Report to TACReport to TAC

March 2010March 2010

In BriefIn Brief Voting ItemsVoting Items

GATF GATF – WMS endorsed the recommendations of the GATF– WMS endorsed the recommendations of the GATF WCATFWCATF – – WMS endorsed Wind Plus Load Ratio Share proposal WMS endorsed Wind Plus Load Ratio Share proposal

and directed WCATF develop appropriate NPRR languageand directed WCATF develop appropriate NPRR language NPRR 091 NPRR 091 – Took 2 votes and endorsed NPRR 091 with – Took 2 votes and endorsed NPRR 091 with

changes to 4.4.11.2, in order to allow cost recovery for units using fuel changes to 4.4.11.2, in order to allow cost recovery for units using fuel oil. oil.

WMS –WMS – endorsed minor change to procedures… WMS shall follow the election endorsed minor change to procedures… WMS shall follow the election process as described in the TAC Procedures, Section III… when electing the WMS process as described in the TAC Procedures, Section III… when electing the WMS Chair and Vice-Chair.Chair and Vice-Chair.

Working Group ReportsWorking Group Reports CMWG , DSWG, QMWGCMWG , DSWG, QMWG – – updates only no votes takenupdates only no votes taken MCWGMCWG

CWG/MCWG merger into TAC Subcommittee with voting structure?CWG/MCWG merger into TAC Subcommittee with voting structure? ““e” factor recommendation or discussion at April TACe” factor recommendation or discussion at April TAC WMS endorsed draft NPPR - DAM & Real-Time Market Default Allocation WMS endorsed draft NPPR - DAM & Real-Time Market Default Allocation

Changes with WMS corrections and any ERCOT staff clean-upChanges with WMS corrections and any ERCOT staff clean-up

In BriefIn Brief Working Groups (cont’)Working Groups (cont’)

VCWGVCWG WMS endorsed standard cost option, directed VCWG to draft NPRR and WMS endorsed standard cost option, directed VCWG to draft NPRR and

provide recommendation regarding switching and escalation factorsprovide recommendation regarding switching and escalation factors Task ForcesTask Forces

QSTF QSTF – WMS endorsed NPRR 207, as submitted, and requested review – WMS endorsed NPRR 207, as submitted, and requested review by ERCOT to determine if it can be done by TNMIDby ERCOT to determine if it can be done by TNMID

MIGTF MIGTF - Interconnection Date for Protocol Considerations NPRR to be - Interconnection Date for Protocol Considerations NPRR to be drafted by M. Bruce. Minimum Cost Planning Concept to be referred to drafted by M. Bruce. Minimum Cost Planning Concept to be referred to RPG for inclusion in GENERATION INTERCONNECTION OR CHANGE RPG for inclusion in GENERATION INTERCONNECTION OR CHANGE REQUEST PROCEDUREREQUEST PROCEDURE

Other ActivitiesOther Activities NPRR211NPRR211 – Modify RUC Capacity Short Charge to Use Final Energy – Modify RUC Capacity Short Charge to Use Final Energy

Trades – WMS recommended that PRS table to allow further discussion. Trades – WMS recommended that PRS table to allow further discussion. WMS will discuss on March 24 and report back at the March PRS meetingWMS will discuss on March 24 and report back at the March PRS meeting

NPRR212NPRR212 – –Disputing Fuel Oil Price (FOP) Costs – WMS endorsed Disputing Fuel Oil Price (FOP) Costs – WMS endorsed with Luminant comments and minor correctionwith Luminant comments and minor correction

Nodal Reliability Must-Run (RMR)Nodal Reliability Must-Run (RMR): ERCOT Created : ERCOT Created Three-Part Supply Offer – referred to QMWGThree-Part Supply Offer – referred to QMWG

TAC Voting ItemTAC Voting Item Generation Adequacy Task ForceGeneration Adequacy Task Force

http://www.ercot.com/content/meetings/wms/keydocs/2010/0120/14_gatf_report_to_wms_100120_.doc

WMS endorsed GATF recommendations:WMS endorsed GATF recommendations: LOLP Study Review/Load Forecasting/EILS and otherLOLP Study Review/Load Forecasting/EILS and other CDR Inputs, Calculations and FormatCDR Inputs, Calculations and Format

