1. http://nodal.ercot.com 1 Market Trials DAM/RUC/SASM Weekly Update May 7, 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 DAM/ RUC/SASM summary QSE Activities for Next Week General Reminders/Updates –Upcoming credit integration Environment Report –Outages –Known Issues FAQ Special Topic: External Web Service for Get Notifications Question and Answers / General Discussion Appendix ERCOT asks that Market Participants log into the WebEx session using their company name and then their name. This will allow ERCOT to take roll-call offline.

4. Market Trials 2010 Roadmap http://nodal.ercot.com 4

5. http://nodal.ercot.com 5 SASM Overview for Apr 30 SASM overview SASM market was opened at 9:10 am and closed at 9:40 am. The study period is from Hour 13 to Hour 24. AS Plan for NSRS was increased by 200 MW for Hour 16 8.1 MW was self-arranged. The SASM MCPC was $5.52. Nine Resources received SASM AS Awards

6. http://nodal.ercot.com 6 HRUC Overview for Apr 30 HRUC overview ERCOT ran HRUC on Apr at 10 am and made 55 Resource commitments. Similar results to the DRUC for the same Operating Day that we discussed on last week’s call. –Number of issues created solution for RUC that was not operationally approved

7. http://nodal.ercot.com 7 Submission Overview for May 4 Submission overview 174 QSEs participated for Op Day 5/4 Cleared 20,261- 27,435 MW per hour Load Zone prices ranged from $13.69 to $47.34.

8. http://nodal.ercot.com 8 Submission Overview for May 4

9. http://nodal.ercot.com 9 Submission Overview for May 4

10. http://nodal.ercot.com 10 Submission Overview for May 4

11. http://nodal.ercot.com 11 Submission Overview for May 4 Submission overview Energy Bids from QSEs – 80% of Load was requested.

12. http://nodal.ercot.com 12 Submission Overview for May 4 Submission overview AS Offers –26 QSEs submitted –No AS insufficiency AS Self-Arrangement from QSEs –No guardrails –27 QSEs sent in AS Self-Arrangement Energy Only Offers – 81 QSEs submitted EOOs PTP Obligation Bids –53 QSEs submitted PTP Bids –Averaged 4,377 MW hourly bid, 3,165 hourly award

13. http://nodal.ercot.com 13 Submission Overview for May 4 Notes from May 4 DAM: The credit limit data was missing for Operating Day 5/5. Root cause was traced to the data load done on 5/3. Credit system will be integrated soon which will mitigate this issue This affected users’ ability to submit after Phase 2 Validation completed and until the issue was fixed at approx 8:30 am. Several offers and bids were cancelled during Phase 2 Validation. ERCOT un- cancelled these and re-executed Phase 2 Validation at approximately 8:45am. This is outside the normal business process. However, ERCOT operators missed one table needed during the un-cancellation process and TPOs were not properly uncancelled. This was discovered too late to correct for the DAM execution. ERCOT delayed DAM submission deadline to 11 am to accommodate additional submissions due to this credit data issue.

14. http://nodal.ercot.com 14 Submission Overview for May 4 Notes from May 4 DAM (cont’d): DAM Operators attempted to work around the outages defect (where the software does not properly handle outages that close breakers). This was not successful and required the Operators to re-execute DAM after undoing the workaround. DAM then experienced the known issue related to certain decimal combinations in bids. This will be fixed in the emergency patch scheduled to migrate by May 14. DAM Operators implemented manual workaround for the bids affected, and re- executed DAM. DAM results were published around 2:52 pm.

