COMS/Settlements/Credit

COMS/Settlements/Credit Weekly Update June 18, 2010 http://nodal.ercot.com 1

Antitrust Admonition ANTITRUST ADMONITION ERCOT strictly prohibits Market Participants and their employees who are participating in ERCOT activities from using their participation in ERCOT activities as a forum for engaging in practices or communications that violate the antitrust laws. The ERCOT Board has approved guidelines for members of ERCOT Committees, Subcommittees and Working Groups to be reviewed and followed by each Market Participant attending ERCOT meetings. If you have not received a copy of these Guidelines, copies are available at the Client Relations desk. Please remember your ongoing obligation to comply with all applicable laws, including the antitrust laws. DISCLAIMER All presentations and materials submitted by Market Participants or any other Entity to ERCOT staff for this meeting are received and posted with the acknowledgement that the information will be considered public in accordance with the ERCOT Websites Content Management Operating Procedure. http://nodal.ercot.com 2

Agenda • Anti-trust Admonition • Standing Reports and Updates • Operating Day Settlement Reports • Week in Review/General Reminders • Next Week’s Activities • Environment Report • Known Issues • Credit • Question and Answers / General Discussion ERCOT asks that Market Participants log into the WebEx session using their company name and then their name. This will allow ERCOT to take roll-call offline http://nodal.ercot.com 3

DAM Settlement Overview for June 8 Statement and Invoice Overview • 166 Statements/Invoices posted to QSEs • 53 Statements/Invoices posted to CRRAHs • 0 QSEs received Statements/Invoices for $0 CRR Overview • CRRs were derated • CRR Owners were fully funded (i.e. there were no Short Fall Charges) General Reminders/Updates • Submit any questions/issues about statements, invoices, extracts or calculations to markettrials@ercot.com http://nodal.ercot.com 4

DAM Settlement Overview for June 10 Statement and Invoice Overview • 171 Statements/Invoices posted to QSEs • 53 Statements/Invoices posted to CRRAHs • 0 QSEs received Statements/Invoices for $0 CRR Overview • CRRs were not derated • CRR Owners were fully funded (i.e. there were no Short Fall Charges) General Reminders/Updates • Submit any questions/issues about statements, invoices, extracts or calculations to markettrials@ercot.com http://nodal.ercot.com 5

DAM Settlement Overview for June 11 Statement and Invoice Overview • 169 Statements/Invoices posted to QSEs • 53 Statements/Invoices posted to CRRAHs • 0 QSEs received Statements/Invoices for $0 CRR Overview • CRRs were derated • CRR Owners were fully funded (i.e. there were no Short Fall Charges) General Reminders/Updates • Submit any questions/issues about statements, invoices, extracts or calculations to markettrials@ercot.com http://nodal.ercot.com 6

DAM Settlement Overview for June 15 Statement and Invoice Overview • 212 Statements/Invoices posted to QSEs • 53 Statements/Invoices posted to CRRAHs • 0 QSEs received Statements/Invoices for $0 CRR Overview • CRRs were not derated • CRR Owners were fully funded (i.e. there were no Short Fall Charges) General Reminders/Updates • Submit any questions/issues about statements, invoices, extracts or calculations to markettrials@ercot.com http://nodal.ercot.com 7

RTM Settlement Overview for June 1 Statement Overview • 143 Statements posted to QSEs • 49 Statements posted to CRRAHs • 2 QSEs received Statements for $0 (This is not due to the closed issue. There were drivers for calculations, but the outputs were zero) General Reminders • Submit any questions/issues about statements, invoices, extracts or calculations to markettrials@ercot.com http://nodal.ercot.com 8

RTM Settlement Overview for June 2 Statement Overview • 186 Statements posted to QSEs • 3 Statements posted to CRRAHs • 4 QSEs received Statements for $0 General Reminders • Submit any questions/issues about statements, invoices, extracts or calculations to markettrials@ercot.com http://nodal.ercot.com 9

Charge Type Tracker • Below are the Day Ahead Market charge types that have been executed at least once during Market Trials (17 of 19 executed) http://nodal.ercot.com 13

Charge Type Tracker • Below are the Real-Time Market charge types that have been executed at least once during Market Trials (30 of 45 executed) ** We are currently planning to have all charge types executed by the end of July** http://nodal.ercot.com 14

