Retail DR and Price Responsive Load Next Steps – Data Collection

1. Retail DR and Price Responsive LoadNext Steps – Data Collection Paul Wattles Karen Farley Updates to DSWG & RMS January 2013

2. Why it’s important to understand retail DR & price response • Resource adequacy concerns • Brattle report underscores the important role of DR in the ERCOT markets • Advanced metering • Enablement of DR is an important element in the return on the AMI investment • There are limits on the amount of DR that the ISO can contract for (e.g., Ancillary Services and ERS) • The bulk of new DR will likely need to be enabled by LSEs: • Price and 4CP-responsive Load • Other retail DR incentives and technologies • Ability to track growth of these products is a key metric in measuring the success of the ERCOT retail market DR/Price Response

3. The need to dig deeper • PUC Subst. Rule §25.505(e)(5): • Load serving entities (LSEs) shall provide ERCOT with complete information on load response capabilities that are self-arranged or pursuant to bilateral agreements between LSEs and their customers. • Phase 1 – Survey • Results shared at August RMS and DSWG • Phase 2 – Data collection • October and November market meetings • Updates to DSWG, RMS on progress, next steps • Phase 3 – Analysis • After data collection, evaluation of price elasticity and how it affects: • Load forecasting • Wholesale market price formation • Resource adequacy • Analysis will be at the aggregate, no specific market participant information will be shared We are here! DR/Price Response

4. Data Collection – Progress and Next Steps • Market meetings held to discuss idea of categories, definitions of categories and data elements • Good participation from both REP and NOIE markets • Separate sessions in October to focus on specific issues for each audience • Category definitions (see appendix) were discussed and refined • REPs and NOIEs will need to analyze their programs/products and determine which category to assign • ERCOT and REPs agreed to a standard data collection approach • ERCOT and NOIEs agreed to bilateral discussions with respondents with programs above a certain size • ERCOT may repeat the survey to get more details • NOIEs may provide aggregated reports to ERCOT • May be able to share a NERC report with ERCOT DR/Price Response

5. Data Collection – Progress and Next Steps • REPs shall create and submit to ERCOT a Comma Separated Values (CSV) file via NAESB • First file will be a snap shot of 06/15/2013 • ERCOT proposed a snap shot 2x a year – once for summer (6/15), once for winter (12/1) • Will revisit the request after we see the first snap shot • Target date of file to ERCOT 08/01/2013 • Data elements from REPs • LSE DUNS • ESI ID – active within a category • Category Code • Direct Load Control (Y/N) – DR initiated by LSE or 3rd party (other than customer) • Start Date – the date this ESI ID commenced service under this category – MMDDYYYY • If an ESI ID is in multiple categories, please submit it twice in the file, once with each category DR/Price Response

6. Data Collection – Progress and Next Steps • ERCOT will meet with NOIEs (based upon the survey responses) in Jan / Feb • To learn what is in place for measurement and verification • Data collection may be specific to each NOIE • May be an aggregated report • Leverage what is already being done, where possible • First report will be a snap shot of 06/15/2013 • ERCOT proposed a snap shot 2x a year – once for summer (6/15), once for winter (12/1) • Will revisit the request after we see the first snap shot • Target date of report to ERCOT 08/01/2013 DR/Price Response

7. Questions? ON OFF DR/Price Response

8. Appendix – Categories • ERCOT would like to correlate premises to the types* of products they are on • RTP – Real Time Pricing • BI – Block & Index • CPP – Critical Peak Pricing • PR – Peak Rebates • 4CP – Four Coincident Peak • TOU – Time of Use / Thermal Storage / DG • OLC – Other Load Control • OTH – Other Voluntary Demand Response Product • FO – Financial Option * see next slides for definitions DR/Price Response

9. Appendix – Definitions • RTP – Real Time Pricing - retail prices for all hours based on ERCOT Real-Time Settlement Point Prices for the premise Load Zone, calculated every 15 minutes, or other real-time wholesale price indicator(s). • BI – Block & Index – fixed pricing for a defined volume of usage, coupled with pricing indexed to the wholesale market for usage exceeding the block. Block prices and volumes may vary by time of day/week. Option could include if usage dips below the block. • CPP – Critical Peak Pricing – contracts that call for prices to rise during critical peaks: limited duration, dynamically set periods of time that usually correlate to high prices in the real-time wholesale market. Critical peak events may occur a limited number of times per year and may be communicated in advance. May be enabled by DG or other technology. • PR – Peak Rebates – full time fixed price contracts that pay rebates to customers for load reductions taken during specified hours. May be enabled by DG or other technology. DR/Price Response

10. Appendix – Definitions • 4CP – Four Coincident Peak – predictor signals or direct load control provided to customers in advance of potential Four Coincident Peak (4CP) intervals during summer months (June through September). Reducing load during such intervals lowers transmission charges. • 4CP charges apply to large customers (peak demand ≥700 kW) in competitive choice areas, and also to NOIEs at the boundary meter level. • TOU – Time of Use / Thermal Storage / Distributed Generation – prices that vary intraday across defined blocks of hours, with predefined prices and schedules. (As used here, does not apply to seasonal adjustments). DR/Price Response

11. Appendix – Definitions • OLC – Other Direct Load Control – contracts that allow the LSE or a third party to control the customer’s load remotely for economic or grid reliability purposes. This category applies to Direct Load Control (DLC) with different deployment criteria than described elsewhere. (Avoid double counting if DLC data was reported in other categories.) • OTH – Other Voluntary Demand Response Product – any retail product that includes a demand response incentive or signal not covered in the other categories. • FO – Financial Option – product where LSE purchases an option from the customer that is backed by a specified level of DR and uses it for their portfolio trades in the wholesale market. DR/Price Response

12. Future ERCOT analysis • Collecting premise-level data on these retail products would allow ERCOT to quantify retail DR and track trends: • Chart market growth in participation for each product type • Develop models (baselines) for the premise load based on historical usage • Compare the baselines to usage on days with likely DR events, depending on identified triggers: • High LMPs (for Real-Time or Critical Peak products) • Probable 4CP signals (for 4CP products) • Energy Emergency Alerts • Evaluate TOU premise peak usage vs. baselines and/or control groups • Provide periodic progress reports to the market on an aggregated basis DR/Price Response