1. Nodal Program Update Jason Iacobucci Nodal Program Manager Technical Advisory Committee 6 May 2010

2. 2 Technical Advisory Committee3 June 2010 Agenda Program Status Issue Escalation Policy LFC Overview Cut-Over Overview Market Readiness Follow-Up Discussion

3. 3 180 Days to Go-Live Technical Advisory Committee3 June 2010 Phase 5: Full Functionality 0 Items Impacting Go-Live Date

4. 4 180 Days to Go-Live Achievements within Market Trials: CRR Four monthly CRR auctions and one Balance of the Year auction have been completed and invoiced Real Time Markets SCED Real Time settlements DAM / RUC DRUC has been running in conjunction with DAM for 5 weeks DAM Settlements are being completed in conjunction with the DAM Settlement and extraction data has been available since Mid-May Continual strong participation from the Market Participants (Averaged 180 QSEs / DAM run) DAM / RUC 5 times per wk Ancillary Services SASM –Will run as needed with Ancillary Services Closed Loop LFC 2 hour test will occurred last month Credit Credit Module went into effect on May 14 th Technical Advisory Committee3 June 2010 Market Trials has been running for 16 weeks Market Quality Testing and Operational Readiness

5. 5 180 Days to Go-Live Technical Advisory Committee3 June 2010 Market Trials has been running for 16 weeks Market Quality Testing and Operational Readiness Upcoming Milestones for Market Trials: Closed Loop LFC 8 hour will occur in mid June Reporting support for DAM/RUC/SASM continues to be upgraded CMM Module for NPRR 206 168 HR Test System Cut-Over Go-Live

6. 6 Integrated Nodal Timeline – Go-Live December 1 st, 2010 Technical Advisory Committee3 June 2010

7. 7 2010 Market Trials Timeline – Go-Live December 1 st, 2010 Technical Advisory Committee3 June 2010

8. 8 180 Days to Go-Live Technical Advisory Committee3 June 2010 DAM Summary

9. 9 Test Activities CRRRTMDAMOSEMSCOMS NMMS CMMREGREPORTS Functional Stability System Stability Business Stability Go-Live Functional Completeness Solution/ Data Completeness Solution/ Data Quality FA/SA TEST INTEGRATION TEST BUSINESS PROCESS TEST PERFORMANCE & LOAD TEST Model Load /Validation Processes MARKET TEST UI Performance Improvements Contingencies ICCP Quality SE Quality DRUC DAM RTM CRR INVOICES HRUC SASM SCED Model Baseline ICCP Point Checkout Technical Advisory Committee3 June 2010 Business Quality Integration 1 Day Dual Entry Testing May Auction Integrated Credit Management Integration Phase 5:Full Functionality Phase 4: DAM/RUC Phase 5:Full Functionality RARF SEM MT 2.1 MT 3.0 MT 4.0MT 5.0

10. 10 Nodal Defects Trends - High Priority (Must Fix Before Go-Live) Technical Advisory Committee3 June 2010 Defect counts decreased due to planned defect migrations into Nodal ITest. Primary source for Open defect counts are EIP, EMS, MMS, and NMMS.

11. 11 Nodal Program Risks & Issues Technical Advisory Committee3 June 2010 Risk/IssueImpacted Milestone TargetCategoryProbabilitySeverityStatus Market Interaction Operating Level Agreements (OLAs) Need to determine operating level agreements associated with market interactions to assist ERCOT in establishing operational thresholds: -Network Model Management -CRR sizing -Reporting ProgramApril/ May 2010 Scope / Budget HighLowPhase 4 OLA definitions complete Phase 5 OLA definitions drafted, pending approval Update given at NATF on 06/01 200,000 submissions total; NATF to discuss on 06/01 Reports continue to become available as Market Trials activities ramp-up. Performance monitoring continues Market Design Assessment Risk around the protocol traceability project and the market results as each phase of market trials becomes active. ProgramAugust 2010 Scope / Budget LowHigh Building experienced market design team to review and assess design and protocol alignment with market trials results Operational Readiness Operational readiness of the Nodal systems and business processes are an increasing risk at this point in the program ProgramSeptember 2010 Scope / Schedule/ Budget MedHighOrganizational capability assessments and improvement recommendations are under review by executive management The PMO has and will continue to identify critical deficiencies and implement mitigation strategies to ensure delivery

