Market Trials DAM/RUC/SASM

Market TrialsDAM/RUC/SASM Weekly Update August 20, 2010 http://nodal.ercot.com 1

Antitrust Admonition ANTITRUST ADMONITION ERCOT strictly prohibits Market Participants and their employees who are participating in ERCOT activities from using their participation in ERCOT activities as a forum for engaging in practices or communications that violate the antitrust laws. The ERCOT Board has approved guidelines for members of ERCOT Committees, Subcommittees and Working Groups to be reviewed and followed by each Market Participant attending ERCOT meetings. If you have not received a copy of these Guidelines, copies are available at the Client Relations desk. Please remember your ongoing obligation to comply with all applicable laws, including the antitrust laws. DISCLAIMER All presentations and materials submitted by Market Participants or any other Entity to ERCOT staff for this meeting are received and posted with the acknowledgement that the information will be considered public in accordance with the ERCOT Websites Content Management Operating Procedure. http://nodal.ercot.com 2

Agenda • DAM/ RUC/SASM summary • QSE Activities for Next Week • General Reminders/Updates • Environment Report • Outages • Known Issues • Special Topic • Question and Answers / General Discussion • Appendix ERCOT asks that Market Participants log into the WebEx session using their company name and then their name. This will allow ERCOT to take roll-call offline. http://nodal.ercot.com 3

Market Trials 2010 Roadmap http://nodal.ercot.com 4

Submission Overview for Friday August 13 DAM submission overview • 181 QSEs participated for Op Day 8/14 • Energy Bids in the range of 38,712 to 60,725 MW per hour • Cleared 33,990 to 52,566 MW energy per hr • Cleared 11,662 to 15,675 PTP bids per hr • Four major Load Zone prices ranged from $25.05 to $108.90 • Energy cleared 82.3% to 103.6% of the forecasted load. http://nodal.ercot.com 5

Submission Overview for Saturday August 14 DAM submission overview • 157 QSEs participated for Op Day 8/15 • Energy Bids in the range of 46,250 to 91,116 MW per hour • Cleared 39,436 to 57,015 MW energy per hr • Cleared 10,526 to 13,191 PTP bids per hr • Four major Load Zone prices ranged from $34.74 to $500.00 • Energy cleared 90.5% to 126.5% of the forecasted load. http://nodal.ercot.com 6

Submission Overview for Sunday August 15 DAM submission overview • 161 QSEs participated for Op Day 8/16 • Energy Bids in the range of 48,098 to 96,924 MW per hour • Cleared 35,867 to 50,007 MW energy per hr • Cleared 11,248 to 14,380 PTP bids per hr • Four major Load Zone prices ranged from $35.67 to $500.00 • Energy cleared 73.8% to 101.9% of the forecasted load. http://nodal.ercot.com 7

Submission Overview for Monday August 16 DAM submission overview • 173 QSEs participated for Op Day 8/17 • Energy Bids in the range of 28,929 to 47,827 MW per hour • Cleared 22,652 to 33,214 MW energy per hr • Cleared 10,757 to 14,567 PTP bids per hr • Four major Load Zone prices ranged from $27.79 to $500.00 • Energy cleared 45.8% to 70.2% of the forecasted load. http://nodal.ercot.com 8

Submission Overview for Tuesday August 17 Submission overview • 181 QSEs participated for Op Day 8/18 • Energy Bids in the range of 55,720 to 98,537 MW per hour • Cleared 40,447 to 56,239 MW energy per hr • Cleared 12,623 to 15,908 PTP bids per hr • Four major Load Zone prices ranged from $32.68 to $490.00. • Energy cleared 83.9% to 124.3% of the forecasted load. http://nodal.ercot.com 9

Submission Overview for Wednesday August 18 Submission overview • 202 QSEs participated for Op Day 8/19 • Energy Bids in the range of 55,935 to 98,453 MW per hour • Cleared 36,712 to 56,308 MW energy per hr • Cleared 12,889 to 15,944 PTP bids per hr • Four major Load Zone prices ranged from $34.44 to $500.00. • Energy cleared 72.7% to 123.0% of the forecasted load. http://nodal.ercot.com 10

