1. COPS PRR 599 Notification for Mismatched Inter-QSE Energy Schedules WHOLESALE MARKET DEVELOPMENT Paula Feuerbacher September 27, 2005

2. PR -- 50128  New Billing Determinants:  MSBDINFO_CQ – Mismatched InterQSE Schedule Delivered Counter QSE Information  MSBRINFO_CQ – Mismatched InterQSE Schedule Received Counter QSE Information  Mismatches occur when:  Different amounts in the same zone  No corresponding counter-party schedule  Different zones (either same amount or different)  Energy schedules submitted by QSEs with ERCOT as a resource (not a true mismatch)

3. Mismatch Examples  Different amounts in the same zone:  Current (and Continuing) Functionality: MSBD_CQ_QSEB_Z05_QSEA,1 10 MWh MSBD_CQ_QSEB_Z05_QSEA,1 10 MWh MSBR_CQ_QSEA_Z05_QSEB,1 8 MWh MSBR_CQ_QSEA_Z05_QSEB,1 8 MWh  New Functionality: MSBDINFO_CQ_QSEB_Z05_QSEA,CH# 2 MWh MSBDINFO_CQ_QSEB_Z05_QSEA,CH# 2 MWh MSBDINFO_CQ_QSEA_Z05_QSEB,CH# -2 MWh MSBDINFO_CQ_QSEA_Z05_QSEB,CH# -2 MWh  No corresponding counter-party schedule  Current (and Continuing) Functionality: MSBD_CQ_QSEC_Z05_QSEA,1 5 MWh MSBD_CQ_QSEC_Z05_QSEA,1 5 MWh  New Functionality: MSBDINFO_CQ_QSEC_Z05_QSEA,CH# 5 MWh MSBDINFO_CQ_QSEC_Z05_QSEA,CH# 5 MWh MSBDINFO_CQ_QSEA_Z05_QSEC,CH# -5 MWh MSBDINFO_CQ_QSEA_Z05_QSEC,CH# -5 MWh The billing determinants high-lighted in red are those affected by PRR-599

4. Mismatch Examples cont…  Different zones (either same amount or different)  Current (and Continuing) Functionality: MSBD_CQ_QSED_Z05_QSEA,CH# 20 MWh MSBD_CQ_QSED_Z05_QSEA,CH# 20 MWh MSBR_CQ_QSEA_N05_QSED,CH# 20 MWh MSBR_CQ_QSEA_N05_QSED,CH# 20 MWh  New Functionality: MSBDINFO_CQ_QSED_Z05_QSEA,CH# 20 MWh MSBDINFO_CQ_QSED_Z05_QSEA,CH# 20 MWh MSBDINFO_CQ_QSEA_Z05_QSED,CH# -20 MWh MSBDINFO_CQ_QSEA_Z05_QSED,CH# -20 MWh MSBRINFO_CQ_QSEA_N05_QSED,CH# 20 MWh MSBRINFO_CQ_QSEA_N05_QSED,CH# 20 MWh MSBRINFO_CQ_QSED_N05_QSEA,CH# -20 MWh MSBRINFO_CQ_QSED_N05_QSEA,CH# -20 MWh  Energy schedules submitted by QSEs with ERCOT as a resource  Current (and Continuing) Functionality: MSBR_CQ_0_Z05_QSEA,1 5 MWh MSBR_CQ_0_Z05_QSEA,1 5 MWh  New Functionality: MSBRINFO_CQ_0_Z05_QSEA,CH# 5 MWh MSBRINFO_CQ_0_Z05_QSEA,CH# 5 MWh There will be no “INFO” cut created for the counter-QSE when the counter-QSE is ERCOT. There will be no “INFO” cut created for the counter-QSE when the counter-QSE is ERCOT. The billing determinants high-lighted in red are those affected by PRR-599

5. Mismatch Quantity Calculation  Post Implementation: the mismatch quantities (MSDQTY and MSRQTY) will be the sum of the new billing determinant records (MSBDINFO_CQ and MSBRINFO_CQ) containing positive values.  Using the previous examples, the following QTY records will be created:  MSDQTY_Z05_QSEA,CH# 27  MSRQTY_N05_QSED,CH# 20  MSRQTY_Z05_QSEA,CH# 5

6. COPS – Project Updates WHOLESALE MARKET DEVELOPMENT Paula Feuerbacher September 27, 2005

7. PROJECTS: EMMS R4  Estimated Deployment: October 5, 2005  PR30131_02 – Resource Plan Improvements  PR30093 – Replacement Reserve  PR40050 – Resource Specific Bid Limits  PR30163 – OOM Tool

8. Modified Competitive Solution Details  PR50010 – SIR Enhancement 5.2  Market Release estimated for October 5, 2005  Section 6.9.5 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  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.