12. 12 Issue Escalation Policy For Market Participants ERCOT Nodal personnel are pulling back from non-Go-Live interaction within subcommittees and task forces Avenues for Question Resolution and Issue Escalation –Question Resolution Current Market Trials Calls Email to markettrials@ercot.commarkettrials@ercot.com –Issue Escalation Issue brought up at Subcommittee, Working Group, or Task Force –Discussed without ERCOT involvement Issue is brought before NATF for overall market discussion and ERCOT opinion –NATF follows up on issue –NATF brings issue forward before TAC Voting Items are brought before TAC Technical Advisory Committee3 June 2010

13. 13 Reminder of Nodal Offer Caps and Prices Technical Advisory Committee3 June 2010 Prices higher than the $2,250 offer cap were observed in the Real-Time Market in the past month -Per PUCT rule and Protocols (4.4.11), there are offer caps from resources, but not price caps -Also described in protocols are shift factors and power balance penalties that can result in prices above offer caps On May 5, from 3-6pm there was a scenario that created prices up to $3,759: - Transmission constraints were active in nodal - Group of resources were lost in a data loading process resulted in under-generation Resulted in a simulated under-generation situation with active constraints As designed, the Real-Time market invoked penalty factors for both: - Under-generation (power-balance) penalty of $3,001 - Constraints/congestion added on top based on shift factor times penalty factor 345 kV: $4,500/MW 138 kV: $3,500/MW 69 kV: $2,800/MW - Penalty values for market trials set in Congestion Management Working group with ERCOT, Market, and IMM - Price spikes may be only local and may not dramatically increase Load Zone price that Load is settled on - Final penalty factors to be set through ERCOT and stakeholder process and brought to TAC/Board of Directors prior to go-live. Even with NPRR091 of $180 or 18 heat rate x GasIndex, prices can be as high as $3,000

14. Scott Middleton Market Trials LFC Test Overview

15. 15 Technical Advisory Committee 2-Hour LFC Test Update Test ActivitiesApprox Timeline Market WebEx start8:00 AM ERCOT - MP pre-test troubleshooting period8:00 AM - 11:15 AM Test start11:15 AM Zonal-Nodal cutover11:15 AM - 11:55 AM System frequency controlled by nodal systems11:55 AM - 12:25 PM Nodal-Zonal cutover12:25 PM - 1:00 PM Test end1:00 PM Market WebEx end1:15 PM 3 June 2010

16. 16 Technical Advisory Committee 2-Hour LFC Test Update 2-Hour LFC Test Update (continued) Constraints (activated in both Nodal and Zonal)Start Time Garrott - Midtown OC3Loss of Greens Bayou - Gable and Hardy - Crocket 138KV overloads Midtown - Garrott 138KV - 102% of 317 MVA rating. 10:45 AM Bellaire Autotransformer OC3Loss of Bellaire 345/138KV autotransformer 2 overloads Bellaire 345/138KV autotransformer 4 - 101% of 600 MVA rating. 11:45 AM 3 June 2010

17. 17 Technical Advisory Committee 2-Hour LFC Test Update 2-Hour LFC Test Update (continued) Common ICCP Issues Identified/Solved During the Test  On/Off status incorrect for LBST/RBST points  Resource Status Codes (RSTs) coming in as SUSPECT  OFF RST being sent for units that were online and generating MW  RST of ON instead of ONREG being sent for units with REG Responsibilities  RST of ONREG being sent for units in hours where they had no REG Responsibility  Non-zero LSLs being sent for WGRs  HSLs for WGRS being set to capacity rather than un-curtailed MW output  MPs updating REG Responsibilities slowly  RegUp & RegDown Responsibilities switched for one another  AS Responsibilities not lining up between Nodal and Zonal (i.e., wrong AS Type or wrong MW value) 3 June 2010

