Nodal Program Update and SEWG Update COPS 3/12/2011 Jim Galvin

2 Settlement Observations- Load Zone to Hub January Meeting Title (optional)Date Load Zone/HUB RTSPP Period:Mar-11 Location AverageZone over HUB Comparison LocationRTSPP AverageRow LabelsAverage RTSPPLocationAverage RTSPPZone over HUB Delta HB_HOUSTON$28.03 LZ_HOUST ON$28.02HB_HOUSTON$28.03-$0.01 HB_NORTH$28.40LZ_NORTH$28.33HB_NORTH$28.40-$0.07 HB_SOUTH$27.71LZ_SOUTH$27.46HB_SOUTH$27.71-$0.25 HB_WEST$16.27LZ_WEST$17.02HB_WEST$16.27$0.75 LZ_HOUSTON$28.02 LZ_NORTH$28.33 LZ_SOUTH$27.46 LZ_WEST$17.02 LZ_AEN$27.29 LZ_CPS$27.13 LZ_LCRA$27.86 Total Average$25.78

3 Load Zone Market Prices Feb 2011 Load Zone/HUB RTSPP Period:Feb-11 Location AverageZone over HUB Comparison LocationRTSPP AverageRow LabelsAverage RTSPPLocationAverage RTSPPZone over HUB Delta HB_HOUSTON$58.47 LZ_HOUSTO N$58.87HB_HOUSTON$58.47$0.40 HB_NORTH$60.11LZ_NORTH$63.08HB_NORTH$60.11$2.97 HB_SOUTH$66.88LZ_SOUTH$88.84HB_SOUTH$66.88$21.95 HB_WEST$53.49LZ_WEST$54.00HB_WEST$53.49$0.51 LZ_HOUSTON$58.87 LZ_NORTH$63.08 LZ_SOUTH$88.84 LZ_WEST$54.00 LZ_AEN$60.26 LZ_CPS$62.60 LZ_LCRA$61.49 Total Average$62.55

4 Cost to Serve Load March –AS $1.82 down from February which was $4.24 (primarily driven by Non-spin during winter weather events –BPD Uplift charges are a credit to Loads at $0.02 per MWh down from $0.08 from February, total BPD charges to resources for March is approximately $340K –RUC Uplift Charges remain negligible as most charges are assigned to entities short at RUC periods Total RUC Charges to short entities $$690 K (down from $5.5 M in December) –Revenue Neutrality uplift to Loads currently a expense of $0.05/MWh (appears to be normalizing) Settlement Observations- Cost to Serve Load January

5 Despite Winter Weather events in February, the RTSPP comparison to MCPE from Q to Q shows a decrease in average 24x7 price from $40.68 (2010 MCPE NZ) to $39.40 (2010 RTSPP NZ) –Winter weather in 2010 was sustained for longer periods –2011 Winter events shorter in nature followed by milder than normal conditions AS costs higher in 2011 due to higher clearing prices for all AS services, primarily driven by Non-spin and more Non-spin procured Absence of uplifted Congestion costs from 2010 (approximately $0.46 /Mwh Revenue Neutrality spikes in 2011 research still ongoing Potential resettlements of December and January months due to “De- energized Bus” issue Settlement Observations Q1 2011

6 SEWG Summary- Nodal Settlement Guide SEWG Leadership has secured volunteers to assist in adding detail to the Nodal Settlement Guide –Harika Basaran (Vice Chair), Lori Williams (BTU), Alana Lewis (NRG) and Heather Boisseau (LCRA) –Approach will be a “divide and conquer” and collaboration on individual efforts as we prepare the document for draft submittal to COPS The team presented examples to the SEWG group at our last meeting, examples are posted on our meeting page from March SEWG members were encouraged by the level of detail and content in examples that were incorporated Sub-group will continue to divide and conquer all charge types with the intent of bringing a draft to COPS this summer Meeting Title (optional)Date

7 Extract Issues Update Events continue to occur for reports and extracts as the system stabilizes but no significant delays ERCOT remains focused on stabilization of the systems Jackie Ashbaugh presented updated statistics of the timeliness of extract and report postings from previous COPs meeting –ERCOT continues to meet protocol objectives for a super- majority of reports and extracts postings ERCOT continues to post and monitor events as were done in Nodal and report to SEWG regularly at the link below:

8 In Process Items NPRR 347- Single Daily Invoice and Counter Party Invoice, as submitted by ERCOT to assist in simplifying the settlement process by reducing statements and aggregating to a single invoice –SEWG and MCWG endorse the concept, NPRR just posted and will be reviewed at next meeting Revenue Neutrality- As RTRN stabilizes and more is presented on the “De-energized Bus” issue, SEWG will continue to monitor RTRN SEWG began discussions on Market Default process and will continue to discuss and evaluate the current process Real Time Settlement Timeline- NPRR drafted to reduce the RT Settlement Timeline by a day was discussed further and determined that the risk of losing a day for processing and receiving data remains a concern for ramping the RT schedule in below the 10-day period

9 Questions? Meeting Title (optional)Date