1. http://nodal.ercot.com 1 Market Trials DAM/RUC/SASM Weekly Update March 19, 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 Antitrust Admonition General Reminders/Updates DAM/RUC/SASM –Objectives –Entry Criteria –Activities –Schedule / Key Dates –Exit Criteria –Dashboards DAM Participation Metric Question and Answers / General Discussion 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 General Reminders/Updates Network Model Update –Last model load was on 3/17/2010 An updated settlement points and MP short name list is posted at http://nodal.ercot.com/readiness/markettrials/index.html http://nodal.ercot.com/readiness/markettrials/index.html –Next scheduled load is 3/31/2010 Reminder of market call schedule: 09:00 AM-10:00 AM Outage Scheduling 10:00 AM-11:00 AM Congestion Revenue Rights 11:00 AM-12:00 PM Day Ahead Market / RUC / SASM 12:00 PM-01:00 PM Break 01:00 PM-02:00 PM Real Time Market / LFC –WebEx Details will be posted at: http://www.ercot.com/committees/nodal/mt/ http://www.ercot.com/committees/nodal/mt/

6. http://nodal.ercot.com 6 General Reminders/Updates Reminder of Phase 4 Kick-Off Seminar next Thursday –Thursday, March 25 9am-3pm, Austin Airport Hilton –http://www.ercot.com/calendar/2010/03/20100325-MThttp://www.ercot.com/calendar/2010/03/20100325-MT –WebEx available Reminder of published Market Trials Phase 4 Handbooks –Outage Scheduler covering Phase 4.0 http://nodal.ercot.com/readiness/markettrials/os/index.htmlhttp://nodal.ercot.com/readiness/markettrials/os/index.html –Real Time Market / LFC covering Phase 4.0 http://nodal.ercot.com/readiness/markettrials/rtm/index.htmlhttp://nodal.ercot.com/readiness/markettrials/rtm/index.html –CRR covering Phase 4.0 http://nodal.ercot.com/readiness/markettrials/crr/index.htmlhttp://nodal.ercot.com/readiness/markettrials/crr/index.html –Settlements / COMs covering Phase 4.0 http://nodal.ercot.com/readiness/markettrials/coms/index.htmlhttp://nodal.ercot.com/readiness/markettrials/coms/index.html –Day-Ahead Market covering Phase 4.0 http://nodal.ercot.com/readiness/markettrials/dam/index.htmlhttp://nodal.ercot.com/readiness/markettrials/dam/index.html

7. http://nodal.ercot.com 7 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

8. http://nodal.ercot.com 8 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

9. 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 9

10. 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 10

11. http://nodal.ercot.com 11 Schedule/Key Dates Week 1Week 2Week 3Week 4Week 5 4/1/2010 4/6/2010 & 4/8/2010 4/13/2010 & 4/15/2010 4/20/2010 & 4/22/2010 4/27/2010 & 4/29/2010 DAM / RUC / SASM Objective Connectivity / Execution AS co- optimization Network constrained solution 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 DRUCNone DRUC after each DAM HRUCNone Limited SASMNone Yes

12. http://nodal.ercot.com 12 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

13. http://nodal.ercot.com 13 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

14. 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 14

15. http://nodal.ercot.com 15 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

16. http://nodal.ercot.com 16 Dashboard

17. 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 17

18. Supplemental Materials Slide 18 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 18

19. http://nodal.ercot.com 19 Q&A Q&A / Open Forum