18. Lisa Hoover Cut-Over Lead Cut-Over Kick-Off Overview

19. 19 http://nodal.ercot.com 19

20. 20 How Time Frame Was Defined –First triggering event necessary to support Cut-Over; includes both business and technical aspects o Pre Go-Live Activities currently ~120 days out (August) o Post Go-Live Activities related to Nodal currently ~180 days after go-live (June 2011) Scope of Cut-Over for ERCOT –Cut-Over Planning Activities –Training on System and Business Processes –Security and Compliance –Data Preparation, Migration and Reconciliation –Contingency / Fall-Back Plans –Organization and Support Structure –Communication Technical Advisory Committee Cut Over Scope Nodal Market Readiness 3 June 2010

21. 21 Technical Advisory Committee Timeline Development Nodal Market Readiness How We Worked Through the Development Process: -Started with Timeline of Business Applications with Earliest Go-Live Dates -Looked at Predecessors and Successors Applications -Incorporated Mid-Stream Dependency Applications -Captured Outstanding Questions o Developed List of Decisions, Proposed Assumptions and Implications Example of Artifacts Taken into Account: -Texas Nodal Market Go-Live Procedure -Texas Nodal Market 168-Hour Test Procedure -Market Trials Real-Time Market Testing Market Participant Handbook 3 June 2010

22. 22Technical Advisory Committee Key Cut-Over Activities Nodal Market Readiness OctoberNovember Market Trials Market Trials Completes Network Model Deadline to Submit Changes for December Model Network Model Posted to Market December Network Model in Production Outage Scheduler Enter Production Outages for December and Beyond CMM Post ACL Can Post Additional Collateral for December 2010 Auction CRR Begin Accepting PCRR Nominations for December 2010 Auction Run December 2010 CRR Auction Settlements & Billing Payment Due for December 2010 CRR Auction ERCOT Financially Cut-Over to Nodal DAM Market Submission OpensDAM Live RTM Market Submission Opens SCED Live (Set All Competitive Constraints as Non-Competitive) September2010December 3 June 2010 Key Cut-Over Activities

23. 23 Technical Advisory Committee Cut-Over Timeline Nodal Market Readiness 3 June 2010

24. 24 Technical Advisory Committee Market Participant Role and Responsibilities and Responsibilities Nodal Market Readiness A Glance at Market Participant Roles and Responsibilities Network Model Nodal Protocol Section 3.10 goes into effect (Sept. 1) TAC Approval – July 1 st Board Approval – July 20 th Market Notice – July 30 th September 1 st Deadline to Submit Changes for the December Network Model October 15 th Market Validation of the December Network Model December 1 st December Network Model in Effect* * load date tbd 3 June 2010

25. 25 Technical Advisory Committee Market Participant Role and Responsibilities Nodal Market Readiness A Glance at Market Participant Roles and Responsibilities Outage Scheduler Nodal Protocol Section 3.1 goes into effect (Sept. 1) TAC Approval – July 1 st Board Approval – July 20 th Market Notice – July 30 th September 1 st Market Participants to Enter Production Outages for December and Beyond September 15 th Market Participants Having Outages Occurring in December and Beyond Should Be Synchronized Between Zonal and Nodal September 15 th ERCOT to Begin Approving/Rejecting Outages in Production using Both Zonal and Nodal Systems 3 June 2010

