2013 Annual Constraint Competitiveness Test (CCT) Study Results – Update for 8/27/12 CMWG

1. 2013 Annual Constraint Competitiveness Test (CCT) Study Results – Update for 8/27/12 CMWG ERCOT, Market Analysis ERCOT Public

2. Study Assumptions • Models used for analysis • CRR Auction – August 2013 case (dated 7/23/2012) • Total load of approximately 74,000 MW • CRR Auction – April 2013 case (dated 8/17/2012) • Total load of approximately 36,000 MW • Total load and distribution of load taken from SSWG cases (Spring Off-peak, Summer On-peak) • Entire topology considered, i.e. not outages on lines and transformers • Constraints that were analyzed: • 741 SCED historical constraints (Nodal Go-Live up to 8/17/12) • 332 CSCs/CREs • Some constraints are in both lists • All constraints were analyzed in both directions ERCOT Public

3. Study Assumptions • Previous studies were updated to reflect the latest decision making entity list (updated as of 8/17/12) • This affected mothballed Resources and Resources for which the decision making entity may have changed • Only the decision making entity was considered for the studies, not the Affiliates • For WGRs, the full capability was considered on the export side of the constraint and 0 MW was considered on the import side • The Resource can moved down to resolve the constraint, but cannot necessarily be moved up • Similarly for DC Ties, the full capability was considered on the export side of the constraint and 0 MW was considered on the import side ERCOT Public

4. CCT Logic Options Previously Discussed – Option 1 • Option 1 logic: • A constraint is “Competitive” if • Constraint can not be overloaded under worst case scenario OR • Combination of • There are resources with absolute Shift Factor >=2 % • AND positive-SF ECI of squared SF with min(0.02, 1/3) threshold <= 2500 • AND negative-SF ECI of squared SF with min(0.02, 1/3) threshold <= 2000 • AND no pivotal player exists • Otherwise, it is “Non-Competitive” • The results using option 1 logic can be found for each constraint in column AJ of the spreadsheet ERCOT Public

5. CCT Logic Options Previously Discussed – Option 2 • Option 2 logic: • A constraint is “Competitive” if • Combination of • There are resources with absolute Shift Factor >=2 % • AND positive-SF ECI of squared SF with min(0.02, 1/3) threshold <= 2500 • AND negative-SF ECI of squared SF with min(0.02, 1/3) threshold <= 2000 • AND no pivotal player exists • Otherwise, it is “Non-Competitive” • The results using option 2 logic can be found for each constraint in column AO of the spreadsheet ERCOT Public

6. CCT Logic Options Previously Discussed – Option 3 • Option 3 logic: • A constraint is “Competitive” if • Constraint can be overloaded under worst case scenario AND • Combination of • There are resources with absolute Shift Factor >=2 % • AND positive-SF ECI of squared SF with min(0.02, 1/3) threshold <= 2500 • AND negative-SF ECI of squared SF with min(0.02, 1/3) threshold <= 2000 • AND no pivotal player exists • Otherwise, it is “Non-Competitive” • The results using option 3 logic can be found for each constraint in column AQ of the spreadsheet ERCOT Public

7. Results – Summer Peak Month (August 2013) • Option 3 seems to be most aligned with Protocol 3.19(1) and grey-boxed 3.19.3(2) • Please note that the same constraint may be in both the “SCED Historical” and “CSC/CRE” constraints list ERCOT Public

8. Results – Off-Peak Month (April 2013) • Option 3 seems to be most aligned with Protocol 3.19(1) and grey-boxed 3.19.3(2) • Please note that the same constraint may be in both the “SCED Historical” and “CSC/CRE” constraints list ERCOT Public

9. Results – Constraints Competitive in Both Study Cases • The currently grey-boxed Protocols have the following language: • “3.19.3 Long-Term Constraint Competitiveness Test (1) The Long-Term CCT uses the monthly peak Load case for all calculations. The monthly peak case must include planned transmission and Resource Outages for the month. (2) A constraint is classified as competitive for the year if it is competitive with respect to all monthly cases for the year. A constraint is competitive for a monthly case if the constraint can be overloaded in the monthly case and it doesn’t meet any of the following conditions:…” • For the purposes of this study, this would seem to mean that a constraint would only be competitive if it were shown to be competitive in both the April and August cases ERCOT Public

10. Results – Constraints Competitive in Both Study Cases • Applying this logic for the 3 different options, the total number of competitive constraints is: • Option 1: 1311 competitive constraints • Option 2: 232 competitive constraints • Option 3: 44 competitive constraints • A full list of the competitive constraints for each option can be found in the spreadsheet on the corresponding tab ERCOT Public

11. Timeline for Approving CCT List • According to 3.19(6): “TAC shall approve the Competitive Constraints one month prior to the annual Congestion Revenue Right (CRR) Auction. …” • Some key dates the for upcoming annual CRR Auction: • September 25, 2012 – ERCOT shall post the CRR Network Model for the 2013 (Year 1) Annual Auction • October 3, 2012 – ERCOT shall post the 2013 (Year 1) Auction Notice and Credit Submission Window Opens • October 25, 2012 – CRR Auction Bid Window Closes for the 2013 (Year 1) Annual Auction • October 26, 2012 – ERCOT shall post the CRR Network Model for the 2014 (Year 2) Annual Auction • November 5, 2012 – ERCOT shall post the 2014 (Year 2) Auction Notice and Credit Submission Window Opens • November 12, 2012 – CRR Auction Results posted for 2013 (Year 1) (will post earlier if completed and results verified) • November 26, 2012 – CRR Auction Credit Lock Date for 2014 (Year 2) Annual Auction • November 29, 2012 – CRR Auction Bid Window Closes for the 2014 (Year 2) Annual Auction • December 17, 2012 – CRR Auction Results posted for 2014 (Year 2) (will post earlier if completed and results verified) ERCOT Public