1. http://nodal.ercot.com 1 Market Readiness Seminar 7 Remaining Market Trials and Cutover Activities October 01, 2010

2. http://nodal.ercot.com 2 Antitrust Admonition ANTITRUST ADMONITION ERCOT strictly prohibits Market Participants and their employees who are participating in ERCOT activities from using their participation in ERCOT activities as a forum for engaging in practices or communications that violate the antitrust laws. The ERCOT Board has approved guidelines for members of ERCOT Committees, Subcommittees and Working Groups to be reviewed and followed by each Market Participant attending ERCOT meetings. If you have not received a copy of these Guidelines, copies are available at the Client Relations desk. Please remember your ongoing obligation to comply with all applicable laws, including the antitrust laws. DISCLAIMER All presentations and materials submitted by Market Participants or any other Entity to ERCOT staff for this meeting are received and posted with the acknowledgement that the information will be considered public in accordance with the ERCOT Websites Content Management Operating Procedure.

3. http://nodal.ercot.com 3 Agenda General Updates and Reminders Market Testing Activities During Cutover Cutover Schedule Review Q&A

4. http://nodal.ercot.com 4 General Updates and Reminders

5. http://nodal.ercot.com 36-Hour Test Completion Summary Overview – Completion Criteria –CPS1 Scores: –Zonal Commercially Significant Constraints (CSCs) and Closely Related Elements (CREs) managed below thermal limits: No CSCs or Stability Limits activated during the test –Local Congestion managed below thermal limits: One constraint was activated both days with no issues –Stability limits managed below transfer limits : No CSCs or Stability Limits activated during the test –No NERC Disturbance Control Standard (DCS) failure if applicable: None –No LFC-SCED system issues that result in termination of the test : None –Procedural and software fixes have been verified to address lessons learned from previous rounds of testing : None Average Hourly CPS1 Score140 Max. Hourly CPS1 Score169 Min. Hourly CPS1 Score100

6. http://nodal.ercot.com 6 Day-to-day operations summary: Planned / Unplanned Outages of Market Trials Planned Outages –10/01/2010 01:00 P.M. – 10/01/2010 04:00 P.M. Application patch deployments are planned in the Nodal production environment and will intermittently affect services rendered by the following systems: –MMS –EWS ( Web services) –MM-UI –OS-UI –OS –10/02/2010 07:00 P.M. – 10/02/2010 07:30 P.M. The EWS application will be unavailable during this time period for signature digital certificate update. Once the deployment takes into Market participants should use the new public key published on readiness center for signature validation. –10/03/2010 – 10/11/2010 ERCOT will be performing cutover maintenance of Market Information System (MIS) and External Web Service’s (EWS) Get Report functions. During this time, Market Participants will be unable to access the MIS portal for launching various applications or be able to download extracts and reports. For application access, please us the following direct links: –Outage Scheduler UI: https://mis.ercot.com/osrui/osrui/Summary.actionhttps://mis.ercot.com/osrui/osrui/Summary.action –Market Manager UI: https://mis.ercot.com/mmsui/mmsui/displayTradesLanding.actionhttps://mis.ercot.com/mmsui/mmsui/displayTradesLanding.action –CRRAH MUI: https://mis.ercot.com/crr/mui/ListAllUserMessage.dohttps://mis.ercot.com/crr/mui/ListAllUserMessage.do –CRRCP MUI: https://mis.ercot.com/crr/mui/editSMPCreditLimit.dohttps://mis.ercot.com/crr/mui/editSMPCreditLimit.do Unplanned Outages –09/29/2010 00:18 AM – 09/29/2010 8:46 AM. Users may have experienced connectivity issues when trying to download data from our reporting system. Root cause has been identified to a database connectivity issue and teams are working to address it. –09/30/2010 08:50 AM – 09/30/2010 9:10 AM. Intermittent connectivity issues were reported when trying to download reports via MIS or EWS “Get Report” service. Root cause is under investigation. –09/30/2010 06:00 PM – 09/30/2010 7:00 PM. A site failover of our reporting system was conducted to restore full service availability due connectivity issues experienced earlier in the day..

