1. 1 Market Operations Presentation Board of Director’s Meeting January 22, 2003

2. 2 Reregulation & Markets Evolving Paradigm- Regulation of Market Institution(s)Regulation of Market Participants Keeping the Lights On – system reliability Get Statements Right and On Time – retailer of record and imbalance accounting Capacity Planning & Forecasting – transmission and generation adequacy Markets – price discovery and credit

3. 3 Operating Perspective ESI IDS = Approx. 5,500,000

4. 4 Get the statements right…and out on time Advocacy: Market ParticipantsAdvocacy: ERCOT Internal Measurement: Customer SatisfactionMeasurement: Throughput Director Retail Services Director Wholesale Services Documentation & Reporting Registration & Support Transaction Support Q/A & Testing Manager of Development Renewables & TCR Wholesale Client Services Settlements & Billing Load Profiling & Data Agg EPS Metering

5. 5 Get the statements right…and out on time Advocacy: Market ParticipantsAdvocacy: ERCOT Internal Measurement: Customer SatisfactionMeasurement: Throughput Director Market ServicesMarket Operations Transparency & Reporting Client Services Retail Renewables & TCR Wholesale Client Services Manager of Development Registration & Support Transaction Support Wholesale Client Services Manager of Development Q/A & Testing Settlements & Billing Load Profiling & Data Agg EPS Metering ESI ID/Rep of Record

6. 6 Status of True-up Settlements Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2003 2004 April 26, 2003 Date we expect to be back to six month after the trade day True-Up Settlements if current pace of True- ups continue January 20, 2003 259 re-settlements performed to date 154 operating days in 2001 105 operating days in 2002 (Current True-up Operating Day April 03, 2002) December 29, 2003 Date we expect to be back to six month after the trade day True-Up Settlements Contingent on April 01, 2003 re-start of true-up for 01-01-2002