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Tab 4: CEO UPDATE

Tab 4: CEO UPDATE. H.B. “Trip” Doggett President & Chief Executive Officer Board of Directors Meeting ERCOT Public September 18, 2012. Financial Performance (Updated through August). YTD Budget vs. Actual Performance: $ 5 .2 Million Favorable.

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Tab 4: CEO UPDATE

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  1. Tab 4: CEO UPDATE H.B. “Trip” Doggett President & Chief Executive Officer Board of Directors Meeting ERCOT Public September 18, 2012

  2. Financial Performance (Updated through August) YTD Budget vs. Actual Performance: $5.2 Million Favorable • $5.1 Million favorable 2011 carry forward • $0.5 Million favorable other revenues • $0.4 Million unfavorable system administration fees • $3.4 Million unfavorable outside services • $1.7 Million favorable salary & related benefits • $0.7 Million favorable facility & equipment costs • $1.2 Million favorable hardware & software maintenance or licensing Revenues Expenses ERCOT public

  3. Financial Performance (Updated through August) Year-End Performance Forecast: $3.0 Million Favorable Revenues • $5.1 Million favorable 2011 carry forward • $4.6 Million unfavorable outside services • $2.7 Million favorable salaries & related benefits • $0.8 Million favorable facility & equipment costs Expenses ERCOT public

  4. Impacts of Economy & Weather – 2012 August 2012: Forecast Energy 35.0 TWhActual Energy 35.4 TWh 2012 YTD Forecast Energy 225.7 TWhActual Energy 224.9 TWh Error: (-0.3%) Economy Impact Weather Impact Model Error ERCOT Public

  5. Summer 2012 Review • As expected, weather was hotter than normal (15 year average), but not as extreme as summer 2011 • The peak demand of 66,626 MW was set June 26, unusually early in the summer, 1,753 MW less than the August 2011 peak of 68,379 MW • The summer 2012 SARA forecasted a peak of 67,492 MW • No significant challenges serving load • Generation forced outages were lower than last year possibly due to temperatures and load not sustained at extreme levels • ERCOT region experienced more rain during the summer of 2012, so drought was not a broad concern • One watch for Physical Responsive Reserve below 2500 MW due to the tripping of two large generating units on July 30 • No Energy Emergency Alert events • Four Transmission Watches issued for areas of South and West Texas due to high loads and some transmission outages • Load growth in West Texas due to gas and oil development led to more transmission congestion in the area ERCOT public

  6. SARA Releases – Sep 4th 2012 Fall 2012 (Final) & Winter 2012-13 (Preliminary) • Sufficient installed generating capacity to serve forecasted peak demands with historical typical generation outages • Persistent drought conditions in ERCOT do not pose a threat to generation operations • Extreme load and extreme generation outage conditions can be accommodated in the Fall • Extreme load and extreme generation outage conditions could lead to rotating outages in the Winter ERCOT Public

  7. Non-binding Forward Price Projection (Evaluation Phase) Analyzed error between 6/28/12 and 8/27/12 looking at the Generation-to-be-Dispatched (GTBD) and Load Zone LMPs Mean Absolute Error for GTBD and Load Zone LMPs Per NPRR 351, ERCOT must post projected non-binding prices for at least 15 minutes into the future ERCOT Public

  8. Non-binding Forward Price Projection (Evaluation Phase) • Observations during the first two months include • Forward Price Projection is reasonable for the first 30 minutes except in the West Zone • Short-term load and wind forecast errors get amplified by the shape of the aggregated offer curve resulting in higher errors in Forward Price Projection • False price spikes have occurred near the top of the hour due to • Timing & modeling of generator start-ups & shut-downs • Handling of differences between COP & telemetered generator status • Updated logic was implemented on 8/29/12 to mitigate the above two issues • ERCOT and Stakeholders are continuing to evaluate further improvements ERCOT Public

  9. Departmental Highlights Compliance • Jim Brenton was appointed by the NERC Board of Trustees to the newly created Reliability Issues Steering Committee (RISC). • RISC is an advisory committee that reports directly to the NERC Board of Trustees and triages and provides front-end, high-level leadership and accountability for nominated issues of strategic importance to Bulk Power System (BPS) reliability. In some cases, that includes solutions other than new or revised standards. • Jim Brenton represents ERCOT and the NERC CIPC (Critical Infrastructure Protection Committee) on this new steering committee. Jim Brenton Principal, Regional Security Coordination Hired: August 1, 2005 ERCOT Public

  10. Departmental Highlights Information Technology • Several members of the IT organization have completed a comprehensive draft of a Technology Roadmap forecasting technology needs over the next 2 to 5 years. • This effort required cross-functional collaboration across IT organizations including IT Strategic Services & Asset Management, Enterprise Architecture, Application Services, Infrastructure, and IT Operations, as well as with Business Integration, Security, and other business stakeholders. • A high-level presentation was given to the ERCOT Board in March. A more detailed IT Deep Dive, along with a Security Deep Dive, was provided to two Board members in August. An overview will be presented to the November Finance & Audit Committee. ERCOT Public

  11. IEEE PES General Meeting, San Diego, July 2012 • Topics Included • Extreme Weather • Phasor Measurements • Situational Awareness • High Wind Penetration • Demand Response • Real-Time Contingency Analysis • State Estimation • Sub-Synchronous Control Interaction • Topology Control • Wide Area Damping Control • Impact of Wind Resource on Prices • Modeling of Wind Parks • Load Modeling ERCOT Public

  12. Top Community Partner – Taylor ISD Award from Texas Afterschool Centers on Education (ACE), a Texas Education Agency program ERCOT outreach to Taylor ISD • 47 ERCOT employees • 600+ volunteer hours Programs included • MAPS – Mentors for 2nd grade students • MUNCH – Mentors for 3rd through 12thgrade • BLADE – Beginners Learning Alternative Designs for Energy • Duck University – Official Afterschool Center on Education (ACE) Tab 4 ERCOT Public

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