Understanding Mass Transition in the Texas Retail Electric Market

Learn about the Mass Transition process in the Texas retail electric market, including what it is, how it is executed, the roles of different Market Participants, and their responsibilities. Explore the transfer of ESI ID numbers from Defaulting CR to VREPs/LSPs, and understand the importance of honoring customer choices during the transition.

• Retail Electric Market
• Mass Transition
• Texas
• Market Participants
• ESI ID

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1. Course Objectives By the end of this module you will have learned: 1. What a Mass Transition is and why it occurs 2. How a Mass Transition is executed and completed 3. The roles and requirements of Market Participants involved in a Mass Transition 1 7/19/2024 TXSET

2. Mass Transition Process What is a Mass Transition? During the course of business in the Texas retail electric market, circumstances may necessitate the expeditious transfer of large numbers of customers from one Market Participant to another. The goal of the transition process is to transfer responsibility for all affected ESI IDs while also honoring the Customer s choice to switch to their chosen CR. This module will follow a typical Mass Transition process focusing on the transition of ESI IDs from a Defaulting CR to either a VREP (Volunteer REP) or a designated POLR REP (Provider of Last Resort). 2 7/19/2024 TXSET

3. References/Definitions Retail Market Guide 7.11 Definitions in 7.11.1 POLR provider -- A volunteer retail electric provider (VREP) or LSP that may be required to provide POLR service pursuant to this section. Voluntary retail electric provider (VREP) -- A REP that has volunteered to provide POLR service pursuant to subsection (i) of this section. Large service provider (LSP) -- A REP that is designated to provide POLR service pursuant to subsection (j) of this section. 3 7/19/2024 TXSET

4. Who are the Market Participants involved? PUCT ERCOT TDSPs Defaulting CR POLR CRs (VREPs/LSPs) a) VREPs (Volunteer REP) apply and are approved to serve a select number of ESID s for each customer class in each POLR area (TDSP territory) b) LSPs (Large Service Provider) a REP designated by the PUCT to provide POLR service for each customer class in each POLR area (TDSP territory) i. VREP s can also be LSP s Customers NOTE: CR and REP will be used interchangeably for this discussion. 1. 2. 3. 4. 5. 6. 4 7/19/2024 TXSET

5. What are their responsibilities? PUCT Staff 1.Coordinates with ERCOT staff on the initiation of a Mass Transition event 2.Oversight of the Mass Transition event 3.Participates in Daily Project Coordination Calls 4.Manages the Decertification Process of the Defaulting CR 5 7/19/2024 TXSET

6. What are their responsibilities? ERCOT 1. Coordinates with PUCT staff before, during, and after a Mass Transition Event 2. Provides Market Notifications a) General Market Notice informing of a Market Participant Default b) Specified Notice to Impacted Market Participants (TDSP s, POLR s (VREPs/LSPs, Defaulting CR, PUCT Staff) c) Customers are informed via official commission seal postcard, automated phone call, email. (to the extent the information is available) 3. Performs ESI allocation between VREPs and LSPs per PUCT 25.43 (for each customer class in each POLR area) 4. Manages Mass Transition Event a) Initiate Drop to POLR transaction (814_03 TS) b) Distribution of the defaulting CR s most current CBCI file (Customer Billing Contact Information ) applicable to the appropriate VREP/LSP http://www.ercot.com/content/wcm/current_guides/53527/09F6_072416.doc c) Monitor and send 814_08 cancel transactions to impacted market participants when necessary 5. Facilitates Daily Project Coordination Calls 6. Determine the Completion of the Mass Transition Event 6 7/19/2024 TXSET

7. What are their responsibilities? TDSPs 1.Execution of the transactions for the Mass Transition Event a)Prepare systems to receive 814_03 TS (Drop to POLR) transactions from ERCOT b)Schedule the Drop to POLR transaction for the Mass Transition date c)Perform Meter reads on Mass Transition date d)Sends to ERCOT 867_03F or 867_04 2.Participate in Daily Project Coordination Calls 7 7/19/2024 TXSET

8. What are their responsibilities? Defaulting CR 1. Provide ERCOT updated CBCI file 2. Send Customer Notification of Default 3. Participate in Daily Project Coordination Calls 8 7/19/2024 TXSET

9. What are their responsibilities? POLR CRs (VREPs/LSPs) 1. Prepare systems to receive 814_14 drop to POLR transactions 2. Process CBCI file if applicable 3. Provide Customer communication as required in PUCT 25.43 4. Participate in Daily Project Coordination Calls 5. Establish Customer relationship for ESID s acquired through mass transition event 9 7/19/2024 TXSET

10. What are their responsibilities? Customers Retail Customers served by the defaulting CR and transitioned to a VREP/LSP or another CR of their choice (Non-POLR CR) Open to choose CR of choice without penalty from defaulting CR or VREPs/LSP s 10 7/19/2024 TXSET