9. 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

10. 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)

11. 50025 Enhance ESI-id Look-up  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 ESI-id extract.  Phase One -- update TML Look-up function to return the following items:  Station ID  Metered/Un-metered Flag  Power Region  Phase Two -- update the extract to include the following items:  Station ID  Power Region  Premise Type (to be included during Phase One Deployment)  Metered/Un-metered Flag  Pending Move-in/Move-out

12. 50025: Anticipated Delivery Dates  Phase One: 1 st Quarter 2006 – dependencies: Texas SET 2.1 code freeze (scheduled to end December 2, 2005) affecting resources, testing environments, deployment schedule.  Phase Two: mid to late 2 nd Quarter 2006 -- complexity: creating an extract that retrieves data from the Siebel source and the Lodestar source; need to explore design options.

13. 50129 Revision to Balancing Energy  Background:  PRR 569 modifies the settlement calculations so that the payment to the QSE will be based on the bid premium supplied by the QSE adjusted for the difference in the Fuel Index for the day before the Operating Day and the Fuel Index for the day the service was provided. This results in a normalized FIP being used for Local Balancing Energy payments. This includes both Aggregate and non-Aggregate resources that are Gas Fired.  Estimated deployment date: December, 2005

14. Revision to Balancing Energy cont…  This Revision to Balancing Energy from a specific Resource project will alter the Price portions of the Amount formulas for:  LBEUP  LBEDN  LBEUPAGG  LBEDNAGG  These changes affect both Generators (gas-fired units only) and LaaRs.  The formula change deals with the Bid Premium sections of the price formula.  The Fuel Index Price (FIP) is not used in the current LBE formulas. FIP is used in the OOME formulas. The LBE formulas use MCPER and Bid Premiums since they pay the Resource as bid. This will change with this project and thus the FIP will be used within the LBE formulas.  The reason for this change is that Market Participants will be submitting bids for tomorrow based on the FIP that is posted for the current day. This project will normalize the FIP so that the Resource is accurately paid for the service they are called to provide.  FIPd-1 & FIPd:  FIPd-1 stands for the FIP price for the previous Trade Day.  FIPd stands for the FIP price for the current Trade Day.

15. 50129: LBE Formula Changes Summaries  LBEUP: The Price portion of the Amount formula takes the Maximum of the OOMLEUPBP and MCPER and then subtracts the MCPER. The new formula will take the (OOMLEUPBP/FIPd-1)*FIPd. The same logic applies to LaaRs. The same logic applies to LaaRs.  LBEDN: The Price portion of the Amount formula takes the Maximum of the 0 or the MCPER - OOMLEDNBP. The new formula will take the (OOMLEDNBP/FIPd-1)*FIPd. This logic does not apply to LaaRs as they are not eligible for LBEDN payment. This logic does not apply to LaaRs as they are not eligible for LBEDN payment.  LBEUPAGG: The Price portion of the Amount formula takes the OOMLEUPBPAGG – MCPER. The OOMLEUPBPAGG is calculated by taking the MINIMUM Bid Premium of all the units that make up the aggregated site. Remember that the logic for this is changing such that the OOMLEUPBP portion will now be (OOMLEUPBP/FIPd-1)*FIPd and this is how the LBEUPAGG formula is affected. The OOMLEUPBPAGG will still take the Minimum Bid Premium of all the units that make up the aggregated site but now how the individual units calculate that premium will change under the new formula.  LBEDNAGG: The Price portion of the Amount formula takes the Maximum of 0 and the MCPER - OOMLEDNBPAGG. The OOMLEDNBPAGG is calculated by taking the MAXIMUM Bid Premium of all the units that make up the aggregated site. Remember that the logic for this is changing such that the OOMLEDNBP portion will now be (OOMLEDNBP/FIPd-1)*FIPd and this is how the LBEDNAGG formula is affected. The OOMLEDNBPAGG will still take the Maximum Bid Premium of all the units that make up the aggregated site but now how the individual units calculate that premium will change under the new formula.