15. http://nodal.ercot.com 15 DRUC Overview for May 4 DRUC overview ERCOT ran DRUC on May 4 and published 74 Resource commitments. Not operationally approved based on operator experience. Previously-reported known issues contributed to overcommitment of resources (defect regarding outages, data issues with line ratings, load distribution factors, missing COP data, offline resources with zero startup/min energy, etc.) Results were published to exercise market and ERCOT downstream systems (as described last week) RUC clearing engine software results were consistent with input data Status update on these known issues will be discussed later (known issues slides)

16. http://nodal.ercot.com 16 HRUC Overview for May 5 HRUC overview ERCOT ran HRUC on May 5 at 10 am and made 80 Resource commitments. Similar results to the DRUC for the same Operating Day plus a few additional observations –Some constraints had Resources with high negative shift factors either having no COP submitted or COP with EMR/OFFNS/OUT resource status –Some constraints had the majority of Resources with high negative shift factors as wind resources with low HSL value in COP (1 MW) –Some constraints had the majority of Resources with high negative shift factor that could not be committed since the number of max startups would have been exceeded (due to known issue with EMS where it overwrites the offline resource status if the unit is telemetering a small MW value – fixed with next EMS software release).

17. http://nodal.ercot.com 17 SASM Overview for May 5 SASM overview ERCOT decided on Monday to open the SASM for ‘Increased AS Plan’ rather than the previously-communicated ‘AS Undeliverable’ reason. AS Undeliverable values come from the HRUC and the team desired to test this scenario one more time in the testing environment prior to executing in the market trials environment. SASM market was opened at 9:12AM and closed at 9:42AM. The study period is from Hour 13 to Hour 24. AS Plan for NSRS was increased by 200 MW for Hours 15-18 10 MW was self-arranged in Hour 18. The SASM MCPC was $0.94. Three Resources received SASM AS Awards

18. http://nodal.ercot.com 18 Submission Overview for May 6 Submission overview 176 QSEs participated for Op Day 5/7 Cleared 26,525 - 37,621 MW per hour Load Zone prices ranged from $8.84 to $52.12.

19. http://nodal.ercot.com 19 Submission Overview for May 6

20. http://nodal.ercot.com 20 Submission Overview for May 6

21. http://nodal.ercot.com 21 Submission Overview for May 6

22. http://nodal.ercot.com 22 Submission Overview for May 6 Submission overview Energy Bids from QSEs – 120% of Load was requested.

23. http://nodal.ercot.com 23 Submission Overview for May 6 Submission overview AS Offers –28 QSEs submitted –No AS insufficiency AS Self-Arrangement from QSEs –29 QSEs sent in AS Self-Arrangement Energy Only Offers – 78 QSEs submitted EOOs PTP Obligation Bids –55 QSEs submitted PTP Bids –Averaged 5,707 MW hourly bid, 1,473 hourly award

24. http://nodal.ercot.com 24 DAM Execution Overview for May 6 DAM execution overview: There were issues with completing by 1330 deadline – in total, DAM ran four times: –Correcting Market Bid/Offer IDs with special characters Reminder asked to not submit special characters. Validation rule will be added with External Interfaces Specification v1.19L, targeted for May 28 –MMS subroutines having issues with certain combinations of decimals in clearing process This issue was reported previously, and caused two DAM executions to not complete Will be fixed in emergency patch by May 14 –Please note that there is a posted known issue regarding the message to QSEs when DAM is delayed (freeform messages from DAM operators). However, we did note a workaround on the known issues using the VDI notification for these messages which was not done for this DAM (or the one on Tuesday). Operators will use this workaround in the future.

25. http://nodal.ercot.com 25 DRUC Execution Overview for May 6 DRUC execution overview: 39 Resources committed for Operating Day May 7 Although not realistic for production purposes, the results were explainable –Laredo area represented about 1/3 of the commitments Number of Resources flagged as OUT or EMR that showed as online in zonal for the same Operating Day/Hour –Houston area did have local constraints Garrett to Midtown 9 Resources at two sites committed –Austin area 2 Resources committed for n-1 security –Please note that some units with zero startup/minimum energy were committed (wind, PUNs) Reminder that ERCOT is proceeding with SASM and HRUC today as planned for Operating Day 5/7 – results will be discussed on next week’s call.

