11

TAC Report to the ERCOT TAC Report to the ERCOT BoardBoard

June 21, 2005June 21, 2005

22

TAC SummaryTAC Summary

• 8 PRRS8 PRRS• Withdrawal of PRR 552Withdrawal of PRR 552• Potomac RecommendationsPotomac Recommendations• REP Default Under LSE AgreementREP Default Under LSE Agreement

33

PRR 552 – Appropriate Use of Relaxed PRR 552 – Appropriate Use of Relaxed Balanced SchedulesBalanced Schedules

• Submitted by Coral (IPM)Submitted by Coral (IPM)• Remanded by Board to TACRemanded by Board to TAC• Remanded by TAC to PRSRemanded by TAC to PRS• Withdrawn by sponsor after remandWithdrawn by sponsor after remand• No motion to reject withdrawal raised at PRSNo motion to reject withdrawal raised at PRS• TAC unanimously approved withdrawal TAC unanimously approved withdrawal

44

PRR 555 – Modify Number of Sub-PRR 555 – Modify Number of Sub-QSEs a Single Entity Can PartitionQSEs a Single Entity Can Partition• Removes limit on the number of sub-QSEs an entity may haveRemoves limit on the number of sub-QSEs an entity may have• ERCOT has authority to determine the implementation plan for ERCOT has authority to determine the implementation plan for

new sub-QSEsnew sub-QSEs• Benefit: More granular accounting capability for QSEsBenefit: More granular accounting capability for QSEs• Amended by ERCOT, PSEG, Calpine & PRSAmended by ERCOT, PSEG, Calpine & PRS• PRS recommended approval with 4 nay votes and 1 abstention- PRS recommended approval with 4 nay votes and 1 abstention-

all market segments were presentall market segments were present• TAC unanimously recommends approval – TAC unanimously recommends approval – all market segments all market segments

presentpresent• ERCOT Staff to report to TAC if costs of adding sub-QSEs ERCOT Staff to report to TAC if costs of adding sub-QSEs

becomes excessivebecomes excessive• Proposed effective date is July 1, 2005Proposed effective date is July 1, 2005

55

PRR 555 – Modify Number of Sub-PRR 555 – Modify Number of Sub-QSEs a Single Entity Can PartitionQSEs a Single Entity Can Partition

Impact AnalysisImpact Analysis

Item ReviewedItem Reviewed DescriptionDescriptionNoNoImpactImpact

Credit Monitoring/LiabilityCredit Monitoring/Liability

BudgetBudget

StaffingStaffing

Computer SystemsComputer Systems

Business FunctionsBusiness Functions

Grid OperationsGrid Operations

ImpactImpact

Case-by-case impactCase-by-case impact

Case-by-case impactCase-by-case impact

66

PRR 564 – OOME DefinitionPRR 564 – OOME Definition

• PRR submitted by ANP (Independent Generator)PRR submitted by ANP (Independent Generator)• Resource owners directly impacted by the actuation of a Resource owners directly impacted by the actuation of a

Special Protection System (SPS)Special Protection System (SPS)• Benefit: Automates settlement process by eliminating dispute Benefit: Automates settlement process by eliminating dispute

filings by generatorsfilings by generators• PRS recommended approval with 3 nay votes and 3 PRS recommended approval with 3 nay votes and 3

abstentions - abstentions - all market segments presentall market segments present• TAC recommends approval with 5 abstentions from consumer TAC recommends approval with 5 abstentions from consumer

segmentsegment• Concern expressed that this may expand OOM (down) Concern expressed that this may expand OOM (down)

payments – discussion on record that this would not expand payments – discussion on record that this would not expand OOM (down) paymentsOOM (down) payments

• Proposed effective date is July 1, 2005Proposed effective date is July 1, 2005

77

PRR 564 – OOME DefinitionPRR 564 – OOME Definition

Impact AnalysisImpact Analysis

Item ReviewedItem Reviewed DescriptionDescriptionNoNoImpactImpact

Credit Monitoring/LiabilityCredit Monitoring/Liability

BudgetBudget

StaffingStaffing

Computer SystemsComputer Systems

Business FunctionsBusiness Functions

Grid OperationsGrid Operations

ImpactImpact

Increased VDI usage

Requires verbal confirmations

Increased TSP communication

88

PRR 572 – Weather Sensitivity PRR 572 – Weather Sensitivity ClassificationClassification

• PRR submitted by Reliant Energy (IPM) for Profile PRR submitted by Reliant Energy (IPM) for Profile Working GroupWorking Group

• Establishes procedures to determine weather Establishes procedures to determine weather sensitivity classifications when an ESI ID is inactive sensitivity classifications when an ESI ID is inactive or de-energizedor de-energized

• Benefit: Improves ERCOT settlement accuracyBenefit: Improves ERCOT settlement accuracy• PRS recommended approval unanimously -PRS recommended approval unanimously -all all

market segments were presentmarket segments were present• TAC unanimously recommends approval – TAC unanimously recommends approval – all market all market

segments were presentsegments were present• Proposed effective date is upon system Proposed effective date is upon system

implementationimplementation

99

PRR 572 – Weather Sensitivity PRR 572 – Weather Sensitivity ClassificationClassificationImpact AnalysisImpact Analysis

