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NOTICE DATE:  December 22, 2010
NOTICE TYPE:  M-D122210-01 Settlements
SHORT DESCRIPTION:  Real-Time Settlement Point Prices were affected for one Settlement Interval due to a software error
INTENDED AUDIENCE:  QSE Settlement Personnel
DAY AFFECTED:  Operating Day December 15, 2010
LONG DESCRIPTION:  On December 15, 2010, Base Points (BPs) and Locational Marginal Prices (LMPs) produced by the Security Constrained Economic Dispatch (SCED) with time stamps of 00:00:32, 00:01:05 and 00:01:38 were calculated without using any Market Participant Energy Offer Curves. The BPs and LMPs were based on proxy Energy Offer Curves created by SCED due to a software defect that prevented the SCED process from reading timely submitted Market Participant Energy Offer Curves. This software error resulted in system-wide negative Real-Time LMPs and Real-Time Settlement Point Prices for the first Settlement Interval (00:15) of Operating Day December 15, 2010. ERCOT has already implemented a business process workaround and is further working on a software fix as a long-term solution for this isolated situation.

Pursuant to paragraph 4 of Protocol Section 6.3, Adjustment Period and Real-Time Operations Timeline, since the Real-Time LMPs and Real-Time Settlement Point Prices for this Settlement Interval are final, ERCOT will recommend that the ERCOT Board of Directors approve price corrections for Settlement Interval 00:15 because such prices were significantly affected by a software or data error. ERCOT's initial recommendation is that the Real-Time Settlement Point Prices for this Settlement Interval be recalculated using previous SCED Real-Time LMPs for the affected SCED runs.

ADDITIONAL INFORMATION:  ERCOT will place this price correction request as an agenda item on the January 2011 ERCOT Board of Directors meeting. Board materials, including a detailed analysis, on the price correction request will be distributed in accordance with the Board Policies and Procedures.

CONTACT:  If you have any questions, please contact your ERCOT Account Manager. You may also call the general ERCOT Client Services phone number at (512) 248-3900 or contact ERCOT Client Services via email at [log in to unmask]<mailto:[log in to unmask]>.

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