SPP-Entergy Market Power Analysis Update Presented By: David B. Patton, Ph.D. President, Potomac Economics April 16, 2008

- 2 - Market Power Study Potomac Economics has been engaged to:Potomac Economics has been engaged to: Perform an evaluation of market power related to ETI joining the SPP; and Perform an evaluation of market power related to ETI joining the SPP; and Identify mitigation options that would address any market power issues found. Identify mitigation options that would address any market power issues found. The study will address:The study will address: The market power requirements of Senate Bill 7 for the SPP to be a Qualified Power Region (“QPR”); as well as The market power requirements of Senate Bill 7 for the SPP to be a Qualified Power Region (“QPR”); as well as Local market power issues associated with serving load in the ETI area. Local market power issues associated with serving load in the ETI area. At the last stakeholder meeting, we described the analysis that we will perform to draw conclusions regarding the market power issues:At the last stakeholder meeting, we described the analysis that we will perform to draw conclusions regarding the market power issues: Market share analysis for the SPP region; Market share analysis for the SPP region; Two market concentration analyses for the ETI region; and Two market concentration analyses for the ETI region; and Two pivotal supplier analyses for the ETI region. Two pivotal supplier analyses for the ETI region.

- 3 - Data Requirements for the Market Power Study Since the last meeting, we have been working with SPP and ETI to gather the data needed for the study, which includes the following:Since the last meeting, we have been working with SPP and ETI to gather the data needed for the study, which includes the following: Generation data, including: Generation data, including: –Ownership information –Operational information Affiliation Information Affiliation Information Load Data (historical and forecasted) Load Data (historical and forecasted) Firm transactions and external network resources Firm transactions and external network resources Base case load flow data, including: Base case load flow data, including: –Generation shift factors –Generation dispatch levels, minimum and maximum output levels –Load level by area –Flows and limits for the key constraints –Total Transfer Capability into ETI

- 4 - Status of the Market Power Study We received a preliminary set of load and generation data and have been working with SPP and ETI to:We received a preliminary set of load and generation data and have been working with SPP and ETI to: Request follow-up data or information; Request follow-up data or information; Validate the data provided. Validate the data provided. We have received a sample of the load flow dataWe have received a sample of the load flow data We expect to get the base case data in the next two to three weeks. We expect to get the base case data in the next two to three weeks. With the data we have received to date, we have begun to develop the programs to be used to perform the analyses.With the data we have received to date, we have begun to develop the programs to be used to perform the analyses. Once all of the data is received and reviewed, we will:Once all of the data is received and reviewed, we will: Perform the base market power analyses; and Perform the base market power analyses; and Develop and analyze market power mitigation options as needed. Develop and analyze market power mitigation options as needed.