7. Special Topic ERCOT SIGNATURE KEY UPDATE: EWS enforces message level security for non repudiations purposes via the use of digital signatures. All EWS outbound messages (BidSet notifications, Alerts etc) are digitally signed by the sender application (ERCOT) attesting to our identity. Verification of authenticity of the signor and integrity of the message during transmission, enroute to the destination, is done by the receiving application ( Market participant) using the public key of certificate used during signature signing step. ERCOT’s certificate for message signing in expiring on October 2 nd at 7:00 P.M. A new certificate will be put in place for signing the messages after current expiration time. Market Participant applications will need the associated public key in order to verify authenticity of the message. Download ERCOT’s public key from Nodal readiness center http://nodal.ercot.com/readiness/sandbox/index.htmlhttp://nodal.ercot.com/readiness/sandbox/index.html Update your application keystores to use this certificate for signature verification. Contact markettrials@ercot.com if you need any further assistancemarkettrials@ercot.com http://nodal.ercot.com 7

8. http://nodal.ercot.com 8 Market Testing Activities During Cutover

9. http://nodal.ercot.com 9 Market Testing Activities During Cutover October October 1, 2010 through October 11, 2010: ERCOT will be performing system maintenance and verifications of production systems During this time, ERCOT Nodal Production systems will not be guaranteed to be available Market Participants may receive communication or application level exceptions when trying to interact with the ERCOT systems Exceptions to this outage are as follows (these systems will remain operational and available unless otherwise communicated via a Market Notice up until and beyond Go-Live): Outage Scheduling NMMS Telemetry October 11, 2010 through October 17, 2010: ERCOT systems will be available, but no markets or scheduled events will occur during this period October 18, 2010 through October 30, 2010: ERCOT will be performing the following Market Facing Tests Day Ahead Market runs up to daily (minimum Monday – Friday) until 10/30/2010 DRUC runs up to daily (minimum Monday – Friday) until 10/30/2010 HRUC runs up to hourly 7 days / weekly (minimum based on operator availability) SCED will publish LMPs and base points every five minutes during this period Additionally: October 27, 2010 through October 28, 2010 Full System Market and Reliability test will take place for a total of 24 hours Full details and start/stop times will be shared on the upcoming Friday Market calls During the October testing with the Market, it is strongly encouraged that Market Participants participate in this testing Participation during the Full System Test is required for QSEs with Resources ERCOT will not be performing any detailed analysis of market solutions and/or prices except during the Full System Market and Reliability test Note that Settlements, CRR Ownership, Credit and Outages will not be integrated into this test ERCOT may “stub” this data as a close representation of what MPs might expect to see These systems will be involved with their transition plans

10. http://nodal.ercot.com 10 Market Testing Activities During Cutover November November 23, 2010 through November 29, 2010, Non-Binding: Day Ahead Market, HRUC and DRUC per protocol timelines SCED will continue to publish base points and LMPs Note that this testing will occur in parallel to the open submission window for the first binding Operating Day in Nodal (12/1/2010) Note that ERCOT is evaluating the request from the Market to start this November testing as early as November 15, 2010 Note that Settlements, CRR Ownership, Credit and Outages will not be integrated into this test ERCOT may “stub” this data as a close representation of what MPs might expect to see These systems will be focused on their transition to Go-Live plans Go-Live Sequence will be reviewed as part of the Cutover review

11. 3/19/2016 Cut-Over Milestones 01 October 2010 Market Readiness Seminar

12. Nodal Cutover and Market Transition – Key Cut-Over Milestones Key Cut-Over Milestones Network Model Nodal Protocol Section 3.10 goes into effect (Sept. 1) TAC Approval – July 1 (July 20) Board Approval – July 20 Market Notice – July 30 Congestion Revenue Rights Nodal Protocol Section 7 goes into effect (Oct. 13) TAC Approval – August 5 Board Approval – August 17 Market Notice – September 13 Outage Scheduler Nodal Protocol Section 3.1 goes into effect (Nov. 1) TAC Approval – August 5 Board Approval – August 17 Market Notice – October 1 Full Nodal Operations Nodal Protocol Sections 3, 4, 5 and 6 go into effect as well as all other unimplemented Protocol Sections (Nov. 23) TAC Approval – October 7 th Board Approval – October 19 th Market Notice – October 23 rd Market Readiness Seminar 01 October 2010

13. 3/19/2016 Key Cutover Activities Thru December 2010 Market Readiness Seminar 01 October 2010

14. Cut-Over Timeline – Thru December 2010 Market Readiness Seminar 01 October 2010

15. Activities Completed (08/01) Model: Begin network modeling timelines-Complete (08/13) OS: Outage Scheduler Zonal to Nodal Import process run (08/13) CRR: Last day to register for CRR December monthly auction (08/16) OS: ERCOT releases Outage Scheduler to Market (08/16-09/17) OS: Open to Market Participants (09/01) Model: Network Model Go-Live (09/01) Model: Deadline to submit Model changes for Month of December (09/02) Model: Begin interim update process (09/01) CRR: ERCOT publishes CRR Activity Calendar to MIS (09/08) CRR: Deadline for PCRR NOIE Contract Eligibility (09/17-12/01) OS: Dual entry of Outages in Zonal/Nodal Systems until Zonal Retirement (12/03/2010) Market Readiness Seminar Cut-Over Timeline – Completion to date 01 October 2010

