ERCOT PROTOCOL REVISION SUBCOMMITTEE (PRS) MEETING

6/21/07 Draft Minutes

Attendance:

PRS Members / Name / Representing
David / Detelich / CPS
Henry / Durrwachter / TXU
Clayton / Greer / J Aaron
Kevin / Gresham (Chair) / Reliant Energy
Randy / Jones / Calpine
Steve / Madden (V-Chair) / StarTex
Sandy / Morris / LCRA
Darrin / Pfannenstiel / Stream Energy
Cesar / Seymour / Suez
Scott / Wardle / Oxy
Participants
John / Adams / ERCOT
Kristy / Ashley / Exelon
Dan / Bailey / GEUS (Greenville)
Bill / Barnes / ERCOT
Brad / Belk / LCRA
Ann / Boren / ERCOT
Adrianne / Brandt / PUC
Jeff / Brown / Coral Power
Tom / Burke / TXU
Shawnee / Claiborn-Pinto / PUC
Betty / Day / ERCOT
Paula / Feuerbacher / ERCOT
Joel / Firestone / ERCOT
David / Forfia / ERCOT
Andrew / Gallo / ERCOT
Jennifer / Garcia / Direct Energy
Beth / Garza / ERCOT
Eric / Goff / Constellation NewEnergy
Ino / Gonzalez / ERCOT
Kristi / Hobbs / ERCOT
Hal / Hughes / DME
Tom / Jackson / Austin Energy
Randy / Jones / Calpine
Dan / Jones / IMM
Don / Jones / TIEC
John / Kassel / ERCOT
Eddie / Kolodziej / Cust. Energy Solutions
Nieves / López / ERCOT
Cagle / Lowe / ERCOT
Elizabeth / Mansour / ERCOT
Matt / Mereness / ERCOT
Sonja / Mingo / ERCOT
Manny / Muñoz / CenterPoint Energy
Ananth / Palani / GP&L
Adrian / Pienazek / NRG Texas
Kenneth / Ragsdale / ERCOT
Raj / Rajagopal / ERCOT
Justin / Rasberry / ERCOT
Kathy / Scott / CenterPoint Energy
Giriraj / Sharma / ERCOT
Jerry / Sullivan / ERCOT
Nikhil / Takalkar / ERCOT
Jeyant / Tamby / ERCOT
David / Troxtell / ERCOT
Carrie / Tucker / ERCOT
Paul / Wattles / ERCOT
Brandon / Whittle / DB Energy Trading
Diana / Zake / ERCOT

1. Anti-Trust Admonition

The Anti-Trust Admonition (Admonition) was displayed for the members. Kevin Gresham read the Admonition and reminded the members that paper copies of the Admonition are available.

2. Approval of the May 17, 2007 Minutes

Randy Jones moved to approve the draft May 17, 2007 minutes as posted. Cesar Seymour seconded the motion. The motion passed unanimously with all Market Segments present for the vote.

3. Urgency Votes

None

4. TAC and Board of Directors (Board) Reports

Steve Madden reported that the Technical Advisory Committee (TAC)voted to recommend Board approval of PRR714, Qualification and Periodic Testing of Loads Acting as Resources (LaaRs), andPRRPRR723, Conform 5.6.6.1 EECP (formally titled “Emergency Interruptible Load Service Formula Correction”).

Mr. Gresham reported that the Board approved the followingPRRs:

  • PRR709, Scarcity Pricing Mechanism;
  • PRR710, Validation Tests Update;
  • PRR711, Update of ERCOT Protocols to Comply with NERC Name Change; and
  • PRR723, Conform 5.6.6.1 EECP (formally titled “Emergency Interruptible Load Service Formula Correction”).

5. 2008 Zonal Project Prioritization

David Troxtell presented the 2008 Zonal Project Prioritization Review. Mr. Troxtell shared that the area-specific funding levels have been reviewed by the appropriate subcommittees and is on schedule for PRS (today) and TAC (June 28, 2007) consideration. Mr. Troxtell presented the program areas’ 2008 budgets and project counts by priority ranking, as well as project highlights for each program area:

  • Commercial Operations (CO) - 10 projects at $9.7 million - large number of projects in multiple areas. There will be a strong focus on security and process improvement.
  • IT Operations (IO) – 10 projects at $10.4 million - emphasis on keeping up with computing infrastructure needs.
  • Market Operations (MO) – four projects at $1.2 million -focus on Demand response related projects.
  • Reliability Operations(RO) - 18 projects at $6.1 million - funding request is similar to previous years, but is anticipating several Public Utility Commission (Commission) decision related projects.
  • System Operations (SO) – two projects at $50,000 - reduced budget is due to Nodal budget. Will not initiate any new projects during 2008.

