from TAC. Mr. Rocha noted that there was not consensus on the item, that OGRR198 should come to the February 2008 ROS meeting for a vote, and that the item could be sent back to TAC in the original form or with revised language.

Performance Disturbance Compliance Working Group (PDCWG)Bob Green reported that Control Performance Standard (CPS) scores increased a little in December 2007. Mr. Dumas added that poor intervals in November 2007 lowered overall scores.

Steady State Working Group (SSWG)Dwight Beckman reported that base cases were finalized in December 2007.

System Protection Working Group (SPWG)Stan Ginsburg reported that low voltage ride-troughs would be taken up again in February 2008, that work continues on fault clearing, as does that of recovery time, which will be presented to ROS for disposition. Mr. Rocha expressed a desire for a meeting open to stakeholders before the ROS vote.

ROS Task Force ReportsGap Analysis Charter TF (GACTF)Rick Keetch reported that the GACTF met several times in December 2007, that all NERC Standard requirements have been reviewed per entity and gaps identified, and that more work remains to be done as to relevance and accuracy. Mr. Keetch noted that there are recently approved Standards to work into the analysis, and that he hesitated to release the GACTF’s working spreadsheet before caveat language is developed to convey that the spreadsheet represented the opinion of Market Participants that attended meetings on any given day.

Mr. Rocha encouraged the development of the caveat language as soon as possible, and recommended that the group change its name to Mapping Task Force to avoid confusion with definition of Gap Analysis.

State Estimator Standards and Telemetry Criteria – Early Delivery System (EDS) 2 ObservabilityBurk Childers presented an update of EDS 2 observability status, noting that the target date of December 15, 2007 was missed, but unobservable points had been reduced by another 36%. Mr. Childers noted that the quality of the points are not verified, that the EDS environment continues to be unstable, and that the system will be down for one day for a hardware upgrade and data migration.

Mr. Bogen expressed concern that the EDS 2 will seek to escalate issues to the Accountable Executives (AEs), as that was contrary to a negotiation in November 2007; Mr. Childers apologized for having conflicting information, noted that he would be at the next NDSWG meeting, and that he would work with the NDSWG to revise next steps before reporting to the AEs.

Texas Nodal Implementation (see Key Documents)Transition Place Task Force (TPTF) UpdateStacy Bridges reviewed the recent activities of TPTF, presented major accomplishments, and announced agenda items for future meetings. Mr. Bridges announced that a conference call is planned to discuss a draft NPRR for Registered Configuration of Private Use Networks.

System PlanningWarren Lasher reported that Phase II of the General Electric (GE) Ancillary Services (AS) study will be available at the end of January 2008 for Market Participant review, with a meeting on January 30, 2008

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for GE to present AS study results. Danielle Jaussaud requested Mr. Lasher to investigate if the amount of gas projected to be built, including a breakdown on combined cycle, turbine, and peaking units, if non-public information, could be released to her under the Public Utility Commission of Texas (PUCT) Confidentiality Agreement.

Market Participants discussed the amount of wind currently online, as well as the amount projected to come online in 2008; that Production Tax Credits are assigned turbine by turbine; and whether the market should expect mid-year Capacity Demand Reserve (CDR) updates. Mr. Lasher expected the May CDR schedule to persist; and noted that ERCOT will post an updated AS study with corrected data and statements once it is provided by GE.

Texas Regional Entity (TRE) Compliance ReportMark Henry reported that in 2007, most regions were allowed to waive penalties with self-reporting to allow a stabilization period, but that in 2008 it is expected that the TRE will be more vigorous in carrying out sanctioning. Mr. Henry reported that one entity has been audited to date and was very well prepared.

Mr. Rocha noted that in the future, all members not following schedules will be referred to the TRE, and cautioned that ERCOT staff is not immune from reporting. Mr. Henry added that the TRE will likely not address non-reliability issues, but that the PUCT will have interest in items outside of what is written in Operating Guides.

Mr. Henry announced the retirement of Robert Potts, thanked Mr. Potts for his service, and expressed his regret at Mr. Potts’ departure.

Other Business2008 WG/TF LeadershipMr. Rocha requested that groups send 2008 leadership information to Stakeholder Services, with a copy to himself and Mr. R. Jones for endorsement at the February 2008 ROS meeting.

Notice of Withdrawal: PRR549, Regulation Control During Abnormal Frequency EventsMr. Rocha noted the withdrawal of PRR549 by its author.

Mr. Rocha emphasized the need to post meeting materials in a timely manner to allow adequate time for review, and asked that ROS members and ERCOT staff consider options to make all reporting more efficient, including the reduction or cancellation of some reporting. Market Participants discussed whether some reports should be given monthly or quarterly; if a moratorium should be imposed on requesting new types of reports; whether discussion should be held on every report offered; and if reports might be pared down. Mr. Rocha noted that some two-day ROS meetings may be needed in 2008.

