WMS Report TO TAC

1. WMS Report TO TAC January 2007

2. In Brief • Two Working Group Reports • Two Task Force Reports • One PRR proposal (PRR701) • Protocol Discussion by the IMM • Retired two Task Forces and created one • Discussed Emergency Interruptible load

3. Working Group ReportsCMWG • Third Quarter report on congestion • Review of CSC flow control by operations • Update on Competitive Constraint determination due in January

4. Working Group ReportsDSWG • Progress report on goals • Status of the PUC work on Demand Side • Issues of LaaR participation in RRS

5. PRR 701Enabling of Stranded Capacity During Alerts • Concept surfaced during EILP discussions. • Not responsive to TAC & PUC request • WMS supported it on its own merit • Comments filed in support • In the PRS process now

6. ERCOT Staff Presentations IMM lead discussion on potential market confussion regarding sections 6.4.2(5) RPRS and 6.5.10(10) OOMC

7. Task Force Reports • Emergency Interruptible Load Task Force (EILTF)

8. EILTF Background • Sept. 15 – ERCOT proposes Emergency Interruptible Load program • Oct. 6 – TAC charges WMS to develop EIL PRR • Oct. 18 – WMS creates EILTF to develop EIL product as a new Ancillary Service • Oct. 31-Nov. 27 – EILTF or its subgroups (app. 40 participants) meet 10 times to develop draft PRRs creating EILS

9. WMS Discussion and Action • EILTF presented 4 draft PRRs • Options A and B – capacity models • Options C and D – energy models • Other issues discussed • Tradeoff between low cost and effective participation • Tradeoff between high participation and ease of administration • Need for EILS vs. other approaches

10. WMS Discussion and Action • Motion to focus on energy-only design • Motion carried – 75.6% in favor • Motion to file Option D • Motion carried – 86.3% in favor • WMS directed EILTF to file PRR 703, but did not endorse PRR 703.

11. PRR 703 • EILS created as new EECP Step 3 • Loads volunteer to interrupt during emergency conditions for an offer price • EILS deployed after LaaRs but before firm load shedding • Last EILS offer cleared sets MCPE for both loads and resources • EILS offers subject to system HCAP • EILS dispatched via hotline call to QSEs

12. PRR 703 • Qualification / Performance • Must be able to communicate one-minute usage data to ERCOT • Must be able to reduce load within 10 minutes to 95% of the offered amount struck by ERCOT • Must have IDR meters • Offers in 1MW increments only

13. PRR 703 • Qualification / Performance • Must be able to communicate one-minute usage data to ERCOT • Must be able to reduce load within 10 minutes to 95% of the offered amount struck by ERCOT • Must have IDR meters • Offers in 1MW increments only

14. PRR 703 • Implementation • EILTF envisions largely manual implementation process to accommodate ERCOT’s requested April 1 effective date • EILS stack can be composed on spreadsheet • MCPE can be manually set following EILS deployment • EILS deployment is by phone call

15. Other PRRs • PRR 702 filed by supporters of capacity-model design developed in EILTF but rejected by WMS • ERCOT PRR to be filed soon • ERCOT expressed concern whether stakeholders will approve either EILS option • ERCOT expressed concern whether either EILS option can be implemented by April 1.

16. ERCOT EILS PRR • EILS procured by ERCOT in 4-month increments (2-month initial period) • Provides capacity payment • Paid as bid, no clearing price • Propose cap of $X/yr for total EILS cost • Some load flexibility to schedule unavailability

17. Jan. 18 PRS Preview • PRR 701 • Alternative/supplement to EILS? • PRR 702 • Capacity model • PRR 703 • WMS-endorsed energy only model • ERCOT PRR • Bilateral contract capacity payment model