1. Protocol Revision Subcommittee Presentation to the ERCOT Technical Advisory Committee August 7, 2008

2. PRS Summary 2 PRRs for Approval 2 PRRs for Approval 5 NPRRs for Approval 5 NPRRs for Approval Unfunded Projects Update Unfunded Projects Update

3. PRR 753 – PRR Appeals Process Purpose(ERCOT) Provides a more structured process for parties to appeal PRS/TAC decisions by including timelines for appealing decisions (accommodates “Urgent” timelines) Benefit A structured and transparent appeals process creates predictability for all parties and ensures due process Market Impact N/A System Change NoN/A AssumptionsN/A PRS Vote PRS unanimously recommended approval as revised by PRS to address the ERCOT Board concerns; all Market Segments were present Effective Date September 1, 2008

4. PRR 753 – PRR Appeals Process Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

5. PRR 766– Interim Solution for 15-Minute Settlement of Advanced Meters Purpose (AEP Texas) PRR supports interim settlement of all provisioned Advanced Meters using actual fifteen minute data, the same way Interval Data Recorder (IDR) meters are settled today, until the long-term solution is implemented. Benefit Allows retail customers to more effectively respond to price signals by supporting innovating retail product offerings, such as demand response, dynamic pricing, and time of use pricing and accelerates the timeline for the market to take advantage of the benefits of Advanced Metering Systems (AMS). Market Impact N/A System Change Yes Impacts to NAESB, Paperfree, Appworx, MarkeTrak, Lodestar, EIS and additional hardware & storage AssumptionsN/A PRS Vote PRS recommended approval unanimously; all Market Segments were present Effective Date Upon System Implementation

6. PRR 766– Interim Solution for 15-Minute Settlement of Advanced Meters Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact $500K - $1M; Budgeted Impacts several systems May add new/enhance current functions

7. NPRR 091– Scarcity Pricing & Mitigated Offer Cap During the Period Commencing on Nodal Market Implementation Date and Continuing for a Total of 45 Days Purpose (ERCOT for TPTF) NPRR adds provisions that all transmission constraints are treated as non-competitive constraints during an initial 30 day period, requires that the System-Wide Offer Cap be set to the higher of $180 or 18 mmBtu HR times the Fuel Index Price during an initial 45 day period and establishes Energy Offer Curve floor adjusted to $-50/MWh. Benefit This proposal provides for a set of “guardrails” to reasonably protect against unforeseen issues associated with the operation of the Nodal Market in the period shortly after “go-live.” Market Impact N/A System Change Yes MMS and MIS will be modified. AssumptionsN/A PRS Vote PRS recommended approval with four opposed (Consumer) and three abstentions (Cooperative, IOU, IPM); all Market Segments were present Effective Date Upon Texas Nodal implementation; $50K-$100K impact to nodal budget

8. NPRR 114 – Section 11, Synchronization of Zonal Protocols Purpose(ERCOT) Synchronizes Nodal Section 11, Data Acquisition & Aggregation with the current zonal Protocols. Benefit Completion of Nodal Protocols. Market Impact N/A System Change NoN/A AssumptionsN/A PRS Vote PRS recommended approval unanimously; all Market Segments were present Effective Date Upon Texas Nodal implementation; no impact to nodal budget or implementation

9. NPRR 127– Section 22 Attachments A, I, J & M, Synchronization of Zonal Protocols Purpose(ERCOT) Synchronizes Nodal Section 22 Attachments with the current zonal Protocols. Benefit Completion of Nodal Protocols. Market Impact N/A System Change NoN/A AssumptionsN/A PRS Vote PRS recommended approval unanimously; all Market Segments were present Effective Date Upon Texas Nodal implementation; no impact to nodal budget or implementation

10. NPRR 132 – Outage Clarification Purpose(ERCOT) NPRR changes the use of the defined term “Outage” to generic “outage” to clarify that the Protocol language regarding outages in the CIM includes known normal operating status outages, not Outages as defined in Section 2.1, Definitions; includes non-substantive edits. Benefit Reflects capability of CIM. Market Impact N/A System Change NoN/A AssumptionsN/A PRS Vote PRS recommended approval unanimously; all Market Segments were present Effective Date Upon Texas Nodal implementation; no impact to nodal budget or implementation

11. NPRR 133– Addition of PSSE Format Purpose(ERCOT) NPRR adds the requirement to post Annual Planning Models and Congestion Revenue Rights Network Models in the Power System Simulator for Engineering format; includes non-substantive edits. Benefit The Common Information Model (CIM) format has not been extended to represent bus-branch type models. The Electric Power Research Institute (EPRI) does have an initiative underway to do so but results are not yet available. Market Impact N/A System Change NoN/A AssumptionsN/A PRS Vote PRS recommended approval unanimously; all Market Segments were present Effective Date Upon Texas Nodal implementation; no impact to nodal budget or implementation

12. PRR/NPRR Summary Revision Requests Recommended for Approval Revision Requests Recommended for Approval PRR 753 – PRR Appeals Process PRR 753 – PRR Appeals Process PRR 766 – Interim Solution for 15-Minute Settlement of Advanced Meters -- URGENT PRR 766 – Interim Solution for 15-Minute Settlement of Advanced Meters -- URGENT NPRR 091 – Scarcity Pricing & Mitigated Offer Cap During the Period Commencing on the Nodal Market Implementation Date and Continuing for a Total of 45 Days NPRR 091 – Scarcity Pricing & Mitigated Offer Cap During the Period Commencing on the Nodal Market Implementation Date and Continuing for a Total of 45 Days NPRR 114 – Section 11, Synchronization of Zonal Protocols NPRR 114 – Section 11, Synchronization of Zonal Protocols NPRR 127 – Section 22 Attachments A, I, J & M, Synchronization of Zonal Protocols NPRR 127 – Section 22 Attachments A, I, J & M, Synchronization of Zonal Protocols NPRR 132 – Outage Clarification NPRR 132 – Outage Clarification NPRR 133 – Addition of PSSE Format NPRR 133 – Addition of PSSE Format

13. PMO Update - Unfunded Project List Quarterly Update There are not any unfunded projects at this time There are not any unfunded projects at this time No change since last report No change since last report There have not been any approved market or PUCT-requested projects that are prioritized below the Program Area funding cut-lines There have not been any approved market or PUCT-requested projects that are prioritized below the Program Area funding cut-lines There have been several ERCOT-requested projects (originally planned for 2008) that have been deferred to 2009 or later in order to limit risk in the Nodal program There have been several ERCOT-requested projects (originally planned for 2008) that have been deferred to 2009 or later in order to limit risk in the Nodal program Unfunded items do not include “parking lot” items that are held for reasons that precluded their funding at the current time Unfunded items do not include “parking lot” items that are held for reasons that precluded their funding at the current time