AdjournmentMr. Rocha adjourned the meeting at 3:23 p.m.

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APPROVED Reliability and Operations Subcommittee (ROS) Meeting

ERCOT Austin – 7620 Metro Center Drive – Austin, Texas 78744Thursday, February 14, 2008 – 9:30 a.m. – 3:30 p.m.

Attendance

Members:Armke, James Austin EnergyAshley, Kristy Exelon Generation Alt. Rep. for M. SamselDillard, Jesse City of DallasGarrett, Mark Direct EnergyGreen, Bob Garland Power & LightGreer, Clayton J AronHatfield, Bill LCRAHelyer, Scott TenaskaHolloway, Harry SUEZ Alt. Rep. for J. SweeneyJones, Randy CalpineKunkel, Dennis AEP CorporationMcDaniel, Rex TNMPRankin, Ellis OncorRocha, Paul CenterPoint EnergyRyan, Martin NRG EnergyRyno, Randy Brazos Electric Power Coop.Schubert, Eric BP Energy Alt. Rep. for S. HausmanWilliams, Blake CPS Energy

Proxy Assignments: Billy Shaw to Randy Jones

Guests:Bogen, David OncorBruce, Mark FPL EnergyChronister, Mark Oncor Via TeleconferenceCochran, Seth Sempra TradingCollins, Bob Texas Regional EntityDavison, Brian PUCTDeTullio, David Air LiquideDonohoo, Ken OncorFirestone, Joel Direct EnergyGibbens, David CPS EnergyHenry, Mark Texas Regional EntityJonte, John CNPKeetch, Rick ReliantKlausman, Armin CNPKremling, Barry Guadalupe Valley E.C.Lange, Garry College Station

ROS Meeting Minutes 2008 Q1

Moore, John STECOwens, Frank Texas Municipal PowerPieniazek, Adrian NRG TexasReid, Walter Wind CoalitionRexrode, Caryn Customized Energy Solutions Via TeleconferenceSeymour, Cesar SUEZTafreshi, Farzaneh Texas Regional EntityThormahlen, Jack LCRA QSEWagner, Marguerite ReliantWard, Jerry LuminantWoods, Brad LCRA TSC

ERCOT-ISO Staff:Adams, JohnAlbracht, BrittneyBoren, AnnBridges, StacyChilders, BurkDumas, JohnGallo, AndrewHuynh, ThuyLasher, WarrenLowe, CagleMani, AshwiniMyers, StevePatra, PradeepTeixeira, JayTaylor, DeniseWeldon, Vann

Unless otherwise indicated, all Market Segments were present for a vote.

Paul Rocha called the meeting to order at 9:33 a.m.

Antitrust AdmonitionMr. Rocha directed attention to the displayed ERCOT Antitrust Admonition and noted the requirement to comply with the ERCOT Antitrust Guidelines. A copy of the guidelines was available for review. Mr. Rocha reviewed assigned proxies and designated alternative representatives for the day.

Approval of the Draft January 10, 2008 ROS Meeting Minutes (see Key Documents) 2 Randy Ryno moved to approve the draft January 10, 2008 ROS Meeting Minutes as posted. Bill Hatfield seconded the motion. The motion carried unanimously.

2 Key Documents referenced in these minutes may be accessed on the ERCOT website at:http://www.ercot.com/calendar/2008/02/20080214-ROS.html

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February 2008 Technical Advisory Committee (TAC) Meeting UpdateMr. Rocha reported TAC approval of Operating Guide Revision Request (OGRR) 204, Hotline Technology Update; OGRR206, Black Start Satellite Phones; and Nodal Operating Guide Revision Request (NOGRR) 002, Nodal Operating Guides – Section 2, System Operations and Control Requirements. Randy Jones noted that it would be helpful for ROS members to either attend TAC meetings and lend their voice to discussions, or brief their representatives on particular issues.

TAC Leadership Meeting of February 8, 2008Mr. Rocha asked that ROS members send suggested 2008 ROS goals to the exploder, and announced that an e-mail vote on 2008 ROS goals may be necessary. Mr. Rocha reported discussion of a progress assessment on State Estimator and Telemetry Criteria; and that ROS is to develop a proposal on whether to form a stakeholder group to address North American Electric Reliability Corporation (NERC) Reliability Standards.

