ERS QSE Training 101 Updated 8/8/19 Disclaimer This

ERS QSE Training 101 Updated 8/8/19 Disclaimer This

ERS QSE Training 101 Updated 8/8/19 Disclaimer This presentation is intended to be fully consistent with the Protocols, Other Binding Documents, and PUC Subst. Rule 25.507. To the extent any part of this presentation contradicts the requirements set forth in the PUC Rule, Other Binding Documents or Protocols, the PUC Rule, Other Binding Documents or Protocols control. PUBLIC Outline 1. ERS Overview

2. QSE Qualification 3. Four Key Phases of an ERS Standard Contract Term Procurement Contract Performance Settlement 4. Other Useful Information Emergency Response Service (ERS) Overview ERS is a service provided by loads and certain types of generators willing to interrupt or export energy onto the ERCOT system during an electric grid emergency in exchange for a payment.

Controlled interruption of prepared customers vs. uncontrolled interruption of unprepared customers It is an additional tool for ERCOT Operations, deployed ONLY in the late stages of a grid emergency Last resort prior to firm load shedding (rotating outages) PUBLIC 4 Emergency Response Service (ERS) Overview Resources are procured for one or more of the four ERS service types: Non-Weather-Sensitive ERS-10 (NWS ERS-10) Weather-Sensitive ERS-10 (WS ERS-10)

Non-Weather-Sensitive ERS-30 (NWS ERS-30) Weather-Sensitive ERS-30 (WS ERS-30) The 10 and 30 in each of the service types designates the minutes between issuance of an ERCOT deployment instruction and full deployment of the resource, also known as the ramp period. There are three 4-month Standard Contract Terms (SCT) within the ERS year. February thru May June thru September October thru January PUBLIC 5 Emergency Response Service (ERS) Overview Offers may be submitted to provide Emergency Response Service for one or more of the following Time Periods in the SCT.

Time Period Time Period 1 Time Period 2 Time Period 3 Time Period 4 Time Period 5 Time Period 6 Time Period 7 Time Period 8 PUBLIC Time Period Hours Hours Ending 0600-0900 (5:00:00 a.m. to 9:00:00 a.m.) Monday through Friday except ERCOT Holidays. Hours Ending 1000-1300 (9:00:00 a.m. to 1:00:00 p.m.) Monday through Friday except ERCOT Holidays.

Hours Ending 1400-1600 (1:00:00 p.m. to 4:00:00 p.m.) Monday through Friday except ERCOT Holidays. Hours Ending 1700-1900 (4:00:00 p.m. to 7:00:00 p.m.) Monday through Friday except ERCOT Holidays. Hours Ending 2000-2200 (7:00:00 p.m. to 10:00:00 p.m.) Monday through Friday except ERCOT Holidays. Hours Ending 0600-0900 (5:00:00 a.m. to 9:00:00 a.m.) Weekend and ERCOT Holidays. Hours Ending 1600-2100 (3:00:00 p.m. to 9:00:00 p.m.) Weekend and ERCOT Holidays. All other hours 6 Emergency Response Service (ERS) Overview An ERS Procurement Schedule is posted for each Standard Contract Term (SCT). http://www.ercot.com/services/programs/load/eils/index The procurement schedule includes all key dates associated with the SCT

A SCT may take approximately 9 months to complete. Because of this, at any point in time, ERS providers may be working simultaneously on activities for the previous, current, and upcoming SCT. FebMay Procure ment Contract Performa nce JunSep Procure ment Settleme nt

Complia nce Contract Performa nce OctJan Procure ment PUBLIC Settleme nt Contract Performa nce

