NPRR 571 ERS Weather Sensitive Loads Requirements

1. NPRR 571 ERS Weather Sensitive Loads Requirements Carl Raish, ERCOT QSE Managers Working Group November 5, 2013

2. Purpose for Revision Request • Primary purpose is to establish ERS rules that facilitate participation by Loads with demand response capability that varies based on weather • Opens up ERS participation to customers willing to have their HVAC systems or other weather sensitive loads curtailed during EEA events • Time Periods BH2, BH3 and 13:00 – 20:00 weekends and holidays • Attracts participation that more closely matches ERCOT system load • Creates a framework for evaluating performance and compensating participants based on the variable amount of load reduction actually provided • Establishes rules that deal more systematically for WS ERS participant churn and growth over the course of an ERS Contract Period • Establishes rules that create a disincentive for the submission of over-stated offers by imposing payment reductions ERCOT Public

3. NPRR 571 Major Changes • Participation contingent on qualification on a weather-sensitive baseline • Aggregations of residential sites automatically qualified • Non-residential aggregations must meet accuracy requirements for the ERCOT Default Regression baseline. • All sites must have at least 9 months of historical interval data • Accuracy is evaluated for specified time periods using Regression Baseline • R2 > 90% and MAPE < 7.5%, or • R2 > 95% and MAPE < 10.0% • Minimum offer for a weather-sensitive load will be 0.5 MW (0.1 MW for other ERS) • Qualification will usually be based on premise load with the anticipation that a weather sensitive end-use will be curtailed • Non-weather sensitive end-uses most likely will continue participating in other ERS • For example, an office building using back-up generation to offset a fixed amount of load … premise load weather sensitive but load reduction fixed. ERCOT Public

4. Weather Sensitive ERS Pilot Participation ERCOT Public

5. NPRR 571 Major Changes • QSE can modify the population of a WS ERS Load over the contract term • QSE specifies initial sites and projected number of sites on offer • Once per month update of sites allowed, number of sites can increase by the greater of: • 100% of initial number • Equivalent of 2 MW worth of sites … (2 MW × projected sites) / offer MW • ERCOT will reject offer if the projected increase in sites exceeds both thresholds • Added sites must meet historical interval data requirements, and the modified aggregation must continue to meet weather sensitivity qualification ERCOT Public

6. NPRR 571 Major Changes • Baselines available • Standard ERS baselines are available – must have historical data that substantiates baseline accuracy • Control-group methodology introduced for WS ERS • Residential loads with at least 600 sites only – no historical interval data required, but must be IDR to participate • ERCOT determines appropriate number of control groups and randomly assigns sites • During tests or EEA events, ERCOT designates a group to be withheld from deployment • Average interval-by-interval load of sites in withheld group is used as the baseline and is compared to the average load of deployed sites • Following each deployment, the withheld group is changed • Site modifications may result in recalculation of number of control groups and control group assignments ERCOT Public

7. NPRR 571 Major Changes • Deployments • Maximum number of deployments is 2 times number of months in contract term • Maximum duration of a sustained response for any deployment is 3 hours • Can be 10- or 30-minute ramp with corresponding EEA-1 and EEA-2 deployment • Deployment can be at same time as other ERS or separately • Self-provision • Same as other ERS • WS ERS self-provision payment offsets WS ERS charges • Availability • Availability factor always set to one • Physical availability is established by monthly testing ERCOT Public

8. NPRR 571 Major Changes • Testing • Two times per month • Test duration up to 3 hours of sustained response • No advance notice of test or duration • Actual EEA Event can result in reduction in total number of tests • Tests do not reduce the number of actual EEA deployments • Resource-level Event Performance • Calculations same as other ERS • Capacity obligations as offered, no change for actual weather or site count • Meeting the 10- or 30-minute ramp period is assessed by • Comparing interval performance factor for first full interval to average of factors for remaining full intervals • If average is less than 75% of remaining average, baseline is reduced to 0.75 times original baseline • This lowers imputed demand reduction and event performance factor ERCOT Public

9. NPRR 571 Major Changes • QSE Portfolio-level Event Performance • QSE portfolio-level Interval Performance Factor calculations same as other ERS (summed reduction / summed obligation) • Portfolio-level event performance factor is the average of the portfolio-level interval performance factors weighted by the interval fractions and sum of the prorated obligations for the interval • Prorated obligation = obligation × participating sites / projected sites • QSE Portfolio-level Contract Period Event Performance • Average of the portfolio-level interval performance factors weighted by the interval fractions and sum of the prorated obligations for the interval across all tests/events ERCOT Public

10. Accelerated Payment Reductions • No further payment reduction will be imposed if: • QSE Portfolio-level Contract Period Event Performance is ≥ 0.90 • QSE portfolio normalized peak demand reduction is ≥ 90% of obligation • Otherwise an accelerated reduction will be imposed on a Load as follows: • If maximum number of sites < 80% of number projected on the offer, or • If average normalized peak DR Value per site < 90% of offer • (Offer MW / projected sites) • If one of the above is true, baseline is reduced such that the event performance factor equals the square of the original event performance factor • If both are true, baseline is reduced such that the event performance factor equals the cube of the original event performance factor • If an accelerated reduction is imposed, the QSE Portfolio-level Contract Period Event Performance is recomputed using the revised baselines ERCOT Public

11. Accelerated Payment Reductions Example • Assume Load had a normalized peak demand reduction less than 90% of obligation • Initial EPF • Adjusted EPF Adjusted IPF = Initial IPF2 ERCOT Public

12. NPRR 571 • Questions? ERCOT Public