1. Protocol Revision Subcommittee Presentation to the ERCOT Technical Advisory Committee January 6, 2010

2. PRS Summary 1 PRR for Approval 3 NPRR for Approval 2 NPRRs for Parking Deck Consideration 0 Rejections 0 Withdrawals Current Discussions

3. PRR842, Addition of Generic Startup Cost and Minimum Energy Cost for Diesel – U RGENT Purpose(STEC) This PRR adds generic costs for the Diesel Resource Category, which also includes other gas-fired Resources (including reciprocating engines). This PRR makes the minimum energy costs for diesel consistent with what is currently in the Nodal Protocols. BenefitAllows diesel and other reciprocating units to be reimbursed for their O&M costs and minimum energy costs when called upon for Out of Merit Order (OOM) instructions. Startup costs for these units are less than for other more “conventional” types of thermal units Market Impact N/A System Change NoN/A PRS Vote PRS voted to recommend approval of PRR842 as submitted. There were two opposing votes from the Consumer Market Segment and three abstentions from the Municipal, Independent Retail Electric Provider (IREP) and Independent Generator Market Segments. All Market Segments were present. CEO Determination No Opinion No Opinion Effective Date February 1, 2010

4. PRR842, Addition of Generic Startup Cost and Minimum Energy Cost for Diesel – U RGENT Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

5. NPRR194, Synchronization of Zonal Unannounced Generation Capacity Testing Process Purpose(ERCOT) Replaces the seasonal testing requirement with unannounced Generation Resource testing and adds a requirement for QSEs to seasonally update their Resources’ High Sustainable Limits (HSLs.) Also leverages existing emergency operations Settlement functionality to provide a mechanism to compensate a Generation Resource for the additional energy above the pre-test Security-Constrained Economic Dispatch (SCED) Base Point during the unannounced Generation Resource test period. Synchronizes the Nodal Protocols with the process added to the zonal Protocols pursuant to PRR750, Unannounced Generation Capacity Testing. BenefitImproved accuracy in reserve reporting. Market Impact N/A System Change NoN/A PRS Vote PRS unanimously voted to recommend approval of NPRR194 as revised by the 11/17/09 Luminant comments and as revised by PRS. CEO Determination Necessary for Go-Live Effective Date Upon Nodal Implementation

6. NPRR194, Synchronization of Zonal Unannounced Generation Capacity Testing Process Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

7. NPRR197, Section 21, Synchronization of Zonal Protocols Purpose(ERCOT) This NPRR synchronizes zonal Protocol Section 21 with the current Nodal Protocols and includes changes from PRR821, Update of Section 21, Process for Protocol Revision. BenefitCompletion of Nodal Protocols. Market Impact N/A System Change NoN/A PRS Vote PRS unanimously voted to forward the 11/19/09 PRS Recommendation Report as amended by the 12/10/09 ERCOT Comments and the Impact Analysis to TAC. CEO Determination Necessary for Go-Live Effective Date Upon Nodal Implementation

8. NPRR197, Section 21, Synchronization of Zonal Protocols Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

9. NPRR202, Clarification of Network Operations Model and State Estimator Postings Purpose(NATF) This NPRR addresses the confidentiality of data in the Network Operations Model and Hourly State Estimator report. The language introduces a newly defined term for redacted-version of the Network Operations Model for non-Transmission Service Providers (TSPs) and also removes Private Use Network data from the Hourly State Estimator report. BenefitN/A Market Impact N/A System Change PendingN/A PRS Vote PRS voted via roll call vote to recommend approval of NPRR202 as revised by PRS and to forward to TAC. CEO Determination Determined this should move through stakeholder process. Effective Date To Be Determined

10. NPRR202, Clarification of Network Operations Model and State Estimator Postings Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact Preliminary $50,000 - $100,000 NMMS, CDR, EIS, MID, MIR, EDW & MIS Under evaluation.