Submission Overview for Thursday August 19 Submission overview • 197 QSEs participated for Op Day 8/20 • Energy Bids in the range of 62,586 to 110,136 MW per hour • Cleared 49,089 to 61,574 MW energy per hr • Cleared 13,792 to 16,493 PTP bids per hr • Four major Load Zone prices ranged from $35.15 to $500.00. • Energy cleared 94.7% to 137.5% of the forecasted load. • HE 0700 excess regup from previous scenario. • Greater participation http://nodal.ercot.com 11

RUC Execution Overview for this week DRUC overview for the week: http://nodal.ercot.com 12

RUC Execution Overview for this week HRUC overview for the week: http://nodal.ercot.com 13

Special Execution of DAM 8/20 and 8/21 Op Days are 8/21 and 8/22 – Will focus on a new “stress” test scenario DAM executing on 8/20 • Operational Scenario: • Market Participant data will be overridden to generate a DAM execution that is exclusive of virtual bids/offers, PTP Obligation bids and CRR offers in a constrained solution. • Creating a base case for participant review • ERCOT may increase credit directly in MMS to enable successful execution of this test. • ACL transfer on Monday will reset credit back to submitted amounts DAM executing on 8/21 • Operational Scenario: • Market Participant data will be overridden to generate a DAM execution that is exclusive of virtual bids/offers, PTP Obligation bids and CRR offers in an unconstrained solution. • Creating a base case for participant review • ERCOT may increase credit directly in MMS to enable successful execution of this test. • ACL transfer on Monday will reset credit back to submitted amounts http://nodal.ercot.com 14

Next Week’s Activities Next week – Op Days are 8/24 – 8/28 DAM executing on 8/23 – 8/27 • No guardrails - Bids/offers should be reasonable • COPs should reflect Zonal Resource Plan prior to DRUC run. We will delay the DRUC run if participants have not updated COPs to be consistent with the Zonal Resource plan. • Operational Scenarios: • RUC Simulation http://nodal.ercot.com 15

Next Week’s Activities DRUC executing after DAM WRUC, HRUC and SASM executing on 8/23-8/27 • HRUC and SASM • WRUC executing on Monday and Wednesday • HRUC will be executed at 1 pm (target Operating Hours will be the balance of the Op Day) • May be run for additional, non-supported hours • SASM will be opened for various training scenarios http://nodal.ercot.com 16

Week of Activities 8/30 – 9/3 Next week – Op Days are 8/31 – 9/4 DAM executing on 8/30 – 9/3 • No guardrails - Bids/offers should be reasonable • COPs should reflect Zonal Resource Plan prior to DRUC run. We will delay the DRUC run if participants have not updated COPs to be consistent with the Zonal Resource plan. • Operational Scenarios: • DAM Fail http://nodal.ercot.com 17

Week of Activities 8/30 – 9/3 DRUC executing after DAM WRUC, HRUC and SASM executing on 8/30-9/3 • HRUC and SASM • WRUC executing on Monday and Wednesday • HRUC will be executed at 1 pm (target Operating Hours will be the balance of the Op Day) • May be run for additional, non-supported hours • SASM will be opened for various training scenarios http://nodal.ercot.com 18

August Scenarios Scenarios to run in August • VDI Commitments and VDI RUC Cancel • Rescheduled to align with settlements integration • De-commitments • Requests MarketTrials@ercot.com • RUC Simulation • ERCOT open to working with companies to align RUC instructions with zonal resource commitments • Requests MarketTrials@ercot.com • Additional Scenarios • Stress test • No DAM, procure AS through SASM http://nodal.ercot.com 19

General Reminders/Updates • Network Model Update • An updated settlement points and MP short name list was posted for the 8/18 load at http://nodal.ercot.com/readiness/markettrials/index.html • Next scheduled load will be installed 8/. • Reminder regarding External Interfaces Specification v1.19N • Posted at http://nodal.ercot.com/readiness/sandbox/index.html • Delivered 7/22 • Next scheduled migration for External Interfaces Specification v1.19O today. • Document will be posted by the end of business today. • ERCOT will be continuing to run WRUC • Please be aware that WRUC requires valid COP data seven days out in order to have a good solution during the study period • ERCOT will continue to announce on the Market Call the operating days for the next week • ERCOT posted the contingency lists for DSV20 and DSV21 • http://nodal.ercot.com/readiness/markettrials/index.html • Participants can now update their COPs for two weeks out. http://nodal.ercot.com 20

