Lead from the front Texas Nodal 1 Texas Nodal EDS 4 Early Delivery System Plan TPTF May 22 nd, 2007

Lead from the front Texas Nodal 2 Agenda Nodal Timelines Nodal summary release schedule EDS Release Philosophy EDS 4 Plan Objectives and Transition Plan requirements Activities Release and testing timelines Market Participant Readiness Staffing How can the TPTF continue to help in the effort?

Lead from the front Texas Nodal 3 Texas Nodal Program Summary Release Schedule High Level Version 2.0

Lead from the front Texas Nodal 4 Release Overview EDS 1 Release 1 – Alarm Processing EDS 1 Release 2 – Point-to-Point Checkout EDS 2 Release 3 – State Estimator & Network Security Analysis EDS 2 Release 4 – Network Model Validation EDS 3 Release 5 – SCED execution and Reasonable LMPs EDS 3 Release 6 – Load Frequency Control EDS 3 Release 7 – Settlement Statements, CRR Allocation & Auction EDS 4 Release 8 – RT Settlements EDS 4 Release 9 – DAM, RUC, SASM, Full Settlements, EDW Extracts

Lead from the front Texas Nodal 5 We are working to “start early” EDS to encourage earlier MP involvement – quality and support expectations must be managed appropriately  Software versions used for “early” EDS testing will not have completed our full quality cycle  EDS Software versions will have known defects that will be corrected under rigorous release management schedules  Emergency issues (e.g. servers down) will also have reduced service level agreements during “early” EDS timeframe  MPs that are “early adopters” will be encouraged to review the current ERCOT defect list to reduce submission duplication  This applies particularly to EDS 4 and especially software deliveries in MMS (DAM, RUC, SASM), Settlements, Outages, and integration  System availability, quality of LMPs and other data, and support responses will improve over time

Lead from the front Texas Nodal 6 EDS 4 Objectives (Check coverage!!) Execution of DAM, RUC, SASM 5.4.6(1) Verify convergence of QSE provided bids and offers and expand testing to allow Market Participants to submit energy-only offers and bids for any settlement point on the ERCOT Transmission Grid 5.4.6(2) Verify that DAM can co-optimize energy and ancillary service procurement 5.4.6(3) Execution of the DAM shall continue for 7 consecutive days 5.4.7(1) Verify proper RUC commitment of available off-line resources Conduct SASM coordinated testing Settlements and Data Extracts 5.4.6(4) Verify RT Operations, DAM, and SASM settlement statements 5.4.7(4) Verify RUC settlement statements Outage Scheduler 5.4.1(2h) Verify for proper operation the functions of the Outage Scheduler 5.4.1(2i) Verify that ERCOT operators are able to determine if the Outage of a Transmission Facility had been scheduled in the Outage Scheduler or is a Forced Outage Emergency Electric Curtailment Plan Conduct tests for the proper operation of the system under EECP conditions Performance and Compliance Measurement Provide sample performance and compliance reports to the Market Participants for review and comment 168 Hr Test ERCOT shall develop real time dispatch market readiness criteria that will include a systems stability test. The systems stability test generally will require the real time systems performing SCADA, Network Security Analysis, Transmission Constraint Management, SCED, RUC and LFC to operate without significant error for at least 168 continuous hours Daylight Savings Time ERCOT shall develop procedures and conduct the tests for the proper transition of systems to and from daylight savings time Data Center - Site fail over and system fault tolerance Test

Lead from the front Texas Nodal 7 EDS 4 – DAM, RUC, SASM, Settlements Testing Approach PhaseActivitiesIncremental System / Features / Artifacts Upload BidsCreate and upload offers for Physical Resources Create and upload bids for Load (SAME AS BULLET 5 ??) Create and upload offers for physical offline resources for testing RUC Validate DAM, RUC, SASM input data QSE Energy-Only Offers submittals and bids for any settlement point on the ERCOT transmission grid QSE Bilateral Trade submittals DAM, RUC and SASM DAM External Input Interfaces available External User Interface updates available Initial EDS 4 MP Handbook complete Perform Outages Test Outage Scheduler (Create, verify, approve, … outages) Dual Entry?? Synchronize use of the Outage Scheduler for transmission elements and resource outages ?? Outage Process ?? Outage Scheduler Outage Evaluation Integrated DAM & RUC Test Settlements Download and verify real-time settlements statements Test the operation of DAM to procure Ancillary Services Update offers for SASM Test transition of systems to and from DST Real Time Settlements Shadow Settlements 24 x 7 Operation 7 day trial Operation of DAM Review the test settlement statements for errors and provide feedback Download and verify full settlements statements & extracts Training Complete 24* 7 support during EDS Final EDS 4 MP Handbook Site redundancy for environments 168 Hour TestParticipate in 168 hour test Perform systems stability test for real time systems – SCADA, NSA, TCM, SCED, RUC and LFC Generate Settlements statements using dispatches and LMPs from SCED and actual meter data Review Settlements statements for each operating day and provide feedback Final Nodal Configuration