26. 26 Technical Advisory Committee Market Participant Role and Responsibilities Nodal Market Readiness A Glance at Market Participant Roles and Responsibilities Credit, CRR and Settlements Nodal Protocol Section 7 goes into effect (Oct. 13) TAC Approval – August 5 th Board Approval – August 17 th Market Notice – September 13 th October 2 nd ERCOT to Pull Network Model and Outage Data October 12 th – 20 th ERCOT to Determine Creditworthiness October 13 th ERCOT to Begin Accepting PCRR Nominations for the December 2010 Monthly CRR Auction October 20 th ERCOT to allocate PCRRs for NOIEs for the December 2010 Monthly CRR Auction Network Model for the December 2010 Monthly CRR Auction Posted October 20 th Model Posted for December 2010 Monthly CRR per Nodal Protocol 3.10.1 October 21 st ERCOT to Post ACLs October 24 th ERCOT to Post the December 2010 Monthly CRR Auction Notice November 3 rd ACLs Posted via MIS 3 June 2010

27. 27 Technical Advisory Committee Market Participant Role and Responsibilities Nodal Market Readiness A Glance at Market Participant Roles and Responsibilities Credit, CRR and Settlements (continued) November 4 th – 10 th Start of the Bid/Offer Submission Window for December 2010 Monthly CRR Auction November 7 th CRR Locks Credit November 9 th Can Post Additional Collateral for December 2010 Monthly Auction November 11 th Run the December 2010 Monthly CRR Auction November 16 th Publication of the December 2010 Monthly CRR Auction Results November 17 th Publication of the December 2010 Monthly CRR Invoice November 22 nd Payment Due for December 2010 Monthly CRR Auction November 23 rd ERCOT to Pay CRR Account Holders Owed from December 2010 Monthly CRR Auction 3 June 2010

28. 28 Technical Advisory Committee Market Participant Role and Responsibilities and Responsibilities Nodal Market Readiness A Glance at Market Participant Roles and Responsibilities Markets, Operations and Remaining Protocol Sections November 23 rd 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 November 23 rd Market Submission Opens (7 Day Operational Window) November 30 th ERCOT Grid Operations to Switch to Nodal Control and Execute a Binding DA Market-- o 10:00 Run DAM for Dec.1 o 14:00 Initiate LFC Control of System o 14:30 Run DRUC o 18:00 Adjustment Period for Dec. 1, and run HRUC hourly o 24:00 Settle Market on Nodal Real-Time Prices and Dispatch 3 June 2010

29. 29 Assess Your Readiness Continue to Actively Engage in Market Trials Cut-Over 60-Day Outlook Updates Through Board of Directors, NATF, and TAC ERCOT to Communicate Network Model Transition Plan (June) Update on Cut-Over to be released on a market call or seminar (July) Additional Cut-Over Details Technical Advisory Committee Next Steps Nodal Market Readiness 3 June 2010

30. 30 Update on Cut-Over and Retirement to be released on a market call or seminar (September) End Dates of Parallel Support Decommissioning of Systems Market Launch Plan (September) Update on Cut-Over and Contingency Plans to be released on a market call or seminar (October) What Do We Do If xyz fails? How Long Would It Take To Fail Back to Zonal if We Had to? Be Aware of Nodal Protocol Dates and Actions Requested Technical Advisory Committee Next Steps Nodal Market Readiness 3 June 2010 Next Steps

31. Vikki Gates Readiness & Transformation Market Readiness

32. 32 2010 Participant Readiness Touch Points Technical Advisory Committee3 June 2010 Meetings Training Outreach Market trials August July June May NATF 5/4 Nodal 101 Transmission 101 Generation 101, 201 CRR – instructor-led NMMS Economics of LMP NOIE QSE Operations Standby site visits Metrics monitoring Bi-weekly TSP calls MRS #4 Cutover Weekly Trials calls 2 hr system-wide LFC test Phase 5 Market Trials initiates NATF 6/1 and 6/29 Nodal 101 LSE 201 Generation 101, 201 Economics of LMP CC Workshop VC Workshop AS Workshop Retail Workshop TSP Outage Scheduler Road Show begins Phase 5 Metrics launch Weekly Trials calls 8 hr system-wide LFC test Full market trials functionality continues TBD Qualification assessment (MP17) Standby site visits Weekly Trials calls 48 hr system-wide LFC test Verifiable costs in execution NPRR206 in execution Nodal 101 Transmission 101 Generation 101, 201 Basic Training Program NOIE QSE Operations Settlements 301 Weekly Trials calls Prepare for 168 hr test NATF 8/3 and 8/31 Nodal 101 Transmission 101 Generation 101, 201 Basic Training Program NOIE QSE Operations Settlements 301 Standby site visits