Installed Capacity Assumptions – use RARFInstalled Capacity Assumptions – use RARF New Unit Additions – affirmative declarationNew Unit Additions – affirmative declaration Renewables – Wind: effective load carrying capability / Solar: Renewables – Wind: effective load carrying capability / Solar:

RARFRARF Mothballed Capacity – no changeMothballed Capacity – no change DC Tie Capacity – no changeDC Tie Capacity – no change Switchable Capacity - RARFSwitchable Capacity - RARF Netting of Generation and Load – no changeNetting of Generation and Load – no change Retired Capacity – introduce “pending unit requirements” lineRetired Capacity – introduce “pending unit requirements” line CDR Format – move Summer and Winter Capacities closer to frontCDR Format – move Summer and Winter Capacities closer to front

TAC Voting ItemTAC Voting Item

TAC Recommended Motion:TAC Recommended Motion:

Move to endorse WMS Move to endorse WMS recommendation to adopt the recommendation to adopt the

GATF report recommendations.GATF report recommendations.

TAC Voting ItemTAC Voting Item Wind Cost Allocation Task Force Wind Cost Allocation Task Force

(WCATF)(WCATF)http://www.ercot.com/content/meetings/tac/keydocs/2010/0304/09._WCATF_WMS_UPDATE_021710_rev_2.ppt

Two allocation methodologies were proposed Two allocation methodologies were proposed for WMS Considerationfor WMS Consideration

Wind Plus Load Ratio Share Proposal (Wind Plus Load Ratio Share Proposal (ENDORSEDENDORSED)) Wind generators receive a hedgeable ancillary service Wind generators receive a hedgeable ancillary service

obligation for responsive reserves, non-spinning obligation for responsive reserves, non-spinning reserves, regulation up, and regulation downreserves, regulation up, and regulation down

Wind generators can reduce the obligation by qualifying Wind generators can reduce the obligation by qualifying for “reliability credits”for “reliability credits”

Incremental Allocation ProposalIncremental Allocation Proposal WMS also heard a presentation that advocated WMS also heard a presentation that advocated

for no action to be taken regarding WCAfor no action to be taken regarding WCA

TAC Voting ItemTAC Voting Item WMS MotionWMS Motion

WMS endorsed the Wind Plus Load Ratio WMS endorsed the Wind Plus Load Ratio Share proposal and directed WCATF to Share proposal and directed WCATF to develop appropriate NPRR languagedevelop appropriate NPRR language

Motion carries: Motion carries: 61.1% to 38.9%61.1% to 38.9%

TAC Recommended Motion:TAC Recommended Motion:

Move to endorse WMS recommendation Move to endorse WMS recommendation to adopt the Wind Plus Load Ratio to adopt the Wind Plus Load Ratio Share Proposal and direct WMS to Share Proposal and direct WMS to

draft protocol language.draft protocol language.

TAC Voting ItemTAC Voting Item NPRR 091 NPRR 091

WMS hosted Special Meeting to discuss and WMS hosted Special Meeting to discuss and address recent comments to NPRR 091 address recent comments to NPRR 091

091NPRR-28 Steel Group Comments 091NPRR-27 REP Nodal Group Comments 091NPRR-25 Luminant Comments

Commission Staff, ERCOT and the IMM were Commission Staff, ERCOT and the IMM were present and updated WMS on the status of present and updated WMS on the status of potential need for changes under P.U.C. SUBST. potential need for changes under P.U.C. SUBST. R. 25.505 to allow for a temporary mitigated offer R. 25.505 to allow for a temporary mitigated offer cap. cap.

After a robust discussion a Motion was made to After a robust discussion a Motion was made to endorse NPRR 091 in form proposed by Steel endorse NPRR 091 in form proposed by Steel group; this Motion Failedgroup; this Motion Failed

TAC Voting ItemTAC Voting Item NPRR 091 NPRR 091

A second Motion was made to endorse the concept A second Motion was made to endorse the concept of revising Section 4.4.11.2, Scarcity Pricing and of revising Section 4.4.11.2, Scarcity Pricing and Mitigated Offer Cap During Nodal Startup, in order Mitigated Offer Cap During Nodal Startup, in order to allow cost recovery for units using fuel oil; this to allow cost recovery for units using fuel oil; this Motion PassedMotion Passed

Subsequent to the Special Meeting, Luminant filed Subsequent to the Special Meeting, Luminant filed comments to the NPRR which addressed the WMS to the NPRR which addressed the WMS recommendation and other options.recommendation and other options.

