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-- Presentation from PWG -- Profile ID Assignment and Annual Review Process

-- Presentation from PWG -- Profile ID Assignment and Annual Review Process. November 17, 2005. Several PWG Conference Calls and Market Workshops were held on “Profile ID Assignment Responsibility Change” with the following intentions:

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-- Presentation from PWG -- Profile ID Assignment and Annual Review Process

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  1. -- Presentation from PWG -- Profile ID Assignment and Annual Review Process November 17, 2005

  2. Several PWG Conference Calls and Market Workshops were held on “Profile ID Assignment Responsibility Change” with the following intentions: To determine the feasibility of a proposed change to move the entire Load Profile ID assignment process, maintenance process, and annual validation to ERCOT “Option 2”: To determine the feasibility of moving a portion of the annual validation process to ERCOT where the profile is calculated annual at ERCOT and the information passed to each TDSP and/or Muni-COOP Reason For Discussions

  3. Several PWG Conference Calls and Market Workshops were held on “Profile ID Assignment Responsibility Change” with the following intentions: To determine the feasibility of a proposed change to move the entire Load Profile ID assignment process, maintenance process, and annual validation to ERCOT “Option 2”: To determine the feasibility of moving a portion of the annual validation process to ERCOT where the profile is calculated annually at ERCOT rather than at each TDSP and/or Muni-COOP Reason For Discussions

  4. Early 2002 – Idea was introduced that annual validation could take place at ERCOT rather than jointly among all TDSPs and ERCOT Mid 2004 – Exchange of ideas in order to craft specifics with ERCOT on a proposed PRR for Annual Validation of Load Profile IDs 08/24/04 – This issue was discussed extensively at the PWG meeting 03/03/05, 03/08/05, 05/23/05 – Ideas were formulated on feasibility of moving the Load Profile ID Assignment and Annual Validation to ERCOT, between ERCOT and sub-team 05/25/05 – Ideas presented at PWG, decision to move forward with workshop consisting of wider RMS and COPS committee membership. 06/07/05, 06/13/05, 06/23/05, 10/14/05 – PWG hosted series of conference calls and market workshops 11/17/05 – PWG Takes Action?? A Brief History...

  5. History of Annual Validation • Oct. 2001 Initial Validation • started and was not completed until Sept. 2002 • 2002 Annual Validation • not performed due to 2001 Initial Validation still in progress. • 2002 PWG sub team changed methodology from utilizing billing month to usage month • 2003 Annual Validation • Large volume of migrations (RES – 24%, BUS 17%) • 2004 Annual Validation for Business Group only • Large volume of migrations (RES – 19%, BUS 16%) • Residential suspended due to large volumes • 2005 Annual Validation (currently in progress) • changes to methodology • RES -- Winter Ratio Dead-bands and Winter Ratio Numerator minimums • RES & BUS -- no changes to a default Profile Type • Expected migrations RES 12%, BUS 15%

  6. Option 2 Change Details • Once per year, ERCOT calculates the profiles and provides a file of changes to each TDSP • TDSP take this file and create appropriate 814_20s, and update their systems • TDSPs still responsible for new accounts and any updates needed for normal business

  7. Option 2 Change Details • Items to Note • If a there is a demand meter on the premise, then a demand reading must be sent in • TDSPs responsible for keeping profile up to date with tariffs • New solution results in no additional costs to CRs for implementation • Original Option - $3M • Recommended Option 2 - $100K • ERCOT would require fewer resources for Annual Validation

  8. Option 2 Change Details • Items to Note (continued) • Who would responsible for profile id assignment accuracy • ERCOT – based on supplied data • TDSP still responsible for accuracy of the default • Disputes could now be between ERCOT and CR • If the dispute is based on incorrect calculation • If enough data are available to calculate a profile segment for new ESIIDs • Rate problem still between TDSPs and CRs • Consistent with current methodology

  9. Benefits of Responsibility Change • Reduced coordination required between TDSPs and ERCOT resulting in potential market wide cost savings • Faster implementation of changes to the Load Profile ID assignment methodology • Potential for reduced lag between identifying the need for a Profile ID assignment change and when the change becomes effective • Provides for more flexibility in implementing changes to the Load Profile ID assignment methodology, including more sophisticated algorithms • Removes any TDSP limitations on the number of months of usage history that can be incorporated in calculations for Profile Type

  10. Benefits of Responsibility Change (cont.) • Eliminates potential for inconsistent application of assignment process across the market • Helps to minimize barriers to entry to the market • Muni/Co-Ops don’t have to implement complicated logic, hire outside consultants, or add personnel • Virtually eliminates need for TDSPs to modify their systems due to ongoing changes in the Load Profile ID assignment process and Annual Validation • CRs would benefit from more accurate profiles • No TX SET changes required with Option 2

  11. Impacts of Change in Profile ID Assignment Process (cont.) • ERCOT process changes required • ERCOT required to provide initial profiles for new opt-in entities based on usage they provide • CR process changes required (optional audit process) • Protocol changes required • Load Profiling Guide changes required

  12. Additional Market Considerations • Audit and Oversight: Checks and balances considerations • ERCOT annually subjected to SAS70 audit by 3rd party • Could have calculation process incorporated into SAS70 • Oversight of the Profile ID assignment process by PUCT and stakeholders would continue • Profile Decision Tree would continue to document and provide visibility for the Profile ID assignment rules … Decision Tree governance is being reviewed by PWG • CR’s would continue to have audit capability via SCR 727 extract process • One set of code would be used for assignment calculations rather than six independently developed sets

  13. Questions

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