26. http://nodal.ercot.com 26 Next Week’s Activities Next week – Op Days are 5/12 and 5/14 DAM executing on 5/11 and 5/13 Plan was to move DAM to 3 x week ERCOT is focusing its teams on researching and resolving the known issues we've talked about over the past few weeks. Consequently, we will only run DAM/DRUC/HRUC/SASM two times next week. No changes to guardrails for DAM from this week’s activities. –We will continue to evaluate for potential AS insufficiency and reduce the AS Plan prior to clearing if necessary to avoid an AS insufficiency Week 2 Note: Dates are DAM execution days 5/12/2010, 5/14/2010 Objective Ramp to 5x week Network Constraints Included Self-Arranged AS Requested DAM – Actual Load Bid MW Requested 80% Tue/120% Thurs forecasted load Virtual Bids / Offers Up to 10 transactions/ QSE/hr PTP Obligations Up to 5 bids totaling 50 MW/QSE/hr NOIE CRR Offers Allocated CRRs only COP Updates After DAM, DRUC HRUC, SASM DRUC W/ each DAM HRUC Limited SASM Yes

27. http://nodal.ercot.com 27 Next Week’s Activities DRUC executing on 5/11 and 5/13 after DAM HRUC and SASM executing on 5/12 and 5/14 HRUC and SASM –HRUC will be executed on Wednesday and Friday at 9 am (target Operating Hours will be the balance of the Op Day) –SASM will be opened for target Operating Hours 15-18 for reason ‘Increased AS Plan’ for all AS types at 3 pm Week 2 Note: Dates are DAM execution days 5/12/2010, 5/14/2010 Objective Ramp to 5x week Network Constraints Included Self-Arranged AS Requested DAM – Actual Load Bid MW Requested 80% Tue/120% Thurs forecasted load Virtual Bids / Offers Up to 10 transactions/ QSE/hr PTP Obligations Up to 5 bids totaling 50 MW/QSE/hr NOIE CRR Offers Allocated CRRs only COP Updates After DAM, DRUC HRUC, SASM DRUC W/ each DAM HRUC Limited SASM Yes

28. http://nodal.ercot.com 28 Next Week’s Activities Next week Reminder that we transfer zonal outages to nodal every week on Monday –This transfer represents approximately 85% of the actual zonal outages Again, next week ERCOT may do workarounds outside the normal business process to sidestep any issues that arise. Furthermore, we may approve the results of the RUC software even if the result is operationally unreasonable. The purpose of this is to exercise settlement and billing determinants related to RUC. Week 2 Note: Dates are DAM execution days 5/12/2010 - 5/14/2010 Objective Ramp to 5x week DAM 3 x week Network Constraints Included Self-Arranged AS Requested DAM – Actual Load Bid MW Requested 80% Tue/120% Thurs forecasted load Virtual Bids / Offers Up to 10 transactions/ QSE/hr PTP Obligations Up to 5 bids totaling 50 MW/QSE/hr NOIE CRR Offers Allocated CRRs only COP Updates After DAM, DRUC HRUC, SASM DRUC W/ each DAM HRUC Limited SASM Yes

29. http://nodal.ercot.com 29 General Reminders/Updates Network Model Update –An updated settlement points and MP short name list was posted for the 5/3 load at http://nodal.ercot.com/readiness/markettrials/index.htmlhttp://nodal.ercot.com/readiness/markettrials/index.html –Next scheduled load is 5/10 –After that, the following dates are targeted: 5/19/2010 (data as of 04/30/2010) – zonal load also 5/24/2010 (data as of 05/07/2010) Phase 5 Handbook for DAM/RUC/SASM –http://nodal.ercot.com/readiness/markettrials/dam/index.htmlhttp://nodal.ercot.com/readiness/markettrials/dam/index.html –As mentioned on the kick off, please review the scripted operational scenarios in June described in the DAM Handbook. Send any suggested operational scenarios to markettrials@ercot.com by May 17 th for consideration to be added to the schedule.markettrials@ercot.com

30. http://nodal.ercot.com 30 General Reminders/Updates Credit system will be integrated with DAM by May 14 (May 18 DAM execution first affected by new credit limits). Please dial-in to the COMS market call at 1 pm for a detailed discussion of credit –Remember that bids/offers in excess of the Counter-Party credit limit will not be accepted by DAM –Also, Counter-Party digital certificates with the role CRR_Extracts assigned are needed to download credit reports from the MIS