The Commission met today.The Commission met today.

WMS endorses changes to 4.4.11.2 in the Luminant WMS endorses changes to 4.4.11.2 in the Luminant comments but defers on making a motion comments but defers on making a motion

recommendation.recommendation.

Working Group ReportsWorking Group ReportsCMWGCMWG

Presentation available at Presentation available at http://www.ercot.com/content/meetings/wms/keydocs/2010/0217/05_CMWG_Update_to_WMS_2-17-10.ppt

Main topics Main topics Operation of Phase Shifting TransformersOperation of Phase Shifting Transformers

Yellow Jacket Phase Shifter In Service Date 1-29-10Yellow Jacket Phase Shifter In Service Date 1-29-10 ERCOT Coordinating with AEP to optimize flowsERCOT Coordinating with AEP to optimize flows

Constraint Competitiveness Test StatusConstraint Competitiveness Test Status GOAL: recommendation of Competitive GOAL: recommendation of Competitive

Constraints to April WMSConstraints to April WMS Next Meeting: March 09 and March 29, Next Meeting: March 09 and March 29,

2010 2010

Working Group ReportsWorking Group ReportsDSWGDSWG

Presentation available at Presentation available at http://www.ercot.com/content/meetings/wms/keydocs/2010/0217/06_dswg_update_to_wms_1http://www.ercot.com/content/meetings/wms/keydocs/2010/0217/06_dswg_update_to_wms_100217.ppt00217.ppt

Working Group ReportsWorking Group ReportsDSWGDSWG

EILS improvement group met on February EILS improvement group met on February 2626thth

Topics were:Topics were: Substitution rulesSubstitution rules Reinstatement procedures and timelineReinstatement procedures and timeline Review baseline performanceReview baseline performance Bidding processesBidding processes Meter data submittalMeter data submittal Procurement scheduleProcurement schedule

Next DSWG Meeting is March 5Next DSWG Meeting is March 5thth

Working Group ReportsWorking Group ReportsQMWGQMWG

Presentation available at Presentation available at http://www.ercot.com/content/meetings/wms/keydocs/http://www.ercot.com/content/meetings/wms/keydocs/

2010/0217/09_qmwg_update_to_wms_100217.ppt2010/0217/09_qmwg_update_to_wms_100217.ppt

Main TopicsMain Topics Definition of WGR and implementation of PRR830Definition of WGR and implementation of PRR830 WGRPP Forecast Accuracy Update WGRPP Forecast Accuracy Update Load Forecasting Accuracy Load Forecasting Accuracy Zonal RPRS unit de-selectionZonal RPRS unit de-selection Implementation of PRR811Implementation of PRR811 Draft NPRR, WGR HSL update process (possible Vote)Draft NPRR, WGR HSL update process (possible Vote) SCR757, Real Time Wind Production by ZoneSCR757, Real Time Wind Production by Zone Forecasting Ancillary Service RequirementsForecasting Ancillary Service Requirements

Next QMWG Meeting: March 8Next QMWG Meeting: March 8thth

Working Group ReportsWorking Group ReportsMCWGMCWG

Presentation available at Presentation available at http://www.ercot.com/content/meetings/wms/keydocs/2010/0217/08_mcwg_update__to_wms_021710.phttp://www.ercot.com/content/meetings/wms/keydocs/2010/0217/08_mcwg_update__to_wms_021710.pptpt

Main topics Main topics NPRR 206 – ERCOT Board ActionNPRR 206 – ERCOT Board Action

WMS directed MCWG to define “e” factors with goal of April TAC and WMS directed MCWG to define “e” factors with goal of April TAC and Board MeetingBoard Meeting

MCWG and CWG MCWG and CWG – 1 credit subcommittee?– 1 credit subcommittee?

WMS endorsed NPPR - DAM & Real-Time Market WMS endorsed NPPR - DAM & Real-Time Market Default Allocation Changes Default Allocation Changes – ERCOT reviewing WMS – ERCOT reviewing WMS recommendation, NPRR should be submitted soon.recommendation, NPRR should be submitted soon.

