1. 14 Minute Ramp Period Testing Workshop June 30, 2009

2. 14 Minute Ramp Period - Testing Workshop Agenda Agenda –Welcome & Admonition –Workshop Objective –Overview –Test Window –Test Schedule –Test Options –Test Requirements –Test Evaluation –Recap/Next Steps 2

3. Antitrust Admonition ANTITRUST ADMONITION ERCOT strictly prohibits Market Participants and their employees who are participating in ERCOT activities from using their participation in ERCOT activities as a forum for engaging in practices or communications that violate the antitrust laws. The ERCOT Board has approved guidelines for members of ERCOT Committees, Subcommittees and Working Groups to be reviewed and followed by each Market Participant attending ERCOT meetings. If you have not received a copy of these Guidelines, copies are available at the Client Relations desk. Please remember your ongoing obligation to comply with all applicable laws, including the antitrust laws. 3

4. Workshop Objective Communicate the test approach, requirements and activities for validating ERCOT and Market Participant readiness to implement PRR803 -14 Minute Ramping. 4

5. Overview Protocol Revision Request 803 will change the ramping period for Balancing Energy Service (BES) deployment for Base Power Schedule Calculation and Balancing Energy Power Schedule from 10 minutes to 14 minutes. Successful implementation of PRR803 requires that both ERCOT and Market Participants update and test the changes to their systems. ERCOT will provide a 3 month ‘Test Window’ for QSEs who wish to participate in testing their system changes with ERCOT. QSE’s are not required to participate in testing with ERCOT, however all QSEs/sub-QSEs will be required to submit documentation to ERCOT stating that their systems are ready for implementation by the end of the Testing Window. QSE’s/sub-QSEs will have two options for performing their system test with ERCOT. 5

6. Test Window The 14-Minute Ramp Period Testing Window is 07/01/09 – 09/30/09 between the hours of 9:00 and 16:00 during business days. The schedule will allow each QSE/sub-QSE to sign up for a 1 hour test period, but it is expected that the test will take only 30 minutes. Only a single QSE/sub-QSE will be allowed to perform testing during a scheduled test period. Each QSE/sub-QSE should only be scheduled for a single test at a time. If the test is unsuccessful or changes have to be made to their systems, additional test times may be arranged within the Testing Window. A QSE will be responsible for communicating and making any necessary arrangements with the Resource Entities it represents. 6

7. Test Scheduling All QSEs/sub-QSEs desiring to participate in the testing must contact their ERCOT Wholesale Account Manager to schedule a test date and time. All test times must be tentatively scheduled at least 7 days prior to the day of testing. The QSE/sub-QSE must communicate to ERCOT the option that they have selected for testing at least 2 business days prior to the scheduled day of testing. A QSE will be responsible for communicating and making any necessary arrangements with the Resource Entities it represents. 7

8. Test Options – Option 1 Test using BES deployments received through the BES Market The QSE/sub-QSE will submit BES as they would on a normal day. The QSE/sub-QSE will still be able to provide AS during the testing period. A Verbal Dispatch Instruction (VDI) will be issued to the QSE/sub- QSE under test relieving them of URC during the test. However, a VDI will not be issued to relieve any AS obligations during the test. 8

9. Test Options – Option 2 Receive BES deployments in the same way that deployments are received during BES Ancillary Service (AS) qualification testing. The QSE/sub-QSE will coordinate with ERCOT the MW amount to be deployed during the testing. The QSE/sub-QSE will be placed in test mode by an ERCOT Operator and will not receive BES deployments for the BES Market during the test. The QSE/sub-QSE will submit BES as they would on a normal day. The QSE/sub-QSE will still be able to provide AS during the testing period, however the proposed MW deployments for testing may need to be reviewed following the clearing of the AS Market. 9

10. Test Options – Option 2 (cont.) Receive BES deployments in the same way that deployments are received during BES Ancillary Service (AS) qualification testing. A Verbal Dispatch Instruction (VDI) will be issued to the QSE/sub- QSE under test relieving them of URC during the test. However, a VDI will not be issued to relieve any AS obligations during the test. 10

11. Test Requirements The QSE/sub-QSE must schedule the test with ERCOT according to the prescribed timelines. The QSE/sub-QSE must specify the method through which they will receive BES instructions during the test and must confirm the proposed amount of MWs to be deployed if the second option has been selected. The QSE/sub-QSE is expected to make available all online generation resources for the test. Base Power schedules will be recalculated assuming 14 minute fixed ramping periods during the evaluation process. QSE’s/sub-QSEs will need to have generation resources online to participate in the test. 11

12. Test Evaluation ERCOT will collect data using PI following the test. Base Power and Balancing Schedules will be recalculated assuming a 14 minute ramp. SCE will be recalculated using the adjusted Schedules. QSE/sub-QSE should perform its own interval evaluation of the test. ERCOT will share its test data and evaluation of the results with the QSE/sub-QSE. Any QSE/sub-QSE receiving a VDI for testing must submit documentation to ERCOT stating whether or not they believe their test was successful. –This must be done within 10 business days of receiving the VDI. –If the test was deemed successful, this should be the document in Appendix A of the Handbook. –If the QSE/sub-QSE does not believe their systems are ready, they need to send an email to ERCOT. 12

13. Recap/Next Steps Testing with ERCOT is voluntary, however all QSEs/sub-QSEs will be required to submit documentation to ERCOT stating that their systems are ready for implementation by the end of Testing Window. –Acknowledgement document is in Appendix A of the Handbook. Tests periods must be scheduled at least 7 days before the test day. –Wholesale Account Mangers should be contacted for scheduling. QSE/sub-QSE choosing to test with ERCOT must select one of the options for testing and communicate this choice to ERCOT at least 2 business days before the test. QSE/sub-QSE must provide documentation back to ERCOT within 10 business days of receiving the VDI for testing stating whether or not they believe their test was successful. Please begin reviewing the Handbook to be familiar with the testing approach and requirements: (Link to Handbook)Link to Handbook 13

14. 14 Minute Ramp Period Testing Workshop Thank You 14