Week in Review • 6/17 – RTM Invoice posted: • No unsupported operating dates included, so QSEs and CRRAHs should be able to validate all line items • RTM Initial 5/28, 5/29, 6/1, 6/2, 6/3 included • RTM Final 5/19, 5/20, 5/21 included • Balancing Account Invoices • All of the invoice payments went to QSEs with load since all CRRs for the month of May were fully funded • Total payments were $21,557,141.62 • CARD Invoices (Distributed Revenue for May CRR Auction) • Total payments were $9,652,403.82 • 8 Hour LFC Test • Emergency Base Points were issued, so Emergency Energy settlements will be executed for the 6-17 RTM Initial settlements • EEA flag was calculated http://nodal.ercot.com 15

Next Week’s Activities • Operating Days for next week that will be settled • 6-22 Op Scenario: Cancel previous RUC commitment (both before and after breaker close). Execute at 1 pm • 6-23 Op Scenario: Manually commit/decommit Resources (one RUC instruction per QSE) • 6-24 SASM only if needed • 6-25 SASM only if needed • 6-26 SASM only if needed • DAM Re-Settlement and First True-Up Statement will be published on 6-22 • We will be adding $10 to all Load Zone, Hub and AS prices so that deltas will be created for the DAM Re-settlement • These changes are not actual price corrections, they are only there to facilitate the re-settlement http://nodal.ercot.com 16

Environment Report-Known Issues COMS New Known Issues • DAEOCPRCAP (Day Ahead Energy Offer Curve Price Cap) does not calculate when HSL=MW quantity and there are multiple quantities equal HSL. This only affects Day Ahead AIEC calculation under this very distinct data scenario • When there is a RUC Decommitment with split decommitted periods from the same RUC Process, we are currently not evaluating the second RUCD period. The second RUCD period should be independently evaluated from the first. • Incorrect ERCOT Admin Fee was used http://nodal.ercot.com 17

Environment Report-Known Issues COMS Closed Issues • EOCPRCAP (Energy Offer Curve Price Cap) is not calculating when RTMG is zero for a 15 minute settlement interval • SUO (Start Up Offer) Bill determinant used in RUC Make-Whole is not being calculated correctly when the offer submitted to the DAM is updated before the adjustment period. • CSI Patch caused new issue where no CRRSFTVIOL bill determinants will be created. This means there will be no CRR derations for Operating Day 5-5. A manual work around will be implemented to fix this for the DAM settlement of Operating Day 5-7 • CSI Logic needs to be updated for the CRRSFTVIOL Bill Determinant. The logic needs to be updated to include TO_STATION, FROM_STATION, TO_STA_KV and FROM_STA_KV. It also should only create the BD when the same constraint is binding for the same hour in both SFT and DAM. This is currently only an issue if the same constraint and contingency is binding in both SFT and DAM, but To-From direction is different in both processes • Lodestar metadata for the Market Constraint table needs to be updated to include the new columns TO_STATION, FROM_STATION, TO_STA_KV and FROM_STA_KV Reminder: ERCOT will post known issues every Friday to the readiness center at: http://nodal.ercot.com/readiness/markettrials/coms/index.html http://nodal.ercot.com 18

Settlements FAQs Q: Where can I see a detailed extract from Nodal tracking registered ESIDs to transmission station name (& associated load zone) A: You can find ESIID to station name in the public TDSP ESIID Extract. The MP can find MP specific data on the ESIIDs in the ESIID Service History & Usage Extract or by using the web services requests to get an answer to a specific attribute question. http://nodal.ercot.com 19

Settlements FAQs Q: Which types of make whole payments will be charged to virtuals? (RUC only?) How will they be charged to virtuals (Are cleared bids and offers netted for this purpose)? A: QSEs with cleared DAM energy only offers and bids could be held liable for RUC Capacity Short charges which are covered in Nodal Protocols section 5.7.4.1. A QSE with cleared energy only bids and Point to Point Obligation Bids in the DAM could also be held liable for DA Make Whole payments though the DA Make Whole Charge which is covered in section 4.6.2.3.2. http://nodal.ercot.com 20