General Reminders/Updates • DAM Deep Dive Conf Call being conducted 2x/week • Interested parties and Nodal PMs were invited based on Deep Dive meetings earlier in the month • Issues being tracked on spreadsheet (posted with this presentation) • Focus on: • Addressing specific data issues (eg, constraints, SPS/RAP, Contingencies) • Detailed questions on certain prices/solution • Testing DAM solution (stress testing) • Participants are MP SMEs focused on details of DAM solution http://nodal.ercot.com 21

Day-to-day operations summary: Planned / Unplanned Outages of Market Trials • Planned Outages • 08/20/2010 12:00 P.M. – 08/20/2010 6:00 P.M. • Application patch deployments are planned in the Nodal production environment and will intermittently affect services rendered by the following systems: • EMS • EWS ( Web services) • Unplanned Outages • 08/13/2010 09:00 A.M. – 08/13/2010 11:00 A.M. • A Hardware outage on one of our AIX frames in the Austin datacenter forced an emergency site failover of the Nodal production systems over to the Taylor center. ERCOT’s infrastructure team, along with IBM, is investigating the cause of the failure. The following application services were affected as a result of this outage. • MMS • EWS • MM-UI • 08/16/2010 8:00 A.M. – 08/16/2010 09:30 A.M. • Users experienced issues with downloading reports via URLs provided by the EWS Get Reports service. An incorrect application configuration was identified as the root cause of the issue. . http://nodal.ercot.com 22

Environment Report-Known Issues Full DAM/RUC/SASM known issues list will post every Friday night at http://nodal.ercot.com/readiness/markettrials/dam/index.html New DAM/RUC/SASM known issues • None http://nodal.ercot.com 23

Special Topics Adjustment of ACL on Non-Business days • On Non-Business days, MMS reduces the latest ACL by the following each day until a new ACL is received from credit. • Energy-only offers • ACL is reduced by the product of the cleared quantity of the offer times the 95th percentile of the hourly difference of the Real-Time Settlement Point Price and Day-Ahead Settlement Point Price over the previous 30 days for the hour. • Energy bids • ACL is reduced by the product of the cleared bid quantity multiplied by the cleared bid price. • Three part energy offers • ACL is reduced by the product of the cleared quantity of the offer times the 95th percentile of the hourly difference of the Real-Time Settlement Point Price and Day-Ahead Settlement Point Price over the previous 30 days for the hour. • PTP Obligation bids • For each cleared PTP Obligation Bid, the ACL is reduced by the cleared bid quantity multiplied by the sum of the cleared bid price, if positive, plus the 95th percentile of the hourly positive price difference between the source Real-Time Settlement Point Price minus the sink Real-Time Settlement Point Price over the previous 30 days for the hour. • Procured AS • For procured Ancillary Services, the ACL is reduced by the product of the cleared quantity of Ancillary Service not self-arranged times the hourly MCPC for that Ancillary Service for that hour. http://nodal.ercot.com 24

Special Topics HRUC next hour commitments • It is possible for HRUC to commit a unit for the next operating hour. • When this occurs it is not possible to update the COP to “ONRUC” for that unit for that hour. • QSE’s need to go ahead and update subsequent hour COPs for all units that are committed. • The next HRUC run will not consider the first hour and therefore there is no impact to not updating the COP for the first hour. • i.e. HRUC runs at 0906 and awards a unit commitments for HE 11-HE 18 at 0941. The QSE will not be able to update the COP for HE 11, but should update the status of the unit to “ONRUC” for HE 12 – HE18. http://nodal.ercot.com 25

Q&A Q&A / Open Forum http://nodal.ercot.com 26

Appendix Appendix • AS Info for the week • Pre- and post-DAM reports • Special Topics http://nodal.ercot.com 27

