1. Technical Advisory Committee Presentation to the ERCOT Board of Directors April 18, 2007

2. Today’s TAC Report Three PRRs. Three PRRs. One Load Profiling Guide Revision Request. One Load Profiling Guide Revision Request. Hot Topics: Hot Topics: Generation Adequacy Task Force recommendations on the reserve margin calculation. Generation Adequacy Task Force recommendations on the reserve margin calculation. Task force comings and goings. Task force comings and goings.

3. PRR 691 – Nodal Implementation Surcharge Verifiable Costs Purpose (NRG - IGEN) Adds the nodal implementation surcharge as a verifiable cost for resources called on for reliability purposes. Benefit Allows a resource owner an opportunity to recover the surcharge if it submits verifiable cost information covering OOMC, OOME, LCRR and RMR. Market Impact May impact QSEs paying for the services listed System Change NoN/A AssumptionsN/A PRS Vote PRS unanimously recommended approval; all Market Segments were present TAC Vote TAC unanimously voted to recommend approval as revised by comments of NRG, responsive to the remand by the Board; all Market Segments present Effective Date May 1, 2007

4. PRR 691 – Nodal Implementation Surcharge Verifiable Costs Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact Impact absorbed with current processes

5. PRR 697 – Posting Requirement Changes Purpose(ERCOT) Incorporates changes from PUC Subst R 25.502 & 25.505 (Pricing Safeguards & Resource Adequacy). Benefit Communicates information as to the type and timing of information posting. Market Impact N/A System Change Yes Project automates and improves current posting by manual process Assumptions Compliance with PUC rules; Critical with 9.5 Rank PRS Vote PRS recommended approval with 1 abstention; all Market Segments were present TAC Vote TAC unanimously voted for approval; all Market Segments were present Effective Date Upon System Implementation

6. PRR 697 – Posting Requirement Changes Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact EIS/Data Extracts <$100K

7. PRR 705 – Emergency Interruptible Load Service – Interim Solution -- URGENT Purpose(ERCOT) Allows ERCOT use of an Emergency Interruptible Load when an EECP is declared and all available generation and LaaRs have been deployed. Benefit Conforms to PUC Subst. R. 25.507; ERCOT requested product in an effort to avoid firm load shed during EECP. Market Impact N/A System Change NoN/A AssumptionsN/A PRS Vote PRS recommended approval by a 6.0 to 1.0 vote, 2 opposed and 6 abstentions; all market segments were present TAC Vote TAC voted to recommend approval as revised by ERCOT’s comments with the understanding that the service was ordered by the PUC, with 1 opposed (IPM) and 7 abstaining (IPM, IG, Municipal) Effective Date April 19, 2007 (Following April BOD)

8. PRR 705 – Emergency Interruptible Load Service – Interim Solution -- URGENT Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact <$100K, O&M New functions to be implemented Minor impacts

9. LPGRR 017 – Implementation of BUSOGFLT Profile Type Purpose(ERCOT) Provides directions for assigning and validating the Business Oil & Gas Flat (BUSOGFLT) Profile Type. Benefit LPGRR 017 implements the new Profile Type (BUSOGFLT), which will result in more accurate price signals and settlement. Market Impact Minimal System Change Yes Minor Lodestar system modifications, to be managed under the O&M budgets of affected departments. AssumptionsN/A COPS Vote COPS voted to recommend approval as recommended by PWG and to endorse the Impact Analysis with one abstention (IOU); all Market Segments present. TAC Vote TAC voted to recommend approval unanimously; all Market Segments present. Effective Date Upon system implementation.

10. LPGRR 017 – Implementation of BUSOGFLT Profile Type Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact Managed within existing O&M budgets Current processes to be modified Minor Lodestar modifications

11. Generation Adequacy Task Force Recommendation Current reserve margin methodology approved in 2005. Current reserve margin methodology approved in 2005. Questions raised in 2006 due to large number of plant announcements. Questions raised in 2006 due to large number of plant announcements. Temporary adjustment to output format. Temporary adjustment to output format. TAC directed GATF to review entire calculation. TAC directed GATF to review entire calculation. Recommended changes to method: Recommended changes to method: Treatment of new generation: Treatment of new generation: Signed interconnection agreement and air permit. Signed interconnection agreement and air permit. Change capacity value for wind: Change capacity value for wind: Base wind capacity value on Effective Load Carrying Capability (ELCC) from ERCOT’s Loss of Load Probability Study (LOLP)— currently measured at 8.7% of installed capacity. Base wind capacity value on Effective Load Carrying Capability (ELCC) from ERCOT’s Loss of Load Probability Study (LOLP)— currently measured at 8.7% of installed capacity.

12. Current Format

13. Generation Adequacy Task Force Recommendation Recommended changes to format: Recommended changes to format: Eliminate the “High” and “Low” reserve margin calculations. Eliminate the “High” and “Low” reserve margin calculations. Eliminate the “Publicly Announced Thermal Units” calculation. Eliminate the “Publicly Announced Thermal Units” calculation. Add “Uncommitted Resources”: Add “Uncommitted Resources”: Remaining mothballed capacity; Remaining mothballed capacity; Remaining DC tie capacity; and Remaining DC tie capacity; and New units with transmission interconnection studies in process, but no signed interconnection agreement. New units with transmission interconnection studies in process, but no signed interconnection agreement.

14. Proposed Format

15. Task Force Comings and Goings (except for the goings) Long term solution task force (LTSTF): investigate a long term solution to replace Emergency Interruptible Load Service (as contemplated by the PUC rule). Long term solution task force (LTSTF): investigate a long term solution to replace Emergency Interruptible Load Service (as contemplated by the PUC rule). Distributed generation review: RMS to lead a review of related issues across all provisions of the Protocols. Distributed generation review: RMS to lead a review of related issues across all provisions of the Protocols.