commercial market operations version 2 - updated on march 18, 2011

March 22, 2011

ERCOT Board of Directors

Commercial Market Operations Version 2 - Updated on March 18, 2011

Betty Day

2 ERCOT Board of Directors March 22, 2011

Summary

Retail Activity• Overall Activity – Activity continues to follow recent trends. A Mass Transition occurred during February; 99.75% of the customer transitions were

complete within 2 days and all transitions were complete within 5 days.

• Transaction Performance Measures – Generally good performance in February. One system issue did cause some measures to fall below the 98% target.

• Advanced Metering – Over 2.4M ESIIDs are now settled using advanced meter data with around 99% having actual data available for initial settlement.

Wholesale Activity

• Settlements & Billing Performance – Perfect performance in February.

• Settlement Dollars – Excluding the extreme weather event, the average dollars transacted were similar to prior months since go-live (around $7M). The extreme weather days averaged around $65M with the highest day (2/2/11) at $190M.

• Reliability Services – February RUC Make Whole Payments to generators were much higher than seen in prior months, but were offset by even higher RUC Clawback Charges which resulted from the high prices on the cold weather days.

• Capacity Services – due to the weather events, capacity service costs for February were substantially higher with the most dramatic increases in Responsive Reserve and Non-Spinning Reserve.

• Congestion Management – Due to the weather events, congestion payments for February were substantially higher than prior months, totaling over $80M

• Verifiable Costs – Approximately half of the available capacity is supported by approved verifiable costs.

• DAM Resettlement - ERCOT resettled the DAM for 2/8/2011. The resettlement was necessary to achieve revenue neutrality in the Balancing Account Closure process because of a procedure failure in ensuring that the 2/8 RTM Settlement Point Price corrections were used by the 2/8 DAM Settlements.

• Market Short-pay - Multiple RTM Invoice short-payments by Abacus Resources Energy LLC causing partial payments to the market. To-date, the total Abacus short-payment is in the amount of $731,420. The default uplift to the market will occur no earlier than September 2011.

• Market Extracts and Reports – Over 1.7M extracts/reports posted during February; over 15.6M extracts/reports downloaded

• Disputes – Dispute volumes have increased somewhat but continue to be lower than anticipated.

• REPs and QSEs Added/Terminated

– 1 new REPs – 3 terminated REP

– 2 new QSEs – 1 terminated QSEs

3

Overall Activity

Transaction Type

Switches 115,861

Move - Ins 318,528

Move Out

CSA 39,192

Total 641,199

Since June 1, 2001 41,022,791

Retail Transactions Summary

02/28/2011

104,467

329,894

69,842

682,929

02/28/2010

53,219

161,509

78,127

17,870

317,916

2011

52,663

162,765

83,829

30,503

329,760

2010

YTD February

160,427 178,726

Mass Transition 7,191 0 7,191 0

(Continuous Service Agreement)

ERCOT Board of Directors March 22, 2011

4

Retail Transactions Summary

Switches Move-Ins

Move-Outs Mass Transition


5

Retail Performance Measures – 2011 Switch

1st Quarter 2nd Quarter

3rd Quarter 4th Quarter


6



Retail Performance Measures – 2011 Move-In / Priority


7



Retail Performance Measures – 2011 Move-In / Standard


8

Migration from Native Affiliate REP

March 22, 2011 ERCOT Board of Directors

Residential

Small Non-Residential

Large Non-Residential

% of ESI IDs% of Load 1

at1/31/11

at1/31/11

at1/31/10

1 - Percent of Deregulated (Non-NOIE) ESI IDs and Load. Usage based on monthly settlement results.