16. Impacts CRR Test Data from Market Trials will be removed MIS UI and EWS Get Report unavailable from 10/03-10/11 for production reconfiguration** Functional Area Network Model Outage Scheduler Congestion Revenue Rights Credit MIS MayJuneJulyAugSeptOctNovDec Cut-Over Monthly Outlook – October Key Cut-Over Activities for October 2010 (10/01) CRR: CRR system data clean up for Go-Live (10/01) Credit: ERCOT assesses each CPs credit worthiness for the Dec CRR Auction (10/02) OS: First pull of December Outages for CRR Network Model (for PCRR Allocation) (10/02) Model: Network Model built for CRR Allocation and Auction (10/03-10/11) MIS UI and EWS Get Report function not available (ERCOT back end reconfiguration) (10/13) OS: Changes to December Outages considered for CRR Auction Model (10/13) Model: Changes to Model considered for CRR December Auction Market Readiness Seminar 01 October 2010

17. Impacts CRRAH able to retrieve ACLs from CRR system each business day. MPs can post additional collateral until 11/08/2010 for Dec 2010 CRR Auction Dec 2010 CRR Model available on MIS Dec 2010 Monthly Auction Notice available on MIS Functional Area Network Model Outage Scheduler Congestion Revenue Rights Credit MIS MayJuneJulyAugSeptOctNovDec Cut-Over Monthly Outlook – October Key Cut-Over Activities for October 2010 (10/14-10/19) CRR: ERCOT begins accepting PCRR Nominations for December Monthly Auction (updated) (10/15-11/15) Model: Network Operations Model posted to TSP Citrix location and TSPs begin validation process (10/26) CRR: ERCOT shall allocate PCRRs to NOIEs for the 2010 December Monthly Auction and publish to MIS (10/26) CRR: ERCOT shall post CRR Network Model for the 2010 December Monthly Auction to MIS (10/28-11/08) Credit: ERCOT posts ACLs daily for CRR December monthly auction to CRR (10/29) CRR: ERCOT to post December 2010 Monthly Auction Notice to MIS Market Readiness Seminar 01 October 2010

18. MIS UI and EWS Get Report Reconfiguration Details (10/03/2010 – 10/11/2010) Market Participants will not have access to the MIS UI and EWS Get Reports functionality. Market Participants will need to use the direct links (listed on next slide) or Citrix to access system applications. All other EWS will be left on and from 10/1 up until the First Run Date as defined in EMIL of the CDR report, the EWS will return ‘no reports found’ during that time. MIS UI and EWS Get Report Go-Live (10/12/2010) Postings will be made available based on the EMIL posting date going forward. Postings live prior to 10/12/2010 will continue to be made available at this time. Market Participants will only have access to go-live posting data. Data from Market Trials activities is no longer available for download. Cut-Over Monthly Outlook – October – MIS UI and EWS Get Report Reconfiguration Details Market Readiness Seminar 01 October 2010

19. URLs to be used during cutover activities: – Network Model via Citrix: – https://gateway.ercot.com/vpn/index.html https://gateway.ercot.com/vpn/index.html – Market Manager User Interface: – https://mis.ercot.com/mmsui/mmsui/displayTradesLanding.action https://mis.ercot.com/mmsui/mmsui/displayTradesLanding.action – Outage Scheduler Application: – https://mis.ercot.com/osrui/osrui/Summary.action https://mis.ercot.com/osrui/osrui/Summary.action – CRR Application (MUI): –https://mis.ercot.com/crr/mui/ListAllUserMessage.do - direct link for CRRAHshttps://mis.ercot.com/crr/mui/ListAllUserMessage.do –https://mis.ercot.com/crr/mui/editSMPCreditLimit.do - direct link for CPshttps://mis.ercot.com/crr/mui/editSMPCreditLimit.do –Web Services Endpoint URL: –https://misapi.ercot.com/2007-08/Nodal/eEDS/EWShttps://misapi.ercot.com/2007-08/Nodal/eEDS/EWS Cut-Over Monthly Outlook – October – MIS UI and EWS Get Report Reconfiguration Details Market Readiness Seminar 01 October 2010

