ERCOT Staff Analysis of Weather Sensitivity Code Changes

February 8, 2005

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Analysis Background

• Analysis based on currently active IDRs

• Includes both NOIE and IOU ESIIDs

• Includes prospective changes based on ERCOT’s 2004 assignment review

• Analysis period is market open to present

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Current Weather Sensitivity Code Assignmentsand Change History

WS Code Assignments (2004 Changes Implemented) Number ESIIDs by Number of WS Code Changes Since Market Open

NWS WS TotalIOU 5,853 1,762 7,615

NOIE 383 650 1,033Total 6,236 2,412 8,648

Number ESIIDs by Number of WS Code Changes Since Market Open

None 1 2 3 TotalIOU 6,097 1,284 731 13 8,125

NOIE 728 254 65 0 1,047Total 6,825 1,538 796 13 9,172

•About 28% of current ESIIDs classified as weather sensitive, 23% for IOUs and 63% for NOIEs

•About 26% of current ESIIDs have had one or more code changes since market open

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Weather Sensitivity Code Changes

Number of WS Changes by Year

To NWS To WS Total2004 871 395 1,2662003 209 1,554 1,763

2001/02 20 145 165Total 1,100 2,094 3,194

ESIIDs with No WS Change Since Market Open

IOU NOIE TotalNWS 5,936 260 6,196WS 161 468 629

Total 6,097 728 6,825

• 80% of IOU, 70% of NOIE ESIIDs with no assignment changes

• About 14% of current ESIIDs are changing as a result of 2004 review

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Year-by-Year Weather Sensitivity Code Changes

ESIIDs with WS Change in 2001/02

IOU NOIE TotalTo NWS 0 20 20To WS 138 7 145Total 138 27 165

ESIIDs with WS Change in 2003

IOU NOIE TotalTo NWS 153 56 209To WS 1,406 148 1,554Total 1,559 204 1,763

ESIIDs with WS Change in 2004

IOU NOIE TotalTo NWS 767 104 871To WS 320 75 395Total 1,087 179 1,266

ESIIDs with WS Flip-flop in 2004

IOU NOIE TotalTo NWS 627 34 661To WS 35 30 65Total 662 64 726

• 2003 had a significant migration (88% of changes) to WS

• 2004 had a significant migration (69% of changes) to NWS

• 57% of ESIIDs with 2004 changes were reverting to pre-2003 code

• 2002 WS Review was not Performed by ERCOT

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Potential Action Items

• Continue using current methodology … current data loading rates lower the impact of applying proxy days

• Assign all IDRs to WS … WS proxy day routine okay for most ESIIDs and falls back to NWS proxy day if no

suitable days are found

• Assign all IDRs to NWS … reduced processing for proxy day routine, may not introduce that much inaccuracy

• However … if Initial Settlement is moved from 17 to 10 days, the proxy day routine will be invoked more often …

a less accurate routine will increase profiling error

• Conduct analysis to improve WS assignment methodology

– Look at R-square distributions

– Use multiple-year window for the analysis

– Incorporate additional variable(s) e.g. summer ratio, kW/kWh minimums

– Outlier analysis e.g. some ESIIDs have large year-to-year changes in R-square

– Apply dead-bands