Lead from the front Texas Nodal 8 What should QSE’s have in place? Release 8 – Energy-Only Offers and Outage Scheduler Personnel have attended recommended Nodal Training Courses and reviewed associated reading materials Provided new and updated Registration data to ERCOT QSE ability to create energy-only offers and bids for any settlement point on the ERCOT grid Release 9 – DAM, RUC, SASM, Settlements QSE ability to create and submit bid curves, offer curves and trades to ERCOT Designate resources providing ancillary services Attest for ancillary services qualification of resources Complete registration and qualification process Market Participant operators available 24 x 7

Lead from the front Texas Nodal 9 EDS 4 – Early Delivery System –Testing All QSEs ready XXX YY ZZZZ QSEs Valuate Declare “Reasonable LMPs” QSEs Post Upload bids offers, and energy-only offers Outages 2008 Build and Maintain Test SettlementsRT Settlements Statements AprMayJunJulAugSepOctNovDec JanFeb Mar 24 x 7 Operations / Full Nodal Functionality Stand-Alone MMS System Testing with selected QSEs Test for validity of offers and other input data from QSEs ERCOT enters test offers as needed Dependencies MMS FAT Complete 6/15 UI Integrated w/ MIS 7/15 EWS available (MP APIs) 7/1 Security Testing Complete 7/15 DAM, RUC, SASM 168 Hr. Testing

Lead from the front Texas Nodal 10 EDS 4 – Early Delivery System –Testing All QSEs ready XXX YY ZZZZ QSEs Valuate Declare “Reasonable LMPs” QSEs Post Upload bids offers, and energy-only offers Outages168 Hr. Test 2008 Build and Maintain EDS 4 Release 8Test Settlements Settlements Statements FebMarAprMayJunJulAugSeptOctNovDec NovDec Jan Stand-Alone MMS System Testing with selected QSEs Test for validity of offers and other input data from QSEs ERCOT enters test offers as needed Dependencies MMS FAT Complete 6/15 UI Integrated w/ MIS 7/15 EWS available (MP APIs) 7/1 Security Testing Complete 7/15 Full Nodal Functionality DAM, RUC, SASM 2007

Lead from the front Texas Nodal 11 Questions Questions?

Lead from the front Texas Nodal 12 EDS 4 – Release 8 System Configuration - Settlements Objectives TPTF Activities Mapping TP 5.4.6(4) ERCOT shall provide QSEs with test DAM settlement statements for the seven consecutive Operating Days. The test DAM settlement statements will use calculated LMPs and MCPCs from the DAM and to the extent possible, show the effect of real time operations simulation from TXMACS. QSEs shall review the test settlement statements for errors and provide feedback to ERCOT for resolution. TP 5.4.7(3) ERCOT shall provide QSEs with test settlement statements for the Operating Day. The test settlement statements will include commitments of Resources from RUC, including to the extent possible, statements showing the effect of real time operations from TXMACS. QSEs shall review the test settlement statements for errors and provide feedback to ERCOT for resolution. Verify RT Operations, DAM, and SASM settlement statements Verify RUC settlement statements

Lead from the front Texas Nodal 13 EDS 4 – Release 9 System Configuration – DAM, RUC, SASM, OS Objectives TPTF Activities Mapping Verify convergence of QSE provided bids and offers Verify that DAM can co-optimize energy and ancillary service procurement Execution of the DAM shall continue for 7 consecutive days Verify proper RUC commitment of available off-line resources Conduct SASM coordinated testing TP 5.4.6(1) ERCOT shall provide DAM MPs with a test plan that will require MPs to create offers for physical Resources and bids for Load. After convergence of DAM using physical bids and offers, ERCOT shall expand testing to allow MPs to submit energy- only offers and bids TP 5.4.6(2) ERCOT shall test the operation of DAM to procure AS according to the protocols using test offers from MPs TP 5.4.6(3) DAM trial operation testing shall continue for seven consecutive Operating Days TP 5.4.7(1) ERCOT shall begin market trials for RUC in parallel with the DAM testing TP ERCOT shall develop procedures and conduct the tests of the SASM systems TP 5.4.1(2h &i) Verify for proper operation the functions of the Outage Scheduler