31. http://nodal.ercot.com 31 Support Metrics * This week, 28 out of 318 questions were responded to outside of the 24 hour time frame. Market Participant Inbound Questions Last WeekThis Week

32. http://nodal.ercot.com 32 Day-to-day operations summary: Planned / Unplanned Outages Outages Planned Outages –05/02/10 07:30 A.M. – 05/02/2010 10:30 P.M. Service availability was interrupted as a result of planned hardware maintenance upgrade. The following systems were unavailable during the outage period. –Outage Scheduler User Interface –EWS Unplanned Outages –N/A

33. Environment Report-Known Issues Full DAM/RUC/SASM known issues list will post every Friday night at http://nodal.ercot.com/readiness/markettrials/dam/index.html http://nodal.ercot.com/readiness/markettrials/dam/index.html New DAM/RUC/SASM known issues DAM SPPs posted twice on the MIS on 4/29 (for Op Day 4/30 DAM). Due to rounding, the AS awarded values may exceed the COP validation logic by a small decimal amount. For instance, the COP validates the RRS value as being less that 20% of HSL. DAM can award 20% plus 0.1 MW. MMS will add a configurable threshold around this COP validation rule. The new validation rule will be total AS <= HSL-LSL + 1 MW and RRS <= 20% HSL + 0.25 MW. There is already a configurable threshold in the AS responsibility check calculation that allows for small deviations. Temporary workaround is to remove the extra decimal MW to pass the validation rule. COP validation logic that is looking at whether or not the resource is RUC-committed when attempting to submit a resource status of ‘ONRUC’ is falsely looking only at the latest RUC process, rather than all RUC processes. For example, if DRUC committed the resource for hours 14-18, and a subsequent HRUC committed it for hour 19 only, then the system will only let you update the COP to a status of ONRUC for hour 19. For DAM and SASM ASObligation notification messages, the ‘MarketType’ field is not being included in payload message. http://nodal.ercot.com 33

34. Environment Report-Known Issues New DAM/RUC/SASM known issues (cont’d) Querying for SASM AS Obligations via the Market Manager, the reports results display with a header of SASM AS Offer Awards instead of SASM AS Obligations. Notices tab on the Market Manager: 'QSE Data Available' is missing as a choice from the drop-down for filtering by Notice Type http://nodal.ercot.com 34

35. Environment Report-Known Issues Update on DAM/RUC/SASM known issues EMS defect regarding the table that counts offline and online hours to send to the market system for purposes of respecting minimum online time and offline time: after data loads and software migrations, the table is not properly counting the online/offline hours past the last data load/software migration. A workaround has been established that was put in place with the 5/3 data load, so this defect should now be invisible to MPs (will be permanently fixed in next EMS release) http://nodal.ercot.com 35

36. Environment Report-Known Issues Status update of recurring DAM/RUC software issues: Issue with DAM/RUC software caused by special scenario created with certain outage data – split network/islanding of resources –Manual workaround is in place for ERCOT Operators –Emergency patch to fix issue is targeted by end of day 5/14 Decimal combination issue within DAM subroutines –Manual workaround has delayed DAM results –Emergency patch to fix issue is targeted by end of day 5/14 Bid/IDs with special characters issue –Validation rule added in External Interfaces Specification v1.19L, scheduled 5/28 –Please avoid these in your submission until then Outage issue with regard to closed breakers –Potential fix identified, delivery date TBD –We are still evaluating possible workarounds Data issues are also currently being worked by ERCOT teams to correct http://nodal.ercot.com 36

37. Environment Report-Known Issues New MIS/Reports known issues: Certified reports are not viewable via the Reports and Extracts Index page. Certified reports are still viewable via their portlet. If you don’t know the location of the portlet for a report that you are looking for, this information is available on the ERCOT Market Information List (EMIL), which is posted on the Readiness Center at http://nodal.ercot.com/readiness/reports/index.html. The columns ‘MIS Landing Page’ and ‘Portlet Name’ will direct you to the location of the report. http://nodal.ercot.com/readiness/reports/index.html http://nodal.ercot.com 37

