CSWG – ERCOT Update

1. CSWG – ERCOT Update ERCOT CSWG

2. Settlements Project & Operational Updates • NPRR 347: Combined Daily Invoice • Still on track for November production release • See other posted materials for additional details • NPRR 322: Real-Time PTP Option Modeling • Still on track for December production release • See other posted materials for additional details • NPRR 461: Energy Storage Resources • NPRR was tabled at WMS • No Updates at this time • NPRR 377: Base Point Deviation Changes • Still on track for December production release • See other posted materials for additional details

3. Settlements Operational Updates – Late Default Uplift Payments • Overview of Issue • Payout of Default Uplift Invoices scheduled for 8/31/12 was delayed due to system issues experienced as a result of a short-payment of the Default Uplift Invoice. • Root Cause • Payment Processing was delayed to give late paying entities time to make payment • When payments were received, system issues were encountered and there wasn’t time to resolve problems and still make 5pm deadline (issues have since been resolved) • Resolution • All payments were made on the morning of 9-3-2012 • Risk Mitigation Going Forward • We will not accept late payments after noon on the day after the due date • We plan to issue miscellaneous and default uplift invoices on Wednesdays or Tuesdays when possible to avoid processing payments on Fridays

4. Zonal ADR Settlement • ERCOT Recently Approved a Zonal ADR from 2007 • Needs to be invoiced by end of September • Per Nodal Protocols Section 20.9(2) • If a resettlement is not practical or possible to address an adjustment required by an ADR resolution, ERCOT shall make the adjustments through a separate ADR Invoice that is produced outside of the normal Settlement system. • ERCOT plans to settle this ADR using a Miscellaneous Invoice in the Nodal Systems and any remaining pending ADRs going forward whenever possible • ERCOT will provide, via market, notice all ERCOT wide data needed to shadow settle: • Total ERCOT True Up Load used in LRS Uplift Calculation • Total Cost of resolved ADR

5. Zonal ADR Settlement • Benefits of Using Nodal Systems to ERCOT • Significant reduction in staff hours and support • Less risk to time line and current nodal systems • Benefits to Market Participants • QSEs don’t need to resurrect Zonal Systems to retrieve Zonal Statement, Invoice and Extract Data • Data Required to shadow should be available via QSE database (2007 True-Up Load for Operating Day) • Individual QSE True-Up load used in calculation can be requested of ERCOT Are there any concerns or questions?

6. Auto Pre-Pay Account Proposal • Overview of Issue • Refund wires are being issued for very small amounts (less than the cost of the wire) • For example: Some MPs had 6 of 7 wires for amounts under $1 on latest default uplift. • In total 721 total wires were sent. 626 were under $10 • Market has raised this as a concern • Proposed Solution • Prepay will be utilized going forward on small invoice amounts (less than $50) for the following invoice types: • Default Uplift Invoices, Late Fee Invoices, Miscellaneous • Market Notice will be sent when refunds are automatically deposited into pre-pay account for the above invoice types • Refunds for DAM, RTM, CRR Auction and CARD invoices will never be held in pre-pay (outside of current processes) • If you would like your small invoice amounts returned via wire, please contact ERCOT Credit or your ERCOT Account Manager after the market notice is sent out

7. Auto Pre-Pay Account Proposal • Pre-Pay Accounts Overview • Prepay is a cash deposit account held with ERCOT by market participants • All market participants may open a prepay account • Prepay cash has no effect on cash collateral or available credit limit • No interest is earned on prepay