49%

56%

77%

53%

60%

79%

55%

83%

78%

at1/31/10

50%

79%

76%

9 ERCOT Board of Directors March 22, 2011

Advanced Meter Settlement

Now settling almost 2.5M ESIIDs with Advanced Meter Data

Data loading issues for one TSP resulted in a reduced amount of actual data available for settlement on 2/17/11

10

Settlements and Billing Performance Measures – February 2011


To Date February02/28/11 2011

Settlement Statements:Zonal 27,881 5,111Day Ahead Market 16,129 5,181Real Time Market 22,200 11,526Total 66,210 21,818Late 0 0Balance 66,210 21,818% Within Protocol 100.00% 100.00%

Invoices:

Zonal 2,436 720

Day Ahead Market 16,129 5,181

Real Time Market 2,210 660

CRR Auction

234

85

Balancing Account

346

172 CRR Auction Revenue Disbursement (CARD)

200

99

Total

21,555

6,917

Late

-

-

Balance

21,555

6,917 % Within Protocol 100% 100%

11

February 2011 Market Total Settlement Dollars


Totals represent the total charges to QSEs and CRRAHs for each Operating Day

12

Reliability Services


February2011

($'s in millions)

Reliability Unit Commitment

• Make Whole Payments ($5.53)

• Claw Back Charges $7.93

Total Reliability Unit Commitment $2.40

• Capacity Short Charges $5.53

• Make Whole Uplift $0.00

• RUC Decommitment Payments $0.00

Note:Positive amounts are a charge to the Market ParticipantNegative amounts are a payment to the Market Participant

13

Capacity Services - Cost


February February

2010 2011

Capacity Services**: ($'s in millions) ($'s in millions)

Reg Up $5.3 $14.5

Reg Down $7.0 $4.8

Responsive Reserve $9.6 $50.0

Non-Spinning Reserve $4.3 $40.1

Black Start $0.4 $0.4

RMR Capacity* $0.5 $0.0

Voltage Services - Reactive Power n/a $0.0

Voltage Services - Lost Opportunity n/a $0.0

TOTAL CAPACITY SERVICES $27.1 $109.8

* Includes Stand-by, Energy, and Non-Performance

**Includes Day-Ahead Market and Supplementary Ancillary Service Markets

14

Capacity Services - Volumes


Reg Up*: February 2010 February 2011 Required (MW) 557,712 330,123 Self Arranged (MW) 108,424 8,376 Procured DAM (MW) 321,747 Procured RTM (MW) - Failure to Provide (MW) 60 Total Procured 450,876 321,747 % Procured 81% 97%Reg Down*: Required (MW) 621,291 324,827 Self Arranged (MW) 128,575 17,028 Procured DAM (MW) 307,800 Procured RTM (MW) 1,524 Failure to Provide (MW) 1,571 Total Procured 494,285 309,324 % Procured 80% 95%Responsive Reserve: Required (MW) 1,543,517 1,545,507 Self Arranged (MW) 575,224 286,064 Procured DAM (MW) 1,259,443 Procured RTM (MW) 1,326 Failure to Provide (MW) 2,891 Total Procured 970,376 1,260,769 % Procured 63% 82%Non-Spinning Reserve: Required (MW) 1,232,447 1,344,003 Self Arranged (MW) 154,358 28,944 Procured DAM (MW) 1,315,059 Procured RTM (MW) 1,410 Failure to Provide (MW) 89 Total Procured 1,080,218 1,316,469 % Procured 88% 98%

*A/S Methodology changed in Dec 2010

15

Energy Settlement


February 2011 ($'s in millions)

• Day Ahead Market Energy Settlement

Energy Purchases $470.28

Point to Point Obligations Purchases $38.85

RMR Day Ahead Revenue $0.00

Energy Sales ($443.60)

Day Ahead Congestion Rent $65.53

Day Ahead Make Whole Payments ($0.09)

• Real Time Market Energy Settlement

Real Time Energy Imbalance

~Resource Node Settlement Points ($1,107.15)

~Load Zone Settlement Points $1,509.25

~ Hub Settlement Points ($285.09)

Real Time Congestion from Self Schedules $11.50

Block Load Transfers and DC Ties ($24.52)

Energy Settlements Impact to Revenue Neutrality $103.99

Emergency Energy Payments ($0.43)Base Point Deviation $2.51

(MWh in millions)Real Time Metered Generation 23.49


16

Congestion Management


February 2011

($'s in millions)

Auction Disbursements

Annual Auction $0.00

Monthly Auction ($14.98)

Total Disbursements ($14.98)

CRR Settlement

Day Ahead CRR Settlement ($60.70)

