NOTICE DATE: March 31, 2011

NOTICE TYPE: W-C033111-01 Settlements

SHORT DESCRIPTION: Some Settlement Point Prices assigned to de-energized Settlement Points in the Day-Ahead Market for Operating Days December 1, 2010, through February 1, 2011, and Real-Time Market for Operating Days December 1, 2010, through January 31, 2011 were incorrect due to a data error

INTENDED AUDIENCE: QSE and CRRAH Settlement Personnel

DAYS AFFECTED: Operating Days December 1, 2010 – February 1, 2011

LONG DESCRIPTION: The network models used by the Real-Time Market for Operating Days December 1, 2010, to January 31, 2011, and by the Day-Ahead Market for Operating Days December 1, 2010, to February 1, 2011, did not contain a sufficient number of Electrical Buses to appropriately implement the pricing heuristics described in paragraph 9 of Protocol Section 4.5.1 DAM Clearing Process, and Protocol Section 6.6.1 Real-Time Settlement Point Prices. There were stations where Settlement Points became de-energized and there were no other energized Electrical Buses in the station with which to calculate prices; hence, the Settlement Points were assigned the price of system lambda.

This data error resulted in inaccurate Real-Time Settlement Point Prices and DAM Settlement Point Prices for many Settlement Intervals. At this time, ERCOT has identified the Settlement Points that were impacted by this data error. (See attached list of Settlement Points.) ERCOT corrected the missing data problem by adding 604 Electrical Buses to the network model on January 31, 2011, in order to correct this situation.

Pursuant to paragraph 4 of Protocol Section 6.3, Adjustment Period and Real-Time Operations Timeline, and paragraph 5 of Protocol Section 4.5.3, Communicating DAM Results, the Real-Time LMPs, Real-Time Settlement Point Prices, DAM LMPs and DAM Settlement Point Prices for these Settlement Intervals are final. However, ERCOT has determined that the prices are in need of correction and therefore will recommend that the ERCOT Board of Directors approve price corrections for certain Settlement Points and Settlement Intervals covering the above referenced period.

ADDITIONAL INFORMATION: ERCOT will place this price correction request as an agenda item on the April 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].

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