ERCOT Nodal Engagement Market Participant Call - June 30, 2010

1. TSP Nodal Engagement Market Participant Call ERCOT June 30, 2010 http://nodal.ercot.com 1

2. Antitrust Admonition ANTITRUST ADMONITION ERCOT strictly prohibits Market Participants and their employees who are participating in ERCOT activities from using their participation in ERCOT activities as a forum for engaging in practices or communications that violate the antitrust laws. The ERCOT Board has approved guidelines for members of ERCOT Committees, Subcommittees and Working Groups to be reviewed and followed by each Market Participant attending ERCOT meetings. If you have not received a copy of these Guidelines, copies are available at the Client Relations desk. Please remember your ongoing obligation to comply with all applicable laws, including the antitrust laws. DISCLAIMER All presentations and materials submitted by Market Participants or any other Entity to ERCOT staff for this meeting are received and posted with the acknowledgement that the information will be considered public in accordance with the ERCOT Websites Content Management Operating Procedure. http://nodal.ercot.com 2

3. Agenda • General Reminders / Updates • Update for Network Operations Model • NDSWG update • Planning Model activities • SSWG update • TSP Outage Scheduler activities http://nodal.ercot.com 3

4. Market Trials 2010 Roadmap http://nodal.ercot.com 4

5. LFC Testing Update http://nodal.ercot.com 5

6. LFC Update • Based on findings from the 8-Hour LFC test, ERCOT will be changing the LFC testing schedule to incorporate additional tests through the end of September • ERCOT will review this in detail at this week’s TAC meeting and again at next weeks NATF • Kenneth Ragsdale to present at TAC • Scott Middleton to present at NATF http://nodal.ercot.com 6

7. General Reminders http://nodal.ercot.com 7

8. General Reminders • Nodal Modeling and Outage Scheduler Go-Live will be discussed at the following Stakeholder meetings: • NATF 6/23/2010 • TAC 7/3/2010 • ERCOT will release the 168-Hour Handbook on 6/30/2010 • Initial presentation on the 168-Hour handbook to take place on 7/8/2010 at NATF • Workshop for all MPs will occur on 7/28/2010 during the Market Readiness Seminar (MRS) #5 • MRS #5 information is located at: http://www.ercot.com/calendar/2010/07/20100728-MT http://nodal.ercot.com 8

9. Update for Network Operations Model http://nodal.ercot.com 9

10. Nodal Model Effort Activity Operations Model (NMMS) Topology Processor (Software) Long Term Planning Model CRR Model SSWG Support SSWG & ERCOT Development SSWG Support NDSWG Support ERCOT TAC Meeting - ROS Report

11. Network Model Management System: Issue • Current State of NMMS Production system • System installed in production since August 2009 (Most recent version installed May 3, 2010) • Database and System of Record for Network Model for Nodal System and Entry Point for Zonal • Issue: System is not stable • NMMS System has a software defect that impacts how the system manages computer memory. • The application restarts itself or crashes when a memory error is detected. • A restart can result in TDSP losing interim model changes. • The May release materially increased the frequency of the restarts:

12. Network Model Management System: Issue • Resolution Strategy: Obtain sufficient analysis data to fix the problem • The nature of the defect is that the system will continue to run after the problem occurs. • By the time the system detects the problem, the evidence of the cause is likely no longer available • Lack of evidence of the root cause results in extended resolution times • The strategy is to implement “traps” and instrumentation that can point to the root cause. • We installed the latest version of the “traps” on June 28th • Recent Progress • The traps triggered successfully for the first time on June 29th • The teams successfully recreated the issue in a stress test environment on June 29th. • Initial investigation points to a specific memory management problem but analysis still underway • Issue Escalation: • The ERCOT Operations team, Application team and Siemens are working this as a priority item • The resources with the right skills have been made available to help solve. • Resources work together at a single site in Taylor when deemed beneficial to the process • Other activities underway: Improve NMMS Metrics • Develop response time metric to measure system availability and response time for simple transactions and more complex transactions. • Next Steps • Continue to aggressively manage this issue as a high priority • Assess status and any necessary contingency plans with NATF

13. Planning Model activities • Supporting Monthly CRR Auction http://nodal.ercot.com 13

14. Nodal Model Effort Activity Operations Model (NMMS) Topology Processor (Software) Long Term Planning Model CRR Model SSWG Support SSWG & ERCOT Development SSWG Support NDSWG Support ERCOT TAC Meeting - ROS Report

15. SSWG Planning Model Activities • Correcting Connectivity Node Groups • June 25 TP output: 213 CNGs needing correction • 10 CNGs left that ERCOT originally populated with numbers because they could not be matched to an existing PSSE bus • TSPs will correct these 10 ASAP

16. SSWG Planning Model Activities • Phase II Corrections: Area #, Zone #, Load ID, Branch ID, Generator ID • Due July 15 • New Topology Processor update delivered to ERCOT • Some features are not working properly. August test is in jeopardy if features do not work by then. • SSWG has submitted a System Change Request (SCR759) related to the Topology Processor changes • Will ask ROS for approval in July • NPRR224 was approved by PRS, next step is TAC approval (July 1 meeting). • Identifying important modeling issues • Categorize these and determine if additional SCRs are necessary • SSWG to work on drafting next SCR • MOD/PMCR Training in July • MOD Sandbox to be opening for TSP access • ERCOT and TSPs will meet to correct the remaining 213 CNG problems

17. SSWG Modeling Issues Annual Planning Model related issues: • Off-nominal transformers: TP not calculating impedances correctly? • Transformer modeling: 2 winding vs 3 winding • No ratings on zero impedance line segments • Ownership • Loads and cap banks being collapsed to the correct CNGs • Cap banks connected to distribution voltage • FACTS devices • Future versions of PSSE

18. SSWG Nodal Schedule June – August Make remaining changes to IMM prior to Planning Go-Live July 2 Remaining 99XXXX and 8XXXXX CNG changes due to ERCOT July 6 ERCOT to send spreadsheet with Phase II information July 12-13 MOD/PMCR training (email SSWGData@ercot.com to reserve spot) July 15Phase II changes due to ERCOT July 15-16 MOD/PMCR training July 19-20 MOD/PMCR training July 22-23 MOD/PMCR training July TSPs Complete changes based on TP enhancements Aug Compare TP output to SSWG 2010 summer peak case Nov Create 2012 summer peak case using TP and MOD Dec – Feb 2011 Review, update, and modify TP/MOD process for case creation Dec 1 Nodal Go-Live Mar – April 2011 Assuming Nov test meets SSWG approval, begin work to create 12DSA using Nodal method

19. TSP Outage Scheduler activities http://nodal.ercot.com 19

20. TSP Outage Scheduler • Qualification activities in-flight • Weekly Market Call every Friday 9-9:30am • http://www.ercot.com/committees/nodal/mt/index • Handbook for Outage Scheduler Activities • http://nodal.ercot.com/readiness/markettrials/os/index.html • OS Qualification Status • No change • 23/25 TSPs • 99.8% complete Equipment Share http://nodal.ercot.com 20