Emergency Load Response Programs

1. Emergency Load Response Programs WMS Monthly Meeting February 22, 2006

2. Emergency Load Response Programs • DSWG given assignment to develop ELR Program for a 1 in 10 year loss of load event (LOLE); a probabilistic approach used to determine reserve margins & resource adequacy • ELR Program concept developed by ERCOT staff and market participants and presented to DSWG with mixed results • ELR concept presented to PUCT staff who were receptive to the idea; PUCT issues proposed Rule 25.505 (resource adequacy) • Proposed rule includes a “backstop” provision for emergency load response (ELR) contracts • ERCOT uses Projected Assessment of System Adequacy (PASA) analysis and reports need for ELR contracts • PASAs are done for Medium Term (looks out 3 years) and Short Term (7 days) • ELR contracts would be for no shorter than 90 days and no longer than 1 year • ELR Resources deployed thru EECP • Cost Recovery done on a System-wide Load Ratio Share • ELR Contracts do not replace other reliability based tools—Day Ahead AS Services, RUC, Black Start, and RMR/MRA

3. Emergency Load Response Programs • ELR Resource Contracts require advance planning and procurement timelines • In general, ELR would not be used to respond to events outside of a peak resource adequacy condition such as • Cold Weather Fuel Curtailments • Shoulder month type events • Loss of multiple contingencies • Cost to provide coverage for expanded list of events may be prohibitive • RRS costs $130K per MW per year for 24x7 coverage • PUCT LM programs cover peak hours during the Summer and cost about $16K per MW for about 700 hours of coverage • Next steps: • Comment period is open for Proposed Resource Adequacy Rule • Stakeholder process will be used to develop implementation for Proposed Rule