Complia nce Settleme nt Complia nce 7 Emergency Response Service (ERS) Overview The ERS Technical Requirements & Scope of Work (TRSOW) sets forth detailed requirements for participation in ERS by QSEs and ERS Resources; and is specific to the ERS SCT defined in the document. It may also include additional requirements or details not found in the protocols. The draft version of the TRSOW is posted to the ERS webpage under

the heading Upcoming SCT for a 14 day stakeholder review period. Interested Market Participants may submit comments to ERCOT for consideration. 8 PUBLIC Emergency Response Service (ERS) Overview ERS Procurement Methodology - Procurement constraints are determined using ERS Capacity Demand Curve and Risk Factors to allocate annual spend limits. Annual Cost Cap -$50 million for the ERS budget year; Feb 1- Jan 31 Annual Cost Cap allocated to each time period to set an expenditure limit for each ERS Time Period. ERS Offer Cap - $80/MW/hr Time Period Expenditure Limits are calculated using risk weighting factors established by ERCOT ahead of each procurement and

included in the RFP. Risk Factors represent the forecasted risk of having an EEA event during each time period Risk Factors can range from 1-100 (100 being greatest risk) PUBLIC 9 Emergency Response Service (ERS) Overview ERS Procurement Methodology All ERS service types specified in the RFP will be procured using a common ERS capacity demand curve for each ERS Time Period. The highest offer accepted for an ERS Time Period will set the clearing price for all ERS Resources in that Time Period. Rules apply to: Prorating offers that would result in exceeding expenditure limit Resolving tied offers

PUBLIC ERS Procurement Methodology posted to Key Documents http://www.ercot.com/services/programs/load/eils 1 0 Emergency Response Service (ERS) Overview ERS Capacity Demand Curve $/MW/Hr Expenditure Limit Capacity Demand

Curve Offer Cap Capacity Inflection Point PUBLIC MW 11 QSE Qualification QSE Qualification ERS Resources must be represented by a Qualified Scheduling Entity (QSE). An ERS QSE is required to establish voice and critical data

capabilities over the ERCOT Wide Area Network (WAN) and must maintain a 24/7 operation that can receive verbal and XML dispatch instructions. ERCOT allows ERS QSEs to utilize QSE Service providers to satisfy technical and control room requirements (QSE Agency Agreement). The process of establishing the WAN may take anywhere from four to six months for the QSE to complete. QSEs work with their ERCOT account manager to become ERS qualified. PUBLIC 1 QSE Qualification QSEs representing procured ERS Resources are paid a capacity payment to be available for deployment No additional payment for ERS Loads from ERCOT if deployed ERS Generators may receive energy payment for energy injected

onto grid ERCOTs only financial relationship is with the QSE Payment to the ERS Resource (customer) is a private contractual issue between the customer and the QSE PUBLIC 14 ERS Procurement Procurement - ERID Submission ERID submission is the first mandatory step in the ERS procurement process. Resources must go through the ERID process each SCT. An ERS Resource is a single site or aggregation of sites that provide the service by reducing the amount of energy used from the grid. This can include sites with onsite generation.

QSEs submit all prospective ERS Resources to ERCOT using the ERS Submission Form. Posted version or Pre-populated Submission Form (sent to QSEs by ERCOT). ERS Submission Form and Instructions are posted to ERS Key Documents http://www.ercot.com/services/programs/load/eils/index PUBLIC 16 Procurement - ERID Submission After analysis ERCOT returns to the QSE, by posting to the MIS, either approved or error books. A digital certificate is required to view/retrieve documents posted to the MIS. Approved ERIDS contain QSE availability and baseline accuracy

information for each baseline for which the resource has been qualified. PUBLIC Two baseline types: Drop-by (Default) or Drop-to (Alternate) Historical availability data is provided as a service to help avoid over- or under-bidding of capacity The baseline options for an aggregated ERS Load are based on the accuracy of the baseline at the aggregate level, not at the site level. See training titled ERS QSE Training 201 17

Procurement - ERID Submission ERS Load, Default Baseline (drop-by) PUBLIC 18 Procurement - ERID Submission ERS Load, Alternate Baseline (drop-to) ERS Resource offer is awarded at 20 MW In a deployment event the ERS Resource is expected to shed to 4.21 MW (declared Maximum Base Load of 4 MW .95) Hypothetical Load Duration Curve MW 60

Peak Load: 58 MW 50 40 30 20 Avg. Hourly Load: 24 MW 10 20 MW Bid 0 Declared Maximum Base Load: 4 MW 0

10 20 30 40 50 60 70 80 90 100

% of Hours in Contract Period PUBLIC 19 Procurement - ERID Submission Fifteen minute interval metering is required for participating in ERS and the interval data from those meters is used for all, availability and performance measurement analysis. PUBLIC Interval data (premise or sub-metered) for each site in an ERS Resource located in a competitive choice area will be adjusted upward to account for distribution losses.