ROS Voting Items (see Key Documents)Endorsement of 2008 Working Group/Task Force LeadershipMr. R. Jones moved to endorse the following volunteers to serve as ROS working group and task force leadership:

o Dynamics Working Group (DWG) Chair: Tony Hudson Vice Chair: David Milner

o Network Data Support Working Group (NDSWG) Chair: David Bogen, Oncor Vice Chair:

o Operations Working Group (OWG) Chair: John Jonte, CenterPoint Vice Chair: David Smith, Suez

o Operations Task Force (OTF) Chair: Stan Morris, TNMP

o Operating Guides Revision Task Force (OGRTF) Chair: John Jonte, CenterPoint Vice Chair: John Brockhan, CenterPoint

o Blackstart Task Force (BSTF) Chair: Glenn Hemperley, CenterPoint Vice Chair: Kelly Blackmer, ERCOT

o Performance Disturbance Compliance Working Group (PDCWG) Chair: Bob Green, Garland Power & Light Vice Chair: Sydney Niemeyer, NRG Texas

o Steady State Working Group (SSWG) Chair: Walt Simmons, Oncor Vice Chair: Brad Woods, LCRA

o System Protection Working Group (SPWG) Chair: Mark Chronister, Oncor Vice Chair: Glenn Hargrave, CPS

Mr. Ryno seconded the motion. The motion carried unanimously.

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Nodal Protocol Revision Request (NPRR) 081, Automatic Voltage Regulator (AVR) StatusMr. Rocha presented NPRR081 for ROS consideration.

Bob Green moved to approve as posted. James Armke seconded the motion. The motion carried unanimously.

OGRR198, Firm Load Shed Implementation Time Periods Mr. Rocha reviewed the history of OGRR198. Market Participants discussed that OGRR198 had been with OWG and OGRTF for some time, and that both groups were recommending its approval.

Mr. Ryno moved to recommend approval of OGRR198 as posted. Dennis Kunkel seconded the motion. Market Participants discussed that the 30 minute Load shed timeline makes entities vulnerable to audit compliance; that it places a requirement in EECP Step 4, when a quick response is needed; that time should not be mentioned at all; that time was needed for communication, as most entities do not have automatic control; and that perhaps the language should mirror the general language of the NERC Standard.

Market Participants also discussed that the TRE requested the OWG to develop a performance metric that everyone could comply with, as there are different methods for shedding Load; that a staged shedding metric might be a solution; that an unrealistic timeframe would guarantee failure; and that even SCADA is not instant, and attention must be paid to the priority of the Load shed.

Market Participants further discussed that NERC Standards should be kept separate from the ERCOT Protocols and Operating Guides; why the TRE seeks to put time requirements in the Operating Guides; that improved training has resulted in better response times, and will continue to do so; and that frequency decay is more critical to ERCOT than other regions, and that ERCOT’s traditionally more stringent requirements should be upheld.

The motion carried on roll call vote with five abstentions from the Independent Generator (2) and Independent Power Marketer (3) Market Segments. (Please see the ballot posted with Key Documents.)

NERC Standards Analysis TFNERC Standards Analysis TF ScopeRick Keetch reported on recent activities of the task force and reviewed the proposed scope.

Mark Garrett moved to approve the NERC Standards Analysis TF scope as posted. Mr. Ryno seconded the motion. Market Participants discussed whether ROS would report to WMS on any items that will affect the market; that the task force would not be proposing policy, but would only address existing items. The motion carried unanimously.

Texas Nodal Implementation (see Key Documents)Transition Plan Task Force (TPTF) UpdateStacy Bridges reviewed the recent activities of TPTF, presented major accomplishments, and announced agenda items for future meetings. Market Participants discussed the draft NPRR, Implementation of PUC SUBST. R. 25.505(f) Publication of Resource and Load Information; Mr. Bridges noted that the item was still out for review.

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2008 ERCOT Market Participant SurveyDenise Taylor reported on the inception of the 2008 Market Participant Survey; highlighted the scope of work and the proposed timeline; and noted that all new stakeholder groups, such as the Transition Plan Task Force (TPTF) would be surveyed, in addition to legacy groups. Ms. Taylor encouraged participation in the survey, and asked that questions or concerns be directed to her and Dale Goodman.

Early Delivery System (EDS) 2 Observability UpdateBurk Childers reported that ERCOT and Transmission Service Providers (TSPs) agreed to Option 2: TSPs provide Calculated Points as the default option, and noted that ERCOT will work with the TSP if the entity is not able to comply with Option 2. Mr. Childers reported that progress continues to be made on observability and thanked TSPs for their extensive participation and cooperation in the effort.

Mr. Childers reported small improvements in EDS environment stability with the installation of new hardware, though data limitations still exist; that all point of suspect data are being tested by a designated ERCOT resource; and again thanked Market Participants for their continued cooperation. Mr. Childers requested that Market Participants review Tap Estimations to ensure that ERCOT has correct model data.