33. 33 Next 60-days of Workshops Technical Advisory Committee3 June 2010 Course Start DateLocation Transmission 101June 1ERCOT Met Center (Austin) Combined Cycle WorkshopJune 2Suez Energy (Houston) Verifiable Cost WorkshopJune 3Suez Energy (Houston) Generation 101June 8LCRA (Austin) Market Settlements 301June 9Suez Energy (Houston) Generation 201June 17LCRA (Austin) Basic Training ProgramJune 21ERCOT Met Center (Austin) Credit WorkshopJune 17ERCOT Met Center (Austin) Load Serving Entity 201June 23Austin Energy Town Lake Center (Austin) Credit WorkshopJune 17ERCOT Met Center (Austin) ERCOT 101 for Wind GenerationJune 28ERCOT Met Center (Austin) Transmission 101June 29Energy Plaza (Dallas) Transmission 101July 13CenterPoint Energy (Houston) Enrollment at: http://nodal.ercot.com/training/courses/index.htmlhttp://nodal.ercot.com/training/courses/index.html

34. 34 Technical Advisory Committee Metrics Roadmap PURPLE ORANGE Timing and Design Confirmed Timing subject to change, design in progress MP15A MP16 MP20 MP3 MP6 MP11 MP14C E9 E1 N2 EMO9(B) CRR3 EMO6 MO4 MO5 CO1 CO2 CO3 CO4 CO5 CO6CO7 CO8CO9 C10 E7 E11 E12 EMO2 EMO3 C1-C10 EMO13 MO7 CRR4 E5 IMM1 R0 R2 R3 MP15B MP3 N1 E3 E10 R1 MP17 EMO9(D) EMO1 MO9 MO8 MO3 MO10 EMO10 EMO9(C) EMO7 EMO9(A) EMO8 New Metric MP23 3 June 2010

35. 35 CRR Metrics Technical Advisory Committee Metric Name Current Score Applies to WeightGreen %Yellow %Red % Not Scored % Primary CriteriaNotes Market Participant Metrics MP15(B) CRR Connectivity Qualification GreenCRRAHs Even weighting 91.4%0.0%4.3% Successful submission CRR transactions 64/70 CRRAHs qualified. CRR3 Operation of CRR Auctions and Allocations GreenCRRAHs Even weighting 93.8%0% 6.2% Participation in at least one of the last two auctions or allocations. AMBER/RED scores light up 5/5/2010. 60/64 CRRAHs with adequate participation in May or Balance of Year auction or allocation ERCOT Metrics CRR3 Operation of CRR Auctions and Allocations AmberERCOTN/A Auction results distributed to participants per schedule in CRR Handbook 5/2 “2010 Balance of year auction results” moved to 5/5 due to Nexant resources onsite. 5/6/2010ERCOTN/A Allocated Revenue Rights in statistical sample = 100% accurate Results of Source/Sink prices / CRR Clearing prices report (avail 5/6) CO8 Verify CRR Auction Invoices GreenERCOTN/A CRR Auction Result for MP(n) – CRR Auction Invoices for MP(n) = 0$ S&B validated that auction invoices reflected awards per CRRAH for March, April, and May auctions,. GreenERCOTN/A100%0% System Generated CRR Auction Invoices not posted = 0 March 2010 Monthly = 40 of 40 April 2010 Monthly = 38 of 38 May 2010 Monthly = 48 of 48 Active Phase 3 Metric Notes: 1. Added CRR3 participation threshold (market segment) - >= 80% participation (GREEN), >= 50% and < 80% (AMBER), < 50% (RED) 3 June 2010

