1 Market Trials Real-Time Market / LFC Weekly Update August 27, 2010

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 Agenda Antitrust Admonition Environment Report –Planned / unplanned outages –Known Issues Standing Reports and Updates –General reminders / updates –Real Time Market / LFC Update –State Estimator Convergence Statistics –24 Hour Full System Market and Reliability Test Update –40 Hour Full System Market and Reliability Test Update –General Full System Market and Reliability Test Update 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 Day-to-day operations summary: Planned / Unplanned Outages of Market Trials and Known Issues Update Planned Outages 9/2/2010 – 9/6/2010 ERCOT will be performing major systems migrations including MMS 5 Patch 9 over this period. Systems will be unavailable intermittently throughout this outage window. Unplanned Outages 08/24/ :50 A.M. – 08/24/ :05 A.M. Market Manger UI users may have experienced intermittent issues with receiving bid submission status during this period. The cause of issue is currently under investigation. Known Issues Recently Open None to report Recently Closed None to report.

5 Standing Reports and Updates: General Reminders / Updates Reminders/Updates Updates to Tracking Artifacts –The Known Issues tracking sheet will refresh overnight to the Readiness center at Network Model Update –The next network model database load will occur Wednesday 9/1/2010 Reminder: Outage Scheduling Activities 08/30/2010: Complete validation and entry of outages effective in September 09/01/2010 – 09/30/2010: Maintain outages effective in September 09/17/2010: Complete validation and entry of outages effective in December and beyond 09/17/2010: Send to verifying completion of validation / entry of post Go-Live 09/17/2010 – 11/30/2010: Maintain outage effective post Go-Live.

Standing Reports and Updates: General Reminders / Updates 6 Reminders/Updates Market Readiness Seminar #6 This will take place on September 1, 2010 at 2:00 PM – 5:00 PM This will be a WebEx only Session Details are posted at: The Agenda is as Follows: Remaining Market Trials Activities 168-Hour Test Post 168-Hour Test September activities Testing to occur during the Cutover period in October Cutover Update Monthly Breakdown of Pre Go-Live activities Post Go-Live Activities in December, 2010 Friday Market Calls Starting next week on 9/3/2010, Friday Market Calls will run from 9am – 12pm These calls will no longer have dedicated time slots for each functional area As each area completes their presentation, the next agenda item will start immediately after The 12pm end time will be extended as needed Additionally, a new agenda item will be added to the end of the call to cover Cutover activities. As Market Trials winds down, Cutover will become the focus.

7 Operational Scenarios (Voltage Support Service) Operational Scenarios (Load Resources deployment/recall) Test of Load Resource group assignments and deployment/recall under Emergency Conditions Test Overview Day 1 (8/30) – QSEs with Load Resources should submit AS Offers and AS self-schedules into the Day-Ahead Market on 8/30 for Operating Day 8/31. QSEs should reflect DAM AS awards and self-schedules in their COP prior to DRUC (DRUC starts at 1430) After DRUC, ERCOT will create Group 1 & Group 2 deployment stacks and they will be published to the MIS Secure Area Day 2 (8/31) – Included below is a high-level outline of the test. Conduct a hotline call to confirm with QSEs that it is only a test and NO LOAD SHOULD BE DROPPED Start the test and send out resource specific deployment XML messages Conduct the second Hotline call to initiate RRS deployment Issue the VDI XML messages will specify the start/end time and will be distributed each hour throughout the deployment Other Test Details Test will be run weekly beginning 8/30-8/31 for five consecutive weeks A detailed test script has been distributed to all QSEs with Load Resources “Group 1 and Group Load Resources for RRS” report will be available to show the Group1/Group2 assignments on the Nodal MIS => Grid => Generation => Load Resource Portlet

6/27/ Real Time Market / LFC Update

9 SCED Week 29 System Lambda at $2250 offer cap or higher for 68 intervals (compared to 373 last week)

40 hour test 10 HDL approaching HASL Approx. 1000MW NSRS deployed 15:45 – 18:00

40 hour test 11 Odessa constraint violated until 14:55; $2800 SP; similar pricing as last test

40 hour test 12

40 hour test 13 Price correction pending for zonal intervals with negative price – incorrect gen offset was used

40 hour test 14

15 State Estimator Convergence

16 State Estimator Convergence Update State Estimator Daily Convergence Statistics (these percentages are graphed in the next slide) MonthDay% Convergence (Including Solved w/ Mismatch) AUG999.50% AUG % AUG % AUG % AUG % AUG % AUG % AUG % AUG % AUG %

17 State Estimator Convergence Update

Hour Full-System Market and Reliability Test Update Scott Middleton

Hour Test Update 24- Hour Full-System Market and Reliability Test Results will initially be shared on 8/30/2010 Monday Call with additional details provided on September 3, 2010 Friday call –Any issues to be resolved will be updated on the Monday call –GREDP results to be sent out the week of 8/30/2010

Hour Full-System Market and Reliability Test Update Scott Middleton

Hour Test Update 40 - Hour Full-System Market and Reliability Test Very few issues encountered so far during the test Non-Spin deployed from 16:30 – 18:00 on 8/26/2010 –This being the first non-spin, ERCOT has requested all deployed QSEs confirm their deployment receipt –This request was sent via late last night Low prices in Zonal –02:30 AM – 04:15 AM –Incorrect offset used in Zonal –Prices as low as for 3 intervals (3:30, 3:45, 4:00) –Prices will be adjusted prior to settlements per Zonal price correction procedures GREDP reports to be sent out early next week

22 General Full-System Market and Reliability Test Update Stacy Bridges

23 General Full System Market and Reliability Test Update Additional Full System Tests Specified in the 168-Hour Handbook During the 168-Hour Test: 48-Hour Test (starting on 9/12/2010) Late September – 36-Hour Test (date TBD) Late October – 24-Hour Test (date TBD)

24 Questions Q&A