System PlanningWarren Lasher noted that format changes had been made to the System Planning report in an effort to highlight month-to-month differences, and that efforts are underway to provide an accounting of project-aggregated on-line wind generation.

Market Participants discussed the need for visibility in wind construction status and determining when full wind functionality is coming on line; that Standard Generation Interconnect Agreements (SGIA) are referenced to determine on-line projections; that wind can be declared operational with only a fraction of eventual capacity actually available; and that fine-tuned forecasting will provide better clarity to actual operational status.

Ancillary Services (AS) StudyMr. Lasher reported that GE would again be presenting the AS Study Phase 2 results at the end of February 2008, and that efforts were being made to coordinate the presentation with the PUCT. Mr. Lasher provided a brief overview of the study. Market Participants discussed that the ability to extrapolate results beyond 15,000 MW is limited; that the current method of calculating Responsive Reserve Service (RRS) is effective, but that more RRS will be needed as more wind comes on-line; that there seem to be inconsistencies in the study and that ERCOT should do its own analysis of the study results; and the need for a financial analysis in addition to a reliability analysis. Mr. Lasher invited Market Participants to send him questions in preparation for the presentation by GE.

ERCOT Operations ReportJanuary Monthly ReportThuy Huynh presented the January 2008 ERCOT Operations Report, and reviewed the Frequency Control Chart and Responsive Events. Marguerite Wagner requested that ERCOT review the off-set process at a future meeting.

John Dumas reported that the project to post online generation continues to be pushed back due to nodal project demands; that a wind workshop is being planned to discuss operational issues, applicable PRRs, and high-level AS Study results; and requested that Market Participants send him questions in advance of

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the workshop. Market Participants discussed that GE assumptions for nodal may or may not be accurate and should be reviewed.

ROS Working Group ReportsDWGMr. Hudson provided the DWG report.

NDWSGMr. Bogen provided the NDSWG report, noting that observability is much improved, and that nodal network model validation by May 31, 2008 will be a major activity.

OWGMr. Jonte provided the OWG report, noting discussion of OGRR198; that the Operations Task Force (OTF) would meet to develop a script for the 2008 hurricane drill; that 2008 Black Start training would soon conclude; and that 27 Continuing Education Hours (CEH) would be available at the 2008 ERCOT Operations Training Seminar.

Performance Disturbance Compliance Working Group (PDCWG)Mr. Green provided the PDCWG report, opining that Control Performance Standard (CPS) scores would improve in spring 2008, as more units with governors come online. Mr. Green noted that discussions continue as to how wind will be treated in Security Constrained Economic Dispatch (SCED); and that wind will not have under- or over-generation charges.

Steady State Working Group (SSWG)Mr. Woods reported that work continues on the Annual Load Data Request (ALDR), which is due March 3, 2008.

System Protection Working Group (SPWG)Mr. Chronister reported SPWG recommendation of draft OGRR language for Low-Voltage Ride Through (LVRT). Market Participants discussed the need for input from generators. Mr. Chronister noted that SPWG developed draft language at the direction of ROS, and that comments are welcomed; Mr. Chronister invited interested parties to send comments to the ROS exploder by February 29, 2008.

Texas Regional Entity (TRE) Compliance ReportMark Henry presented the TRE report, noting that 42 audits are scheduled for 2008; and NERC approval of the TRE 2008 Compliance Enforcement Program Implementation Plan will have significant impacts to, and educational opportunities for, the ERCOT Independent System Operator (ISO). Market Participants discussed entity registration; that wind is allowed to offer-in but is not required to perform; that Market Participants created the wind programs, and the TRE enforces that program; and that there is a need for a discussion of how to better use data.

Reliability Standards Committee (RSC) Farzaneh Tafreshi reviewed the composition of the Reliability Standards Committee (RSC), the composition of the Standard Drafting Team (SDT), and the role of ROS in developing SDTs.

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Request for Standards Drafting Team (SDT) Members for Standards Authorization Request (SAR) 001, Revision to Texas RE Documents to Provide for the ERCOT ISO to Participate and have a Vote in the ProcessesMarket Participants discussed how SDT should be formed, and that certain expertise may need to be drafted into service; that all Market Segments should be represented; that Ms. Tafreshi should distribute a request for volunteers, build the record, and report to responses received by February 22, 2008, to ROS for discussion and endorsement. Mr. R. Jones reiterated that no one should be excluded from the process.

Other BusinessOGRR193, System Voltage Profile ClarificationEllis Rankin reported on TPTF efforts to make equivalent terms of Voltage Profile and Voltage Schedule, possibly as a result of a poor understanding of the existing distinctions. Mr. Rankin reviewed term distinctions and suggested a task force be formed to clarify the language. Mr. Rocha requested that Mr. Rankin and Mr. R. Jones draft clarifying language for NPRR092, Remove Voltage Schedules Requirment, for potential e-mail endorsement by ROS in time for the February 2008 Protocol Revision Subcommittee (PRS) meeting.

