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Next Steps to Reduce the RTM Settlement TimelineCOPS Workshop

August 29, 2013

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Agenda

• Level Set - Workshop Objectives– Why are we here?

• Current State– Evolution of RTM Settlement timeline

• Stakeholder & ERCOT Input– TDSP Process– Lessons learned from 9 to 7– Concerns & Solutions

• Next Steps– What to report to TAC & Board?

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Workshop Objectives

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Objectives –

• Problem Statement– What problem are we trying to solve?– Increase in offer caps as of 6/1/2014 to $7000 and 6/1/2015 $9000– Why is reducing the timeline part of the solution?

• Capture Input from Stakeholders & ERCOT– Risks, Impacts, Challenges & Benefits– Lessons learned

• Discuss Options and Address Key Questions– At what point does the risk of generation data availability become a

“showstopper” or require a solution?– At what point do we anticipate transitioning from settlement on predominantly

TDSP-submitted usage data to predominantly ERCOT-estimated usage data? – At what point is an additional settlement iteration needed in order to mitigate

risk associated with waiting until Final Settlement to resolve data availability and accuracy issues?

– At what point do we anticipate introduction of credit risk that may outweigh credit benefit?

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Current State

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Evolution of ERCOT’s RTM Settlement Timeline

Period Statement Invoice

8/2000 –2/2002 OD+3 Issued Weekly, due in 5 BDs

3/2002 – 12/2005 OD+17 Issued Weekly, due in 5 BDs

1/2006 – 11/2011 OD+10 Issued Weekly, due in 5 BDs

12/2011 – 3/2013 OD+9 Issued Weekly, due in 5 BDs

Daily, OD+9, due in 2 BDs

4/2013 – 7/2013 OD+8 Daily, OD+8, due in 2 BDs

8/2013 to current OD+7 Daily, OD+7, due in 2 BDs

Under Discussion X < OD+7 Daily, OD+X, due in 2 BDs

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Cash Clearing Stats on the Current OD+7 Schedule

OD + "X"$ to ERCOT:

# of ODs$ to ERCOT:

% of ODs$ to Market:

# of ODs$ to Market:

% of ODs

9 147 40.27% 0 0.00%

10 52 14.25% 95 26.03%

11 138 37.81% 51 13.97%

12 24 6.58% 179 49.04%

13 4 1.10% 32 8.77%

14 0 0.00% 6 1.64%

15 0 0.00% 1 0.27%

16 0 0.00% 1 0.27%

Total 365 100% 365 100%

• On an OD+7 timeline, the vast majority of the Operating Days have cash cleared through ERCOT within 13 calendar days from the OD.

• For each day removed from the timeline, a corresponding day is removed from the cash clearing timeline

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Benchmarking with Other ISOs/RTOs

Statement T+3, T+12, T+55,…Cash Clears ~OD+12*

Statement T+7, T+59, T+180Cash Clears ~OD+12*

Statement T+7, T+47, T+77, T+137,…Cash Clears ~OD+22*

Statement T+4 (credit only), T+7, T+14, T+55, T+105Cash Clears ~OD+21*

Statement T+1, EOM+5, ~T+120, ~T+240

Cash Clears ~OD+12*

Statement T+4B, ~EOM+120, ~EOM+300Cash Clears ~OD+12*T+10B, T+20B

Cash Clears ~OD+43*

Statement T+7B, T+2MCash Clears ~OD+49*

Statement Wkly (T+3 to T+9) Cash Clears ~OD+11*

*Cash clearing timeline based on an example day of 6/6/2013. However, non-business days have the effect of creating a range of dates during which this activity can occur. Cash clearing is from OD to payment to the Market Participant.

The statement and cash clearing timelines added to this map are approximations for an “apples to apples” comparison

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Advanced Meter Settlement Impacts – July 2013

July 2013: At month end, settling 6.3M ESIIDs using Advanced Meter data.

July 2013: 97.0% of the load in ERCOT is settled with 15-min interval data (AMS, Competitive IDR, and NOIE IDR).

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ERCOT Wide Load Volumes by Meter Type – INITIAL Settlement – July 2013

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ESI ID Data Availability “Look-Back” Analysis – August 2013

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ESI ID Data Availability “Look-Back” Analysis – August 2013

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ESI ID Data Availability “Look-Back” Analysis – August 2013

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ESI ID Data Availability “Look-Back” Analysis – August 2013

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Next Steps

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Next Steps -

• Complete finals for August 2013 before finalizing recommendations?– By October 31 we will have final statements for all Initial days of August 2013 posted

& invoiced & cash cleared– Impact of moving data agg to day 6 will be known by each MP

• Homework– Outstanding questions or data needs– Draft NPRR for review at subsequent workshop?– Or clearly defined alternatives as options to TAC to get more direction

• Schedule another workshop with or in lieu of September COPS meeting– General update to TAC and the BOD in September– May delay if receive different direction from TAC/Board

• Stakeholder Process– Continue Weekly webex calls to gather feedback on OD+7 timeline