Item ReviewedItem Reviewed DescriptionDescriptionNoNoImpactImpact

Credit Monitoring/LiabilityCredit Monitoring/Liability

BudgetBudget

StaffingStaffing

Computer SystemsComputer Systems

Business FunctionsBusiness Functions

Grid OperationsGrid Operations

ImpactImpact

1010

PRR 575 – Mandatory Down PRR 575 – Mandatory Down Balancing Ramp RateBalancing Ramp Rate

• PRR submitted by ERCOTPRR submitted by ERCOT• Specifies that the Mandatory DN Balancing amount Specifies that the Mandatory DN Balancing amount

should be deployable in one hourshould be deployable in one hour• Benefit: Increase system reliabilityBenefit: Increase system reliability• PRS recommended approval of PRR as amended by PRS recommended approval of PRR as amended by

PRS with 2 nay votes from Power Market segment PRS with 2 nay votes from Power Market segment and 6 abstentions from IPP and IOU segment - and 6 abstentions from IPP and IOU segment - all all market segments were presentmarket segments were present

• TAC unanimously recommends approval – TAC unanimously recommends approval – all market all market segments were presentsegments were present

• Proposed effective date is July 1, 2005Proposed effective date is July 1, 2005

1111

PRR 575 – Mandatory Down PRR 575 – Mandatory Down Balancing Ramp RateBalancing Ramp Rate

Impact AnalysisImpact Analysis

Item ReviewedItem Reviewed DescriptionDescriptionNoNoImpactImpact

Credit Monitoring/LiabilityCredit Monitoring/Liability

BudgetBudget

StaffingStaffing

Computer SystemsComputer Systems

Business FunctionsBusiness Functions

Grid OperationsGrid Operations

ImpactImpact

1212

PRR 576 – Disclosure of OOME, OOMC PRR 576 – Disclosure of OOME, OOMC and RMR Serviceand RMR Service

• PRR submitted by ERCOTPRR submitted by ERCOT• Changes posting from 17 Business Days to the Changes posting from 17 Business Days to the

Business Day after the Initial Statement and adds a Business Day after the Initial Statement and adds a definition for “Off-Line”definition for “Off-Line”

• Benefit: Aligns posting requirement with data Benefit: Aligns posting requirement with data availability – enables automation of postingavailability – enables automation of posting

• PRS recommended approval with one nay vote from PRS recommended approval with one nay vote from PM segment - PM segment - all market segments were presentall market segments were present

• TAC unanimously recommends approval – TAC unanimously recommends approval – all market all market segments were presentsegments were present

• Proposed effective date is July 1, 2005Proposed effective date is July 1, 2005

1313

PRR 576 – Disclosure of OOME, OOMC PRR 576 – Disclosure of OOME, OOMC and RMR Serviceand RMR Service

Impact AnalysisImpact Analysis

Item ReviewedItem Reviewed DescriptionDescriptionNoNoImpactImpact

Credit Monitoring/LiabilityCredit Monitoring/Liability

BudgetBudget

StaffingStaffing

Computer SystemsComputer Systems

Business FunctionsBusiness Functions

Grid OperationsGrid Operations

ImpactImpact

1414

PRR 587 – Intra-year Modification of PRR 587 – Intra-year Modification of CRECRE

• PRR submitted by ERCOTPRR submitted by ERCOT• Implements Patton #4 – Allows ERCOT to identify Implements Patton #4 – Allows ERCOT to identify

and implement CRE list changes anytime within a and implement CRE list changes anytime within a year – TAC review of recommendationyear – TAC review of recommendation

• Benefit: Provides greater accuracy in managing Benefit: Provides greater accuracy in managing congestion in ERCOTcongestion in ERCOT

• Amended by ERCOT, CMWG & PRSAmended by ERCOT, CMWG & PRS• PRS recommended approval unanimously -PRS recommended approval unanimously -all all

market segments were presentmarket segments were present• TAC unanimously recommends approval – TAC unanimously recommends approval – all market all market

segments were presentsegments were present• Proposed effective date is July 1, 2005Proposed effective date is July 1, 2005

1515

PRR 587 – Intra-year Modification of PRR 587 – Intra-year Modification of CRECRE

Impact AnalysisImpact Analysis

Item ReviewedItem Reviewed DescriptionDescriptionNoNoImpactImpact

Credit Monitoring/LiabilityCredit Monitoring/Liability

BudgetBudget

StaffingStaffing

Computer SystemsComputer Systems

Business FunctionsBusiness Functions

Grid OperationsGrid Operations

ImpactImpact

1616

PRR 589 – CSC & Zone DeterminationPRR 589 – CSC & Zone Determination

• PRR submitted by ERCOTPRR submitted by ERCOT• Implements Patton #1—strengthens ERCOT’s role in Implements Patton #1—strengthens ERCOT’s role in