20. Impacts Available Credit Limit is locked for CRRAHs CRRAHs can submit disputes against CRR Auction Invoice via the API or MIS CRRAHs can receive postings on MIS QSEs can begin DAM Bid submission (15 submission items) Market checkpoint calls begin to facilitate issues and readiness Daily Market Conference Bridge starts 11/23 Functional Area Settlements Credit Congestion Revenue Rights Disputes Market Management MayJuneJulyAugSeptOctNovDec Cut-Over Monthly Outlook – November Key Cut-Over Activities for November 2010 (11/8/2010 12:00pm) Credit: Collateral Posting Deadline (Dec Auction) (11/8/2010 5:00pm) CRR: Credit Lock for Dec CRR Auction (11/9/2010 – 11/11/2010) CRR: December CRR Auction Bid Open/Close (11/12/2010) CRR: December CRR Auction Executes (11/15/2010) CRR: December CRR Auction Results published (11/16/2010) Settlements: December CRR Auction Invoice published (11/16/2010) Disputes: Dispute submitted to ERCOT for CRR Invoice (11/19/2010) Credit: Payment Due for December CRR Auction Invoices (11/22/2010) Settlements: Payments to CRRAH (Dec Auction) (11/23/2010) Credit: ERCOT to Release ACL (TPE and ACL Reports Available on MIS) (11/23/2010) Market Submission Opens (Remaining Protocol Go- Live) (11/24/2010) Model: Network Model Load (11/29/2010) Credit: ERCOT to Publish ACL for the initial Day-Ahead Market execution by ERCOT Market Readiness Seminar 01 October 2010

21. Impacts Daily Market Calls continue for issue facilitation Settlement Calendar Extracts (See Emil for full list of postings) MPs receive 1 st Nodal Invoice for DAM and RTM via MIS MPs can submit Disputes via MIS or API Functional Area Network Model Settlements Congestion Revenue Rights Credit Market Management System MayJuneJulyAugSeptOctNovDec Cut-Over Monthly Outlook – December Key Cut-Over Activities for December 2010 (12/01/10) Nodal Program: Nodal Go-Live (Operating Day 1) (12/3/2010) Settlements: Nodal Day Ahead Market Statement & Invoice Available (12/3/2010) Disputes: Disputes submitted to ERCOT for DAM Invoice (12/8/2010) Credit: Nodal Payment Due for OD12/01/2010 (12/9/2010) Credit: Nodal Payout for OD12/01/2010 (12/15/2010) Model: Network Model Load (12/13/2010) Settlements: Nodal Real-Time Statement Available (12/16/2010) Settlements: Nodal Real-Time Invoice Available (12/27/2010) Credit: Nodal Payment Due for Real-Time Invoice 12/16/10 (12/28/2010) Credit: Nodal Payout for Real-Time Invoice 12/16/10 Market Readiness Seminar 01 October 2010

22. 3/19/2016 Go-Live Sequence Updates 01 October 2010 Market Readiness Seminar

23. As of 9-29-2010 there was ~1000 Transmission outages submitted in the Nodal Outage scheduler effective for the month of December ~ 206 Outages were canceled ~ 420 Outages have been Approved ~ 375 Outages have a status of RatE (Received at ERCOT) ~ 319 were submitted less than 90 days prior to the Planned Start ~ 57 were submitted more than 90 prior to the Planned Start ~ 11 were submitted > 90 days in Nodal and in Zonal they were submitted 85 days prior to the Planned Start and will be Approved 30 days prior to the Planned Start The remaining 46 outages will be Approved when they are approved in the Zonal OS according to the Protocol timelines Outage Scheduling process for the Dec CRR Auction Market Readiness Seminar 01 October 2010

24. Outage Coordination and Go-Live ERCOT will continue to approve outages in both Zonal and Nodal systems through Oct and Nov as well as Dec. Nodal Outages will be Approved at the same time at the Zonal Outages. If the Outages are not in the Nodal OS when the outage is Approved in the Zonal OS, the Nodal outages may require another study before they are Approved. The Nodal Protocols for section 3.1 go into effect Nov 1 for Dec. Market Readiness Seminar 01 October 2010

25. CRR Cutover for CRR December Auction Market Readiness Seminar DayDateActivityComments Friday10/1/2010 ERCOT initializes and validates CRR Production Database static data, Market Participant data, Time of Use data, Calendar Period data, and system parameters ERCOT CRR team publishes Activity Calendar for 2010 and 2011 with known corrections and updates to MIS Monday10/4/2010 ERCOT CRR team pulls outages and model for 2010 December network model Wednesday10/13/2010 ERCOT CRR team loads validated 2010 December network model into CRR system ERCOT CRR team prepares contracts and entitlements for 2010 December Allocation and loads into CRR system Thursday10/14/2010 ERCOT will start accepting PCRR Nominations at 08:00:00 CPT for the 2010 December Monthly CRR Auction 1 Tuesday10/19/2010 PCRR Nomination for the 2010 December Monthly CRR Allocation must be received by ERCOT at 17:00:00 CPT 2 15 Business Days prior to the opening of the auction Section 7.4.2 (c)(i) Friday10/22/2010 TCR Auction Notice for December TCR Auction Monday10/25/2010 ERCOT CRR team pulls outages and model for 2011 January network model Tuesday10/26/2010 ERCOT shall allocate PCRRs to NOIEs for the 2010 December Monthly CRR Auction3 10 Business Days prior to the opening of the auction Section 7.4.2 (c)(i) ERCOT shall post CRR Network Model for the 2010 December Monthly CRR Auction4 Post no later than 10 Business days before the auction Section 7.5.3 (1)(i)(i) Friday10/29/2010 ERCOT shall post the 2010 December Monthly CRR Auction Notice – ACL credit window opens, and ACL’s received from Credit will be visible in the CRR application 5 Not less than 10 days before each monthly CRR auction Section 7.5.3.2 (1) Monday11/1/2010 ERCOT CRR team publishes Activity Calendar for 2010 and 2011 with known corrections and updates to MIS 01 October 2010

