Board of Directors Meeting February 26, 2013 Standards, Registration and Certification Report

2 STANDARDS Board of Directors Meeting February 26, 2013

3 Approve Reliability Standards Committee 2013 Officers (VOTE) ●Chair – Brenda Hampton, EFH Luminant  Brenda was Vice Chair/Acting Chair of RSC in  Brenda is currently Senior Project Manager, Regulatory Policy for Energy Future Holdings (EFH), where she is involved in a variety of regulatory activities for Luminant and other EFH entities. ●Vice Chair – Andrew Gallo, Austin Energy  Andrew was Chair of NSRS in  He currently serves as Director, Reliability Compliance for Austin Energy, where he oversees compliance efforts for FERC, NERC and ERCOT reliability requirements. Board of Directors Meeting February 26, 2013

4 NERC Standards Review Subcommittee Officers for 2012 ●Chair – Lisa Martin, Austin Energy  Lisa is the Transmission Service Compliance Program Manager for Austin Energy. She works to ensure compliance with non-CIP NERC Standards relating to transmission operations. ●Vice Chair – Daniela Hammons, CenterPoint Energy  Daniela is the Manager of Policy and Compliance for CenterPoint Energy Houston Electric, LLC., where she oversees implementation of the company’s internal compliance program and other activities related to regulatory policy and compliance. Board of Directors Meeting February 26, 2013

5 Regional Standard – Status and Path Forward ●Ballot conducted February 1-15 – PASSED  Ballot passed with 80% segment-weighted affirmative vote (67% required to pass)  22 Entities Voted (plus 12 abstentions) Abstentions were from generation companies and their affiliated registered entities ●RSC will Approve Ballot Results ●Texas RE Board Approval (April 2013) ●Submit to NERC/FERC (~May 2013) Board of Directors Meeting February 26, 2013

6 Regional Standard BAL-001-TRE-1 ●Primary Frequency Response in the ERCOT Region  Requires ERCOT to maintain the Interconnection Frequency Response at an acceptable level  Requires Generator Owners to apply specified Governor settings and to provide Frequency Response from individual units  Provides objective performance metrics to assess compliance by individual generators ●A Field Trial was conducted to demonstrate and test the individual unit Frequency Response requirements and measures Board of Directors Meeting February 26, 2013

7 Other Standards Activities ●The Texas RE NERC Standards Review Subcommittee (NSRS) continues to meet every few weeks to discuss issues of interest to our Region. ●Texas RE regularly votes in NERC standards ballots, based on evaluation of posted drafts by Texas RE experts.  We file comments as needed to explain negative votes and to provide our perspective. ●Texas RE staff actively participates in NERC Standards Committee and related activities.  NERC Standard Quality Review teams  Paragraph 81 Working Group  Cold Weather Event Working Group Board of Directors Meeting February 26, 2013

8 Current NERC Standards Activities ●There are currently a number of high-profile NERC projects:  Major Revision of NERC’s Standards Development Procedures and Practices  Addressing recommendations from the 2011 Cold Weather Event Report  Bulk Electric System Definition – Phase 2 ●Major Projects Completed in 2012  Paragraph 81 – retire requirements that do not support reliability  BES Definition  CIP Version 5 Board of Directors Meeting February 26, 2013

9 REGISTRATION & CERTIFICATION Board of Directors Meeting February 26, 2013

10 Work Completed in 2012 ●Completed TOP Entity Certifications  Denton Municipal Electric  TMPA  Reviewed Several Control Center Moves ●54 Registration Actions  Registrations, Retirements, Revisions  Also processed annual CFR addendums and revisions Board of Directors Meeting February 26, 2013

Projects ●CREZ TOP Entity Certifications  Wind Energy Transmission Texas (WETT)  Sharyland Utilities ●“Bulk Electric System” (BES) Definition Implementation  Administer Exception Process  Registration issues ●Monitor Proposed CFR Revisions Board of Directors Meeting February 26, 2013