Interval data for sites in NOIE areas also will be adjusted upward to account for distribution losses if the NOIE has submitted a distribution loss study to ERCOT pursuant to Protocols, Section 13.3, Distribution Losses. 20 Procurement - ERID Submission In order to evaluate the applicability of a Default Baseline, ERCOT must have access to at least six months of site-specific historic interval meter data, pulled within the last 45 days. Interval data submitted by TDSP to ERCOT, or QSE installed metering (premise or end-use metering are allowed). ERCOT will limit the baseline option for an ERS Load to the Alternate Baseline in the following circumstances:

If one or more sites within the ERS Load has less than 6 months of available historic interval meter data. If the prospective ERS Load contains a non-interval metered site. In such cases the QSE is responsible for ensuring that the site is equipped with interval metering by the start of the applicable SCT. Interval data can be provide from QSE installed metering, or By the relevant meter-reading entity (TDSP). PUBLIC 21 Procurement - Offer Submission QSEs representing prospective ERS Resources submit offers to provide ERS using an approved ERID with an assigned ERID Number. ERID number assigned by ERCOT during the ERID process For each ERS Resource, the QSE shall declare the following values for each Time Period for which an offer is being submitted:

Submission Type (ID page) Baseline Capacity offer Price Whether capacity proration is allowed Proration lower limit Award Notifications are posted to certified section of the ERCOT Market Information System (MIS). PUBLIC 22

Contract Performance PUBLIC Deployment of ERS 30-Min Ramp ERS Products Dispatched as early as EEA Level 1 (PRC<2300 MW) 10-Min Ramp ERS Products Dispatched as early as EEA Level 2 (PRC<1750 MW) ERCOT Operations will release ERS Resources after the emergency is over via another hotline call. Must be back online and ready to perform within10 hours of the release ERS may be separated into deployment blocks if more than 500 MWs are procured. If deployment blocks are used ERCOT will notify ERS providers through an e-mail prior to the start of the SCT.

PUBLIC 24 Deployment of ERS ERCOT Operations dispatches ERS Resources via an XML message that is followed by a hot line phone call to all-QSEs. QSEs in turn dispatch the Resources with a 10 or 30 minute response time. VDI shall represent the official start of the ERS ramp period ERS Resources must shed at least 95% of their committed load within 10 or 30 minutes depending on the service being provided. Performance is measured after the fact using 15 minute interval metering PUBLIC 25

Deployment of ERS ERS Resources must respond according to their commitment and baseline assignment within 10 minutes or 30 minutes (ramp period) of the QSEs receipt of the instruction Deployment obligation time is the cumulative time during the Sustained Response Period of an event during which an ERS Resource has an obligation. Deployment obligation time does not include the ramp time. Subject to a maximum of eight hours of cumulative deployment obligation time per ERS Contract Period If an ERS deployment is still in effect when the ERS Resources cumulative deployment obligation time is equal to or exceeds eight hours, the ERS Resource must continue to meet its event performance requirements for the next four hours or until ERCOT releases the ERS Resource, whichever comes first. PUBLIC

26 Deployment of ERS - Testing ERCOT may conduct an unannounced test of any ERS Resource at any time during an ERS Time Period in which the ERS Resource is contracted to provide ERS The test performance factors for ERS Resources resulting from those tests will be used in Settlement for that and subsequent ERS Standard Contract Terms An ERS Resource that successfully completes a test shall not be subject to an additional test for at least 330 days (unless specified differently) An ERS Resource that meets its performance obligations during any ERS deployment event shall not be subject to a test for at least the following 330 days. (unless specified differently) PUBLIC 27