26. CRR Cutover for CRR December Auction Market Readiness Seminar DayDateActivityComments Monday11/1/2010 Bidding for December 2010 TCR Auction begins at 08:00:00 CPT Wednesday11/3/2010 Bidding for December 2010 TCR Auction ends at 14:00:00 CPT – last day for Account Holder to post collateral for the TCR Auction Thursday11/4/2010 ERCOT CRR team loads validated 2011 January network model into CRR system ERCOT CRR team prepares contracts and entitlements for 2011 January Allocation and loads into CRR system Friday11/5/2010 ERCOT will start accepting PCRR Nomination at 08:00:00 CPT for the 2011 January Monthly CRR Auction 1 5 Days from acceptance date Monday11/8/2010 CRR Auction Lock Date for 2010 December Monthly CRR Auction at 17:00:00 CPT6 Lock Date Section 16.11.4.6.1 (1) TCR Auction Collateral released Tuesday11/9/2010 CRR Auction Bid Window Opens at 00:00:01 CPT for the 2010 December Monthly CRR Auction 7 Thursday11/11/2010 CRR Auction Bid Window Closes at 17:00:00 CPT for the 2010 December Monthly CRR Auction 8 If total bid transactions exceed 200,000, ERCOT will notify Market Participants via the CRR Application Message facility that a second round bid window has opened – 2 nd round bid window will be open from 18:00:00 CPT on Thursday, 11/11/2010 until 12:00:00 CPT on Friday, 11/12/2010 8aSection 7.5.2 (3) (b)(c) Friday11/12/2010 ERCOT starts the Execution of the Auction Engine for the 2010 December Monthly CRR Auction 9Auction Engine Starts PCRR Nomination for the 2011 January Monthly CRR Auction must be received by ERCOT at 17:00:00 CPT 2 15 Business Days prior to the opening of the auction Section 7.4.2 (c)(i) TCR December 2010 Auction Invoices Due Monday11/15/2010 ERCOT posts 2010 December Monthly CRR Auction results to Market at 01:00:00 CPT10 Post Auction Results Section 7.5.3.1 (1) Auction Transactions sent to Settlements and Billing at 01:55:00 CPT11 Tuesday11/16/2010 CRR releases Locked Auction Funds for 2010 December Monthly CRR Auction at 16:30:00 CPT 12 ERCOT releases locked auction funded Settlement & Billing creates a 2010 December CRR Auction Invoice and sends in out electronically prior to 23:59:59 CPT 13 S&B issues invoices Section 9.8(1) 01 October 2010

