NOTICE DATE: January 3, 2012

NOTICE TYPE: W-A010312-01 Operations

SHORT DESCRIPTION: Implementation of maximum shadow prices for irresolvable non-competitive constraints in SCED

INTENDED AUDIENCE: ERCOT Market Participants

DAY AFFECTED: January 1, 2012

LONG DESCRIPTION: On December 12, 2011, the ERCOT Board of Directors approved the ERCOT Business Practice, Setting the Shadow Price Caps and Power Balance Penalties in Security Constrained Economic Dispatch Version 3 with an effective date of January 1, 2012.

On January 1, 2012, ERCOT implemented maximum shadow prices for non-competitive constraints that were found to be irresolvable at any point in time since December 1, 2010, and also met the criteria of Section 3.6.1 of the business practice document. The contingency/constraint pairs and maximum shadow prices (set in accordance with Section 3.6.2) are as follows:

Contingency Name	Constraint Name	Description	Maximum Shadow Price
BASE CASE	VALIMP	Valley Import Basecase	$2,000.00
DGRSLNC5	6856__B	Graham to Long Creek 345 kV overloads Bomarton - Seymour 69 kV	$2,000.00
DODEQAL5	6611__A	Odessa - Morgan Creek / Quail Sw 345 kV overloads Ackerly Vealmoor - Ackerly 69 kV	$2,000.00
DW_DDEN8	AIR_W_DE_1	Denton - Argyle / West Denton 138 kV overloads Jim Crystal - West Denton 69 kV	$2,000.00
SCABWES8	NAVAL__N_PADR1_1	Cabaniss - Westside 138 kV overloads Naval to North Padre 69 kV	$2,000.00
SKEYWLV8	6611__A	Key to Willow Valley Sw 138 kV overloads Ackerly Vealmoor - Ackerly 69 kV	$2,554.65
SKEYWLV8	6611__C	Key to Willow Valley Sw 138 kV overloads Ackerly - Lyntegar 69 kV	$2,800.00
SNCWHLT9	6915__A	Odessa North to Holt Sw 69 kV overloads Odessa Basin Sw - Odessa North 69 kV	$2,800.00
SNCWMOS8	ODNTH_FMR1	Holt Sw - Moss Sw 138 kV overloads Odessa North xfmr	$2,274.65
SODBODN9	6860__A	Odessa Basin Sw to Odessa North 69 kV overloads Holt Sw - Ector Shell Tap 69 kV	$2,000.00

Note that none of the above constraints have been activated in SCED since the time of maximum shadow price implementation.

ADDITIONAL INFORMATION: Per Section 3.6.3 of the business practice document, the net margin values for all of the above listed constraints were reset to zero on January 1, 2012.

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].

If you are receiving email from an ERCOT distribution list that you no longer wish to receive, please follow this link in order to unsubscribe from this list: http://lists.ercot.com.