Lead from the front Texas Nodal 14 AugSep DAM, RUC, SASM, OS, Settlement Release Timeline Objectives Enable MPs to enter DAM bids and Offers Test MP ability to submit DAM inputs through API’s Enable MPs to enter Energy Only Bids into the DAM Enable MP to enter Trades System Needs MMS 2 DAM, RUC, SASM MMS UI (updated) DAM LMP Output (CSV?) EIP Energy Bid, Energy Only, Energy Trade, Self Sched, CRR AS Offer, AS Trade, Self Arranged AS, Capacity Trade, DC Tie Sched, PTP Obligation Data / Stubs EMS Testing Tools Defect tracking & communication process / tool Infrastructure Production Class Hardware Objectives (Incremental) Enable MPs to enter outages Test MP ability to submit outages through API’s Begin RT Settlement Statements and Extracts (Mar) System Needs Outage Scheduler Outage Scheduler UI S&B RT Settlement Statements EDW Settlement Extracts EIP Outage Creation Outage Cancellation Outage Query MMS-to-Settlements MMS-to-EDW Data / Stubs Settlement Stub Data TBD Testing Tools TBD Infrastructure EDS 4 Production Class HW Objectives (Incremental) Execute DAM, RUC, SASM processes All MPs to participate together Publish all DAM, RT reports Integrate DAM, RUC, SASM, SCED processes Test Settlements System Needs MMS2 No change EMS 4 NMMS Production Network Model EDW MMS Report Extracts MIS MMS Reporting complete EIP EMS-to-MMS MMS-to-EMS MMS-to-EDW / MIS DAM, RUC Output API’s Data / Stubs No Change Testing Tools No Change Infrastructure EDS 4 Production Class HW Objectives (Incremental) Execute full nodal functionality Begin 24 x 7 operations Full Settlement Statements and Extracts (DAM, RUC, RT) System Needs ITEST Completed ERCOT QC Testing EIP Data / Stubs Minimal Testing Tools None Infrastructure EDS 4 Production Class HW SME Support levels: Estimated at 3 man day per week per development project SME Support levels: Estimated at 3 man day per week per development project SME Support levels: Estimated at 3 man day per week per project SME Support levels: Estimated at 5 man day per week per project Objectives (Incremental) Begin 168 hour testing runs System Needs MMS Bug fix only MIS Bug fix only EMS Bug fix only EIP Bug fix only NMMS Bug fix only MIS Bug fix only EDW Bug fix only Data / Stubs No Change Testing Tools No Change Infrastructure No Change SME Support levels: 8*5 support for SCED 24 * 7 support for Infrastructure JanFeb MarAprMayJunJul

Lead from the front Texas Nodal 15 Web Service Implementation Timeline Objectives The following Web Services should be available by June 30th, 2007 Web Services – EIP Three Part Offer Incremental/Decremental Offers Congestion Revenue Rights Current Operating Plan Energy-Only Offer Output Schedule Bid Set Acceptance Bid Set Errors Get mRID System Status JanFebMarAprMayNovDec Objectives The following Web Services should be available by July 30th, 2007 Web Services – EIP Forecasted Load Market Totals Market LMPs and SPPs Binding Constraints Active Contingencies in SCED Voltage Profiles Shift Factors Proxy Curves Mitigated Curves Objectives The following Web Services should be available by August 30th, 2007 Web Services – EIP Energy Bid PTP Obligation Self Schedule Real-Time System Load Total Regulation Load Ratio Share Load Distribution Factors Unit Availability Startup and Shutdown Instructions CRR Awards Objectives The following Web Services should be available by September 30th, 2007 Web Services – EIP Self Arranged Ancillary Services Ancillary Service Offers Ancillary Service Trades Capacity Trade DC Tie Schedule Energy Trade Get Award Set Market MCPCs Ancillary Service Schedule Obligations Customer Load Profile PTP Obligation Awards Objectives The following Web Services should be available by October 30th, 2007 Web Services – EIP Dynamic Ratings Competitive Constraints Aggregated Ancillary Service Offer Curves Ancillary Service System Plan Pending Trade Energy Offer Awards Energy Only Offer Awards Energy Bid Awards Ancillary Service Awards Outage Creation Objectives The following Web Services should be available by November 30th, 2007 Web Services – EIP Total Ancillary Service Offers Total DAM Energy Derated CRRs Notices and Alerts Outage Notifications Alert Acknowledgement Outage Query Outage Cancellation