27. CRR Cutover for CRR December Auction Market Readiness Seminar DayDateActivityComments Wednesday11/17/2010 ERCOT CRR team pulls outages and model for 2011 February network model Friday11/19/2010 2010 December Monthly CRR Auction Invoices are due to ERCOT by 17:00:00 CPT14 Invoices due Section 9.9.1(1) ERCOT shall allocate PCRRs to NOIEs for the 2011 January Monthly CRR Auction3 10 Business Days prior to the opening of the auction Section 7.4.2 (c)(i) ERCOT shall post CRR Network Model for the 2011 January Monthly CRR Auction4 Post no later than 10 Business days before the auction Section 7.5.3 (1)(i)(i) 2010 December Monthly CRR Auction Invoices are due to ERCOT by 17:00:00 CPT14 Invoices due Section 9.9.1(1) Wednesday12/1/2010 Go Live Date ERCOT CRR team publishes Activity Calendar for 2010 and 2011 with known corrections and updates to MIS Thursday12/2/2010 ERCOT CRR team loads validated 2011 February network model into CRR system ERCOT CRR team prepares contracts and entitlements for 2011 February Allocation and loads into CRR system Friday12/3/2010 ERCOT will start accepting PCRR Nomination at 08:00:00 CPT for the 2011 February Monthly CRR Auction 1 Monday12/6/2010 CRR Auction Lock Date for 2011 January Monthly Auction Closes at 17:00:00 CPT6 Lock Date Section 16.11.4.6.1 (1) Tuesday12/7/2010 CRR Auction Bid Window Opens at 00:00:01CPT for the 2011 January Monthly Auction7 ERCOT shall post CRR ownership as of 11/30/2010 Section 7.5.5.2 Thursday12/9/2010 CRR Auction Bid Window Closes at 17:00:00 CPT for the 2011 January Monthly CRR Auction8 If total bid transactions exceed 200,000, ERCOT will notify Market Participants via the CRR Application Message facility that a second round bid window has opened – 2 nd round bid window will be open from 18:00:00 CPT on Thursday, 12/9/2010 until 12:00:00 CPT on Friday, 12/10/2010 8aSection 7.5.2 (3) (b)(c) Friday12/10/2010 ERCOT starts the Execution of the Auction Engine for the 2011 January Monthly CRR Auction9 PCRR Nomination for the 2011 February Monthly CRR Auction must be received by ERCOT at 17:00:00 CPT 2 15 Business Days prior to the opening of the auction Section 7.4.2 (c)(i) 01 October 2010

28. Refunding TCR’s for December 2010 TCR Auction Market Readiness Seminar 01 October 2010

29. Credit Cutover – December 2010 CRR Auction - As discussed in August, the initial CRR Auction (for December 2010) held in early November, will be handled as follows: Treated similarly to the current Zonal TCR Auctions Separate collateral posted Available Credit Limits (ACL) viewable in CRR, not MIS Market Readiness Seminar 01 October 2010

30. Establish ACLs for December 2010 CRR Auction ERCOT Credit will verify creditworthiness of CRRAHs by October 1, 2010 (and thereafter, if needed) CRRAHs that meet Creditworthiness Standards and are assigned unsecured credit will notify Credit staff of how much unsecured credit (other than that used for Zonal QSE activity) to assign to the December 2010 CRR Auction (if any) between October 28 and November 8 CRRAHs that do not meet the Creditworthiness Standards but wish to participate in the December 2010 CRR Auction will: –Send collateral specifically earmarked for the December 2010 CRR Auction to ERCOT via wire transfer between October 28 and November 8 The combination of posted collateral and unsecured credit allocated by the CRRAH will be the ACL provided for the CRR Auction Market Readiness Seminar December 2010 CRR Auction held in November 01 October 2010

31. December 2010 CRR Auction held in November View ACLs prior to December 2010 CRR Auction ACLs will be viewable in the CRR Application beginning October 29, 2010 –ACLs will be viewable only by CRR Account Holders and Counter-Parties and only in the CRR Application leading up to the December CRR Auction (e.g. not on MIS). December 2010 CRR Auction bid submission window opens on November 9, closes on November 11, and the CRR Auction begins execution on November 12 After the CRR Auction has executed Auction results posted in CRR Application and on MIS on November 15 PCRR and CRR Auction invoices are posted on MIS by November 16 (before midnight) CRR Auction invoice payments are due by November 19 by 5:00 PM (CST) ERCOT to pay CRR amounts on November 22 Market Readiness Seminar 01 October 2010

32. December 2010 CRR Auction held in November Release of CRR collateral / Ongoing collateral requirement for CRR obligations Once invoices are paid, CRR collateral or unsecured credit is released and may be refunded, with the following consideration –CRR Obligations - An amount equal to the greater of the ACPE component of the FCE calculation and the Auction Clearing Price (ACP) will be held as collateral for FCE until ACLs are produced by CMM –CRR Options - No collateral will be retained Market Readiness Seminar 01 October 2010

33. 11/30/2010 Go-Live Sequencing Market Readiness Seminar Cut-Over Monthly Outlook – Go-Live Sequence of Events TimeActionComments up to 10:00Bids and Offer submission QSE submit bids and offers 10:00Close DAM 10:00Execute Dam Clearing Process 13:30Approve DAM results Day Ahead results will be posted to MIS 14:00 Generation Cutover to Nodal Control Generation control moves to Nodal systems 1330-1430 Submit Post DAM COP and offers QSE submit Post Dam COPs and Offers 14:30Close for RUC 14:30Begin Execution of DRUC 16:00Approve DRUC Results 16:00Post DRUC Results 18:00HRUC executions Hourly HRUC runs hourly thru 23:59:59 of Operating Day 01 October 2010

