1. 1 Summary of TAC Procedures – RMS, ROS, WMS May 11, 2005 After RMS Review

2. 2 Revision of TAC Procedures Project began in October 2004 to incorporate the Commercial Operations Subcommittee into the TAC Procedures In January 2005, the project was expanded to provide more clarity and information related to the structure and voting process for TAC and all the subcommittees (PRS, RMS, ROS, WMS) Several conference calls have been conducted to discuss areas of concern by parties The primary goal was to add more information and clarity Some changes have also been proposed

3. 3 Subcommittee Designation Of Alternate Rep. Current – No language in TAC procedures, but included in subcom. procedures, similar to current TAC] If used, a designated Alternate Representative and proxy must be sent to ERCOT for each subcommittee meeting and shall only be valid for such meeting. Alternate Representatives, if not employed by the voting member thereby represented, must be confirmed in writing by such member (signed by a duly authorized representative of the member). Proposed – change to timeframe If the Standing Representative wishes to designate an Alternate Representative or proxy, a notification of the designation of such Alternate Representative or proxy must be sent to ERCOT and shall be valid for the time period designated by the Standing Representative. Alternate Representatives, if not employed by the voting member thereby represented, must be confirmed in writing by such member (signed by a duly authorized representative of the member).

4. 4 Subcommittee Meetings and Notification Current – No language in TAC procedures, but included in subcom. procedures Meetings called by the Chair and notice sent to each member and posted on website at least 1 week prior to the meeting, unless an emergency condition should suggest otherwise. In addition to the above, subcom. meetings are normally attended by an ERCOT Staff Member who provides support for meeting arrangements, subcom. meeting minutes, meeting notes and other administrative support. Proposed – minor change Meetings called by the Chair and notices sent to each SR, the subcom. distribution list and posted on website at least 1 week prior to meeting unless an emergency condition requires a shorter notice. In addition, subcommittee meetings are attended by ERCOT Staff person(s) who coordinate ERCOT support of the meeting, including meeting arrangements, meeting minutes, and ERCOT Staff participation in the meeting.

5. 5 Subcommittee Membership – RMS, ROS, WMS Current – TAC Procedures Membership shall consist of 1 to 4 representatives from each Segment. Subcom. Procedures adds: The number of representatives for each Segment shall be determined by the TAC members representing that Segment. Representatives, if not employed by the voting member thereby represented, must be confirmed in writing by such member (Signed by a duly authorized representative of the member). Proposed – TAC Procedures Membership shall consist of 1 to 4 Standing Representatives from each Segment.

6. 6 Membership: Membership shall consist of one (1) to four (4) Standing Representatives from each Market Segment elected or appointed by the voting members of the respective Market Segment with the exception of the Consumer Segment. The Consumer Segment shall consist of three (3) subsegments (Residential, Commercial and Industrial). The number of Standing Representatives for each Market Segment shall be determined by the TAC members representing that Market Segment. Standing Representatives, if not employed by the voting member thereby represented, must be confirmed in writing by such member (signed by a duly authorized representative of the member). These will be the voting members of the subcommittee. The Standing Representatives of the subcommittee shall elect from amongst themselves a Chair and Vice-Chair, subject to confirmation by the TAC, for a one-year term on a calendar year basis. ERCOT shall appoint an appropriate staff member to attend and participate in the subcommittee meetings. Subcommittee Membership – RMS Recommendation

7. 7 Subcommittee Quorum – RMS, ROS, WMS Current – At least 1 representative from each of 4 market segments and a majority of the subcommittee members must be present at a meeting to constitute a quorum. Proposed – same as current, plus Standing Representatives may participate in the meeting [add: and vote] via telephone, but participation via telephone shall not count towards a quorum.