38. FAQ Q: I tried to retrieve my awards for Operating Day 4/21 and got no results. Why is this? A: Awards are only available for query for 7 days. This applies to transaction queries as well. Follow up on Pre-Contingency Action Plan (PCAP) question from last Friday’s market call: –The PCAP question is still being investigated. Currently there is no separate “mechanism” to incorporate PCAPs and none of the five PCAPs are being taken into consideration in the DAM. –ERCOT is investigating if it is appropriate and technically feasible to represent them similar to the way the Remedial Action Schemes are represented. http://nodal.ercot.com 38

39. Special Topic –Opportunity cost impact on MCPCs We discussed last week the cause of the RegDn price over $1,000 MW for Operating Day 4/28, and present here further details to help understand the scenario. (1)As previously discussed, the RegDn price was high due to the opportunity cost of RegUp price (which was also over $1,000). ERCOT identified the marginal offer which provided the last MW of RegDn. In the DAM solution, this resource had already been awarded the whole capacity up to HSL (3PO + RegUp + RRS) and RegDn = 3PO – LSL. If system needed one more MW of RegDn, this resource would have to increase 1 MW of energy and reduce 1 MW of either RegUp or RRS. The reduced 1 MW RegUp/RRS would be provided by marginal offers of RegUp/RRS which is $1001.01 based on MCPC for RegUp/RRS. Increased 1 MW energy will require other resources to reduce a total 1 MW and the cost change will be the LMP at the resource node associated with the resource entering the marginal offer. Therefore, RegDn MCPC = (RegUPMCPC - RegUPOffer) + (EnergyOffer - LMP) + RegDNOffer (2) The system did have a lot of RegDn Offers, but not all were available for selection for RegDn. Most were unavailable because the resource was not committed by the optimization. Reasons include high startup & minimum energy costs, awards to other CC modes (more than one mode has RegDN offers, but only one mode can be awarded, temporal constraints (minimum online/offline time), etc. The remaining RegDn offers that were not awarded and available had opportunity costs just as high or higher as the marginal offer that was awarded for RegDn (discussed in (1)) Note that in this scenario the LMP at this resource node can be lower than the cleared marginal offer at the same point. Although the generator energy offer in the Three-Part Offer is cleared, it is not the marginal energy offer. The LMP will be set by other marginal energy offers. However, the energy offer cost in the Three Part Offer over LMP shall be included in RegDn price. http://nodal.ercot.com 39

40. Special Topic –Web Service for Get Notifications ERCOT added a new web service to retrieve notifications in the last release (v1.19K) It provides the ability to query for Bid, Resource Parameter, and VDI acceptance and rejection notifications The ErcotGetNotifications.xsd currently has a different target name space from the other xml schema files –ErcotGetNotifications.xsd has http://www.ercot.com/schema/2010- 01/nodal/ews/notifications/messagehttp://www.ercot.com/schema/2010- 01/nodal/ews/notifications/message –The other schema files have http://www.ercot.com/schema/2007-06/nodal/ewshttp://www.ercot.com/schema/2007-06/nodal/ews A market participant has requested that we change the target name space to match the others We will proceed with this change in the next version of the External Interfaces Specification, unless other MPs object (having already completed their implementation of this web service) Please let us know at the markettrials@ercot.com email address if you have an objection or opinion on this topic by COB Wednesday, May 12markettrials@ercot.com Will also send an email about this to the market trials web services contacts that we have on file http://nodal.ercot.com 40

41. http://nodal.ercot.com 41 Q&A Q&A / Open Forum

42. Appendix –DAM Kickoff slides –Pre- and post-DAM reports –Special Topics http://nodal.ercot.com 42

43. http://nodal.ercot.com 43 Objectives Objectives of Phase 4.0 DAM/RUC Market Trials: Execute DAM, RUC, and SASM in the Market Trials environment twice a week Generate awards, notifications, and reports