36. 36 Real-Time Metrics Technical Advisory Committee Metric Name Current Score Applies to WeightGreen %Yellow %Red % Not Scored % Primary CriteriaNotes Market Participant Metrics MP3 Market Submissions Connectivity Qualification GreenQSERs Generation Ratio Share 99.0%1.0%0.0% Successful submission of RT and DAM transactions 81/84 QSERS Qualified (includes QSEs with Load Resources). GreenQSEs Even weighting 96.7%.06%.05%2.2% 176/182 QSEs qualified. Below 95% threshold for overall GREEN. MP15-A Real-time Market Participation GreenQSERs Generation Ratio Share 99.0%1.0%0.0% Weekly average of daily SCED submissions 77/79 QSERs above 95% weekly average for SCED submissions. EMO6 Individual LFC Testing GreenQSERs Generation Ratio Share 91%0% 9% 80% of system-wide generation has completed individual QSE tests for LFC 56/76 QSERs completed their individual LFC test ERCOT Metrics MO4 Verify SCED Execution Quality GreenERCOTN/A100%0% All successful SCED executions passed the post-execution price validations. 4/6-4/19 period - 4,030 Price Validation runs with no rule violations MO5 Generate 6 Months of LMPs GreenERCOTN/A98.1%.0%1.9%0% 95% of SCED executions completed with LMPs posted on MIS. 4/6-4/19 period, 3,985 out of 4,063 SCED runs with LMPs posted. Active Phase 3 and 4 Metrics Notes: 1. ERCOT Criteria added to MP3 and MP15(B) – “ERCOT scores in connectivity will mirror the MP scores.” 3 June 2010

37. 37 Day-Ahead Market Metrics Technical Advisory Committee Metric Name Current Score Applies to WeightGreen %Yellow %Red % Not Scored % Primary CriteriaNotes Market Participant Metrics MP16 DAM Participation GreenQSERs Generation Ratio Share 98.9%0.0%1.1%0% Participation in 50% of the Day-Ahead Market runs 76/79 Rolling Average QSEs with Resources, 70/79 Regular AmberQSEs Even Weighting 79.1%6.0%12.1%2.8% 144/182 Rolling Average QSEs w/o Resources ERCOT Metrics MO8 Verify DAM Execution Quality 5/19/2010ERCOTN/A Red DAM executions pass the post-execution price validations Report in progress MO9 Generate DAM LMPs 5/19/2010ERCOTN/A 95 percent Day-Ahead Market execution as evidenced by Day- Ahead LMP postings Report in progress MO10 DRUC Execution 6/2/2010ERCOTN/A 95 percent DRUC execution Report in progress Notes: 1.MP16 – 10 DAM runs (as of the 5/4/2010 run) 2.MP16 – Metric is based on a 2 week rolling average. 3.MP16 – 96.5% Load participating. 3 June 2010

38. 38 Outage Scheduler Metrics Technical Advisory Committee Metric Name Current Score Applies to WeightGreen %Yellow %Red %Not Scored %Primary CriteriaNotes Market Participant Metrics MP20 Outage Scheduler Connectivity Qualification GreenQSERs Generation Ratio Share 98.1%0.0% 1.9% Successful submission of OS transactions 74/78 QSERS qualified. GreenTSPs Ownership Ratio Share 99.8%0%.02%23/25 TSPs qualified. ERCOT Metrics EMO3 Verify Outage Evaluation System Functionality 6/2/2010ERCOTN/A A test of the Outage Management Process is completed Will be reviewed at 6/1 NATF Active Phase 3 Metric 3 June 2010