11. Withdrawals and Rejections None this month

12. Revision Requests Recommended for Inclusion in the Nodal Parking Deck

13. NPRR131, Ancillary Service Trades with ERCOT Purpose (NRG Texas) In today’s zonal market, Resource Entities can, if they choose, procure Ancillary Services from ERCOT. This functionality was omitted in the Nodal Market design. Currently, the Nodal Market design only allows QSEs with Ancillary Service Obligations the option in the Day-Ahead Market (DAM) of either: 1) self-providing, or 2) procuring all or a portion of their obligation from ERCOT. This NPRR would allow QSEs with Ancillary Services responsibilities, i.e., Resource Entities, the same functionality. BenefitAllow all QSEs, whether they represent Resources, Loads, or both, to procure Ancillary Services in the DAM. Market Impact N/A System Change PendingN/A PRS Vote PRS unanimously voted to endorse and forward to TAC the 6/19/08 PRS Recommendation Report for NPRR131 as amended by the 12/8/09 ERCOT comments and as revised by PRS. PRS also unanimously voted to recommend a priority of High for NPRR131. CEO Determination Not Needed for Go-Live

14. NPRR181, FIP Definition Revision Purpose(Luminant) This NPRR revises the definition of Fuel Index Price (FIP) to correctly account for the timing difference between ERCOT’s application of the FIP in its systems (midnight to midnight) and the timing of natural gas prices reflected by the index (i.e., hour ending 1000 to 0900). The fuel price index published in Gas Daily, in the Daily Price Survey, under the heading “East-Houston-Katy, Houston Ship Channel” for any particular day reflects natural gas prices available to users from hour ending 1000 of the particular day to hour ending 0900 of the next day (i.e., the normal “gas day”). This NPRR also adds a new definition for the term “Gas Day.” BenefitMore accurate pricing of energy produced from natural gas-fueled generation. Market Impact N/A System Change PendingN/A PRS Vote PRS unanimously voted to recommend approval of NPRR181 as submitted. PRS also unanimously voted to recommend a priority of High and to forward NPRR181 to TAC. CEO Determination Not Needed for Go-Live

15. Parking Deck Priority and Rank NPRR131, Ancillary Service Trades with ERCOT– Priority of HIGH NPRR181, FIP Definition Revision – Priority of HIGH

16. PRR/NPRR Summary Revision Requests Unanimously Recommended for Approval with No Impacts NPRR194, Synchronization of Zonal Unannounced Generation Capacity Testing Process NPRR197, Section 21, Synchronization of Zonal Protocols Revision Requests Not Unanimously Recommended for Approval with No Impacts PRR842, Addition of Generic Startup Cost and Minimum Energy Cost for Diesel – U RGENT Revision Requests Unanimously Recommended for Approval with Impacts None this month Revision Requests Not Unanimously Recommended for Approval with Impacts NPRR202, Clarification of Network Operations Model and State Estimator Postings

17. PRS Discussion Update 2009 Goals Timeline for approval of PRRs

18. PRS 2009 Goals PRS 2009 Goals Process PRRs and NPRRs (Section 21 requirement) Facilitate and make recommendations for 2010 Project Priorities as requested by ERCOT Collaborate with ERCOT PMO to structure a process for “releasing” NPRRs to be included in “go-live plus ‘x’”

19. 2010 PRR Approval Cycle – Normal Timeline PRR Posting Deadline PRS Consideration PRS CBA/IA Review TAC Consideration Board Consideration Effective Date 23-Dec21-Jan18-Feb4-Mar20-Apr5/1/10 22-Jan18-Feb18-Mar8-Apr18-May6/1/10 19-Feb18-Mar22-Apr6-May15-Jun7/1/10 26-Mar22-Apr20-May3-Jun20-Jul8/1/10 23-Apr20-May17-Jun1-Jul20-Jul8/1/10 21-May17-Jun22-Jul5-Aug21-Sep10/1/10 25-Jun22-Jul19-Aug2-Sep21-Sep10/1/10 23-Jul19-Aug23-Sep7-Oct16-Nov12/1/10