Update on Short-Pay Fund Update on Short-Pay Fund - - a subgroup has been set up to a subgroup has been set up to discuss and ediscuss and expectation is that a proposal will be available for WMS for March 2010

Next Meetings – March 8, 12 and 26th

Working Group ReportsWorking Group ReportsVCWGVCWG

Presentation available at Presentation available at http://www.ercot.com/content/meetings/wms/keydocs/http://www.ercot.com/content/meetings/wms/keydocs/

2010/0217/11_VCWG_Update_for_WMS_021710.ppt2010/0217/11_VCWG_Update_for_WMS_021710.ppt

Main TopicsMain Topics TThe standard cost proposal, as presented by VCWG in the he standard cost proposal, as presented by VCWG in the

whitepaper, was endorsed and VCWG was directed to develop whitepaper, was endorsed and VCWG was directed to develop NPRR language, review hydro issue (should Hydro be with NPRR language, review hydro issue (should Hydro be with Coal or explicitly not RUC’d), review requests for additional Coal or explicitly not RUC’d), review requests for additional technologies to be added to the proposal, make a technologies to be added to the proposal, make a recommendation to WMS on escalation factors for Standard recommendation to WMS on escalation factors for Standard Costs and options for switching from VC to SC and vice-versa. Costs and options for switching from VC to SC and vice-versa.

Some minor changes were also made to the Manual for i) a Some minor changes were also made to the Manual for i) a change control process, ii) allow fuel from breaker close to change control process, ii) allow fuel from breaker close to LSL and iii) affidavit.LSL and iii) affidavit.

Next Meeting: not scheduled at time of pptNext Meeting: not scheduled at time of ppt

Working Group ReportsWorking Group ReportsVCWGVCWG

Standard CostsStandard Costs1.1. Options for Filing Verifiable CostsOptions for Filing Verifiable Costs

a)a) File Verifiable Costs.File Verifiable Costs.

b)b) File with election of Standard O & M Costs by File with election of Standard O & M Costs by Technology.Technology.

1.1. Standard O & M per Startup by Technology - $ per Standard O & M per Startup by Technology - $ per StartStart

2.2. Standard O & M for Energy - $/MWHStandard O & M for Energy - $/MWH

3.3. Will have to provide Actual fuel flows, Heat Rate Will have to provide Actual fuel flows, Heat Rate Curves , emissions rates, ect.Curves , emissions rates, ect.

c)c) Nodal Generics will be used for entities that do Nodal Generics will be used for entities that do not elect option a or b.not elect option a or b.

Working Group ReportsWorking Group ReportsVCWGVCWG

Standard CostsStandard CostsWMS endorsed $/MWH for standard O & M WMS endorsed $/MWH for standard O & M

Costs.Costs.

Plant Type Cold Start-up Warm Start-up Hot Start-up Variable O&MStart Year = 2009 (2009 Dollars) $/Start $/Start $/Start $/MWh

Advanced Simple Cycle1 1,000.00$ N/A N/A 3.94$ Diesel 487.00$ N/A N/A 5.00$

Simple Cycle Commissioned before 1996 > = 90MW2 5,000.00$ N/A N/A 3.94$

Simple Cycle Commissioned before 1996 <90MW2 2,300.00$ N/A N/A 3.94$ Combined Cycle (CC) 6,810.00$ 5,107.50$ 2,553.75$ 3.19$

Gas-Steam Supercritical Boiler3 4,800.00$ 3,600.00$ 1,800.00$ 7.08$

Gas-Steam Reheat Boiler3 3,000.00$ 2,250.00$ 1,125.00$ 7.08$ Nuclear Coal and Lignite 7,200.00$ 5,400.00$ 2,700.00$ 5.02$ Renewable N/A N/A N/A 5.50$ 1Modern Simple Cycle costs have been updated to refl ect current costs . 2Simple Cycle resources commiss ioned before 1996 are us ing the Startup Costs from the Zonal Protocols .3Because this particular technology i s not addressed in the CEC report VCWG used the SNL to pul l FERC Form 1 data .

