Market Trials Update

1. Market Trials Update NATF May 4, 2010 http://nodal.ercot.com 1

2. Agenda • General Reminders / Updates • Phase 4 in Review • 90 Day Look Ahead http://nodal.ercot.com 2

3. Market Trials 2010 Roadmap http://nodal.ercot.com 3

4. General Updates / Reminders • Reminder: Weekly Friday Market Call Changes • ERCOT will be adjusting the agenda, effective 5/7/2010 • 09:00 AM-09:30 AM Outage Scheduling • 09:30 AM-10:00 AM Congestion Revenue Rights • 10:00 AM-11:00 AM Day Ahead Market / RUC / SASM • 11:00 AM-12:00 PM Real Time Market / LFC • 12:00 PM-01:00 PM Break • 01:00 PM-02:00 PM Settlements and Billing / COMs • The weekly Monday kick off meeting will remain in place, unchanged • Environment Availability for May 2010 • The Nodal Production Environment will be available Monday – Friday from 8am – 6pm for all systems except EMS / SCADA and SCED • EMS / SCADA and SCED will continue to be monitored, maintained and available 24x7 • ERCOT will continue to submit test transactions to verify and performance test systems • Additionally, ERCOT will also begin the process of testing fail-overs. • Initially, this will be during non-business hours • Once the process is matured, we will perform these during business hours • Test date / times will be communicated on Friday market calls so that MPs may also test their own failure process • Reminder: ERCOT is looking for suggestions for additional Operational Scenarios • Send these to markettrials@ercot.com • Deadline for submissions is 5/17/2010 http://nodal.ercot.com 4

5. Phase 4 in Review • Day Ahead Market • Participation levels: • 169 / 265 QSEs actively participating in the Day Ahead Market >50% of the • 7 / 265 are newly registered and ramping up • 45 / 265 are participating under the 50% requirement • 44 / 265 are not participating • Cleared 9 Market-Facing Day Ahead Markets and ran DRUC, SASM and HRUC • Telemetry update • ERCOT continues to reach out to TSPs and QSEs on telemetry issues • 260 QSE telemetry points • Mostly due to incorrect ownership information • 145 of these will be corrected in the next model load • 357 TSP telemetry points • 288 of these are being worked by the TSPs • The remainder fall into the following categories: ERCOT investigating, considered “future” points and ownership issues • Expect resolution of most points by 5/10/2010 • Quality (ICCP server to server only) • TSP Quality currently has 1356 suspect points: 97.9% Good overall • QSE Quality currently has 871 suspect points: 94.9% Good overall http://nodal.ercot.com 5

6. Phase 4 in Review • Real Time Market (continued) • Submissions • >95% of the expected TPOs are consistently submitted • Individual LFC tests • 23 tests conducted in MT4 • 10 additional tests are scheduled prior to the 5 / 7 timeline • Model / Data Update • Delayed the start of weekly updates (currently on bi-weekly updates) • Continue to work on registration data • CRR • Monthly Auction ran and invoiced as planned • Initiated Bid Window for Multi-Month Auction • Settlements Began on time for DAM / RTM Operating 4/21/2010 http://nodal.ercot.com 6

7. Phase 4 in Review • Primary issues with DAM / RUC coming out of Phase 4 • Bid/Offer IDs with special characters • QSEs do not submit special characters until resolved • This will be included in 1.19L • ETA early June • MMS subroutines having issues with certain combinations of decimals in clearing process • The suspected root cause was that 2 QSEs had identical bids • Will be fixed in emergency patch from vendor in approx. 1 week • Circuit Breaker outages seen as always ‘Open’ • Fixed in MMS Patch 7 – ETA TBD • MMS numbers the main network incorrectly when integrated with outages (depends on combination of outages). • Included in the emergency patch in approx 1 week http://nodal.ercot.com 7

8. 90 Day Outlook : May Market Activities Jan Feb Mar Apr May June July Aug Functional Area Targeted Activities for May 2010 • ERCOT ramps to DAM / DRUC 5x / weekly • 2hr LFC closed loop test executed • ERCOT complete Balance of Year auction • ERCOT executes June Monthly CRR Auction • ERCOT releases credit integration • SASM executed as needed • ERCOT executes limited HRUC • ERCOT ramps to reflect protocol timelines on a best effort basis • Real-Time Market • Congestion Revenue Rights • Day-Ahead Market • Reliability Unit Commitment • Outage Scheduler • COMS/Settlements • Network Modeling • Nodal Reports • Credit • Full Integration

9. 90 Day Outlook : June Market Activities Jan Feb Mar Apr May June July Aug Functional Area Targeted Activities for June 2010 • Operational scenarios executed • 8hr LFC closed loop test executed • ERCOT executes July Monthly CRR Auction • DAM / DRUC Continues 5x / weekly • SASM executed as needed • ERCOT executes limited HRUC • Protocol timelines on a best effort basis • Real-Time Market • Congestion Revenue Rights • Day-Ahead Market • Reliability Unit Commitment • Outage Scheduler • COMS/Settlements • Network Modeling • Nodal Reports • Credit • Full Integration

10. 90 Day Outlook : July Market Activities Jan Feb Mar Apr May June July Aug Functional Area Targeted Activities for July 2010 • Exercise ‘Normal State’ processes and procedures, including weekends • 48hr LFC closed loop test executed • DAM / DRUC executes 7x / weekly for two weeks • ERCOT executes HRUC 7x24 during 7 day weeks • Protocol timelines during 7 day weeks • ERCOT executes August Monthly CRR Auction • SASM executed as needed • Real-Time Market • Congestion Revenue Rights • Day-Ahead Market • Reliability Unit Commitment • Outage Scheduler • COMS/Settlements • Network Modeling • Nodal Reports • Credit • Full Integration

11. Q&A Q&A / Open Forum http://nodal.ercot.com 11