2009 Project Prioritization Schedule/Initiatives ListTroy Anderson presented the 2009 Project Prioritization schedule and a list of initiatives. Mr. Anderson requested that ROS member review the Project Prioritization List (PPL) and be prepared to vote on the item at the March 2008 ROS meeting. Market Participants requested additional project details and definitions; and discussed which items might be deferred until after nodal go-live. Mr. Rocha requested that Cagle Lowe distribute a synopsis of applications by February 22, 2008, and Market Participants respond with comments by February 29, 2008.

2008 GoalsMr. Rocha requested that Market Participants submit suggested 2008 ROS goals to the ROS exploder, and noted that an e-mail vote may be required to approve the goals in advance of the March 2008 TAC meeting.

ROS/NERC StandardsMr. Rocha reported that as some regions exert an organized influence on NERC Standards, TAC requests that ROS consider whether an organized, ERCOT-wide approach to commenting on NERC Standards would be appropriate, feasible, or desirable. Mr. Rocha requested that Market Participants send comments to the ROS exploder by February 22, 2008.

Scott Helyer noted that other while regions do pool comments, their influence is questionable; that discussion promotes similar voting among individuals, due to a more thorough understanding of the issue; and that topics should be taken on an ad hoc basis. Steve Myers added that the same set of comments submitted by multiple individuals carries significant weight, and in that regard, organization is beneficial.

AdjournmentMr. Rocha adjourned the meeting at 3:25 p.m.

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APPROVEDReliability and Operations Subcommittee (ROS) Meeting

ERCOT Austin – 7620 Metro Center Drive – Austin, Texas 78744Thursday, March 13, 2008 – 9:30 a.m. – 3:30 p.m.

Attendance

Members:Armke, James Austin EnergyAshley, Kristy Exelon Generation Alt. Rep. for M. SamselDonohoo, Ken OncorGallaga, Loretta South Texas Electric Coop.Garrett, Mark Direct EnergyGreen, Bob Garland Power & LightGreer, Clayton J AronHatfield, Bill LCRAHolloway, Harry SUEZ Alt. Rep. for J. SweeneyJones, Randy CalpineKunkel, Dennis AEP CorporationMcCann, James Brownsville PUBMcDaniel, Rex TNMPRocha, Paul CenterPoint EnergyRyan, Martin NRG EnergyRyno, Randy Brazos Electric Power Coop.Schubert, Eric BP Energy Alt. Rep. for S. HausmanWilliams, Blake CPS Energy

Proxy Assignments: Billy Shaw to Randy Jones

Guests:Bogen, David OncorBruce, Mark FPL EnergyCaufield, Dennis CenterPoint EnergyCollins, Bob Texas Regional EntityEric, Sabina FERC Via TeleconferenceGibbens, David CPS EnergyHelton, Bob IPAHenry, Mark Texas Regional EntityHughes, Gilbert AEPJaussaud, Danielle PUCTJones, Dan Potomac EconomicsJonte, John CNPKlausman, Armin CNPLane, Rob Luminant EnergyMarciano, Tony PUCTMora, Michael Topaz Power Group

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Ögelman, Kenan CPSPieniazek, Adrian NRG TexasReid, Walter Wind CoalitionRyall, Jean ConstellationThormahlen, Jack LCRA QSEWagner, Marguerite ReliantWard, Jerry LuminantWhittle, Brandon DBET

ERCOT-ISO Staff:Adams, JohnAlbracht, BrittneyBarry, StacyBoren, AnnBridges, StacyChilders, BurkHuynh, ThuyLasher, WarrenLowe, CagleMani, AshwiniMcIntyre, KenPatterson, MarkTomlin, DaleWattles, Paul

Unless otherwise indicated, all Market Segments were present for a vote.

Paul Rocha called the meeting to order at 9:34 a.m.

Antitrust AdmonitionMr. Rocha directed attention to the displayed ERCOT Antitrust Admonition and noted the requirement to comply with the ERCOT Antitrust Guidelines. A copy of the guidelines was available for review.

Agenda Review and Meeting ManagementMr. Rocha announced that the agenda item related to the Low Voltage Ride-Through would be moved to after the lunch break in order to allow more time for discussion, and that ERCOT Antitrust Training would be conducted at the April 2008 ROS meeting in order to accommodate the day’s full agenda.

Mr. Rocha noted that the ROS endorsement of Ebby Johns as vice-chair for the Network Data Support Working Group (NDSWG) would be taken up at the April 2008 ROS meeting.