ERCOT Staff noted that the 2008 budget takes into consideration the lag in spending experienced in 2007.

PRS participants requested more information regarding the Demand response under the MO program area. ERCOT Staff explained that this budget item relates to future advanced metering requirements pursuant to Commission rules, including settlement metering, as well as implementation of PRR478, Use of Lagged Dynamic Samples for New Load Profiles, and PRR385, DLC Implementation. PRS also confirmed that the IO program area budget would be limited to covering non-Nodal related infrastructure needs. Hal Hughesinquired whether there is a specific budget amount assigned to the Commission. ERCOT Staff explained that these are estimates based on anticipated changes in requirements related to advanced metering and renewable energy. ERCOT Staff noted that these figures will be subject to review in the October time frame. Mr. Gresham inquired whether the proposed budget included any cost items related to the Texas Regional Entity (TRE). ERCOT Staff explained that the TRE has its own budget and that it does not anticipate any TRE related projects for 2008.

Mr. Madden moved to endorse the 2008 Project Priority List and forward the documents to TAC. Henry Durrwachter seconded the motion. The motion passed with one abstention from Investor Owned Utility (IOU) Market Segment. All Market Segments were present for the vote.

6. Review of PRR Recommendation Report and Impact Analysis

PRR718 – Authority for Determination of Urgency for SCR

Sandy Morris moved to approve the Recommendation Report and endorse the Impact Analysis(IA) for PRR718, and forward the documents to TAC. Mr. Madden seconded the motion. The motion passed unanimously with all Market Segments present.

7. Review of PRR Language

PRR713 – Resource Outage Notification

TXU offered comments relating to moth-balling notification to resolve potential gaming problems. The comments were acceptable to ERCOT Staff. ERCOT Staff also offered a date change in Section 6.5.9.3, Mothballed Generation Resource Time to Service Updates.

Mr. Durrwachter moved to recommend approval of PRR713 as revised by TXU Wholesale 052107 comments and PRS. Adrian Pienazek seconded the motion. The motion passed unanimously with all Market Segments present.

PRR717 – EILS Disputes and Resettlements

Participants discussed whether the definition of a contract period as proposed inPRR717 is in conflict with the language in PRR725, Emergency Interruptible Load Service Formula & Standard Form. ERCOT Staff explained that the language in the two PRRs is complimentary and that the intent of PRR717 is to allow for final resettlements of the contract period.

Mr.Seymour moved to recommend approval of PRR717 as submitted. Mr. Hughes seconded the motion. The motion passed with two abstentions from the Independent Retail Electric Provider (IREP) Market Segment. All Market Segments were present for the vote.

PRR720 – Texas Regional Entity Fee Methodology Revision

Bill Barnes reviewed PRR720. Mr. Barnes explained that this PRR removes the TRE fee from the System AdministrationFee; creates a separate charge mechanism; and provides for a true-up mechanism at the end of the year. Mr. Barnes further explained that this PRR creates the functional separation between the Independent System Operator (ISO-ERCOT) and the TRE. Mr. Barnes confirmed that the proposal does not change the actual amount charged to the Market Participants. Sandy Morris opined that this PRR appears to add a level complexity and proposed sending the PRR to the Commercial Operations Subcommittee (COPS) for further review. Mr.Durrwachter questioned whether placing the TRE fee collection mechanism in the ERCOT Protocols would make the Protocols subject to federal oversight. Mr. Durrwachter commented that for the very reasons of functional separation, TRE related provisions should not be in the Protocols. Betty Day noted that the current fee collection mechanism is in the Protocols. Andy Gallo noted that the TRE role, in part, is to ensure compliance with NERC Reliability Standards and the ERCOT Protocols. Participants disputed this notion. Mr.Madden suggested that the fee should be collected quarterly, with an annual true-up performed by the Finance department, not the Settlements department, of ERCOT. Mr. Gresham summarized that PRS needs clarification and/or additional guidance regarding the appropriate collection dates for the TRE fee;the manner in which the Load Ratio Share (LRS) is calculated; a process for handling invoice disputes and short-pays; the jurisdictional issues related to the TRE and where TRE related provisions should reside (i.e. in the Protocols or in the contract or elsewhere); and whether there needs to be a NPRR to carry the fee collection mechanism over to the Texas Nodal Market.

Mr. Durrwachter moved to request that the COPSevaluate PRR720 within the scope of the questions raised during the PRS discussion and report back at the July 19, 2007 PRS meeting; and directed ERCOT Legal Staff to address the jurisdictional issues raised during the PRS discussion and report back at the July 19, 2007 PRS meeting as well. Ms. Morris seconded the motion. The motion passed unanimously with all Market Segments present.

