COPS – ERCOT PROJECTS UPDATE WHOLESALE MARKET DEVELOPMENT Paula Feuerbacher August 23, 2005

PROJECTS:  PR40104 – Zero Charge Elimination  June: Market Participants were asked to consider system implications  July: ERCOT was assigned to perform analysis on extract modification – providing “null” notification informing no activity was encountered for a charge type.  August: ERCOT recommends to cancel the current project effort. The storage savings to implement zero charge do not out-weigh the risk to statement provision stability. The storage savings to implement zero charge do not out-weigh the risk to statement provision stability. Storage issues are being addressed by other infrastructure projects. Storage issues are being addressed by other infrastructure projects. Review requirements within TNT effort. Review requirements within TNT effort.  PR50025 – Enhance ESI-id Look-up Function  Address PRR-312, assigned a priority of 1.2, ranked 34 on the 2005 PPL  Current project state: planning phase -- gathering requirements and performing analysis on impact to TDSP ESI-id extract.  Communication will be provided at the following meetings: RMS – September 14, 2005 RMS – September 14, 2005 COPS – September 27, 2005 COPS – September 27, 2005

Modified Competitive Solution Details  PR50010 – SIR Enhancement 5.2  Section of the Protocols – Settlement Obligation for Balancing Energy Service (Modified Competitive Solution) Reduces / eliminates dependency on Miscellaneous Debit/Credit charge type Reduces / eliminates dependency on Miscellaneous Debit/Credit charge type Improves ability of Market Participants to Shadow Settle Improves ability of Market Participants to Shadow Settle Reduces dependency on manual work-around Reduces dependency on manual work-around  Market Release estimated for September 28, 2005  New Charge Types:  MCSMPAY – modified competitive solution payment  MCSMCHG – modified competitive solution charge  New Bill Determinants:  MCSMPAY: PAM_zone_QSE: manually calculated and imported by Settlement and Billing Staff reflecting positive values where payment is appropriate; 15 minute interval data. PAM_zone_QSE: manually calculated and imported by Settlement and Billing Staff reflecting positive values where payment is appropriate; 15 minute interval data. PAMPRICE_zone_QSE: value Market Participant will be paid; 15 minute interval data. PAMPRICE_zone_QSE: value Market Participant will be paid; 15 minute interval data. PAMQTY_zone_QSE: value of 1 (when PAM > 0) or 0 (when PAM = 0); 15 minute interval data. PAMQTY_zone_QSE: value of 1 (when PAM > 0) or 0 (when PAM = 0); 15 minute interval data. PAMBILLQTY_zone_QSE: quantity delta between current settlement run and prior settlement run; 15 minute interval data. PAMBILLQTY_zone_QSE: quantity delta between current settlement run and prior settlement run; 15 minute interval data. PAMAMT_zone_QSE: (-1*PAMPRICE*PAMQTY); 15 minute interval data. PAMAMT_zone_QSE: (-1*PAMPRICE*PAMQTY); 15 minute interval data. PAMBILLAMT_zone_QSE: payment delta between current settlement run and prior settlement run; 15 minute interval data. PAMBILLAMT_zone_QSE: payment delta between current settlement run and prior settlement run; 15 minute interval data. PAMBILLAMTTOT: total of all PAMBILLAMT for all zones for all QSEs; 15 minute interval data. PAMBILLAMTTOT: total of all PAMBILLAMT for all zones for all QSEs; 15 minute interval data.

MCS cont…:  New Bill Determinants cont…:  MCSMCHG: POSRI_QSE: the sum of all positive Resource Imbalance amounts for all zones per QSE when PAMBILLAMTTOT is not equal to zero; 15 minute interval data. POSRI_QSE: the sum of all positive Resource Imbalance amounts for all zones per QSE when PAMBILLAMTTOT is not equal to zero; 15 minute interval data. POSRITOT: the sum of all POSRI_QSE; 15 minute interval data. POSRITOT: the sum of all POSRI_QSE; 15 minute interval data. POSLI_QSE: the sum of all positive Load Imbalance amounts for all zones per QSE when PAMBILLAMTTOT is not equal to zero; 15 minute interval data. POSLI_QSE: the sum of all positive Load Imbalance amounts for all zones per QSE when PAMBILLAMTTOT is not equal to zero; 15 minute interval data. POSLITOT: the sum of all POSLI_QSE; 15 minute interval data. POSLITOT: the sum of all POSLI_QSE; 15 minute interval data. IRS_QSE: imbalance ratio share calculated as (POSRI+POSLI)/(POSRITOT+POSLITOT); 15 minute interval data. IRS_QSE: imbalance ratio share calculated as (POSRI+POSLI)/(POSRITOT+POSLITOT); 15 minute interval data. QPAMPRICE_QSE: {-1*(PAMBILLAMTTOT/(POSRITOT + POSLITOT))}; 15 minute interval data. QPAMPRICE_QSE: {-1*(PAMBILLAMTTOT/(POSRITOT + POSLITOT))}; 15 minute interval data. QPAMQTY_QSE: calculated as (POSRI + POSLI); 15 minute interval data QPAMQTY_QSE: calculated as (POSRI + POSLI); 15 minute interval data QPAMBILLQTY_QSE: quantity delta between current settlement run and prior settlement run; 15 minute interval data. QPAMBILLQTY_QSE: quantity delta between current settlement run and prior settlement run; 15 minute interval data. QPAMAMT_QSE: allocation amount uplifted to QSEs with positive Resource and/or Load Imbalance values calculated as (- 1*IRS_QSE*PAMBILLAMTTOT); 15 minute interval data. QPAMAMT_QSE: allocation amount uplifted to QSEs with positive Resource and/or Load Imbalance values calculated as (- 1*IRS_QSE*PAMBILLAMTTOT); 15 minute interval data. QPAMBILLAMT_QSE: charge delta amount between current settlement run and prior settlement run; 15 minute interval data. QPAMBILLAMT_QSE: charge delta amount between current settlement run and prior settlement run; 15 minute interval data. QPAMBILLAMTTOT: total of all QPAMBILLAMT for all QSEs; 15 minute interval data QPAMBILLAMTTOT: total of all QPAMBILLAMT for all QSEs; 15 minute interval data

MCS cont…:  Formulas: LodestarProtocol IRS = [(POSLI + POSRI) / (POSLITOT + POSRITOT)] IRSiq = ∑[MAX(0, RIizq) + MAX(0, LIizq)]z/ ∑[(MAX(0, RIizq) + MAX(0, LIizq)]zq LodestarProtocol QPAMAMT = -1 * ∑PAMBILLAMTTOT * IRS QPAMiq = PAMi * IRSiq QSE Share of Incremental Payments above the Adjusted MCPE (QPAMAMT) Imbalance Ratio Share (IRS)

PROJECTS: EMMS R4  Estimated Deployment: September 28, 2005  PR30131_02 – Resource Plan Improvements  PR30093 – Replacement Reserve  PR40050 – Resource Specific Bid Limits  PR30163 – OOM Tool