COMS/Settlements/Credit Weekly Update June 25, 2010 http://nodal.ercot.com 1

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. DISCLAIMER All presentations and materials submitted by Market Participants or any other Entity to ERCOT staff for this meeting are received and posted with the acknowledgement that the information will be considered public in accordance with the ERCOT Websites Content Management Operating Procedure. http://nodal.ercot.com 2

Anti-trust Admonition Standing Reports and Updates Agenda Anti-trust Admonition Standing Reports and Updates Operating Day Settlement Reports Week in Review/General Reminders Next Week’s Activities Environment Report Known Issues Credit Question and Answers / General Discussion ERCOT asks that Market Participants log into the WebEx session using their company name and then their name. This will allow ERCOT to take roll-call offline http://nodal.ercot.com 3

DAM Settlement Overview for June 16 Statement and Invoice Overview 153 Statements/Invoices posted to QSEs 53 Statements/Invoices posted to CRRAHs 1 QSEs received Statements/Invoices for $0 (Not due to earlier closed issue) CRR Overview CRRs were derated CRR Owners were fully funded (i.e. there were no Short Fall Charges) General Reminders/Updates Submit any questions/issues about statements, invoices, extracts or calculations to markettrials@ercot.com http://nodal.ercot.com 4

DAM Settlement Overview for June 17 Statement and Invoice Overview 163 Statements/Invoices posted to QSEs 53 Statements/Invoices posted to CRRAHs 0 QSEs received Statements/Invoices for $0 CRR Overview CRRs were derated CRR Owners were fully funded (i.e. there were no Short Fall Charges) General Reminders/Updates Submit any questions/issues about statements, invoices, extracts or calculations to markettrials@ercot.com http://nodal.ercot.com 5

DAM Settlement Overview for June 18 Statement and Invoice Overview 159 Statements/Invoices posted to QSEs 53 Statements/Invoices posted to CRRAHs 1 QSEs received Statements/Invoices for $0 CRR Overview CRRs were derated CRR Owners were fully funded (i.e. there were no Short Fall Charges) General Reminders/Updates Submit any questions/issues about statements, invoices, extracts or calculations to markettrials@ercot.com http://nodal.ercot.com 6

DAM Settlement Overview for June 19 Statement and Invoice Overview 158 Statements/Invoices posted to QSEs 42 Statements/Invoices posted to CRRAHs 0 QSEs received Statements/Invoices for $0 CRR Overview CRRs were derated CRR Owners were fully funded (i.e. there were no Short Fall Charges) General Reminders/Updates Submit any questions/issues about statements, invoices, extracts or calculations to markettrials@ercot.com http://nodal.ercot.com 7

DAM Settlement Overview for June 22 Statement and Invoice Overview 152 Statements/Invoices posted to QSEs 53 Statements/Invoices posted to CRRAHs 0 QSEs received Statements/Invoices for $0 CRR Overview CRRs were derated CRR Owners were fully funded (i.e. there were no Short Fall Charges) General Reminders/Updates Submit any questions/issues about statements, invoices, extracts or calculations to markettrials@ercot.com http://nodal.ercot.com 8

DAM Settlement Overview for June 23 Statement and Invoice Overview 159 Statements/Invoices posted to QSEs 53 Statements/Invoices posted to CRRAHs 0 QSEs received Statements/Invoices for $0 CRR Overview CRRs were derated CRR Owners were fully funded (i.e. there were no Short Fall Charges) General Reminders/Updates Submit any questions/issues about statements, invoices, extracts or calculations to markettrials@ercot.com http://nodal.ercot.com 9

RTM Settlement Overview for June 8 Statement Overview 196 Statements posted to QSEs 3 Statements posted to CRRAHs 6 QSEs received Statements for $0 (This is not due to the closed issue. There were drivers for calculations, but the outputs were zero) General Reminders Submit any questions/issues about statements, invoices, extracts or calculations to markettrials@ercot.com http://nodal.ercot.com 10

RTM Settlement Overview for June 9 Statement Overview 151 Statements posted to QSEs 53 Statements posted to CRRAHs 3 and CRRAHs QSEs received Statements for $0 General Reminders Submit any questions/issues about statements, invoices, extracts or calculations to markettrials@ercot.com http://nodal.ercot.com 11

RTM Settlement Overview for June 10 Statement Overview 201 Statements posted to QSEs 3 Statements posted to CRRAHs 7 QSEs received Statements for $0 General Reminders Submit any questions/issues about statements, invoices, extracts or calculations to markettrials@ercot.com http://nodal.ercot.com 12

RTM Settlement Overview for June 11 Statement Overview 200 Statements posted to QSEs 3 Statements posted to CRRAHs 3 QSEs received Statements for $0 General Reminders Submit any questions/issues about statements, invoices, extracts or calculations to markettrials@ercot.com http://nodal.ercot.com 13

RTM Settlement Overview for June 15 Statement Overview XXXStatements posted to QSEs XStatements posted to CRRAHs XQSEs received Statements for $0 General Reminders Submit any questions/issues about statements, invoices, extracts or calculations to markettrials@ercot.com http://nodal.ercot.com 14

Charge Type Tracker Below are the Day Ahead Market charge types that have been executed at least once during Market Trials (17 of 19 executed) http://nodal.ercot.com 15

Charge Type Tracker Below are the Real-Time Market charge types that have been executed at least once during Market Trials (30 of 45 executed) ** We are currently planning to have all charge types executed by the end of July** http://nodal.ercot.com 16