PRR721 – Provision of Customer Billing Information to TDSPs

Jennifer Garcia explained the purpose of PRR721. Mr. Madden wanted the language to be explicit so that the provision applies only during a Mass Transition event within the body of the PRR and in the style of the PRR.

MannyMuñoz moved to recommend approval of PRR721 as revised by PRS. Tom Jackson seconded the motion. The motion passed unanimously with all Market Segments present.

PRR722 – 48 Hour Restoration

Mr. Durrwachter reiterated TXU’s comments regarding this PRR. Scott Wardle agreed stating that he had reservations regarding this PRR.

Mr. Durrwachter moved to reject PRR722. Mr. R. Jones seconded the motion. The motion passed with three abstentions from the IOU (1) and Municipally Owned Utility (MOU) (2) Market Segments. All Market Segments were present for the vote.

PRR724 – Removal of the Drop to AREP References

Kathy Scott explained that the intent of this PRR is to make the Protocols consistent with regulatory changes resulting from the order in Project 33025, Rulemaking Proceeding to Amend Commission Substantive Rules Consistent with §25.43, Provider of Last Resort (POLR). Ms. Scott explained that this PRR was unanimously endorsed by the Retail Market Subcommittee (RMS).

Mr. Madden moved to recommend approval of PRR724 as submitted. Darrin Pfannenstiel seconded the motion. The motion passed unanimously with all Market Segments presentfor the vote.

PRR725 – Emergency Interruptible Load Service Formula & Standard Form

Paul Wattles explained the purpose of PRR725.

Mr. Seymour moved to recommend approval of PRR725 as submitted. Mr.Pieniazek seconded the motion. The motion passed with one abstention from the Independent Power Marketer (IPM) Market Segment. All Market Segments were presentfor the vote.

PRR726 – DC Tie Scheduling Clarifications

Joel Firestone explained the purpose of PRR726. Mr. R. Jones advocated removing references to Back-to-Back (BtB) ties. Participants ascertained that the Laredo connection will be treated as a Direct Current (DC) tie. Mr. Gresham inquired whether DC ties will have an impact on Step 4 in the Emergency Electric Curtailment Plan (EECP). Mr. Gresham also sought clarification relating toBlock Load Transfers (BLT) and DC ties.

Mr. Seymour moved to recommend approval of PRR724 as submitted. Mr. Durrwachter seconded the motion. The motion passed unanimously with all Market Segments present for the vote.

PRR727 – Process for Transition to Nodal Market Protocol Provisions

Diana Zake explained the purpose of PRR727 and directed participants to the draft Zonal to Nodal Protocol Disposition Table. Mr. Wardle stated that he hesitated to recommend this PRR for approval without having the Transition Plan Task Force (TPTF) take an actual vote to endorse the documents. Mr. Muñoz and Mr. Durrwachter commented that the PRR needs to include provisions to resolve potential conflicts between Nodal and Zonal Protocol Sections.

Mr. Muñoz moved to refer PRR727 to TPTF for a recommendation on how to resolve potential conflicts between Nodal and Zonal Sections and how to process zonal Settlements after the start of the Texas Nodal Market (12/1/08), including any Settlement disputes, and report back at the July 19, 2007 PRS meeting. Mr. Durrwachter seconded the motion. The motion passed unanimously with all Market Segments present for the vote.

PRR728 – Proposal to Allow ERCOT Discretion When Processing Renewable Production Values

Ino Gonzalezreported that the Wholesale Market Subcommittee (WMS) requested that PRR728 be tabled until July to allow WMS more time to resolve certain issues.

Mr. Durrwachter moved to table PRR728 until July. Mr. Pienazek seconded the motion. The motion passed unanimously with all Market Segments present for the vote.

PRR729 – Conforming Section 16 to New Section 22 Standard Form MP Agreements

Matt Mereness reviewed PRR729. Mr. Durrwachter inquired why these provisions need to be in the Zonal Protocols if they are already addressed in the nodal Protocols and questioned whether this is procedurally correct. Mr. Durrwachter suggested that if these agreements must be in place before the start of the nodal market then this should be stated explicitly in PRR727. Mr.Muñoz opined that language pertaining to the Independent Market Monitor (IMM) should also be in Protocols, and not just in the body of the agreements. Andy Gallo reported that this proposal was rejected by Commission. The Commission then specifically directed that language regarding the IMM be in the contract. Mr. Muñoz and Mr. Durrwachter stated that the contract should apply to the zonal, nodal and transition market periods. ERCOT Staff clarified that the Standard Form Agreement (SFA) refers to the Protocols, policies and procedures in general, and therefore, it would apply to both nodal and zonal markets. Mr. Muñoz reiterated that this must be explicitly addressed in zonal Protocols. Mr. Gallo explained that this would be the purpose of the proposed Disposition table. Mr. Durrwachter suggested that there should be a specific start date for the SFA in the zonal Protocols. Participants also discussed whether these provisions would have an impact on any agreements between the TRE and Market Participants (MPs).