Mr. Rocha also reviewed assigned proxies and designated alternative representatives for the day.

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Approval of the Draft February 14, 2008 ROS Meeting Minutes (see Key Documents) 3 Randy Ryno moved to approve the draft February 14, 2008 ROS meeting minutes as posted. Randy Jones seconded the motion. The motion carried unanimously.

February 2008 Technical Advisory Committee (TAC) Meeting UpdateMr. Rocha reported TAC approval of Operating Guide Revision Request (OGRR) 198, Firm Load Shed Implementation Time Periods, and Nodal Protocol Revision Request (NPRR) 081, Automatic Voltage Regulator (AVR) Status, noting that TAC Chair Mark Dreyfus requested that ROS reconfirm that OGRR198 is not in conflict with the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corporation (NERC) Reliability Standards on firm Load shed. John Adams reiterated his concern that an auditor would consider “not more than 30 minutes” incompatible with a “time frame of emergency.” Mr. R. Jones added that TAC recognized that the ERCOT standard is more prescriptive, and encouraged Market Participants to continue to be diligent in conducting operations in accordance with standards as they are understood. No vote was taken to reaffirm OGRR198.

Mr. Rocha invited Market Participants to review posted 2008 ROS goals and send any comments to himself and Mr. R. Jones.

ROS Voting Items (see Key Documents)Standards Drafting Team (SDT) for Standards Authorization Request (SAR) 001 Mr. Rocha reviewed the list of volunteers to serve on the SDT for SAR001.

Mr. R. Jones moved that ROS accept the slate of members for the SDT for SAR001. Mr. Ryno seconded the motion. The motion carried unanimously.

2009 System Operations (SO) Project Prioritization List (PPL)Troy Anderson presented the 2009 PPL for ROS consideration, noting that all items are considered to be above the capability line at this time, and that nodal stabilization efforts are budgeted separately. Market Participants discussed that it is premature to discuss budgets, as items may be gray boxed; that many unanticipated items will need to be quickly addressed, and will likely require far more dollars than currently estimated; and that the Application Programming Interface (API) is easier to implement than new applications and should perhaps be prioritized above new projects. Market Participants also discussed that gray boxed language may be delayed indefinitely; and that a delay of nodal go live would be preferable to going live without certain functionalities.

Mr. Anderson noted that $20 million is scheduled to be available for SO projects and stabilization, and that the prioritization process would be more rigorous later in the year when more information is available. Market Participants further discussed hardware deliveries that will enable the Independent Market Monitor (IMM) to rerun studies of Security Constrained Economic Dispatch (SCED); that if go-live is delayed, the nodal budget will be in effect; that some of the prioritized projects are fixes to correct misinterpretations of the Protocols; and that some improvements are perpetually on the PPL and cause substantial administrative work that takes time away from efforts to ensure reliability. Market Participants further discussed the necessity and process of filing System Change Requests (SCRs.)

3 Key Documents referenced in these minutes may be accessed on the ERCOT website at:http://www.ercot.com/calendar/2008/03/20080313-ROS.html

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Dennis Kunkel moved to endorse the 2009 PPL as amended by ROS. James Armke seconded the motion. Market Participants discussed that prioritization may be premature as challenges are unknown. Mr. Kunkel and Mr. Armke accepted Mr. R. Jones’ amendment that ROS provide input to amend the 2009 PPL without endorsement, and express concern that the budget may not be adequate to address unknown challenges. The amended motion carried unanimously.

OGRR205, Modify Responsive Reserve ObligationJohn Jonte presented OGRR205 for ROS consideration.

Clayton Greer moved to approve OGRR205 as posted. Mr. Ryno seconded the motion. The motion carried unanimously.

Zonal/Nodal Outage Schedulers Dual Entry and Test Duration ScheduleDennis Caufield reported that Transmission Service Providers (TSPs) and Qualified Scheduling Entities (QSEs) will be required to manually enter outages for both the zonal and nodal markets from September through December 2008. Mr. Caufield explained that there are difficulties associated with the requirement such as increased need for human resources and the need for experienced personnel rather than temporary personnel to make these entries. Market Participants discussed whether temporary upgrades will be funded and might provide relief; the risk that only partial lines would be approved; that a translator to continuously synchronize table will be difficult to implement for nodal; and that a translation tool would still need to be checked for accuracy.

Market Participants further discussed dual risks to through-flow and dollars; that the 168-hour test will test the interface to the market and that if the test goes well, certain systems will cut-over early; how constraints will be incorporated into the Balancing Energy market; and that a new interface might require an architecture change. Mr. Rocha requested that an SCR be considered to accommodate telemetering all switches to ERCOT. No vote was taken.