44. http://nodal.ercot.com 44 Entry Criteria ERCOT Entry Criteria for Phase 4.0: ERCOT has completed required integration testing for Phase 4.0 functionality ERCOT has published all known, market-relevant defects to Market Participants via the Readiness Center Market Participant Entry Criteria for Phase 4.0: QSEs have met the system requirements (digital certificate with ‘MMS Trader’ role assigned, etc.) QSEs have completed the qualification testing and have confirmed their ability to use Web Services or the Market Manager to submit transactions necessary to support Day-Ahead Market Trials

45. Summary of QSE Activities QSEs with Resources: Maintain SCED offers and ensure Start-Up and Minimum Generation Offers are available prior to the Day Ahead 10:00 a.m. (Central) deadline Submit AS Offers Update COP after DAM, DRUC, HRUC starting 4/13 QSEs with Load: Self-Arrange requested amount of AS Obligations Bid a portion of their Load in the DAM (see example on next slide). In general, this should take the form of an Energy Bid but during the last week of April, can also be in the form of a PTP Obligation Bid. –Tuesday- 80% of QSE’s forecasted Load –Thursday- 120% of QSE’s forecasted Load http://nodal.ercot.com 45

46. Summary of QSE Activities QSEs with Load (cont’d): Example for load bids All QSEs: May submit a limited amount of DAM Energy Only Offers and DAM Energy Bids that do not represent actual Resources or Loads (virtual bids and offers) – limit is up to a MW quantity total contained within a certain number of transactions per hour. PTP Obligation Bids will be limited as well Details with dates on next slide http://nodal.ercot.com 46

47. http://nodal.ercot.com 47 Schedule/Key Dates Week 1Week 2Week 3Week 4Week 5 Note: Dates are DAM execution days4/1/2010 4/6/2010 & 4/8/2010 4/13/2010 & 4/15/2010 4/20/2010 & 4/22/2010 4/27/2010 & 4/29/2010 Objective Connectivity / Execution AS co- optimization Network constrained + Initial DRUC DAM + DRUC DAM + DRUC + HRUC + SASM Network ConstraintsNone Included Self-Arranged AS Requested100%50% Actual Load Bid MW Requested 80/120% forecasted load 80/120% forecasted load 80/120% forecasted load 80/120% forecasted load Virtual Bids / Offers Up to 5 transactions totaling 50 MW/QSE/hr Up to 10 transactions totaling 100 MW/QSE/hr Up to 10 transactions/ QSE/hr PTP Obligations Up to 5 bids totaling 50 MW/QSE/hr None Up to 5 bids totaling 50 MW/QSE/hr Up to 5 bids totaling 50 MW/QSE/hr (unless the bid represents QSE's load) NOIE CRR Offers Allocated CRRs only None Allocated CRRs only COP UpdatesNot needed After DAM and DRUC After DAM, DRUC and HRUC DRUCNone DRUC Thursday DRUC after each DAM HRUCNone Limited SASMNone Yes

48. http://nodal.ercot.com 48 Activities Market Participant Activities: Submit, update, and cancel DAM submission items, while keeping within the guardrails. –Three-Part Supply Offers (including Minimum Energy Offer and Startup Costs) –COP –AS Offer –AS Self-Arrangement –Energy-Only Offers –Energy Bids –PTP Obligation Bids –CRR Offer (for NOIEs only) Report any issues to the Market Trials Team at markettrials@ercot.commarkettrials@ercot.com Download and review pre-DAM and post-DAM report postings Download and review RUC postings, as applicable Download and review SASM posting, as applicable Update COP (after DAM, RUC) Submit self-selected credit limit to ERCOT, if desired, as often as weekly

49. http://nodal.ercot.com 49 Activities ERCOT Activities: Execute DAM (including Phase 2 Validation), DRUC, HRUC and SASM periodically Generate Awards, Day-Ahead LMPs/SPPs, and other reports Communicate DAM/RUC/SASM reports and outputs to the market via Market Information System (MIS) postings Verify QSE submission activities Work with Market Participants to resolve issues Update Counterparty credit limits with self-selected credit limits submitted by MPs