Credit and Treasury Weekly Update June 18, 2010 http://nodal.ercot.com 21

Week in Review • Resolved generation volume issue identified last week • All high historical estimates will roll off as settlement data is available (by next Friday) • Prior reports will not be rerun • Continue to post Credit Reports • ACL and TPE Summary Reports early (by 9:30) • Remainder by 11am (after review) • Continue to send ACLs each business day • ERCOT continues to adjust ACLs or credit limits as needed to ensure adequate credit limits while the market gets familiar with the Credit Reports • No issues with CRR auction or with LFC test • Encountered a delay with the CMM calculation engine which caused CMM reports not to be posted on Tuesday PM http://nodal.ercot.com 22

Week in Review • Large credit exposures • Load volume estimation and the generation volume estimation issue is fixed, all load estimates are now correct; generation estimates with erroneous data will fully roll off in by next Friday. • Expect “completed not settled” estimates used in AIL component of TPE calculation to improve daily and reflect all corrections next week • The issue related to Credit and Debit invoices appearing in the OIA (Outstanding Invoice Amount) of the EAL (Estimated Aggregated Liability) calculation after payment due date has been identified, a fix is in process and a manual work around is in place in the meanwhile) • Extrapolation of high historical activity forward continue to impact exposure calculations for CPs with ongoing activity in Real Time • Clean up: All data older than June 3 has been removed to “reset” the ADTE using more current market activity • CPs may work with ERCOT staff to adjust the ADTE component of the Total Potential Exposure (TPE) further if needed http://nodal.ercot.com 23

Week in Review • Large credit exposures • While some CPs are beginning to operate more normally, we continue to see other CPs utilize the Real Time market significantly, resulting in high exposures • To obtain more realistic exposure calculations, CPs should begin functioning in MT5 as you might after Go-Live • For QSEs representing Load, use Energy Trades or DAM rather than RT to meet your load requirements. • For all, use more realistic estimates in your market activity (bids / offers in DAM, etc) http://nodal.ercot.com 24

Volume by Counter-Party by Day http://nodal.ercot.com 25

Next Week • ERCOT • Will continue to review exposure calculations for reasonableness • Will continue to override ACL as needed • Once data stabilizes and AIL report is available, will discontinue override (tentatively the week of June 28th) • Will send collateral calls the week of June 28th • Will do credit approvals of CRR Bilateral Trades as received • Counter-Parties • Continue to Review the Credit Report calculations to confirm they reflect their MT5 activity to the extent possible • Ensure your ACL is adequate for normal DAM activity • If CPs wish to have a higher limit, they should send “e-collateral” http://nodal.ercot.com 26

Next Week - Schedule of activity Meeting Title (optional)

Other topics • Tentative timeline for First Priority Security Interest document • July 1, 2010 – ERCOT circulates initial draft to CPs. • July 19, 2010 – Comments back from CPs. • August 2, 2010 – ERCOT circulates second draft to CPs. • August 17, 2010 – ERCOT reviews document with F&A. • September 21, 2010 – Final review and possible approval by F&A and ERCOT Board. • NPRR 206 and “e” factors • NPRR 206 with 1/0/1 – in by mid-July • “e” factors – planned - August 1 • Training on NPRR 206 and “e” factors in August http://nodal.ercot.com 28

New Known Issues • Unbilled Day Ahead Amount (UDAA) of the EAL Details Report reflects days that have already been invoiced (May 15 – June 14) • Root cause is being investigated • Daily Average Liability Extrapolation (DALE) Supporting Details of the EAL Details Report is missing several invoices (June 4, 5, 10) • Root cause is being investigated • Real time estimates for Aggregate Incremental Liability (AIL) are delayed by up to two days • Due to a CSI framework restart, jobs are delayed. Expect to self correct as jobs catch up. • Note: Know Issues can be reviewed at : http://nodal.ercot.com/readiness/markettrials/coms/index.html, http://nodal.ercot.com 29

Closed Known Issues • Load Volume used in AIL Calculation – Fixed • Historical data has been corrected • Generation Volume used in AIL Calculation – Fixed • Approximately five days of historical data needs to be corrected • OIA (Outstanding Invoice Amount) of the EAL (Estimated Aggregated Liability) calculation - Fixed • Credit and Debit invoices appear in OIA calculation after payment due date • ADTE field of the EAL Details Report has a display issue; calculation is correct - Fixed http://nodal.ercot.com 30

http://nodal.ercot.com 31

COMS/Settlements/Credit