34. Nodal Cutover and Market Transition – Reversion Plan Reversion Plan Approach: 12/01/2010 – 12/02/2010: Zonal and Nodal systems continue to process in parallel. This allows for 48hrs of stabilization (2 Operating Days) with parallel processing similar to the level of effort being performed with the LFC Testing 12/03/2010 – 12/31/2010: Zonal systems in “Stand-By” where processing is disabled, but remain in place in the event they are needed to be reinstated quickly. 01/01/2011: Zonal System Decommissioning begins **10/14/2010 MRS will cover Zonal Rollback in detail Market Readiness Seminar 01 October 2010

35. Nodal Cutover – Nodal System Readiness Criteria Nodal System Readiness Update Market Readiness Seminar 01 October 2010

36. Nodal Cutover Communications – Zonal Protocol 21.12.3 21.12.3 Notice to Market Participants of Effective Date for Nodal Protocol Provisions and Retirement of Zonal Protocol Provision No part of the nodal market design may start operation until all the Market Readiness Criteria for that part of the nodal market design have been met. Certification that all Market Readiness Criteria have been met must be made at least by each of the following: the Technical Advisory Committee (TAC), ERCOT and the ERCOT Board. Upon such certification, ERCOT shall issue two Notices alerting Market Participants to the effective date of Nodal Protocol sections and the retirement of Zonal Protocol sections, as applicable. ERCOT shall issue the first Notice no less than thirty (30) days prior to the effective date or retirement date, as applicable, and the second Notice no less than ten (10) days prior to the effective date or retirement date, as applicable. The Notice shall include: (1)The Nodal Protocol Sections to become effective; and (2)The Zonal Protocol Sections to be retired, if any Market Readiness Seminar 01 October 2010

37. Nodal Program Communications Readiness Signoff Schedule Network Operations Modeling 06/30 07/01 07/20 07/30 09/01 ERCOT Management Readiness Signoff TAC Approval Board of Directors Approval 30 Day Market Notice sent Nodal Protocol Section 3.10 goes into effect Congestion Revenue Rights 08/04 08/05 08/17 09/13 10/13 ERCOT Management Readiness Signoff TAC Approval Board of Directors Approval 30 Day Market Notice sent Nodal Protocol Section 7 goes into effect Outage Scheduling 08/04 08/05 08/17 10/01 11/01 ERCOT Management Readiness Signoff TAC Approval Board of Directors Approval 30 Day Market Notice sent Nodal Protocol Section 7 goes into effect Full Nodal Operations 10/01 10/07 10/19 10/23 11/23 ERCOT Management Readiness Signoff TAC Approval Board of Directors Approval 30 Day Market Notice sent Nodal Protocol Sections 3,4,5,6 go into effect as well as all other unimplemented Protocol Sections Market Readiness Seminar 01 October 2010

38. Readiness Methodology ERCOT will measure readiness by the following categories: System Readiness – an evaluation of a particular system needed to support identified market activities Process Readiness – an evaluation of the Processes and Procedures necessary to support identified market activities People Readiness – an evaluation of ERCOT and Market Participant capabilities to support identified market activities ERCOT plans to review the Market Readiness Criteria at NATF and subsequently request a vote from TAC per Section 21.12.3, Notice to Market Participants of Effective Date for Nodal Protocol Provisions and Retirement of Zonal Protocol Provision Market Readiness Seminar 01 October 2010

39. Readiness Methodology System Readiness – evaluation of the Nodal system to support the market design –Core system functionality delivered Protocol required system functionality available for market testing –System Integration delivered System to system integration delivered to support Market Timeline and Business Processes –Known defects resolution plan All ‘Must fix prior to go-live’ defects have a resolution plan in place –Active Readiness Metrics Current status of Readiness Metrics Market Readiness Seminar 01 October 2010

40. Readiness Methodology Process Readiness – evaluation of the Processes and Procedures necessary to support the market design –Procedures complete ERT project procedures to support business processes complete –System cutover transition plan established ERCOT and Market Participant business activities required for transitioning into Go-Live have been established and communicated. –Market rules transition communicated Nodal and Zonal Protocol effective / retirement dates identified and communicated for Market Participant review Market Readiness Seminar 01 October 2010

41. Readiness Methodology People Readiness – evaluation of ERCOT employee readiness and Market Participant knowledge to support the market design –ERCOT staff supporting Market Trials ERCOT Business teams supporting system execution, problem resolution, and Market questions –ERCOT staff trained on System and Processes ERCOT Business teams training status based on identified ERT training metrics –Market Participant Training delivered ERT external training classes and web based training provided by the Nodal training project Market Readiness Seminar 01 October 2010

42. Nodal – Overall Readiness Readiness Signoff NATF Recommendation 10/05/10In Process ERCOT Management Signoff 10/01/10In Process TAC Approval 10/07/10 BOD Approval 10/19/10 30 Day Market Notice 10/23/10 10 Day Market Notice 11/13/10