NDSWG Priorities to Support Transition to Nodal MarketDavid Bogen presented the NDSWG list for ROS consideration, and noted that ERCOT staff is developing an approach document to present to the nodal team.

Mr. Kunkel moved that ROS endorse the proposed NDSWG Priorities to Support Transition to Nodal Market as presented. Mr. Ryno seconded the motion. The motion carried unanimously.

ERCOT Operations Report (see Key Documents)February Monthly ReportMr. Adams presented the February 2008 Operations report. Market Participants discussed that congestion in the west is frequent and will not be reduced until the 345kV line from San Miguel is complete Participants noted that units in the west were ordered online to address thermal limits and Replacement Reserve Service (RPRS), and that voltage problems will not show up in RPRS; and that there is a significant conceptual difference between Reliability Unit Commitment (RUC) and RPRS. In reference to the February 26, 2008 Emergency Electric Curtailment Program (EECP) event, Market Participants discussed the communication issues with Loads acting as Resource (LaaRs) and that Mid-Term Load Forecast (MTLF) Error comparisons are not meaningful. Suggested improvements would be appreciated.

Mr. Adams highlighted that there were five Special Protection Scheme (SPS) activations at the Worldwind Energy Center. Market Participants discussed that multiple activations may indicate a problem; that the market should be informed if an SPS activates and is triggered legitimately, but should not be informed for misoperation; and whether manpower is being spent writing reports that are not

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useful. Mr. Rocha noted that the use of SPS is a contentious issue before NERC, though no one would debate that SPS should not be activated for n-0 conditions.

EECP Step 2 – February 26, 2008Mr. Adams reviewed the Executive Summary for the EECP Event report for February 26, 2008. Market Participants discussed that wind should be specifically named as a major cause of the event, that the use of the word “primarily” is accurate, and that the impact of other types of unavailable generation was minimal. Participants noted that the Reserve Discount Factor (RDF) only applies to Responsive Reserve Service (RRS) and debated whether a wind-adjusted Discount Factor would be useful because only a percentage of forecasted wind is used and 100% of the forecast should not be considered available. Participants stated that wind generators could have done a better job of updating resource plans, but that there are no incentives in place for them to do so. Danielle Jaussaud expressed interest in the development of incentives for wind to update resource plans. Market Participants discussed that the short-term Load forecast is irrelevant if it is not compensated for in the offset in real-time and that any available improvements should be made to the business process for Summer 2008, before nodal go-live.

Market Participants also discussed that telemetering spinning reserves would allow a view of slipping capacity giving the Market Participants the opportunity to alter behavior intra-hour and provide additional capacity. Market Participants further discussed that the wind power forecast is not currently automated. Mr. Adams encouraged Market Participants to sponsor an SCR process, because that would avoid the internal prioritization and review process. Market Participants further discussed that although the Nodal Protocols call for publication, contractual issues prevent the publishing of the 50-50 and the 80-20 forecasts. Participants commented that the frequency of wind-related events will increase and that signals are needed for quick start units, as well as a mechanism for compensation. Market Participants expressed interest in the causes and timeframe of the Emergency event and noted; that human effort is not perfect, but that reliance on automated tools promotes failure. Participants also noted that the event provided a training opportunity for operators. Mr. Adams opined that as controllable-down only resources are increased, that additional planning steps need to be taken. Mr. Adams announced that a Wind Workshop is scheduled for Monday, March 17, 2008 at ERCOT Austin.

Balancing Energy OffsetMr. Adams presented the Balancing Energy Offset process and reported that efforts to automate the 96-times-per-day process are still underway. Mr. Adams explained that the Offset is used to account for such things as forecast errors and Schedule Control Error (SCE); and that approximately once each month an interval is held because the calculation is incorrect. Market Participants expressed appreciation for the review, and discussed that offset calculation would be easier if generators were more accurate in operating at zero SCE. Participants also stated that while wind is not expected to be perfect, generators should demonstrate a good-faith effort in meeting their schedules, and that the data regarding wind generators updating resource plans should be made available. Mr. Adams responded that although a perfect wind forecast would reduce efforts, it would not eliminate all the causes for the Emergency event. Mr. Adams commented that instituting wind SCE penalties would require expending extensive resources in the last nine months of the zonal. Mr. Adams suggested that ERCOT should focus its efforts on the implementation of the AWS TrueWind forecast and that ERCOT will continue to operate around wind shortfalls.

Mr. Rocha requested that a status update on the implementation of PRR750, Unannounced Generation Testing, be either provided via e-mail or at the April 2008 ROS.