50. Other Note: All transactions will be supported. Trade submission and confirmation (Energy, Capacity and AS Trades) may be exercised at this time. DAM notifications will be active. Phase 2 Validation process will be active and supported. QSE transactions that do not follow the guidelines are subject to cancellation at ERCOT’s discretion. ERCOT may run DAM on non-supported days. No QSE participation is requested, and ERCOT staff will not be available to answer questions regarding the outputs of these non-supported processes. CRR information from the market trials auction conducted in March for the month of April will be integrated into the market system. CRR Offers (by NOIEs) must contain CRR IDs from this auction in order to be valid. http://nodal.ercot.com 50

51. http://nodal.ercot.com 51 Exit Criteria ERCOT Exit Criteria ERCOT completes DAM execution with Market Participant data, as planned ERCOT completes RUC execution with Market Participant data, as planned ERCOT completes SASM execution with Market Participant data, as planned Market Participant Exit Criteria Each QSE participates in at least 50% of the available scheduled DAM executions by successfully submitting the relevant transactions as tracked on the DAM participation dashboard

52. http://nodal.ercot.com 52 Dashboard

53. MP16 Day-Ahead Market Participation  Requires at least 50% participation in Market Trials Day Ahead Market runs (includes all sub-QSEs)  Metric is reported up to the 168 Hour Test  80% of Load and 80% of Generation participation required to meet the metric  Light up date of 4/1 for GREEN/WHITE and 4/21 for AMBER/RED  Participation equals any DAM-specific transactions (bids, offers, or AS self- arrangements) Nodal Scorecard Reminder http://nodal.ercot.com 53

54. Supplemental Materials Slide 54 Reference and DescriptionLocationVersion External Interfaces Specification http://nodal.ercot.com/readiness/sandbox/index.html1.19 Explanation of Market Submission Items http://nodal.ercot.com/readiness/markettrials/connectivity/in dex.html 0.26 Market Manager User Guidehttp://nodal.ercot.com/readiness/markettrials/connectivity/in dex.html 0.06 MMS Requirementshttp://nodal.ercot.com/docs/pd/mms/index.html#reqVarious Market Connectivity Handbookhttp://nodal.ercot.com/readiness/markettrials/connectivity/in dex.html 0.97 DAM/RUC Known Issues Listhttp://nodal.ercot.com/readiness/markettrials/dam/index.ht ml N/A Web Services XSDshttp://nodal.ercot.com/readiness/sandbox/index.html1.3.19 Sample Reports, Extracts, and DDLs http://nodal.ercot.com/readiness/reports/index.htmlVarious DAM ERCOT Operating Procedures http://nodal.ercot.com/readiness/markettrials/dam/index.ht ml 2.0 DRUC/WRUC ERCOT Operating Procedures http://nodal.ercot.com/readiness/markettrials/dam/index.ht ml 0.2 http://nodal.ercot.com 54

55. http://nodal.ercot.com 55 Report Postings Posted by 6 am: Ancillary Services (AS) Plan Load Ratio Shares (these will be static based on Zonal production data as of October 16, 2009) * AS Obligations * Wind Generation Resource Power Potential (WGRPP) forecast * and Aggregated WGRPP forecast List of all Settlement Points and the mapping to Electrical Buses Load forecasts for ERCOT system, Weather Zones and Load Zones Load forecast distribution factors Distribution Loss Factors and forecasted Transmission Loss Factors Weather assumptions * Denotes MIS Certified reports

56. http://nodal.ercot.com 56 Report Postings Posted after each DAM: Awards (AS Offers, Energy Offers, DAM Energy-Only Offers, DAM Energy Bids, CRR Offers, and PTP Obligation Bids) * DAM Clearing Price for Ancillary Services (MCPC) Day-Ahead hourly Settlement Point Prices (SPPs) Day-Ahead hourly Locational Marginal Prices (LMPs) Shadow Prices Quantity of AS Offers Aggregated AS Offer Curve Total quantity of energy (in MWh) bought and sold in DAM See DAM Handbook for a list of all DAM/RUC/SASM reports available starting in Phase 4.0 - http://nodal.ercot.com/readiness/markettrials/dam/index.html. See MIS Handbook for a comprehensive list of reports available - http://nodal.ercot.com/readiness/markettrials/mis/index.html.http://nodal.ercot.com/readiness/markettrials/dam/index.html http://nodal.ercot.com/readiness/markettrials/mis/index.html * Denotes MIS Certified reports

