TAC Report to the ERCOT Board

1. TAC Report to the ERCOT Board March 18, 2003

2. Summary • OGRRs • Generation Adequacy Report • PUCT filing by WMS • PRRs 374, 380, 388 and 395 - vote • Recommendation of A/S bid limit related to PRR 342 - vote • Protocol/Profiling Guides waiver request - vote • Recommendation on resumption of True-Up Settlements for 2002 - vote

3. Operating Guides • TAC approved OGRRs - 122, 124, 125, and 126 • All related to keeping Operating Guides consistent with Protocols

4. Generation Adequacy • TAC approved a report from the Joint Generation Adequacy TF, including three recommendations. • Definition / description of ERCOT reserve margin calculation • Assumptions and data inputs for next ERCOT generation reserve margin study - to be completed in early 2004 • Use traditional LOLE methodology for next study, with sensitivity analysis around costs of reserve margin target. Explore costs of utilizing more rigorous market-based methodology.

5. WMS input to Market Design • February 20th, WMS was requested by Comm. Perlman to provide feedback by March 10th on a proposed roadmap for evolving ERCOT’s market model. • WMS met Feb. 26th and March 7th to develop a response, which was filed in #26376.

6. PRR 374 – RMR Text Changes • Conforms RMR text to prior changes in Day-Ahead timeline • Clarifies use of RMR energy • Corrects typos • No impact to ERCOT computer systems • Effective April 1, 2003

7. PRR 380 - Black Start Service • Approved Urgent status to meet RFP release date for 2004 Black Start Resources • Clarifies Black Start requirements • Recommends Black Start TF address issues raised in comments • No impact to ERCOT computer systems • Effective April 1, 2003

8. PRR 388 - BULs Capacity Payment • Approved Urgent status because project is “in flight” • Clarifies allocation methodology for BUL activity • Facilitates ongoing system development; no existing computer system impact • Effective April 1, 2003

9. PRR 395 - Declare Backup Plans Protected Information • Approved Urgent status due to the sensitivity of information and the deadline for its submittal • Adds Protocol required backup plans from QSEs and Transmission Operators to the list of Protected Information. • No impact to ERCOT computer systems • Effective upon Board approval

10. PRR 342 follow up • PRR 342 was approved with a placeholder for the amount that a bid for a ‘lower quality’ Ancillary Service may exceed the bid for a ‘higher quality’ Ancillary Service, when those bids are for the same capacity • TAC recommends the Board set the placeholder value equal to 20%.

11. Direct Load Control Beta test • Waivers are required to implement a Direct Load Control pilot program this summer • From Protocol 18.2.9, requiring 150 day notice prior to implementing a Load Profile change. • From Load Profiling Guides 12.4, prohibiting profile changes during June - September.

12. TAC recommendation Protocols Section 18.2.9 “Adjustment and Changes to Load Profile Development” and Load Profiling Guides Section 12.4 “Process Timing for Requesting Changes” be waived to implement the Beta Test Proposal and restrictions as presented by ERCOT and that the TAC directs Green Mountain to submit a PRR to that effect on an urgent timeline to the PRS for TAC action at its April meeting. 

13. ERCOT Staff suggestion The Board agrees that Protocols Section 18.2.9 “Adjustment and Changes to Load Profile Development” and Load Profiling Guides Section 12.4 “Process Timing for Requesting Changes” should be revised to allow implementation ofa limited “Beta Test”of Direct Load Control Program in the summer of 2003 with restrictions as required by ERCOT Staff. THE BOARD REQUESTS THAT Green Mountain submit a PRR to effect required Protocols revisions to allow for the Beta Test on an urgent timeline to the PRS for TAC action at its April meeting and for Board action at the April Board meeting.  Green Mountain is further directed to initiate and obtain approval for revisions to the Load Profiling Guides to allow for the Beta Test prior to June 1, 2003.

14. True Up Restart Recommendation • True-up settlements for 2002 shall begin 60 days after the initial release of the SCR 727 data. [March 13 --> May 12] • MPs will have up to 30 days prior to the scheduled settlement date for a particular operating day to identify variances in the data extract pursuant to procedures to be developed by ERCOT. Should a MP raise an issue in a true-up dispute, ERCOT shall consider the MP’s compliance with this resolution in evaluating that dispute. • ERCOT shall present a resolution for consideration by the RMS concerning the process for variance resolution. This resolution shall be processed in a timeframe such that a resolution concerning the variance resolution process will be presented to the Board at its March 2003 meeting. The process shall identify specific responsibilities and timelines for variance resolution. ERCOT shall coordinate and report compliance with the variance resolution process.

15. As a follow-up to the previous motion above, the RMS moves to suspend any further effort by all MPs for Market Synchronization Priority 5, DART and QRE until the ERCOT Board approves the 2002 True-Up Restart Criteria and furthermore moves to cease any further efforts on Market Synchronization and QRE upon Board approval of 2002 True-Up Restart Criteria. MPs are obligated to complete Priorities 1, 2, 4(1) no later than 30 days prior to the scheduled resettlement of the effected trade date . This motion is intended to eliminate the possibility of a duplicate work effort. It was noted that issues can still be addressed on a day to day basis through FasTrak.