1. CEO Report Thomas F. Schrader ERCOT Board of Directors May 17, 2005

2. CEO Report Topics Legislative Update Comptroller’s Review REP Default
Management Projects
Management Dashboard

3. Legislative Update House & Senate agree on: A few differences remain:
ERCOT Governance
Market Monitoring
A few differences remain:
Details of ERCOT Oversight
Open records for ERCOT
Renewable energy -- 5,880 total MW by 2015
Texas Nodal – House requires PUC study

4. Comptroller’s Review Letter to Legislators Recommendations Follow-up
PUC oversight
Contracting, Security, Sales Tax
Task Force
Follow-up
PwC
Debriefing

5. REP Default ERCOT and Market Participant working to Identifying issues
Transition customers to new REP or POLR
Minimize impact to the market
Identifying issues
Timeline for QSE notice of termination of LSE
Clarity of responsibility of transition tasks
Clarity of timeline, including trigger point
Need cooperation of REP for customer data

18. REP Default ERCOT and Market Participant working to Identifying issues
Transition customers to the new REP or POLR
Minimize the impact to the market
Identifying issues
Timeline for QSE notice of termination of LSE
Clarity of responsibility of transition tasks
Clarity of timeline, including the trigger point
Need cooperation of losing REP for customer name and billing address

19. Customer Transition Activity
May 16, 2005

20. Timeline for Customer Transition
May 5th – Qualified Scheduling Entity (QSE) gave ERCOT the required 5-day notice to terminate its relationship with the Retail Electric Provider (REP). (Protocol Section ) REP required to identify new QSE or post collateral with ERCOT to become an Emergency QSE by end of 5-day notice period. (Protocol Section )
May 11th - Deadline for REP to post collateral with ERCOT to become an Emergency QSE passed.

21. Timeline for Mass Transition
May 12th
With permission and participation of affected REP, ERCOT initiated a discussion with all affected Providers of Last Resort (POLRs) and Transmission and/or Distribution Service Providers (TDSPs) about a possible Mass Transition event.
As of midnight, affected REP was no longer represented by a QSE. Load becomes Unaccounted for Energy, a cost borne by Loads (NOIE impact is less).
REP has less than 30 MWs of load and less than 3,000 ESI IDs.
ERCOT requested that the REP provide information regarding the population of ESI IDs to be dropped to the POLR as early as possible on May 16.
REP indicated there were discussions with another REP to acquire approximately 60% of their existing ESI IDs.

22. Timeline for Mass Transition
May 13th - ERCOT continued transition discussions with PUCT, REP, all POLRs and TDSPs.
May 16th
REP will provide ERCOT list of ESI IDs to transition to another REP and to POLR
REP will provide information needed by POLRs to submit off-cycle switch transactions.
ERCOT will provide each POLR their list of the ESI IDs and information provided from REP in which the POLR will submit off-cycle switches to obtain the Customer.
ERCOT will provide a list of ESI IDs to each affected to TDSP for their monitoring/planning purposes.

23. Timeline for Mass Transition
May 17th
ERCOT will identify all ESI IDs active with the Terminating REP.
ERCOT will identify and cancel all pending transactions transitioning Customers to the Terminating REP based on the effective date.
POLRs will begin submitting switch transactions for all affected ESI IDs.
All ESI IDs are to be completely transitioned away from the Terminating REP by June 3, given no exceptions encountered.

24. Timeline REP must post credit to be EQSE
Provide list of all affected ESI IDs
Transition complete
5/5
5/11
05/12
05/16
05/17
06/03
QSE
Notice
QSE representation ends
Transition of Customers Begins