57. Special Topics Phase 2 Validation reports and process Phase 2 validation re-evaluates all submitted transactions at 7 am in the day-ahead with updated information, such as AS Obligation, CRR ownership, credit limits, etc. If there is a validation error, ERCOT will cancel the transaction We send a notification that a Phase 2 report is available for a particular transactions type, and notification containing the cancellation for the transaction. You can query for the Phase 2 report via web service or on the Reports page of the Market Manager in order to view the reason for the cancellation. Correct and resubmit prior to 10 am. Note that submissions are locked out during the Phase 2 process, which is currently taking about 15 minutes to complete. http://nodal.ercot.com 57

58. Special Topics Day-Ahead Self Commitment DAM clearing engine treats your TPO differently if you submit Startup and Minimum Energy (SU/ME) costs as $0 vs. NULL If you submit with SU/ME as $0, DAM engine treats this as a normal offer where the QSE is not requesting SU/ME to be covered. HSL/LSL constraints will be respected. Also, if you are selected for an online Ancillary Service, you will also be awarded at least LSL on your offer curve. If you submit with SU/ME as NULL, DAM engine is signaled to ignore the HSL/LSL constraints for the resource. In this scenario, the offer curve submitted will start at 0 MW and go to the max MW quantity desired – again, DAM will ignore LSL/HSL constraints. If the offer curve submitted doesn’t start at 0 MW, it will be extended to 0 MW by DAM. If the resource is selected for Ancillary Services, no requirement to also award TPO at LSL (since no LSL constraint honored in this case). http://nodal.ercot.com 58

59. Special Topics Day-Ahead Self Commitment The purpose of the NULL: It allows a QSE to use part of a Resource to serve its own load, and then offer in the rest to the DAM and enable the offer to be co- optimized with its AS Offer. Example: A Resource has 100 MW LSL and 400 MW HSL, and the QSE has already committed 300 MW of the Resource through some other mechanism. The QSE wishes to offer the remaining 100 MW, which would otherwise be ignored due to the 100 MW LSL. Then going into real-time, so QSEs will need to update their TPO to cover the full capacity of the resource, from LSL to HSL, rather than from 0 MW. To do that if the resource is awarded in the DAM, the QSE must provide a reason code, which is DSCM. This functionality came about due to TPTF subgroup on the issue. It has not yet been added to the protocols but will during our protocol traceability/cleanup effort. http://nodal.ercot.com 59

60. Special Topics Bid/Offer efficiencies ERCOT has identified efficiencies in Bid/Offers submission with regard to the format of submission This applies to all transaction that use a Bid ID or an Offer ID (Energy Only Offers, Energy Only Bids, PTP Obligation Bids, and CRR Offers) Preference is for QSEs to submit the same Bid/Offer ID for each hour in the submission, versus submitting a different Bid/Offer ID for every hour. The market system treats the submission the exact same way, regardless of which format is used Using the preferred format will optimize DAM system performance For xml examples detailing this issue, please view a document that will be posted along with this presentation on the calendar page at http://www.ercot.com/calendar/2010/04/20100409-MT http://www.ercot.com/calendar/2010/04/20100409-MT This was discussed at NATF 4/6, we send an email to the nodal technical contacts that we have on file for all QSEs, and we will add it to the External Interfaces Specification http://nodal.ercot.com 60

61. Special Topics JOUs and COP consistencies In DAM, if the different owners of the jointly-owned unit have submitted conflicting COP statuses for the current day, online statuses will overwrite offline statuses when DAM is determining the initial condition of the unit (i.e., is the unit online or offline at the start of the next operating day). In RUC, if the different owners have conflicting COP statuses for the next operating day: –If any owner has OUT status for any hour then the unit is considered OUT. –If all owners have submitted a COP, and at least one of them has an online status in a particular hour then the resource status for the unit is online (unless any owner has OUT) http://nodal.ercot.com 61