1. (a) EILS procurement. ERCOT shall procure EILS, a special emergency service that is intended to be deployed by ERCOT in an Emergency Electric Curtailment Plan (EECP) event prior to or in conjunction with ERCOT instructing transmission and distribution service providers to interrupt firm load.

   1. (1) EILS may be procured for one or more of three contract periods:

      1. (A) February through May;
      2. (B) June through September; and
      3. (C) October through January.
   2. (2) Notwithstanding the foregoing, the first EILS contract period shall be from the effective date of this section through May of 2007.
   3. (3) ERCOT may determine cost limits for each EILS contract period in order to ensure that the EILS cost cap is not exceeded.
   4. (4) The maximum amount of EILS for which ERCOT may contract in an EILS contract period is 1,000 megawatts (MW).
   5. (5) The minimum amount of EILS for which ERCOT may contract in an EILS contract period is 500 MW. If ERCOT does not receive enough offers to meet the required minimum amount for a period in which it seeks to procure EILS or cannot procure at least 500 MW for a period in which it seeks to procure EILS due to the EILS cap, ERCOT shall not contract for EILS.

   6. (6) This section will no longer be effective provided the following conditions are met:

      1. (A) An alternative long-term solution is approved in the form of a Protocol Revision that meets the requirements of subsection (h) of this section and ERCOT.
      2. (B) The Protocol Revision is implemented so that ERCOT has a solution continuously in place with no interruption of the protection offered by EILS.
      3. (C) If an alternative long-term solution is developed, but cannot be implemented 30 days prior to the beginning of the next contract period EILS will be extended for an additional contract period.

2. (b) Definitions.

   1. (1) EILS--A special emergency service procured and used by ERCOT in accordance with this section.
   2. (2) EILS contract period--As defined in subsection (a) of this section.
   3. (3) EILS cost cap--The maximum amount ERCOT may spend on the EILS program in a year, February-January. The cost cap is set at $17 Million for 2007 (April 2007 - January 2008) and $20 Million for 2008 (February 2008 - January 2009).
   4. (4) EILS non-prime hours--Any hours not defined as EILS prime hours.
   5. (5) EILS prime hours--Hours occurring on a business day (as defined by ERCOT Protocols) during the time frame of hour ending 0900 through hour ending 2000.
   6. (6) EILS resource--Load that is contracted to provide EILS.
   7. (7) EILS time period--EILS prime hours or EILS non-prime hours.
   8. (8) ERCOT--The professional staff of the Electric Reliability Council of Texas, Inc.

3. (c) Participation in EILS. In addition to requirements established by ERCOT, the following requirements shall apply for the provision of EILS:

   1. (1) EILS bids may be submitted to ERCOT by a qualified scheduling entity (QSE) on behalf of an EILS resource.

      1. (A) Bids may be submitted for EILS prime hours or EILS non-prime hours.
      2. (B) The minimum amount of EILS that may be offered in a bid to ERCOT is one MW. QSEs representing EILS resources may aggregate multiple resources to reach the one MW bid requirement, provided that each Electric Service Identifier (ESI ID) in an EILS Resource aggregation has a peak demand of 500 kilowatts (kW) or greater. Such aggregated bids will be considered a single EILS resource.

   2. (2) To qualify to participate in the EILS program, an EILS resource shall meet the technical requirements set out in this paragraph.

      1. (A) Each EILS resource, including each EILS resource participating in an aggregated bid, shall have an ESI ID.
      2. (B) Each EILS resource shall have a dedicated installed Interval Data Recorder (IDR) meter. If the IDR meter is not used for settlement with ERCOT, then the IDR meter and the method and format used to collect and transfer the meter data are subject to ERCOT approval. This subsection also applies to meters behind a Non-Opt-In Entity (NOIE) meter point and behind a private network's settlement meter point.
      3. (C) An EILS resource shall be capable of reducing its load by its contracted capacity compared to its baseline capacity within ten minutes of an ERCOT verbal dispatch instruction (VDI) to its QSE and shall be capable of maintaining its performance at contracted levels for the entire period of the EILS deployment.
      4. (D) EILS resources, once deployed, shall be able to return to their contracted operating level for providing EILS within ten hours following the recall instruction.
      5. (E) EILS resources shall be subject to qualification, testing, and performance requirements as developed and administered by ERCOT.
      6. (F) An EILS resource shall be registered as a Resource Entity with ERCOT.
      7. (G) The QSE shall execute a standard form EILS agreement as developed by ERCOT.
      8. (H) The EILS resource shall be served by a QSE qualified to provide ancillary services and capable of communicating with ERCOT and the EILS resource.
      9. (I) An EILS resource shall not provide other ancillary services, including balancing energy services with the same capacity, while under an EILS Agreement.

