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Integrated ERCOT Readiness and Transition (IRT)

TPTF - November 6th, 2006

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Purpose of today's presentation

• Share QSE & CRR Qualification Approach• Share EDS 3 Approach• Confirm Delivery Dates of IRT’s Key Deliverables• Seek direction concerning a sub-group for IRT related activities

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IRT Scope

• Business readiness & transition plan for each ERCOT department by Director

• Updated ERCOT Operating Guides based on Nodal Protocols and placed under change control

• Updated Control Room Desk Procedures based on Nodal Protocols and place under change control

• Market Participant Qualification Plan, execution and tracking (including entry and exit criteria)

• EDS 3 and 4 plans and daily schedule and execution• Readiness Criteria, tracking, and reporting• Readiness declarations• ERCOT Nodal Go Live Plan • Zonal “closure” strategy and implementation

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Project Status Summary

• Business readiness & transition plan– ERCOT employees mapped to Nodal Training Course Curriculum– Working with Vendors to define software package curriculums– Detailed Process Inventory and Impact Assessment underway

• Updated ERCOT Operating Guides – 7 of 8 under change control– Participating in OGRTF review sessions

• Updated Control Room Desk Procedures– Scheduled for 2007; dependent on operating guides and CSDs

• Market Participant Qualification Plan– Approach to be reviewed today

• EDS 3 Approach – Internal review ongoing

• ERCOT Readiness Criteria– Final stages of contracting for third-party

• ERCOT Nodal Go Live Plan– Scheduled for late 2007

• Zonal “closure” strategy and implementation– Scheduled for Q2 2008

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Why is qualification required? ERCOT protocols

Each Market Participant must “demonstrate to ERCOT’s reasonable satisfaction that it is capable of performing the functions” required of the Market Participant under the protocols.

Transition to the nodal market introduce Change in protocols Changes in transactions between ERCOT and Market Participants Changes in systems at ERCOT and market Participants Changes in personnel

To assure MPs are capable of performing their functions, ERCOT will: Define and communicate readiness activities for all MPs Perform qualification tests required by protocols

QSEs CRR Account Holders

Qualification for the nodal market

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CRR Account Holder Qualification Requirements Registration Agreements Satisfaction of credit requirements Training

QSE qualification steps (Existing) Registration Agreements Communication Functional Testing

Market Operations System Operations (Ancillary Services)

Credit Requirements Training Others…

Qualification for the nodal market

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QSEs without Resources

Registration- No changes

Agreements – No changes

Communication Portal (TML) or API

Functional Testing Market Operations functional testing

Credit Requirements Refined classification of counter-parties with new requirements

Training

Qualification for the nodal market

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QSEs with Resources (Ancillary Services) QSE Qualification tied to Resource qualification

“Each QSE and the Resource providing Ancillary Service must meet qualification criteria to operate satisfactorily with ERCOT”

Registration No changes to QSE Registration Resource Registration (“Each QSE that represents a Resource must submit parameters to ERCOT for that

Resource “

Agreements – No changes Communication (Voice and Data Circuits between control centers)-No change Communication

Portal (TML) or API Telemetry, Redundant Data communication (* Example)

Functional Testing Market Operations functional testing (Offers, Schedules, COPs) System Operations (Ancillary Services)

QSE system qualification Resource qualification

Credit Requirements Refined classification of counter-parties with new requirements

Training

Qualification for the nodal market

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Qualification Timeline

Resource Registration Q4 ‘07

Communication (Telemetry) Q2-Q3 ‘07

Market Operations Q4 ‘07

System Operations Ancillary Services qualification

Performed at the beginning of EDS-3

Q1 ‘08

Qualification for the nodal market

ResourceRegistration

Communication

Q3 Q4 Q1 Q2Q2

Market OperationsFunctional Testing

AS Qualification

Training, Credit Requirements

2007 2008

EDS-3

EDS-1,2

Majority of QSEs would have to complete each activity in the time periods shown to meet EDS criteria. Qualification activities may continue past

dates shown above.