Day Ahead CRR Short Charges $6.24

Day Ahead CRR Short Charges Refunded ($6.24)

Real Time CRR Settlement ($19.56)

Real Time CRR Short Charges $0.64

Real Time CRR Short Charges Refunded ($0.64)

Total Proceeds ($80.26)

PTP Obligations Acquired in DAM

Day Ahead Point to Point Obligation Settlement $38.85

Real Time Point To Point Obligation Settlement ($84.49)

Net Settlement ($45.64)


17

Net Impact to Load


February 2011

($'s in millions)

Market-Based Fees

Auction Disbursements ($14.98)

Balancing Account Proceeds ($4.82)

Net Reliability Unit Commitment ($2.40)

Capacity Services* $109.81

Real Time Revenue Neutrality $0.05

Emergency Energy Payments $0.43

Base Point Deviation Charge ($2.51)

ERCOT Fees

ERCOT Administrative Fee $9.90

Net Impact to Load $95.46

* RMR included in Capacity Services


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Revenue Neutrality


19

Market Based Fees


20

Daily DAM and RTM Activity


21

Verifiable Costs


22

Extract & Report Postings


TOTAL POSTINGS TOTAL FILE SIZE (GB)1,721,153 158.51

Market Extract & Report PostingsRun on Mar 7, 2011 5:13:30 PM

Start Date: Feb 1, 2011End Date: Feb 28, 2011

Posting Classifications:Certified = Available only to the Market Participant owning that dataSecure = Available to any Market Participant with a digital certificatePublic = Available to all Market Participants & general public (via ERCOT.com)

23

Extract & Report Postings


Top 10 Market Extract & Report Postings Run on Mar 7, 2011 5:36:39 PM


PUBLISH COUNT

24

Extract & Report Downloads


Market Extract & Report DownloadsRun on Mar 7, 2011 4:32:21 PM


TOTAL DOWNLOADS TOTAL FILE SIZE (GB)15,653,190 1,180.01Posting Classifications:

Certified = Available only to the Market Participant owning that dataSecure = Available to any Market Participant with a digital certificatePublic = Available to all Market Participants & general public (via ERCOT.com)

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Extract & Report Downloads


Top 10 Market Extract & Report DownloadsRun on Mar 7, 2011 5:34:30 PM


DOWNLOAD COUNT

26

ERCOT Wholesale Market Settlement Dispute Report


CRR Market Day-Ahead Mkt Real Time Mkt

Current Month*

SinceDec 1, 2010

Current Month*

SinceDec 1, 2010

Current Month*

SinceDec 1, 2010

Received 13 13 10 46 80 151

Granted 0 0 0 0 3 6

Granted w/Exception 0 0 0 0 1 2

Denied 12 12 17 30 3 16

In Process 1 1 16 16 127 127

February 2011

*Some current month activity is on disputes that were received in prior months.

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REPs and QSEs Added/Terminated – as of February 28, 2010

• Added REPs • Added QSEs

Entrust Energy Inc. (LSE)

• Terminated REPs • Terminated QSEs Abacus Resources Energy LLC (LSE) Abacus Resources Energy LLC dba

Abacus Resources Energy (LSE) Mpower Retail Energy LP (LSE)

Abacus Resources Energy LLC (QSE – L2)


Levels of QSE QualificationQSE without Resources:Level 1: Qualified to perform Inter-QSE trades only; does not have direct representation of Load Serving Entities or Resource Entities.Level 2: Qualified to represent Load serving Entities; does not have direct representation of Resource Entities.QSE with Resources Level 3: Qualified to represent Load Serving Entities and/or Resource Entities without providing Ancillary Services; may also perform QSE without Resources activities. QSE with Resources-AS Qualified Level 4: Qualified to represent Load Serving Entities and/or Resource Entities and provide Ancillary Services; may also perform level QSE without Resources activities.

Met Texas Virtual LP (QSE – L1)

Envapower Inc. (QSE – L1)

Questions?

commercial market operations version 2 - updated on march 18, 2011

Documents

resettlement ercot

market short

retail performance measures

extreme weather days

weather events

cold weather days

good performance

congestion payments