Submission Overview for August 13 http://nodal.ercot.com 28

Other Note: • All transactions will be supported. • Trade submission and confirmation (Energy, Capacity and AS Trades) may be exercised at this time. • DAM notifications will be active. • Phase 2 Validation process will be active and supported. • QSE transactions that do not follow the guidelines are subject to cancellation at ERCOT’s discretion. • ERCOT may run DAM on non-supported days. No QSE participation is requested, and ERCOT staff will not be available to answer questions regarding the outputs of these non-supported processes. • CRR information from the market trials auction will be integrated into the market system. CRR Offers (by NOIEs) must contain CRR IDs from this auction in order to be valid. http://nodal.ercot.com 35

Report Postings Posted by 6 am: • Ancillary Services (AS) Plan • Load Ratio Shares (these will be static based on Zonal production data as of October 16, 2009) * • AS Obligations * • Wind Generation Resource Power Potential (WGRPP) forecast * and Aggregated WGRPP forecast • List of all Settlement Points and the mapping to Electrical Buses • Load forecasts for ERCOT system, Weather Zones and Load Zones • Load forecast distribution factors • Distribution Loss Factors and forecasted Transmission Loss Factors • Weather assumptions * Denotes MIS Certified reports http://nodal.ercot.com 36

Report Postings Posted after each DAM: • Awards (AS Offers, Energy Offers, DAM Energy-Only Offers, DAM Energy Bids, CRR Offers, and PTP Obligation Bids) * • DAM Clearing Price for Ancillary Services (MCPC) • Day-Ahead hourly Settlement Point Prices (SPPs) • Day-Ahead hourly Locational Marginal Prices (LMPs) • Shadow Prices • Quantity of AS Offers • Aggregated AS Offer Curve • Total quantity of energy (in MWh) bought and sold in DAM See DAM Handbook for a list of all DAM/RUC/SASM reports available starting in Phase 4.0 - http://nodal.ercot.com/readiness/markettrials/dam/index.html. See MIS Handbook for a comprehensive list of reports available - http://nodal.ercot.com/readiness/markettrials/mis/index.html. * Denotes MIS Certified reports http://nodal.ercot.com 37

Special Topics Phase 2 Validation reports and process • Phase 2 validation re-evaluates all submitted transactions at 7 am in the day-ahead with updated information, such as AS Obligation, CRR ownership, credit limits, etc. • If there is a validation error, ERCOT will cancel the transaction • We send a notification that a Phase 2 report is available for a particular transactions type, and notification containing the cancellation for the transaction. • You can query for the Phase 2 report via web service or on the Reports page of the Market Manager in order to view the reason for the cancellation. • Correct and resubmit prior to 10 am. • Note that submissions are locked out during the Phase 2 process, which is currently taking about 10 minutes to complete. http://nodal.ercot.com 38

Special Topics Day-Ahead Self Commitment DAM clearing engine treats your TPO differently if you submit Startup and Minimum Energy (SU/ME) costs as $0 vs. NULL • If you submit with SU/ME as $0, DAM engine treats this as a normal offer where the QSE is not requesting SU/ME to be covered. HSL/LSL constraints will be respected. Also, if you are selected for an online Ancillary Service, you will also be awarded at least LSL on your offer curve. • If you submit with SU/ME as NULL, DAM engine is signaled to ignore the HSL/LSL constraints for the resource. In this scenario, the offer curve submitted will start at 0 MW and go to the max MW quantity desired – again, DAM will ignore LSL/HSL constraints. If the offer curve submitted doesn’t start at 0 MW, it will be extended to 0 MW by DAM. If the resource is selected for Ancillary Services, no requirement to also award TPO at LSL (since no LSL constraint honored in this case). http://nodal.ercot.com 39