CSC & zone determination process – also eliminates CSC & zone determination process – also eliminates BOD approval of NOIE exemptions from CSC BOD approval of NOIE exemptions from CSC determinationdetermination

• Benefit: Clarifies ERCOT’s role in processBenefit: Clarifies ERCOT’s role in process• PRS recommended approval with 1 nay vote from PRS recommended approval with 1 nay vote from

Consumer segment and 1 abstention from PM Consumer segment and 1 abstention from PM segment - segment - all market segments were presentall market segments were present

• TAC unanimously recommends approval – TAC unanimously recommends approval – all market all market segments were presentsegments were present

• Proposed effective date is July 1, 2005Proposed effective date is July 1, 2005

1717

PRR 589 – CSC & Zone DeterminationPRR 589 – CSC & Zone Determination

Impact AnalysisImpact Analysis

Item ReviewedItem Reviewed DescriptionDescriptionNoNoImpactImpact

Credit Monitoring/LiabilityCredit Monitoring/Liability

BudgetBudget

StaffingStaffing

Computer SystemsComputer Systems

Business FunctionsBusiness Functions

Grid OperationsGrid Operations

ImpactImpact

1818

PRR 592 – Modify Shift Factor Calculation to PRR 592 – Modify Shift Factor Calculation to Exclude Fixed Output GeneratorsExclude Fixed Output Generators

• Submitted by ERCOTSubmitted by ERCOT• Implements Patton #3 – excludes fixed output Implements Patton #3 – excludes fixed output

generators from monthly shift factor calculationsgenerators from monthly shift factor calculations• Benefit: Indeterminate – may financially impact some Benefit: Indeterminate – may financially impact some

market participants positively and other negativelymarket participants positively and other negatively• PRS recommended approval with 2 abstentions from PRS recommended approval with 2 abstentions from

IPP and PM segment - IPP and PM segment - all market segments were all market segments were presentpresent

• TAC unanimously recommends approval – TAC unanimously recommends approval – all market all market segments were presentsegments were present

• Proposed effective date is November 1, 2005 in Proposed effective date is November 1, 2005 in accordance with the normal CSC/CRE processaccordance with the normal CSC/CRE process

1919

PRR 592 – Modify Shift Factor Calculation PRR 592 – Modify Shift Factor Calculation to Exclude Fixed Output Generatorsto Exclude Fixed Output Generators

Impact AnalysisImpact Analysis

Item ReviewedItem Reviewed DescriptionDescriptionNoNoImpactImpact

Credit Monitoring/LiabilityCredit Monitoring/Liability

BudgetBudget

StaffingStaffing

Computer SystemsComputer Systems

Business FunctionsBusiness Functions

Grid OperationsGrid Operations

ImpactImpact

2020

Recommended TAC ActionsRecommended TAC Actions• ApprovalApproval

• PRR 555 – Modify Number of Sub-QSEs/Entity (unanimous)PRR 555 – Modify Number of Sub-QSEs/Entity (unanimous)• PRR 564 – OOME DefinitionPRR 564 – OOME Definition• PRR 572 – Weather Sensitivity Classification (unanimous)PRR 572 – Weather Sensitivity Classification (unanimous)• PRR 575 – Mandatory DN Balancing Ramp Rate (unanimous)PRR 575 – Mandatory DN Balancing Ramp Rate (unanimous)• PRR 576 – Disclosure of OOMC, OOME and RMR (unanimous)PRR 576 – Disclosure of OOMC, OOME and RMR (unanimous)• Urgent PRR 587 – Intra-year Modification of CREs Urgent PRR 587 – Intra-year Modification of CREs

(unanimous)(unanimous)• Urgent PRR 589 – CSC & Zone Determination (unanimous)Urgent PRR 589 – CSC & Zone Determination (unanimous)• Urgent PRR 592 – Modify Shift Factor Calc to Exclude Fixed Urgent PRR 592 – Modify Shift Factor Calc to Exclude Fixed

Output Generators (unanimous)Output Generators (unanimous)

• Withdrawal AffirmationWithdrawal Affirmation• PRR 552 – Clarification of Relaxed Balanced Schedules PRR 552 – Clarification of Relaxed Balanced Schedules

(unanimous)(unanimous)

2121

REP Default Under LSE AgreementREP Default Under LSE Agreement

ERCOT provided update regarding REP default ERCOT provided update regarding REP default under LSE agreement at May BOD meetingunder LSE agreement at May BOD meetingTAC created RMS/WMS joint task force to TAC created RMS/WMS joint task force to review current procedures and determine review current procedures and determine whether improvements can be made – objective whether improvements can be made – objective is to minimize or eliminate uplift exposureis to minimize or eliminate uplift exposureKick-off meeting scheduled on June 24Kick-off meeting scheduled on June 24 thth

Anticipate that any proposed PRRs would be Anticipate that any proposed PRRs would be presented to BOD late this year or 1presented to BOD late this year or 1stst quarter quarter next yearnext year