Emergency Interruptible Load Service (EILS) Update (see Key Documents)

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Paul Wattles reviewed NPRR107, Nodal Emergency Interruptible Load Service (EILS), and TPTF comments filed by Reliant, and noted that EILS would continue to be administered manually by ERCOT Staff in the nodal market. Market Participants discussed that SCED executes every five minutes, that generators may need to back down if EILS is deployed, and that a staged deployment of EILS may be needed to address the issue; that the Public Utility Commission of Texas’ (PUCT) intent for EILS to carry over to the nodal market is embedded in the preamble to the rule revision; and that the potential transmission overload problems posed by concentrated regional procurement of EILS needs to be considered during the bid selection process.

Texas Nodal Implementation/ Transition Plan Task Force (TPTF) Update (see Key Documents) Stacy Bridges reviewed the recent activities of TPTF; presented major accomplishments, and announced agenda items for future meetings. In response to a question from Mr. Rocha, Mr. Bridges noted that upcoming items of particular interest to ROS are SCED related issues, Locational Marginal Pricing (LMP) Milestone dates, Load Frequency Control (LFC) testing, and the 168-Hour Test.

Early Delivery System (EDS) 2 Observability Update (see Key Documents)Burk Childers reported that one unobservable bus has been added to the list, while none were removed; and that the next EDS database load should remove all remaining unobservable buses. Mr. Childers also noted that ERCOT is tracking meteorological data from wind farms, but that this data is not always reliable, and that ERCOT is collecting data requested in the NERC Modeling Advisory.

System Planning (see Key Documents)There were no questions of Warren Lasher regarding the Systems Planning report.

ROS Working Group Reports (see Key Documents)In the interest of time, Mr. Rocha noted that Working Group reports were posted to the ROS meeting detail for review by Market Participants, and asked if there were any questions.

Dynamics Working Group (DWG)Tony Hudson provided the DWG report, and noted that Phase I studies of LaaR impacts on system dynamics studies would be completed by July 2008 or sooner.

System Protection Working Group (SPWG) – Low Voltage Ride Through (LVRT) DiscussionKen Donohoo presented LVRT issues that are of concern to Oncor and suggested that a time scale for transition and knowledge of existing transmission capabilities is needed. Mr. Donohoo claimed that ERCOT Planning has concerns about the viability of Competitive Renewable Energy Zones (CREZs) without LVRT implementation.

Walter Reid spoke on behalf of the Wind Coalition, expressed the Coalition’s desire for the adoption of a good LVRT standard, highlighted FERC Order 661-A (Wind Power Connection Standards); and contrasted the Western Electric Coordinating Council (WECC) proposal to the more demanding SPWG proposal. Mr. Reid noted that the voltage curve presented by SPWG is more aggressive, opined that the bullet exempting wind should be removed, and that an implementation timeline should be added.

Market Participants expressed concern that ERCOT could become a “dumping ground” for bad machinery that cannot meet compliance standards in other regions that this lack of a standard presents a reliability issue as more wind comes on line. Participants suggested that ERCOT explore guidance

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outside of ERCOT, such as European grid codes, in the interim work. Mark Henry suggested that the new Regional Standards process be utilized, and asserted that a regional standard that is more stringent than the eventual national standard is permissible. Market Participants discussed that changes should be proposed to the Operating Guides, as the Regional Standard process would take longer. Market Participants suggested that this matter should be expedited, as ERCOT is daily fielding calls regarding the standards.

Mr. Adams suggested that Mr. Reid draft the item and forward it to the OGRTF. Mr. Rocha noted that a status report would be on the May 2008 ROS agenda.

Texas Regional Entity (TRE) Compliance Report (see Key Documents)Mark Henry provided the TRE report, noted that the FERC and NERC personnel are interested in the analysis of the February 26, 2008 EECP event, and requested that ROS commission a group to review the event for possible recommendations to improve system operations and discover lessons learned.

Market Participants discussed that accelerated implementation of the AWS TruWind short term Load forecast for nodal and telemetering of Spinning Reserve Service would provide an improvement. Market Participants reiterated that the current event report seems complete and that EECP events will often involve wind to some degree. Market Participants also reiterated that reliance on automated tools is problematic; that operators should have access to a database of load forecasts and load curves for seasonal frontal passages; and that no model can substitute for operator judgment.

Mr. Henry concluded that he would provide Mr. Rocha with the name of a TRE contact not associated with compliance to receive comments and recommendations from Market Participants.

Other BusinessReliability Terminology Task ForceMr. Rocha requested that parties interested in participating in a task force to propose terminology consistent for both NERC and ERCOT contact DeAnn Walker.

Walter Reid requested that a discussion of the coordination of transmission and generation outages be added to the April 2008 ROS meeting agenda.

AdjournmentMr. Rocha adjourned the meeting at 4:25p.m.

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