39. 39 Network Modeling Metrics Technical Advisory Committee Metric Name Current Score Applies to WeightGreen %Yellow %Red % Not Scored % Primary CriteriaNotes Market Participant Metrics MP14-C TSP Model Validation GreenTSPs Ownership Ratio Share 99.9%.1%0.0% Network Model data validated by TSP 24/28 TSPs have submitted model validation e-mail to ERCOT. MP6 Telemetry Compliance with Nodal Protocols 3.10.7.5 GreenQSERs Generation Ratio Share 100%0.0% Expected State Estimator telemetry submitted. 78/78 complete. 3502 total SE points provided GreenQSERs Generation Ratio Share 100%0.0% Expected SCED telemetry submitted. 78/78 complete. 7629 SCED points provided GreenTSPs Ownership Ratio Share 99.3%0.0%.7% Expected TSP telemetry per ICCP Handbook submitted 16/17 TSPs above 95% threshold for GREEN. 357 points outstanding N2 Telemetry ICCP System Failover Green/White only QSERs Generation Ratio Share 11.8%0% 88.2% ICCP Failover test completed successfully prior to the 8-hour LFC test. 18/78 QSERs completed ICCP telemetry failover test MP18 Mapping of Resources and Loads in Private Use Networks 6/2/2010QSERs Generation Ratio Share N/A # of QSE(n) PUN Points Provided / # of QSE(n) PUN Points Expected 306 points across 7 QSEs with Resources. 15 points still assigned to TDSP. MP23 Telemetry Quality (MP to ICCP server) 7/14/2010TSPs Ownership Ratio ShareN/A # of TSP(n) Suspect/Bad points provided / # of TSP(n) points total 1356 Suspect/Bad points (97.9% good quality). 7/14/2010QSERs Generation Ratio Share N/A # of QSER(n) Suspect/Bad points provides / # of QSER(n) points total 871 Suspect/Bad points (94.9% good quality) Active 4 Metric Notes: 1.MP6 does not include 405 QSE CB and DSC points from TSP outreach. ERCOT is determining whether these rollback into the QSER MP6 measurement 3 June 2010

40. 40 Network Model Metrics Technical Advisory Committee Network Modeling Metrics Metric Name0 Current Score Applies to WeightGreen %Yellow %Red % Not Scored % Primary CriteriaNotes ERCOT Metrics EMO9(A) State Estimator Standards Performance 5/19/2010ERCOTN/A State Estimator converges 97% during monthly test period March 91.4% convergence EMO9(B) RTCA Modeling Differences 5/19/2010ERCOTN/A 95% of values matched between Zonal and Nodal Network Models - Impedances - Dynamically and Non- dynamically Rated Lines - Load Tap Settings Measurement excludes pseudo switches and multi-section lines EMO9(C) RTCA CSC Comparison7/14/2010ERCOTN/A CSC Pre-contingency SE Flows within 5% (Hourly snapshot) Measurement establishes baseline flows on Commercial lines to indicate the significance of Psuedo modeling and multi- section lines on the SE flows. EMO9(D) Validate Zonal and Nodal Security Analysis Results 9/8/2010ERCOTN/A 90% of active constraints in Zonal RTCA are also detected in Nodal RTCA To be determined EMO10 Anomalous / Auto-Disabled Telemetered Points 6/2/2010ERCOTN/A The % of Anomalous and Auto-Disabled Measurements is less than 2% of Total Measurements April Nodal 2.58% March Nodal 3.17% Zonal hovers ~ 1.7% Notes: 1. SE performance requirements in EMO12 moved to EMO9(A) 3 June 2010

41. 41 Resource Entity Metrics Technical Advisory Committee Metric NameCurrent ScoreApplies toWeightGreen %Yellow %Red %Not Scored %Primary CriteriaNotes Market Participant Metrics MP11 Resource Registration GreenREs Registered MW Capacity Ratio Share 97.7%1.82%.5%0.0% Decision Making Authority form submitted, and GENMAP validated 151/157 Resources completed. 3 June 2010

42. 42 Readiness Metrics Technical Advisory Committee Metric NameCurrent Score Applies to Percentage (if applicable) Primary CriteriaNotes ERCOT Metrics E1 ERCOT Staff Completes Training GreenERCOT100% Training plans must be adhered to for highly impacted departments 15 out of 15 highly impacted departments are up to date with their training plans. E9 Develop Nodal Procedures GreenERCOT100% Procedures developed 1 month prior an exercised in the appropriate Market Trials Phase All MT4 and MT5 are now developed and the MT3 procedures were exercised during MT3 as scheduled. MT4 procedures on target to be exercised by the end of MT4. 3 June 2010

43. 43 Questions ?

