1. ROS December 2007 Carlos Gonzalez-Perez ERCOT Operations Support CFE-ERCOT DC-Ties Commercial Operations 1 10/30-31/2007 CFE/ERCOT/AEP Meeting – Mexico City

2. ERCOT DC-Ties ERCOT-CFE Operational DC-Ties Eagle Pass (DC_S, 36 MW) Laredo Variable Frequency Transformer (DC_L, 100 MW) Sharyland Railroad (DC_R, 150MW) ERCOT-SPP Operational DC-Ties North DC-Tie (DC_N, 220 MW) East DC-Tie (DC_E 600 MW) DC_N 220 MW DC_E 600 MW DC_S 36 MW DC_L 100 MW DC_R 150 MW 2 ROS Meeting – December 2007

3. ERCOT CFE Business Rules DC-Tie Operator DC-Tie Control Settlement Inadvertent Accounting Emergency Operations DC- Tie Limit Calculation Capacity Reservation Schedule Approval Schedule Curtailment Commercial Operational Aspects 3 ROS Meeting – December 2007

4. Future Commercial Ops. of the DC-Ties ERCOT management of the scheduling process in the South DC-Ties will be similar to the North DC-Ties Minimal modifications to the ERCOT systems will be necessary CFE to establish a NERC E-Tag operation for transactions between Mexico and ERCOT (and vice versa) 4 ROS Meeting – December 2007

5. ERCOT DC-Ties Scheduling Process 5 ROS Meeting – December 2007

6. Proposed Day Ahead Operations – Limit Calculations Limits are initially calculated Daily (can be changed to weekly, etc) CFE to provide ERCOT limits by 16:00 Most constrained transfer limits will be made public and posted Limits will be recalculated in real-time based on system conditions as needed CFE Day Ahead Transfer Limits ERCOT Day Ahead Transfer Limits Tie De-Ratings LIMIT Set to the Lower of all the Values 6 ROS Meeting – December 2007

7. Modification of Operating Conditions Due to reliability issues, the limits for the DC-Ties Change CFE/ERCOT CFE/ERCOT operator identifies the amount of Flow that needs to be curtailed on the DC-Tie. The Tie-Operator will indicate any operational de-ratings in the Tie to CFE and ERCOT ERCOT Tie Operator EROT is notified of the curtailment via E-Tag. The Tie-Operator receives new instructions for net schedule interchange from CFE The DC-Tie flow is properly adjusted to the new limit Schedule Curtailment Process 7 ROS Meeting – December 2007

8. Inadvertent Accounting Scheduled Energy: Calculated from the NERC E-Tag Actual Energy: Real-time SCADA hourly integrated. For hourly monitoring EPS meter true-up 7 days after the fact Daily Check-out: Between ERCOT Operator and Tie Operator after midnight Define payback in kind schedules, if the Inadvertent Balance larger than X MWh Monthly True-up Between CFE and ERCOT Keeping up with the Inadvertent Account Balance 8 ROS Meeting – December 2007

9. Before going into Commercial Operations Finalize Operating procedures for the South DC-Ties Finalize an Emergency Assistance Agreement with CFE Finalize Inadvertent agreement with CFE CFE to have an E-Tag operation in place ERCOT to finalize the testing of ERCOT systems Tie Operator systems ready CFE declare ready for Commercial Operations 9 ROS Meeting – December 2007