Description of NPRR418

1. PRS Response to the ERCOT Appeal of the Rejection of NPRR418, Reporting of Resource Forced Outages

2. Description of NPRR418 • NPRR418 was submitted by ERCOT and makes a change to the existing requirements concerning the entry of generation forced outages of less than 2 hours duration. • Existing protocol language in Section 3.1.4.6 • “Any Forced Outage that occurs in Real-Time must be entered into the Outage Scheduler if it is to remain an Outage for longer than two hours.” • This language equally applies to both generation and transmission outages • Proposed change in NPRR418 to Section 3.1.4.6(2) • “Any Forced Outage of a Transmission Facility that occurs in Real-Time must be entered into the Outage Scheduler if it is to remain an Outage for longer than two hours.” • Added Section 3.1.4.6(3) • “Any Forced Outage of a Resource that occurs in Real-Time must be entered into the Outage Scheduler as soon as practicable.”

3. Procedural History – needs one correction • On 10/5/11, NPRR418 and the associated Impact Analysis were posted. • On 10/19/11, NRG Texas comments were posted. • On 10/20/11, PRS considered NPRR418 and voted to reject. There were two opposing votes from the Municipal Market Segment and six abstentions from the Investor Owned Utility (IOU) (3), Cooperative (2), and Municipal Market Segments. All Market Segments were present for the vote. • On 10/20/11, participants noted that Real-Time Resource Status is currently telemetered to ERCOT and provided in the Current Operating Plan (COP) and that the added requirement for Forced Outages of more than two hours to be entered into the Outage Scheduler will introduce additional costs to Resource owners. ERCOT Staff countered that requiring Resources to enter Forced Outages that occur in Real-Time into the Outage Scheduler will provide additional operational and planning tools needed to manage the ERCOT System; result in accurate Seasonal Assessment of Resource Adequacy (SARA) forecasts; and reduce the number of RFIs that Market Participants are receiving from ERCOT.

4. Corrected Procedural History • On 10/5/11, NPRR418 and the associated Impact Analysis were posted. • On 10/19/11, NRG Texas comments were posted. • On 10/20/11, PRS considered NPRR418 and voted to reject. There were two opposing votes from the Municipal Market Segment and six abstentions from the Investor Owned Utility (IOU) (3), Cooperative (2), and Municipal Market Segments. All Market Segments were present for the vote. • On 10/20/11, participants noted that Real-Time Resource Status is currently telemetered to ERCOT and provided in the Current Operating Plan (COP) and that the added requirement for Forced Outages of less than two hours to be entered into the Outage Scheduler will introduce additional costs to Resource owners. ERCOT Staff countered that requiring Resources to enter Forced Outages that occur in Real-Time into the Outage Scheduler will provide additional operational and planning tools needed to manage the ERCOT System; result in accurate Seasonal Assessment of Resource Adequacy (SARA) forecasts; and reduce the number of RFIs that Market Participants are receiving from ERCOT.

5. PRS Reasons for Rejection • ERCOT statements: “Accurate Forced Outage reporting will contribute to a more reliable and efficient operation of the ERCOT System and more importantly provide an increased operational awareness for ERCOT”; “….[NPRR 418]improves the Real-Time situational awareness for ERCOT Operators.” • PRS Response: • The Outage reporting system is a planning tool, not an operational tool. Upon a change in a unit’s status, such as a unit trip, Resource Entities are already required to telemeter the unit’s status in Real-Time, and then update the Current Operating Plan (COP) within 60 minutes of the change in unit status (Reference paragraph (7) of Section 3.9, Current Operating Plan (COP)). • During routine operations, Real-Time telemetry, and to a lesser extent the COP, provide ERCOT operators the required information to reliably run the system. • And during emergency operations, such as February 2nd and 3rd of this year, even the COPs are not what operators use for situational awareness.  During emergency operations, operators default to continuously updated telemetry data and Real-Time communications with QSEs. An operator trying to determine current operational status is going to look at automated live feeds of info, not at stale data that is dependent on human input, such as the COP, and they certainly are not going to depend on the data in the Outage Scheduler. Please note that the reasons for rejection described on this slide are primarily derived from comments submitted on NPRR418 by NRG Texas dated October 19, 2011. The contents of this slide may not be indicative of the opinions of every PRS member.

6. PRS Reasons for Rejection • ERCOT statements: “Accurate Forced Outage reporting will contribute to a more reliable and efficient operation of the ERCOT System and more importantly provide an increased operational awareness for ERCOT”; “….[NPRR 418]improves the Real-Time situational awareness for ERCOT Operators.”.” • PRS Response: • The COP and unit telemetry provide the needed operational information. If timely, updated COPs and continuously updated telemetry were not enough information to provide “operational awareness,” then ERCOT Operations personnel would have raised the issue long before now. • …the Texas RE’s report titled “February 2, 2011 EEA-3 Event Public Report,”…has no mention anywhere of real-time “operational awareness” as being a problem during the February 2nd event. Please note that the reasons for rejection described on this slide are primarily derived from comments submitted on NPRR418 by NRG Texas dated October 19, 2011. The contents of this slide may not be indicative of the opinions of every PRS member.

7. PRS Reasons for Rejection • ERCOT statement: “[NPRR418 will] Reduce the number of RFIs that are sent out to Market Participants after significant ERCOT System events such as the February 2011 weather event.”.” • PRS Response: • “…. [it is] impossible for anyone to predict the nature of questioning that may be included in a set of RFIs. The sponsor of the NPRR is using the RFIs that resulted from a one-time, unprecedented cold weather event (February 2nd) as a basis for the untenable conclusion that the NPRR will result in a reduction of RFIs for some future, unknown, completely unpredictable event. “ Please note that the reasons for rejection described on this slide are primarily derived from comments submitted on NPRR418 by NRG Texas dated October 19, 2011. The contents of this slide may not be indicative of the opinions of every PRS member.

8. Summary • NPRR418 increases costs to generation owners without a proven benefit to the market. • The outage scheduler is not an operational tool, it is a planning tool. Do outages of less than 2 hours in duration really impact planning? • All of the data needed for “operational awareness” are included in the COP and real-time telemetry. And there is no proof that operational awareness, or lack thereof, was a problem on February 2, 2011. • If operators are depending on administrative entries into the outage scheduler for operational awareness, then do we need to reevaluate how they are managing the system in real-time? Can they operate a real-time system if they have to wait on administrative entries by market participants into a “scheduling” system?   • It is impossible to predict the nature and contents of any future RFIs. Therefore, a statement that NPRR418 will result in a reduction of RFIs in the future is purely speculative. • The outage scheduling provisions were only changed for generation owners, not transmission owners. Outages to both generation and transmission can have negative impacts on reliability, yet the outage reporting requirements of NPRR418 are not the same. The existing “in excess of 2 hours duration” outage reporting requirement should remain for both generation and transmission owners.