PWG Update Report By Ernie Podraza of Reliant Energy ERCOT PWG Chair for RMS Meeting

1. PWG Update Report By Ernie Podraza of Reliant Energy ERCOT PWG Chair for RMS Meeting August 14, 2003

2. Next PWG Meetings 8/19, 8/20 and 9/11. • New Profile Cost Recovery Method per PUCT Project 25516. • Annual Profile Type and Weather Zone Validation. • Opt-in Entity Issues for PWG. • Oil and gas properties profile change request. • Direct Load Control (DLC) Project Status. • IDR Requirement Report. • Default Profiles.

3. PUCT Project 25516, Load Profiling and Load Research Rule. • Approved at open meeting 3/05/03. Effective Date April 16, 2003 (Oct. 16, 2003 - end of 6 months). • ERCOT has 6 months to establish a procedure to provide a method of recovery of research costs associated with obtaining a new profile by a sponsoring Market Participant. • ERCOT presented a strawman at the 5/07/03 PWG meeting. • PWG refined the strawman at the 5/28/03 PWG Meeting. • PWG presented alternatives at the RMS meeting on 6/12, Pay As You Go was selected. • Per PWG meetings 6/18, 6/19 and 7/09, the PWG has drafted a PRR and LPGRR. • PRR442 and LPGRR2003-003. • 7/17/03 RMS approved , urgent status approved at 07/24/03 PRS and 8/6/03 TAC meetings, and PRS Comments due: 08/11/03. • PRS Review: 08/21/03, Comments on PRS Recommendation: 09/03/03, TAC Consideration: 09/04/03, Board Consideration: 09/16/03.

4. Annual Profile Type and Weather Zone Validation.

5. Based on 12 months ending April 2002 and using the usage month algorithm in current Profile Decision Tree. Percentages are for a residential and a business sample of 20,000 ESIIDs each per TDU pulled in November 2002 and not over the whole population.

6. Opt-in Entity Issues for PWG. • Nueces and San Patricio. • Texas SET Version 1.5 Mid July, 2003. • Invite the Muni and Coop Segment participation. • ACTION ITEMS: • Initial Validation of Profile Id Assignments. • Updates to the LPG, Load Profiling Guides. • Updates to Protocols. • Shall be using the Profile Decision Tree Version 1.08. • Both entities working with ERCOT staff to get data loaded. • San Patricio may opt-in Spring 2004. • Nueces does not yet have profile id assignments.

7. Oil and gas properties profile change request. • Submitted to ERCOT 3/6/03 by Pioneer Natural Resources, Priority Power Management, and Energy Data Source . • ERCOT to post to WEB. • Argument is that the aggregate profile is a very high load factor profile, close to flat. • ERCOT is to evaluate and submit recommendation to PWG. • May test the new PUCT Rule 25516 for reimbursement. • ERCOT shall post the methodology request to the Market Information System (MIS) and respond to the request within sixty (60) days of the posted date of the request. This period does not include the time to analyze and render the complete assessment of the request. • “ERCOT withholds a decision on making a recommendation on whether to adopt or to deny adoption of the suggested profile change; instead ERCOT finds the request, as submitted, is incomplete and deficient. The requestors are invited to address the incompleteness and deficiencies listed below and re-submit the request for further review.” • Per 6/19 PWG meeting, a straw-man in development for changes to the profile change request process and to allow lagged dynamic samples.

8. Direct Load Control (DLC) Project Status. • PRR 385 Section 18 is complete with Board Approval 5/20/03. • LPGRR2003-001 is attached to PRR385, approved by TAC 7/02, reviewed by Board, and the LPG is updated). • ERCOT Schedule is pending, Project Manager assigned. • ERCOT and some Market Participants question priority going forward. • PRR Section 6 Language for DLC still needs to be written for a PRR. • Memo, on Project 26359 on Competitive Metering, May 8, 2003, by Commissioner Perlman suggests that wires companies need to develop a rate structure that provides strong incentives for demand responsiveness by charging different rates during high load periods. • PRR388 and PRR400 does not completely cover DLC issues.

9. IDR Requirement Report • 07/03/03, ERCOT issues IDR_threshold_analysis_20030627.xls. • July 30, 2003, ERCOT issues a Market Notification for IDR Requirement File on Portal. • PWG discussed on 7/30/03. Background: • The report was issued in the spring of 2002 and manually sent to market participant contacts. • The report was again issued in the spring of 2003 and manually sent to market participant contacts. • The report was automated on monthly basis on 5/2, 6/2, and 7/2/03.

10. IDR Requirement Report Load Profiling Guides, Section 9.2.3.3.1 Non-IDR to IDR (NIDR to IDR) Per Protocols Section 18.6.1, "Interval Data Recorder (IDR) Installation and Use in Settlement," any ESI ID that exceeds 1000 kW or 1000 kVA in any two (2) billing months in the most recent twelve (12) month period or that receives service at 60 kV or above is required to have an interval data recorder (IDR) installed and utilized for settlement. ERCOT shall monitor the peak demand level of demand metered customers and post a monthly report to the Market Information System (MIS), with the appropriate Portal security rules, detailing which ESI IDs are required to have an IDR installed. The CR serving the ESI ID has thirty (30) days to verify the demand level and request that the TDSP install an IDR. If the CR does not agree that the IDR criteria have been met, the CR shall refer to Section 14.3, "General Dispute Resolution Guidelines," to address the issue. The TDSP has until the second regularly scheduled meter read date after receipt of the CR’s request to install the IDR. The TDSP shall update the Load Profile ID in the ERCOT systems effective on the meter install date, via the appropriate Texas SET transactions.

11. Default Profiles • PWG reviewed 7/30/03. • Requested ERCOT staff examine PWG suggestions if a new module can be added to the settlement software to allow ways of scaling the default profiles when both the IDR data is missing and/or a NIDR premise changes to IDR. • PWG and ERCOT staff to further discuss at the 8/19 PWG meeting.