Performance (Non-Weather Sensitive ERS) Performance is based on both the availability of the ERS Resource and Test/Event Performance during the SCT. No later than 45 days after the end of an ERS Standard Contract Term in which one or more ERS deployment events occurred, ERCOT shall provide each QSE representing ERS Resources with an event performance report containing the results of ERCOTs evaluation of the event(s) for each ERS Resource and the QSEs portfolio-level event performance factor for the event(s) and the ERS Standard Contract Term. PUBLIC 28 QSE Portfolio Performance A single availability and event performance factor for the QSE will be calculated across all contract periods in the SCT.

Default Baseline Loads: Considered available for any hour in the contracted time period in which actual load greater than 95% of its obligation. Alternate Baseline Loads: Considered available if the average curtailable load (excluding MBL) divided by Obligation is 1 or greater. Resources will be settled using the QSE portfolio level availability and Test/Event performance factors. If the portfolio performs at or above 100%, it will be paid for its entire obligation. PUBLIC 29 Settlement PUBLIC

Settlement Payment Information Timing of Payments are described for each Standard Contract Term in Protocol Section 9.14.5 (1) Protocol states 20 Days after the final Settlement of the last Op Day of the ERS SCT is posted. (For example: May 31 - Final settlement post on July 29; add 20 days = August 18) Notice is sent out on the Notice Settlement exploder list Link to sign up for the list: http://lists.ercot.com/scripts/wa-ERCOT.exe?INDEX Sign up for the NOTICE_SETTLEMENTS LIST ERS QSE-level Payment Details Report are posted on the same day to the MIS. PUBLIC 31 ERS Participation in NOIE areas ERS Resource located outside of a competitive service area may use a

unique service identifier (UMI) in lieu of an ESI ID. QSEs representing ERS Resources that include sites located in a territory served by a NOIE are responsible for Arranging with the NOIE Transmission and/or Distribution Service Provider (TSP/DSP) to provide interval data to ERCOT; or Providing interval data from QSE installed metering PUBLIC Interval meter data for the sites must be provided in one of the prescribed formats within 35 days following the end of a calendar month or following an ERCOT unannounced test. 32 Other Helpful Information PUBLIC

Additional Information 1. Got questions? Who ya gonna call? a. Client Services ([email protected]) Contact your client rep for questions regarding QSE qualification General ERS questions b. Demand Integration ([email protected]) 2. Other ERS Information Resources a. DSWG (and subgroups) - http ://www.ercot.com/committees/board/tac/wms/dswg/ b. Demand Side WG Exploder List Subscribe to the DSWG exploder list to receive email notifications of upcoming meetings, document postings and announcements regarding ERS. http ://lists.ercot.com/scripts/wa-ercot.exe?INDEX PUBLIC 34

Additional Information 3. Information Where Is It? How Can I get? Demand Response: http://www.ercot.com/services/programs/load/index a. Annual Report on ERCOT Demand Response b. Monthly ERCOT Demand Response from Pilot Projects (if any) c. Demand Response Providers List (Under Key Documents) Emergency Response Service: http ://www.ercot.com/services/programs/load/eils/index d. ERS Offer Disclosure (available 60 days after the 1st day of SCT) e. ERS Procurement Results (posted prior to the start of the SCT) f. Current, Upcoming and Previous SCT docs Request for Proposal (RFP) Technical Requirements and Scope of Work (TRSOW) Procurement Schedule PUBLIC 35

Additional Information ERS Forms & Supporting Documents: http ://www.ercot.com/services/programs/load/eils/documents a. Sample Test Scripts, Meter Data Format Samples, Instructional documents on how to submit forms and more. Market Information System (MIS) - https://mis.ercot.com/pps/tibco/mis a. For retrieving ERS materials b. Requires Digital Certificate (see your client rep) Required docs (need to be submitted prior to Offers) a. ERS Supplement to QSE Agreements (one time only) b. NOIE Authorization Form For sites in a NOIE area PUBLIC 36

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