8. 8 Subcommittee Votes – RMS, ROS, WMS Current – Each Segment has 1 vote except the Consumer Segment, which will have 1 ½ votes. Votes are fractionally and equally divided among the representatives of each Segment. Proposed – same as current, plus Votes divided among the SRs of each segment present at the meeting and casting a vote, except the Consumer Segment which is divided into 3 subsegments, each of which has 1/3 of the segment vote. For CS, if no SR from a subseg. is present or all SRs from a subseg. abstain, the vote is allocated to subseg. present and casting a vote.

9. 9 Votes: Each Segment shall have a Segment Vote of 1.0 except the Consumer Segment, which shall have a Segment Vote of 1.5. Segment Votes shall be equally divided into Fractional Segment Votes among the Standing Representatives, designated Alternate Representatives and proxies of each Market Segment that cast a vote. The Consumer Segment Vote shall be equally divided into a Fractional Segment Vote of.5 for each of the three subsegments. The Fractional Segment Vote for each subsegment of the Consumer Segment is allocated to the Standing Representatives, designated Alternate Representatives, and proxies of the subsegment casting a vote. For the Consumer Segment, if no Standing Representative from a subsegment is present at a meeting or all Standing Representatives, designated Alternate Representatives and proxies of a subsegment abstain from the vote, the Consumer Segment vote is allocated equally to the subsegments that cast a vote. Subcommittee Votes – RMS Recommendation

10. 10 Subcommittee Voting – RMS, ROS, WMS Current – The act of a majority of the votes represented by members present and a minimum of three (3) votes will be the act of the subcommittee Proposed – same as current, plus Only Standing Representatives, their designated Alternate Representative, or proxy may vote. A motion of the subcommittee passes when 1) a majority of the aggregate of the fractional Segment votes are affirmative and 2) a minimum of three (3) Segment Votes are affirmative. A Segment Vote is considered affirmative when the majority of Standing Representatives of the Segment voted affirmatively. The results of all votes taken will be reported to TAC, whether or not the vote passed.

11. 11 Only Standing Representatives, their designated Alternate Representative, or proxy may vote. A motion of the subcommittee passes when a majority of the aggregate of the Fractional Segment Votes are 1) affirmative and 2) a minimum total of three (3). The results of all votes taken will be reported to TAC, whether or not the vote passed. Subcommittee Voting – RMS Recommendation

12. 12 Subcommittee - Abstentions Current – [No current language in TAC or subcom. procedures on treatment of abstentions except that abstentions during roll call votes will be recorded.] Proposed – In the event that a voting member, their designated Alternate Representative, or proxy, is not present during a roll call vote, or abstains from voting, that member’s fractional vote will be reallocated equally among the remaining voting members of that Segment; except for the Consumer Segment. NOTE: Alternative language for abstention: [For purposes of voting, an abstention is treated as if the individual did not cast a vote. A vote is cast as an “aye” or a “nay” vote. An abstention is not a vote.] In the event that a voting member, their Designated Alternate Representative, or proxy, abstains from a vote, the Segment vote is allocated among the members casting a vote.

13. 13 Subcommittees – E-Mail Voting, RMS, ROS, WMS Current – E-mail voting is permitted to expedite processes provided the Chair distributes to the roster (e- mail) a detailed description of the issue or proposition. The chair will submit meeting minutes wherein the vote is recorded for review of accuracy at the next scheduled subcommittee meeting. (Individual exceptions will be made where needed to accommodate members who do not have e-mail addresses.) “Discussion Required” votes count as “No”.

14. 14 Subcommittees – E-Mail Voting, RMS, ROS, WMS Proposed – An e-mail vote is permitted provided a notification is distributed to the subcommittee distribution list that includes a detailed description of the issue or proposition. A request for an e-mail vote can only be initiated by the Chair or Vice Chair. A quorum of Standing Reps must participate in the e-mail vote. Participation requires casting a vote, or abstaining. Votes shall be submitted to ERCOT for tallying by the close of two (2) Business Days after notification of the vote. Votes are tallied in the same manner as a regular meeting. The final tally shall be distributed to the subcommittee distribution list and posted on the MIS