Update to Settlement Charge Type Tracker Planned Settlement dates for charge types not yet executed in Market Trials **Any updates to these dates will be communicated at the Friday Settlements Market Trials Call http://nodal.ercot.com 17

Stats on RTM Charge Types in Market Trials http://nodal.ercot.com 18

Stats on DAM Charge Types in Market Trials http://nodal.ercot.com 19

Nodal Dispute Update System will handle both MIS submitted disputes and API submitted disputes The Nodal Dispute form is already available. The (“Submit Nodal Dispute” is available on TML) The API dispute submission has been tested but is not yet turned on in the Nodal test environment ERCOT anticipates both MIS and API processes should be turned on for MPs to test prior to the 168 Hour test. ERCOT will not use submitted Nodal disputes to track Market Trials issues, but Client Services will close the feedback loop by responding to disputes with the appropriate statuses http://nodal.ercot.com 20

No Unsupported Operating Dates included Week in Review RTM Invoice (Posted 6-24) No Unsupported Operating Dates included Initials Included 6/4, 6/5, 6/8, 6/9, 6/10 Finals Included 5/25, 5/26, 5/27, 5/28, 5/29 True-Ups Included 5/1 July CRR Auction Invoices 44 Invoices Issues $44,880,613.64 in total auction revenue Invoice Payment Timeline update NPRR 221 Due to passing of NPRR 221, the DAM Invoice due date will be update to the third Bank Business Day after the DAM Invoice date Updates will be reflected in Lodestar and published in the Settlements Calendar Extract http://nodal.ercot.com 21

Next Week’s Activities Operating Days for next week that will be settled 6-29 SASM for failure to provide and AS un-deliverability 6-30 SASM only if needed 7-1 SASM only if needed 7-2 SASM only if needed 7-3 SASM only if needed http://nodal.ercot.com 22

Environment Report-Known Issues COMS New Known Issues The Nodal SID Extract for 6/22 posted 9 minutes late (00:09 on 6-23) COMS Closed Issues No new closed issues Reminder: ERCOT will post known issues every Friday to the readiness center at: http://nodal.ercot.com/readiness/markettrials/coms/index.html http://nodal.ercot.com 23

Credit and Treasury Weekly Update June 25, 2010 http://nodal.ercot.com 24

ACL and TPE Summary Reports were posted around 8:30 am Week in Review Posted Credit Reports ACL and TPE Summary Reports were posted around 8:30 am Remaining Credit Reports were posted around 9:30 am Sent ACLs each business day ERCOT adjusted ACLs or credit limits as needed to ensure adequate credit limits for DAM Final Nodal Credit training session was held on June 24th http://nodal.ercot.com 25

Credit exposures should reflect market participant activity Week in Review Credit exposures Credit exposures should reflect market participant activity There remain a few exceptions, which are listed on the Known Issues list Extrapolation of high historical activity forward continue to impact exposure calculations for CPs with ongoing activity in Real Time Still see a significant amount of CP activity in the RT market http://nodal.ercot.com 26

Volume by Counter-Party by Day http://nodal.ercot.com 27

Next Week ERCOT Plan to begin posting Aggregate Incremental Liability (AIL) report on Monday, June 28th and will be posting this with the other Credit Reports from now on Occasionally, some operating day’s real time estimates are missing due to delayed jobs. If this happens, the corresponding forward day’s estimates would also be missing (known issue). Beginning, Wednesday, June 30, ERCOT will no longer override the ACL or adjust credit limits ERCOT will send collateral calls if exposure exceeds collateral Note: If ERCOT sends a collateral call, the CP will likely not be able to bid in the DAM until additional e-collateral is received Will continue to review exposure calculations for reasonableness Will do credit approvals of CRR Bilateral Trades as received http://nodal.ercot.com 28

Counter-Parties Next week Since ERCOT will no longer override ACLs, CPs should review Credit Reports, consider a) their exposure and b) upcoming DAM activity and send e-collateral as needed CPs that have set their e-collateral at a high level should request a “refund” of e-collateral to adjust it down consistent with exposure and begin managing in a more normal way Continue to review the Credit Report calculations to confirm they reflect their MT5 activity To obtain more realistic exposure calculations, CPs should begin functioning in MT5 as you might after Go-Live For QSEs representing Load, use Energy Trades or DAM rather than RT to meet your load requirements. For all, use more realistic estimates in your market activity (bids/offers in DAM, etc) http://nodal.ercot.com 29

Next Week - Schedule of activity Date Meeting Title (optional)

Tentative timeline for First Priority Security Interest document Other topics Tentative timeline for First Priority Security Interest document July 1, 2010 – ERCOT circulates initial draft to CPs. July 19, 2010 – Comments back from CPs. August 2, 2010 – ERCOT circulates second draft to CPs. August 17, 2010 – ERCOT reviews document with F&A. September 21, 2010 – Final review and possible approval by F&A and ERCOT Board. NPRR 206 and “e” factors NPRR 206 with 1/0/1 – expected early next week “e” factors – planned - August 1 Training on NPRR 206 and “e” factors in August http://nodal.ercot.com 31

New Known Issues Some of the Real Time and DAM Statements are not being transferred from S&B to CMM. This is impacting the following calculations ADTE AIL DALE Root cause is being investigated, the calculations will self correct once the statement issue is fixed. http://nodal.ercot.com 32

Closed Known Issues Real time estimates for Aggregate Incremental Liability (AIL) are delayed by up to two days – Jobs caught up and issue self corrected Note: Known Issues can be reviewed at : http://nodal.ercot.com/readiness/markettrials/coms/index.html, http://nodal.ercot.com 33