11. Timeline For the purpose of a Mass Transition and the associated timeline, the following definitions shall apply: (a) Notification Date - Date on which ERCOT sends the initial Mass Transition Market Notice to affected parties informing them that a Mass Transition will occur as a result of a Market Participant default, also known as the pre-Launch stage in the process. (b) Calendar Day 0 - Date that ERCOT sends 814_03 TS, Enrollment Notification Request. This can be on the Notification Date. (c) Mass Transition Date - Scheduled Meter Read Date (SMRD) will be equal to Calendar Day 0 plus two days and will be the date requested in the 814_03 TS transaction from ERCOT to the TDSP. POLRs will be responsible for ESI IDs no earlier than the Mass Transition date. 11 7/19/2024 TXSET

12. Timeline for Initiation of a Mass Transition Project Coordination Call 867_02s from TDSP to ERCOT. 814_04s from TDSP to ERCOT. 814_11s from ERCOT to Losing CR. 814_14s from ERCOT to POLR and/or Designated CRs. Customer billing information sent by ERCOT to POLR and/or Designated CRs and affected TDSP(s). ERCOT sends PUCT mandated notifcations to Customers Project Coordination Call TDSP sends to ERCOT Final 867_03s and ERCOT forwards to Losing CR. TDSP sends 867_04s to ERCOT and ERCOT forwards to POLR and/or Designated CRs. Mass Transition completes at ERCOT. Notification Date Project Coordination Call Default confirmed by ERCOT legal Mass Transition process: ESI ID allocations & lists are generated and sent to POLR and/or Designated CR and affected TDSPs by ERCOT 814_03s sent by ERCOT requesting Mass Transition Date. ERCOT requests Customer Billing Contact Information from Defaulting CR. Initial Notification sent Initial Project Coordination Call scheduled Mass Transition Date If default is on a Business Day before a weekend or ERCOT holiday, initial project coordination call to occur on same Business Day Project Coordination Call TDSP performs meter reads (actuals or estimates) for Mass Transition Date. Calendar Day 0 Calendar Day -1 Calendar Day 1 Calendar Day 2 Calendar Day 3 & 4 Calendar Day 5 12 7/19/2024 TXSET

13. Customer Communications When a customer is moved to POLR service, the customer shall be provided notice of the transition by ERCOT, the REP transitioning the customer, and the POLR provider. The ERCOT notice shall be provided within two days of the time ERCOT and the transitioning REP know that the customer shall be transitioned and customer contact information is available. If ERCOT cannot provide notice to customers within two days, it shall provide notice as soon as practicable. (1) ERCOT notice methods shall include a post-card, containing the official commission seal with language and format approved by the commission. ERCOT shall notify transitioned customers with an automated phone-call and email to the extent the information to contact the customer is available pursuant to subsection (p)(6) of this section. ERCOT shall study the effectiveness of the notice methods used and report the results to the commission. PUCT Subst. Rule 25.43(u) Market Notice of Transition to POLR Service ERCOT shall notify all affected Market Participants and the Retail Market Subcommittee (RMS) email listserv of a mass transition event within the same day of an initial mass-transition call after the call has taken place. The notification shall include the exiting REP s name, total number of ESI IDs, and estimated load. 13 7/19/2024 TXSET

14. Mass Transition Transactions 814_14 814_03 TS 3a 1 POLR/ VREP/CR 814_04 867_02 ERCOT TDSP 5 2 867_02 867_04 9a 3b 9b 4 7 867_03F 8 867_04 6 814_11 867_03F Defaulting CR 810_02 14 7/19/2024 TXSET

15. Timeline for Customer Choice During a Mass Transition Project Coordination Call 867_02s from TDSP to ERCOT. 814_04s from TDSP to ERCOT. 814_11s from ERCOT to Losing CR. 814_14s from ERCOT to POLR and/or Designated CRs. Customer billing information sent by ERCOT to POLR and/or Designated CRs and affected TDSP(s). ERCOT sends PUCT mandated notifcations to Customers Project Coordination Call TDSP sends to ERCOT Final 867_03s and ERCOT forwards to Losing CR. TDSP sends 867_04s to ERCOT and ERCOT forwards to POLR and/or Designated CRs. Mass Transition completes at ERCOT. Notification Date Project Coordination Call Default confirmed by ERCOT legal Mass Transition process: ESI ID allocations & lists are generated and sent to POLR and/or Designated CR and affected TDSPs by ERCOT 814_03s sent by ERCOT requesting Mass Transition Date. ERCOT requests Customer Billing Contact Information from Defaulting CR. Initial Notification sent TDSP must receive choice transactions by 7 pm on the transition date or the ESI ID will be transition to the POLR REP. Initial Project Coordination Call scheduled Mass Transition Date If default is on a Business Day before a weekend or ERCOT holiday, initial project coordination call to occur on same Business Day Project Coordination Call TDSP performs meter reads (actuals or estimates) for Mass Transition Date. Calendar Day 0 Calendar Day -1 Calendar Day 1 Calendar Day 2 Calendar Day 3 & 4 Calendar Day 5 15 7/19/2024 TXSET