1 Commercial Operations Working Group Update to TAC April 7, 2005

2 COPS Update  ERCOT presented solution for PRR 548, create new determinants (delta information), which would allow more transparency for MPs concerning mismatches. Requirement – Change to Protocol Section (2) (C) to allow ERCOT to disclose mismatched schedule adjustments to QSE and Counterparty. PRR/SCR to be developed.  ERCOT presented a proposed DAM Settlement & Billing Timeline (statements & invoices). COPS is planning a workshop prior to April 26 th meeting.  Settlement Training for EMMS 4.0 scheduled for April 25 th, day prior to COPS meeting.

3 COPS Update ADR Summary ERCOT requested Board Affirm current approach to handling data correction ADR’s (November 16, 2004) Board referred issue to TAC for resolution, which referred it to COPS (December 2, 2004) COPS created Task Force to work through issue –ADR Resolution Task Force met on December 8 th and 9 th 2004 –ADR Resolution Task Force met on February 18, 2005 Additional ADR discussion during COPS March 22 nd meeting

4 COPS Update ADR Update 3 Voting Items 1)Motion: COPS recommends that TAC affirm that it is appropriate to deny that portion of Market Participant disputes and ADRs that are filed that relate to the accuracy of the Market Participant’s data supplied to and processed by ERCOT (as required by Sections 10 & 15 of the Protocols), even though ERCOT may have received data corrections subsequent to the True-Up Settlement related to the Operating Day –Results: Yes %, No %, 7 Abstains –All Sector Voting Totals: Yes = 2.75, No = 2.25 –Motion failed due to lack of a minimum majority sector vote of 3 per COPS Procedures

5 COPS Update ADR Update 3 Voting Items 2)Motion: COPS recommends that TAC affirm that it is appropriate to deny that portion of Market Participant disputes and ADRs that are filed that relate to the accuracy of the Market Participant’s data supplied to and processed by ERCOT (as required by Sections 10 & 15 of the Protocols), even though ERCOT may have received data corrections subsequent to the True-Up Settlement related to the Operating Day. COPS will continue the review of the dispute and ADR process and follow up with necessary protocol revisions to improve the process –Results: Yes %, No %, 7 Abstains –All Sector Voting Totals: Yes = 0.75, No = 3.25 –Motion failed

6 COPS Update ADR Update 3 Voting Items 3)Motion: COPS will continue the review of the dispute and ADR process and follow up with necessary protocol revisions to improve the process –Results: Yes %, No %, 4 Abstains –All Sector Voting Totals: Yes = 7.0, No = 0.0 –Motion passed

7 COPS Update ADR Update No Consensus reached on ERCOT’s current dispute and ADR process. Due to no consensus on ERCOT’s current process, alternative proposals were not presented during COPS. With the passing of Motion 3: COPS will continue the review of the dispute and ADR process and follow up with necessary protocol revisions to improve the process, Market Participant are wanting to improve the current dispute and ADR processes on a go forward basis.