   3. (3) ERCOT shall establish an individual load baseline for each proposed EILS resource. If the EILS resource is an aggregation of ESI IDs, ERCOT shall take into account the load characteristics of each ESI ID represented by the EILS resource.

      1. (A) ERCOT shall review IDR data from the most recent available 12-month period to determine the baseline consumption. If 12 months of IDR data is not available, ERCOT may use reliable meter data for a shorter period or from a different source, at its reasonable discretion in establishing baselines, including establishing alternate baselines for highly fluctuating batch process loads. If ERCOT does not possess sufficient data, the EILS Resource or its QSE must provide data to ERCOT according to ERCOT's specifications.
      2. (B) The baseline shall be used to verify or establish an EILS Resource's maximum contract amount and to verify the EILS resource's performance as compared to its contracted capacity during an EILS deployment event.

   4. (4) EILS shall be deployed by ERCOT by VDIs in a single phone call to all QSEs providing EILS.

      1. (A) When ERCOT issues a VDI, 100% of the available contracted EILS resources shall be deployed.
      2. (B) ERCOT may deploy EILS at any time during a settlement interval.
      3. (C) An EILS resource shall be subject to a maximum of two deployments per EILS contract period, lasting no more than eight hours total, unless an EILS deployment is still in effect when the eighth hour lapses, in which case EILS deployment shall continue until ERCOT releases the EILS resource.
      4. (D) ERCOT may conduct a load-shedding test of each EILS resource once a year unless the EILS resource has met its performance obligations during an EILS deployment during the preceding 12 months. ERCOT tests are not "deployments" under subparagraph (C) of this paragraph.

4. (d) EILS Payment and Charges.

   1. (1) ERCOT shall pay a capacity payment to each QSE representing an EILS resource on an as-bid basis subject to modifications determined by ERCOT based on the EILS resource's availability during an EILS contract period, and the EILS resource's performance in a deployment event.
   2. (2) ERCOT shall charge each QSE a capacity charge for EILS based upon its load ratio share during the relevant EILS time period and EILS contract period.
   3. (3) There shall be no energy payments for providing EILS above and beyond typical load imbalance payments pursuant to the ERCOT protocols.
   4. (4) ERCOT shall settle an EILS contract period through payments and charges on a settlement statement of a single operating day within 70 days following the completion of the EILS contract period.

   5. (5) ERCOT shall make the following available to market participants through market notices and by posting on a publicly accessible section of the ERCOT web site:

      1. (A) Methodology used to develop baseline formulas;
      2. (B) Formulas used for wholesale market settlement; and
      3. (C) Equations used to determine an EILS resource's compliance with its obligations in an EILS deployment.
5. (e) Compliance. QSEs representing EILS resources are subject to penalties for failure to meet their obligations under this section. ERCOT shall withhold all or part of an EILS resource's capacity payment for a contract period and suspend participation in EILS for six months if the EILS resource fails to make its committed load available during its committed hours, or fails to meet its load reduction obligations in an EILS deployment event. In order to be reinstated after the suspension the load must demonstrate its capability of performing the service by satisfactorily performing a test conducted by ERCOT.
6. (f) Reporting. At the completion of each contract period, ERCOT shall review the effectiveness and benefits of the EILS and report its findings to the commission within 70 days of the completion of the contract period. The report shall contain, at a minimum, the number of MW procured in each period, the total dollar amount spent, the number and level of EECP events, and the number and duration of deployments.
7. (g) Implementation. ERCOT shall develop additional procedures, guides, and/or protocols that are consistent with this section and that ERCOT finds necessary to implement EILS, including but not limited to developing a standard form EILS Agreement and specific performance guidelines and grace periods for EILS Resources.

8. (h) Long-term solution. Any long-term solution must offer ERCOT the ability to avoid shedding firm load by bringing more resources online or curtailing load voluntarily. In this context the commission is interested in:

   1. (1) Better price signals leading up to an EECP event;
   2. (2) Bringing more resources (both interruptible load and generation) online through existing ancillary services; and
   3. (3) Examining the priorities set by TDSPs when shedding firm load.
9. (i) Non-Opt In Entity (NOIE) Self Provision. ERCOT shall develop procedures for NOIE self provision as soon as possible. If no procedures for NOIE self-provision are developed by the effective date of this rule, ERCOT shall implement procedures no later than the beginning of the following contract period.

Source Note:The provisions of this §25.507 adopted to be effective April 10, 2007, 32 TexReg 1999.