The CEC report does not address a l l the technology types that currently exis t in ERCOT. VCWG encourages Market parti cipati on

in establ i shing soluti ons for the Resources not covered in the CEC

Start -up and Variable Operations & Maintenance Costs

Other ActivitiesOther Activities NPRR211: Modify RUC Capacity Short NPRR211: Modify RUC Capacity Short

Charge to Use Final Energy TradesCharge to Use Final Energy Trades PRS referred NPRR211 to WMS to allow for PRS referred NPRR211 to WMS to allow for

further time to work on revisions and additional further time to work on revisions and additional discussion at the March 2010 WMS meeting, discussion at the March 2010 WMS meeting, and requested that WMS report back at the and requested that WMS report back at the March 2010 PRS meeting.March 2010 PRS meeting.

NPRR212 Disputing Fuel Oil Price (FOP) NPRR212 Disputing Fuel Oil Price (FOP) Costs Costs WMS endorsed NPRR212 as amended by the WMS endorsed NPRR212 as amended by the

2/15/10 Luminant Energy comments and as 2/15/10 Luminant Energy comments and as revised by WMS. There was one opposing vote revised by WMS. There was one opposing vote from the Consumer Market Segment.from the Consumer Market Segment.

Inactive Task ForceInactive Task Force Joint ROS/WMS Multiple Interconnection Joint ROS/WMS Multiple Interconnection

of Generation Task Force (MIG TF)of Generation Task Force (MIG TF) TF has be disbandedTF has be disbanded WMS Action to be taken:WMS Action to be taken:

Market Participant Notification Period (Transmission Market Participant Notification Period (Transmission outage)outage)

ROSROS

Interconnection Date for Protocol ConsiderationsInterconnection Date for Protocol Considerations Mark Bruce Mark Bruce shall draft protocols to introduce generation operation date. The generation shall draft protocols to introduce generation operation date. The generation

operation date shall define what the generation unit is expected to do, and the operation date shall define what the generation unit is expected to do, and the Interconnection Date would define the requirements of equipment at the point of Interconnection Date would define the requirements of equipment at the point of interconnection. Existing resources reconnecting to a different line would be grandfathered interconnection. Existing resources reconnecting to a different line would be grandfathered to the date of the original interconnection.to the date of the original interconnection.

Planning Concept Endorsement Planning Concept Endorsement Option – B - Minimal Cost - As a default view TSPs would try to minimize the cost of Option – B - Minimal Cost - As a default view TSPs would try to minimize the cost of

Transmission, (ERCOT process does not change regarding optimization).Transmission, (ERCOT process does not change regarding optimization).

TO BE DRAFTED BY RPGTO BE DRAFTED BY RPG

WMS 2010 GoalsWMS 2010 GoalsItem [WMS to set prioritization]Item [WMS to set prioritization] WMS input/direction needed by WMS input/direction needed by Nodal Market TransitionNodal Market Transition On-going On-going

• Market Participant ReadinessMarket Participant Readiness• TCR to CRR Transition TCR to CRR Transition • Nodal Protocol TracebilityNodal Protocol Tracebility• Nodal Parking DeckNodal Parking Deck• Nodal Test EvaluationNodal Test Evaluation

Nodal Verifiable Cost Methodology Nodal Verifiable Cost Methodology On-going (VCWG) On-going (VCWG) Consideration of necessary Zonal Market changesConsideration of necessary Zonal Market changes Before Q2Before Q2Review of Generation Adequacy in ERCOTReview of Generation Adequacy in ERCOT Q1 (GATF)Q1 (GATF)Market Issues Related to:Market Issues Related to:

Credit issuesCredit issues On-going (MCWG)On-going (MCWG)EILSEILS On-going (DSWG)On-going (DSWG)Reliability & A/S Dispatch Impacts on Energy MarketsReliability & A/S Dispatch Impacts on Energy Markets On-goingOn-goingMarket Event EvaluationMarket Event Evaluation On-goingOn-goingAdv. meters & other demand response in A/S and Energy MarketsAdv. meters & other demand response in A/S and Energy Markets On-going (DSWG)On-going (DSWG)Wind & related renewable technology integrationWind & related renewable technology integration On-going (various WG)On-going (various WG)Criteria in Nodal for supplying A/S, Energy and Capacity MarketsCriteria in Nodal for supplying A/S, Energy and Capacity Markets On-going (WMS)On-going (WMS)Integration of Quick Start Resources into NodalIntegration of Quick Start Resources into Nodal QSTFQSTFPower Storage Devices On-going (TBD)LaaR Responsive Reserve Performance Penalty On-going (DSWG)On-going (DSWG)