Special Topics Day-Ahead Self Commitment The purpose of the NULL: It allows a QSE to use part of a Resource to serve its own load, and then offer in the rest to the DAM and enable the offer to be co-optimized with its AS Offer. Example: A Resource has 100 MW LSL and 400 MW HSL, and the QSE has already committed 300 MW of the Resource through some other mechanism. The QSE wishes to offer the remaining 100 MW, which would otherwise be ignored due to the 100 MW LSL. Then going into real-time, so QSEs will need to update their TPO to cover the full capacity of the resource, from LSL to HSL, rather than from 0 MW. TPOs for real-time should always cover the entire capacity of the resource to avoid the proxy curve creation. To do the TPO update if the resource is awarded in the DAM, the QSE must provide a reason code, which is DSCM. This functionality came about due to TPTF subgroup on the issue. It has not yet been added to the protocols but will during our protocol traceability/cleanup effort. http://nodal.ercot.com 40

Special Topics Bid/Offer efficiencies • ERCOT has identified efficiencies in Bid/Offers submission with regard to the format of submission • This applies to all transaction that use a Bid ID or an Offer ID (Energy Only Offers, Energy Only Bids, PTP Obligation Bids, and CRR Offers) • Preference is for QSEs to submit the same Bid/Offer ID for each hour in the submission, versus submitting a different Bid/Offer ID for every hour. The market system treats the submission the exact same way, regardless of which format is used • Using the preferred format will optimize DAM system performance • For xml examples detailing this issue, please view a document that will be posted along with this presentation on the calendar page at http://www.ercot.com/calendar/2010/04/20100409-MT • This was discussed at NATF 4/6, we send an email to the nodal technical contacts that we have on file for all QSEs, and we will add it to the External Interfaces Specification http://nodal.ercot.com 41

Special Topics JOUs and COP consistencies • In DAM, if the different owners of the jointly-owned unit have submitted conflicting COP statuses for the current day, online statuses will overwrite offline statuses when DAM is determining the initial condition of the unit (i.e., is the unit online or offline at the start of the next operating day). • In RUC, if the different owners have conflicting COP statuses for the next operating day: • If any owner has OUT status for any hour then the unit is considered OUT. • If all owners have submitted a COP, and at least one of them has an online status in a particular hour then the resource status for the unit is online (unless any owner has OUT) http://nodal.ercot.com 42

FAQ • EWS Notification Delivery & Network Firewall Configuration • EWS Notification deliveries are currently originating from the following ERCOT servers listed below. To meet system demand and scalability requirements, we will be adding additional servers to this mix. To prevent any service disruptions, as a result of addition of new servers, we recommend your network firewall rules be configured to allow traffic based on address range as opposed limiting them to specific IPs. • Current IPs in Play: • Recommended IP Ranges: http://nodal.ercot.com 43

Supplemental Materials http://nodal.ercot.com 44 Slide 44

Special Topic – Jointly Owned Units JOUs are modeled as a single physical unit • DAM uses the separate logical resources when evaluating energy and ancillary services, but Network Security Monitoring (NSM), which is a sub-process of DAM, must consider the physical unit. • http://nodal.ercot.com/docs/pd/ida/wp/sgrm/IDA041_White_Paper_for_Split_Generation_Resource_Modeling_v1.doc JOUs offering into DAM • Owners offer their share into the DAM separately, but the physical unit must be committed together • All owners have to offer in the unit (energy or AS) to the DAM or else it cannot be committed to any owner (one exception for a self-commitment scenario described below). DAM must make a commitment decision about the physical unit, which it cannot do without offers from all the owners. • Self-commitment examples (assume three owners) – remember that self-committing by submitting Startup and Minimum Energy Costs as ‘NULL’ (leaving them out of the submission altogether rather than submitting zeroes) signals the DAM software that it doesn’t need to make a commitment decision and to ignore resource constraints. • If two owners self-commit (startup/minimum energy costs are NULL) and the other submits nothing, the unit can be awarded without making a commitment decision. • If one owner self-commits, another submits a TPO with startup/minimum energy costs, and the third submits nothing, the unit cannot be awarded • If one owner self-commits, and the other two submit TPOs with startup/minimum energy costs, the unit can be awarded after making a commitment decision based on the resource constraints and the submitted startup/minimum energy costs. • Note that if self-committed, do not submit an OFFNS offer. That offer negates the self-commitment and the DAM software will not consider it as a self-committed resource (since the QSE is requesting ERCOT to evaluate the unit offline) http://nodal.ercot.com 45

Market Trials DAM/RUC/SASM