Mr. Durrwachter moved to recommend approval of PRR729 as amended by PRS to add the SFA to Section 22 and require that all MPs have a SFA in place, and thatPRS request that TAC request of the Board to direct all MPs to have aSFA in place by March 1, 2007. Mr. Seymour seconded the motion. The motion passed unanimously with all Market Segments present for the vote.

Mr. Gallo requested that PRR729 be placed on an Urgent timeline to ensure compliance with subsection (o) of P.U.C. Subst. R. 25.365, Independent Power Monitor.

Mr. Durrwachter moved to grant the request for Urgent status. Mr. Seymour seconded the motion. The motion passed unanimously with all Market Segments present for the vote.

8. Review of NPRR Language

Mr. Durrwachter moved to waive notice requirements for the following NPRRs:

  • NPRR020, ERCOT Nodal Implementation Surcharge
  • NPRR026, Nodal Implementation Surcharge Verifiable Cost
  • NPRR067, Modeling of Private Use Networks
  • NPRR068, Settlement Clarifications to Startup Eligibility, Decommitment Payments and Corrections to RUC Formulas
  • NPRR069, Changes to SURAMP
  • NPRR070, Changes to DAM Clearing Start Time Allocation of McCamey Flowgate Rights in Day-Ahead Market
  • NPRR071, Trade Validation by Matching Identical Trade Submissions
  • NPRR072, Day-Ahead RMR Settlement Clarification
  • NPRR073, Update of Sections 6.6 and 6.7 Due Requirements, Use Cases and CSDs
  • NPRR074, Revisions to Monitoring and Qualification Tests in Section 8, Performance Monitoring and Compliance
  • NPRR075, Section 9, Settlements Clean-Up

Mr. Pienazek seconded the motion. The motion passed unanimously with all Market Segments present for the vote.

NPRR020 – ERCOT Nodal Implementation Surcharge

ERCOT Staff explained that the mechanism for the end-date is addressed in the Commission Final Order in Docket No. 32686, Application of the Electric Reliability Council of Texas for Approval of a Nodal Market Implementation Surcharge and Request for Interim Relief. ERCOT Staff also explained that the amount to be collected is not to exceed the Commission approved budget and that ERCOT is required to provide an accounting of monies collected and expended.

Mr. Durrwachter moved to recommend approval of NPRR020 as amended by ERCOT comments, endorse the IA and forward documents to TAC. Mr. Hughes seconded the motion. The motion passed with one abstention from the IPM Market Segment. All Market Segments were present for the vote.

NPRR026 – Nodal Implementation Surcharge Verifiable Cost

Mr. Pienazek explained the purpose of the different sets comments submitted by NRG. Mr. Barnes reviewed ERCOT Staff’s understanding of NRG’s proposal and found it to be acceptable.

Mr. R. Jones moved to recommend approval of NPRR026 as amended by NRG comments, endorse the IA and forward documents to TAC. Mr. Pienazek seconded the motion. The motion passed with one abstention from the Consumer Market Segment. All Market Segments were present for the vote.

NPRR036 – Market Operations TestEnvironment (MOTE) in the Nodal Market

PRS reviewed TPTF proposed revisions.

Mr. Muñoz moved to recommend approval of NPRR036 as revised by TPTF comments, endorse the IA and forward documents to TAC. AnanthPalani seconded the motion. The motion passed unanimously with all Market Segments present for the vote.

NPRR040 – Synchronization of Emergency Energy Curtailment Plan

Tabled.

NPRR045 – Wind Power Forecasting

It was reported that TPTF action is delayed pending examples from the NPRR sponsor (Walter Reid, Wind Power Coalition) to support this NPRR.

Mr. Durrwachter moved to table consideration of NPRR045. Mr. Pienazekseconded the motion. The motion passed unanimously with all Market Segments present for the vote.

NPRR053 – Creation of New Trading Hub at Venus Switching Station

Jeff Brown recommended that this NPRR not be approved because another trading station at the Venus hub will create confusion and result in disputes.

Mr. Brown moved to reject NPRR053. Mr. Jackson seconded the motion. The motion passed unanimously with all Market Segments present for the vote.

NPRR057 – Posting Requirements Pursuant PUC Subst. R. 25.505

Mr. Mereness reviewed comments posted by ERCOT Staff. Mr. Mereness explained that during IAprocess, ERCOT Staff developed a simpler way to implement the provisions of P.U.C. Subst. R. 25.505, Resource Adequacy in the Electric Reliability Council of Texas Power Region.