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EDS 3 – Market Trials Timeline

Mar 08Feb 08Jan 08 May 08 Jun 08Dec 07 Apr 08

LMP Market Readiness Criteria

MET

Cycle 10

Nov 07

Market Trials Start

AS QualificationAS Qualification

ALL QSEsALL QSEsWeekly CycleWeekly Cycle

Cycle 1

LMP w.Controls

Single Entry Model

GO LIVE

Resource RegistrationResource Registration

MP Sandbox, Pre-EDS validationMP Sandbox, Pre-EDS validation

LMP w Controls: ERCOT will submit all market data covering various scenarios to validate the system and begin the LMP publishing

1/2/08 to 1/15/08 Initial:

Duration two weeks (1/21/08 to 2/1/08) 2 QSEs willing to work through probable process and system issues to resolution

Cycle 2 to 9: Duration one week each (2/4/08 to 3/28/08) 5-10 QSEs each

Cycle 10: Duration two weeks (3/31/08 to 4/11/08) Makeup & contingency testing window for all remaining QSEs which could not successfully complete a cycle during

Cycles 1 to 9 Real-time Parallel Ops:

All QSEs in live EDS mode. 4/14/08 to 6/27/08

Cycle 2-9 Real-time Parallel Ops

…

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EDS 3 Scope

EDS 1/2 – Single Entry Model

Basic Network Model & SE Criteria NMMS (UI internal only) ICCP (RTU migration) Nodal EMS (non-live)

EDS 3 – Real Time Operations

NMMS (without Planning model) Nodal EMS Outage Scheduler SCED RUC SASM COP Emergency Operations Trades, Schedules Offers (3 part) CRR (settled in RT) CMM (part) MIS (part) Commercial operations (for RT) EDW (for RT) Integration (part) LMPs published 8*5 support

EDS 4 – Day Ahead Market/CRR

NMMS (full) DAM CRR (full) CMM (full) MIS (full) Full back-end (x4) 8*5 support (24*7 for MP ITEST) ERCOT & Market Readiness Criteria

approved

EDS 4 Trial outcomes

All MP Registration complete for Go Live All market facing interfaces complete Testing of all markets complete 168 Hour test complete All interfaces validated Training complete MP financial & operational qualification complete Market Readiness Declarations met “Home Team” transitioned (as needed)

Production GO/NO GO

EDS 3 Trial outcomes

6 month SCED test completed EMS enhancements complete MP offers LFC, OS, RPP complete All MP Registration complete for Go

Live “Home Team” transitioned (as needed)

LMP Market Readiness Criteria- MET

EDS4 - GO/NO GO

Q2 2008 Q4 2008Q3 2008Q2 2007Q1 2007 Q4 2007 Q1 2008 Q1 2009Q3 2007

EDS 3

EDS 4 Go-live Trans.

EDS 3 Mote and ERCOT UATEDS 1/2

EDS 1/2 Trial outcomes

SE Criteria achieved Telemetry criteria achieved

Single Entry Model (with stable and capable SE)

GO/NO GO

EDS3 Training

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Deliverable Timeline

Covers Next ~90 days

– EDS

• EDS 3 Approach………………………………………….11/28

• Market Operations Sandbox Approach………………...Jan ‘07

– Readiness Criteria

• Initial review……………………………………………….Mid-Jan ‘07

• Final review………………………………………………..Early Feb ‘07

– Registration & Qualification

• QSE Qualification Approach……………………………..12/4/06

• QSE Qualification Guide………………………………….Jan ‘07

• Registration Approach…………………………………….Jan ‘07

• Registration Guide…………………………………………Feb ‘07

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IRT / Market Participant Sub-group

• ERCOT Desires a forum to collaboratively develop:– Qualification Plans– Readiness Criteria– Market Trials– Go-live Transition

• Immediate Need:– Weekly meetings from November 13th through January 31st to

develop readiness criteria• Need participation from TOs, QSEs, Resource Entities

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Summary & next steps

• QSE & CRR Qualification Approach • EDS 3 Approach• Key Dates & Deliverables• Market Trials Forum• Next steps