43. 3/19/2016 Cut-Over Communication Plan Market Readiness Seminar 01 October 2010

44. Nodal Cutover and Market Transition – Communication Plan - Scott Friday Market Calls Starting 09/03/2010 at 9AM-12noon these calls will be combined, without breaks, into a single Market Trials and Cut-over Activities call Market Participants should plan on attending the full duration of this call as it will provide the primary means of communication between ERCOT and the Market. Information and materials covered in this call will continue to be posted to the ERCOT calendar website every Friday at the following URL: http://www.ercot.com/committees/nodal/mt/ http://www.ercot.com/committees/nodal/mt/ Monday Kick-Off Calls As needed to review the cutover activities for the week Market Notices and Market Participant Contact Lists ERCOT will continue to leverage Market Notices to communicate pertinent information that is required to be consumed by the Market as a whole. Market Participants employees can subscribe to the Market Notices on the ERCOT Lists website at the following URL: http://lists.ercot.com/scripts/wa-ercot.exe?HOME.http://lists.ercot.com/scripts/wa-ercot.exe?HOME Market Participants may verify their contact information on file with ERCOT through their assigned Whole Client Services Representative. Market Readiness Seminar 01 October 2010

45. Nodal Cutover and Market Transition – Communication Plan (Cont.) Market Participants Contacting ERCOT Market Trials email inbox: markettrials@ercot.com. This inbox will continue to be maintained throughout Nodal Cutover. This will serve as a “catch-all” forum for questions if there is any doubt as to where a question should be submitted.markettrials@ercot.com Friday Market Calls: In line with the previously mentioned schedule, these Market Calls not only serve as the primary means for ERCOT to communicate to the Market, but also for MPs to field general questions concerning the Nodal Cutover plan. ICCP email inbox: ERCOTICCPSupport@ercot.com for specific MP questions regarding their Nodal ICCP / Telemetry, this email address should be leveraged for the fastest response.ERCOTICCPSupport@ercot.com ERCOT Wholesale Client Services Account Manager: Whenever possible MPs should leverage the Market Trials email inbox, however, MP’s Wholesale Client Services Account Manager will also be equipped to either answer your questions or route you to the correct support personnel. Nodal Advisory Task Force (NATF): NATF will serve as a forum for initially reviewing changes in activities during the ERCOT Nodal Cutover, NPRRs and any concerns from the Market that would impact the overall Cutover plan. To that end, NATF will be meeting more frequently to ensure expedient coverage of these types of issues. Details regarding meeting agendas and materials from past meetings will continue to be maintained at the following URL: http://www.ercot.com/committees/board/tac/natf/http://www.ercot.com/committees/board/tac/natf/ Market Readiness Seminar 01 October 2010

46. Nodal Cutover and Market Transition – Communication Plan (Cont.) Go-Live Communication Strategy Purpose and Objectives Maintain reliable grid operations during the Go-Live period Maintain constant interaction to respond quickly and effectively to issues that arise during the go-live period Respond and report any observed anomalies in market performance or behavior Go-Live Period Communication Market Calls Daily and at times hourly conference calls between ERCOT and Market Participants will start on 11/23/2010. ERCOT will set up the logistics of the calls and communicate via a Market Notice and the Cutover Handbook Stabilization Period Communication Market Calls Daily Market Calls thru 12/07/2010 then adjust to weekly/biweekly based on need Daily Issue / Inquiry Wholesale Client Service Reps Retail Client Service Reps ERCOT Helpdesk **More details and updates on the Go-Live Communication plan to be presented in the coming months Market Readiness Seminar 01 October 2010

47. Next 60-days of Nodal Classes/Workshops – Brandon Update Enrollment at: http://nodal.ercot.com/training/courses/index.htmlhttp://nodal.ercot.com/training/courses/index.html Market Readiness Seminar 01 October 2010 Course Start DateLocation ERCOT Nodal 101October 5RBS Sempra (Stamford, CT) Retail WorkshopOctober 6ERCOT MET Center (Austin) Generation 101October 12Norris Conference Center (Houston) Generation 201October 14Norris Conference Center (Houston) Basic Training ProgramOctober 18Suez Energy (Houston) Load Serving EntityOctober 21Reliant Energy (Houston) Nodal 101October 25ERCOT MET Center (Austin) Economics of LMPOctober 27Calpine (Houston) Transmission 101October 28ERCOT MET Center (Austin) Generation 201November 3ERCOT MET Center (Austin) Load Serving Entity 201November 8Liberty Power (Florida) Load Serving Entity 201November 19ERCOT MET Center (Austin)

48. 48 01 September 2010Market Readiness Seminar