Application of High Sustainable Limit

With PRR 666/676

WMS November 15, 2006

Ino GonzalezERCOT Settlements

Under Scheduled Capacity Charge

USRP = Min{2 * USQRP * (PCOOMRP + LPCRP + PCRP)/ CapOOMRP, [(PCOOMRP + LPCRP + PCRP) *

USQRP] / [Σ(USQRP)]}

Where:

• USRP($) Under Scheduled Charge by hour for the QSE.

• USQRP(MW) Under Scheduled Quantity per QSE per hour

• PCOOMRP($/hr) Sum of all OOMC payments across ERCOT

• LPCRP($/hr) Sum of all Local RPRS payments across ERCOT

• PCRP($/hr) Sum of all Zonal/Capacity Insufficiency RPRS payments across ERCOT

• CapOOMRP(MW) Sum of all Capacity (HSL) procured for OOMC or RPRS for the hourly interval

The CAPOOMRPi is defined as:

“Sum of all Capacity (HSL) (MW) procured for OOMC or RPRS for the hourly interval”

• HSL is a 96 interval data cut but its values represent hourly MW quantities (EMMS R4).

• This allows the QSE representing the resource to update the HSL every 15 minutes.

• For the calculation of USRP, ERCOT will use an average HSL for the hourly interval value.

Let’s look at an example =

Calculation of CapOOMRP

Sample Calculation of CapOOMRP

Int8 Int9 Int10 Int11 Int12

514 514 0 0 0

Hour 3

Hour Three HSL: 514 + 0 + 0 + 0 = 514

514 divided by 4 = 128.5

Quantity for CapOOMRP = 128.5

Utilizing Average

HSL is consistent with:

1. OOMC Capacity Values Determination

2. Calculation of OOMC and Local RPRS Payments at the Load Sustainable Limit (LSL)

Summary:

Questions?