ERCOT Overview Warren Lasher Sr Director System Planning

ERCOT Overview Warren Lasher, Sr. Director, System Planning Texas Energy Summit November 12, 2019

The ERCOT Region The interconnected electrical system serving most of Texas, with limited external connections • 90% of Texas electric load; 75% of Texas land • 74, 666 MW peak, August 12, 2019 • More than 46, 500 miles of transmission lines • 650+ generation units (excluding PUNs) Western Interconnection Includes El Paso and Far West Texas Eastern Interconnection Includes portions of East Texas and the Panhandle region 220 MW with SPP ERCOT connections to other grids are limited to ~1, 250 MW of direct current (DC) ties, which allow control over flow of electricity *preliminary operating data PUBLIC 600 MW with SPP 30 MW with CENACE at Eagle Pass ERCOT Interconnection 100 MW with CENACE at Laredo 300 MW with CENACE at Mc. Allen 2

Texas Competitive Model The Texas Legislature restructured the Texas electric market in 1999: • Generating units are owned by privately owned companies o Except for municipal and cooperative units • Compete in ERCOT market to serve load o Market is overseen by PUC. PUBLIC • Transmission and distribution lines and related facilities are owned and operated by regulated utilities. o Utilities are regulated by PUC. • Retailers compete to serve consumers’ electric load in ~75% of state o Except 25% in municipal and cooperative utility areas • Active retail competition • 92% have switched • ~15% switches in a year • Nearly 100% smart meters 3

Power Supply (Generation) Must Match Load (Demand) • The fundamental concept behind ERCOT operations is that generation has to match load at all times. • In other words, a 1 MW reduction in load has the same effect on the grid as a 1 MW increase in generation. PUBLIC 4

ERCOT Transmission Grid Power transfers between resources and customer demand are limited by transmission constraints. • Thermal • Voltage • Stability Power transfers are limited so that any one component could be removed and the system would remain secure. Transmission constraints can result in running resources that are not economic. PUBLIC 5

Annual Energy and Peak Demand (2008 -2018) PUBLIC 6

ERCOT Installed Capacity (1999 -2018) 100 000 Wind and solar values are based on nameplate capacity (not adjusted for peak capacity contribution) 21. 4% 80 000 0. 3% 12. 1% 60 000 51. 6% 35. 4% 40 000 4. 8% 20 000 0 1999 2000 2001 2002 2003 2004 Nuclear PUBLIC 2005 Coal 2006 Other 2007 Gas CC 2008 2009 Gas Steam 2010 2011 Gas CT/IC 2012 Wind 2013 2014 2015 2016 2017 2018 Solar 7

Wind Generation Capacity – September 2019 PUBLIC 8

Utility Scale Solar Generation Capacity – September 2019 PUBLIC 9

Average Wholesale Market Electricity Prices* *Source: ERCOT Independent Market Monitor (http: //www. ercot. com/content/wcm/key_documents_lists/161457/11_Independent_Market_Monitor__IMM__ Report. pdf) PUBLIC 10

Coal Plant Closures Unit Name Closure Type Summer Capacity (MW) Initial Operation Date of Closure GIBBONS CREEK Indefinite Mothball 470 3/15/1983 6/1/2019 J T DEELY Unit 1 Indefinite Mothball 420 8/8/1977 12/31/2018 J T DEELY Unit 2 Indefinite Mothball 420 8/1/1978 12/31/2018 BIG BROWN Unit 1 Retired 606 12/23/1971 2/12/2018 BIG BROWN Unit 2 Retired 602 12/6/1972 2/12/2018 SANDOW Unit 4 Retired 600 5/15/1981 1/11/2018 SANDOW Unit 5 Retired 600 1/6/2010 1/11/2018 MONTICELLO Unit 1 Retired 535 12/23/1974 1/4/2018 MONTICELLO Unit 2 Retired 535 12/8/1975 1/4/2018 MONTICELLO Unit 3 Retired 795 8/1/1978 1/4/2018 PUBLIC 11

Daily Peak Hour Demands 80 Higher demands in August 75 July was warm and dry June was cool and wet 70 GW 65 60 55 50 45 91 89 87 85 83 79 81 77 75 73 71 69 67 63 65 61 59 57 55 51 53 47 49 45 43 39 41 37 35 33 31 29 27 23 25 21 19 17 15 11 13 9 7 3 5 1 40 12 PUBLIC

8. 12. 2019 14: 00: 13 8. 12. 2019 14: 20: 08 8. 12. 2019 14: 40: 08 8. 12. 2019 14: 55: 10 8. 12. 2019 15: 11 8. 12. 2019 15: 35: 13 8. 12. 2019 15: 55: 12 8. 12. 2019 16: 13: 48 8. 12. 2019 16: 25: 12 8. 12. 2019 16: 45: 12 8. 12. 2019 17: 05: 13 8. 12. 2019 17: 25: 13 8. 12. 2019 17: 45: 12 8. 13. 2019 14: 05: 12 8. 13. 2019 14: 25: 12 8. 13. 2019 14: 40: 12 8. 13. 2019 15: 00: 18 8. 13. 2019 15: 20: 14 8. 13. 2019 15: 40: 14 8. 13. 2019 16: 00: 18 8. 13. 2019 16: 20: 14 8. 13. 2019 16: 40: 14 8. 13. 2019 17: 00: 18 8. 13. 2019 17: 20: 14 8. 13. 2019 17: 40: 13 8. 14. 2019 14: 00: 15 8. 14. 2019 14: 20: 11 8. 14. 2019 14: 40: 10 8. 14. 2019 15: 00: 16 8. 14. 2019 15: 20: 12 8. 14. 2019 15: 40: 14 8. 14. 2019 16: 00: 17 8. 14. 2019 16: 20: 12 8. 14. 2019 16: 40: 12 8. 14. 2019 17: 00: 17 8. 14. 2019 17: 20: 12 8. 14. 2019 17: 35: 12 8. 14. 2019 17: 55: 13 8. 15. 2019 14: 15: 09 8. 15. 2019 14: 35: 09 8. 15. 2019 14: 50: 12 8. 15. 2019 15: 05: 12 8. 15. 2019 15: 25: 13 8. 15. 2019 15: 40: 15 8. 15. 2019 16: 00: 16 8. 15. 2019 16: 20: 13 8. 15. 2019 16: 35: 12 8. 15. 2019 16: 45: 13 8. 15. 2019 17: 05: 12 8. 15. 2019 17: 25: 13 8. 15. 2019 17: 45: 12 8. 16. 2019 14: 05: 11 8. 16. 2019 14: 25: 13 8. 16. 2019 14: 45: 12 8. 16. 2019 15: 05: 13 8. 16. 2019 15: 25: 12 8. 16. 2019 15: 45: 11 8. 16. 2019 16: 05: 12 8. 16. 2019 16: 25: 12 8. 16. 2019 16: 45: 12 8. 16. 2019 17: 05: 12 8. 16. 2019 17: 25: 12 8. 16. 2019 17: 45: 12 System Prices and Load (2 pm-6 pm) $ 10 000 $ 9 000 PUBLIC 76000 EEA Level 1 $ 8 000 74000 $ 7 000 72000 $ 6 000 $ 5 000 70000 $ 4 000 $ 3 000 68000 $ 2 000 66000 $ 1 000 $64000 Wholesale Market Price Load 13