44. 44 Appendix

45. 45 Nodal Program Risks & Issues: Definitions 3 June 2010Technical Advisory Committee Definitions for Category, Probability and Severity of Risks & Issues: Category –Scope : Will require a scope change –Schedule: Will require a schedule change –Budget: Will require a budget change Probability –High : Probability to occur is ≥ 90%; perceived impact would require a Change Request over the next 1-3 months –Medium: Probability to occur is between 31 – 89%; perceived impact would require a Change Request over the next 4 -10 months –Low: Probability to occur is ≤ 30 %; not expected to require a Change Request Severity –High: Milestone impact, or budget impact >$250,000 –Medium: Milestone impact - but expected to be mitigated, or budget impact between $0 - $250,000 –Low: No milestone impact, or no budget impact

46. 46 3 June 2010 5/31/2016 120 Day Outlook What’s On The Horizon? Technical Advisory Committee

47. 47 120 Day Outlook : May Market Activities Functional Area Real-Time Market Congestion Revenue Rights Day-Ahead Market Reliability Unit Commitment Outage Scheduler COMS/Settlements Network Modeling Nodal Reports Credit Full Integration Targeted Activities for May 2010 ERCOT ramps to DAM / DRUC 5x / weekly 2hr LFC closed loop test executed ERCOT completes Balance of Year auction ERCOT executes June Monthly CRR Auction ERCOT releases credit integration SASM executed as needed ERCOT executes limited HRUC ERCOT ramps to reflect protocol timelines on a best effort basis JanFebMarAprMayJuneJulyAug Technical Advisory Committee 3 June 2010

48. 48 120 Day Outlook : June Market Activities Functional Area Real-Time Market Congestion Revenue Rights Day-Ahead Market Reliability Unit Commitment Outage Scheduler COMS/Settlements Network Modeling Nodal Reports Credit Full Integration Targeted Activities for June 2010 Operational scenarios executed 8hr LFC closed loop test executed ERCOT executes July Monthly CRR Auction DAM / DRUC Continues 5x / weekly SASM executed as needed ERCOT executes limited HRUC Protocol timelines on a best effort basis JanFebMarAprMayJuneJulyAug Technical Advisory Committee 3 June 2010

49. 49 120 Day Outlook : July Market Activities Functional Area Real-Time Market Congestion Revenue Rights Day-Ahead Market Reliability Unit Commitment Outage Scheduler COMS/Settlements Network Modeling Nodal Reports Credit Full Integration Targeted Activities for July 2010 Exercise ‘Normal State’ processes and procedures, including weekends 48hr LFC closed loop test executed DAM / DRUC executes 7x / weekly for two weeks ERCOT executes HRUC 7x24 during 7 day weeks Protocol timelines during 7 day weeks ERCOT executes August Monthly CRR Auction SASM executed as needed JanFebMarAprMayJuneJulyAug 3 June 2010Technical Advisory Committee

50. 50 120 Day Outlook : August Market Activities Functional Area Real-Time Market Congestion Revenue Rights Day-Ahead Market Reliability Unit Commitment Outage Scheduler COMS/Settlements Network Modeling Nodal Reports Credit Full Integration Targeted Activities for August 2010 August is reserved for focusing on any issues or scenarios encountered in the first 3 months of Phase 5 Real time submission continue ERCOT executes August Monthly CRR Auction SASM executed as needed JanFebMarAprMayJuneJulyAug Technical Advisory Committee 3 June 2010