1 Readiness Scorecard – Market Readiness Series Brandon McElfresh Nodal Readiness and Transition January 28, 2010

Agenda Nodal Metrics Objective Nodal Scorecard Overview Active Market Participant Metrics Metrics Roadmap for Market Participants Real-Time Market CRR Outage Scheduler DAM/RUC Network Model Useful Documents 2

Nodal Metrics Objective 3 Objective The objective of the Nodal Metrics is to provide a concise and transparent view of ERCOT’s and its Market Participant’s progress towards launching the Nodal Market. History In the previous Nodal EDS effort, any changes to the Nodal Metrics were approved by TPTF and TAC. Governance In the current Market Trials effort, NATF reviews the metrics monthly to advise on design and scheduling decisions submitted by ERCOT. TAC also reviews the metric scores monthly. Population There are 61 ERCOT metrics and 19 MP metrics to be completed.

4 Nodal Scorecard Functionality Rollup by MP type. Weighting for Overall Scores QSERs – Gen Ratio Share TSPs – Ownership Share REs – Registered MW Capacity Ratio Share QSEs, CRRAHs, and LSEs – even weighting within the MP type Acronyms QSERs – QSEs with Resources QSEs – QSEs without Resources TSPs – Transmission Service Providers REs – Resource Entities CRRAHs – CRR Account Holders LSEs – Load Serving Entities As of 1/26/2010

Nodal Scorecard Continued 5 Confidentiality QSERs, QSEs, CRRAHs, and LSEs have a private view to see their individual metrics Escalation At least 5 days advanced notice from ERCOT for “AMBER” or “RED” scores Updates “GREENs” updated ASAP “AMBERs” & “RED” updated based on Metric Update Calendar Example Access for login

6 Active Mark Participant Metrics Metric Name Current Score (as of 1/25/2010) Applies toWeight Green % Red %Yellow %Not Scored % Primary Criteria Notes MP3 Market Submissions Connectivity Qualification GreenQSERs Generation Ratio Share76%0% 24% Successful submission of RT and DAM transactions (289 total entities included sub- QSEs) 19 out of 45 QSERS Qualified. 5 partially qualified. First “AMBER” & “RED” scores will be released 2/11/2010. GreenQSEs Even weighting54%0% 58% 60 out of 112 QSEs qualified. First “AMBER” & “RED” scores will be released 2/11/2010. MP6 QSER and TSP Compliance with the Nodal Protocols Section Telemetry Criteria GreenQSERs Generation Ratio Share71%0% 29% 100% expected State Estimator telemetry submitted. 39 out of 45 QSERs completed. For the 6 QSEs in review, most issues have been resolved, leaving an estimated 6 SE points to be resolved out of 3659 required points (99.99%) First scores - 2/10/2010TSPs Ownership Share MP11 Resource RegistrationGreenREs Registered MW Capacity Ratio Share98%2%0% RARF validated, Decision Making Authority form submitted, and GENMAP validated MP15-B CRR Connectivity QualificationGreenCRRAHs Even weighting35%0% 65% Successful submission of CRR transactions 29 out of 82 CRRAHs qualified. First “AMBER” & “RED” scores will be released 2/11/2010.

7 Metrics Roadmap MP15A MP16 MP20 MP3 MP6 MP11 MP14C E9 E1 N2.1 EMO9 CRR3CRR5 EMO6 MO4 MO5 CO1 CO2 CO3 CO4 CO5 CO6CO7 CO8CO9 C10 E7 E11 E12 EMO2 EMO3 EMO8 MO3 C1-C10 EMO13 MO7 CRR4 E5 IMM1 R0 R2 R3 MP15B MP3 N1 E3 E10 PURPLE ORANGE Timing and Design Confirmed Timing subject to change, design in progress R1

Metrics Roadmap – Real-Time Market 8 MP15A Real-Time Market Participation (QSER) MP3 Market Submissions Connectivity Qualification (QSER, QSE) MP6 Telemetry Compliance (QSER, TSP) N2 Telemetry/ICCP Failover (ERCOT) EMO1 Network Security Analysis & Transmission Constraint Management (ERCOT) EMO9 Nodal and Zonal Security Analysis Results (ERCOT) EMO6 QSE Response To Dispatch (ERCOT, QSER) MO4 SCED Execution Quality (ERCOT) MO5 Generate 6 Months of LMPs (ERCOT) EMO2 Voltage Support (ERCOT) EMO8 Conduct EEA Test (ERCOT) N1 Telemetry Alarms (ERCOT) EMO7 Load Forecast Accuracy (ERCOT) PURPLE ORANGE Timing and Design Confirmed Timing subject to change, design in progress MP6 – QSERs and TSPs Telemetry Compliance with Nodal Protocols QSERs SCED Scores Active – 2/11/2010 TSP Scores Active – 2/11/2010 MP15-A – QSERs Real-Time Market Participation Scores based on daily submissions of Energy Offer Curves and Output Schedules Active – 2/11/2010 EMO6 – QSERs respond to dispatch Scores based on participation in LFC testing in MT Phase 5 Active – May 2010

Metrics Roadmap – CRR Market 9 CRR3 Operation of MonthlyCRR Auction and Allocation (ERCOT) CRR5 Operation of Annual CRR Allocation and Auction (ERCOT) MP15-B CRR Connectivity Qualification (CRRAH) MP15-B – CRRAH Connectivity Qualification Scores based on submission of selected CRR transactions. For example, Logged-in and accessed the CRR application Downloaded one of the pre-auction market information Uploaded a bid/offer portfolio (in either XML or CSV) Active PURPLE ORANGE Timing and Design Confirmed Timing subject to change, design in progress

Metrics Roadmap – Outage Scheduler 10 MP20 Outage Scheduler Connectivity Qualification (QSER, TSP) EMO3 Outage Evaluation Functionality (ERCOT) MP20 – QSERs and TSPs Outage Scheduler Connectivity Qualification Scores based on submission of selected OS transactions. For example, Planned outage on a single piece of equipment Maintenance Level 1 outage on a group of Resources Active – 2/10/2010 PURPLE ORANGE Timing and Design Confirmed Timing subject to change, design in progress

Metrics Roadmap – DAM/RUC 11 MP16 Day-Ahead Market Participation (QSER, QSE) MO3 Verify Supplemental AS Market (ERCOT) MP3 Market Submissions Connectivity Qualification (QSER, QSE) MP3 – QSERs and QSEs Market Submissions Connectivity Qualification Scores based on submission of selected DAM transactions. For example, Three Part Offers Ancillary Service Offers Energy-only Offers and Bids Active. First “AMBER” or “RED scores on 2/11/2010 MP16 – QSERs and QSEs Day-Ahead Market Participation Scores based on participation in Day-Ahead Market Runs. Active – April 2010 PURPLE ORANGE Timing and Design Confirmed Timing subject to change, design in progress

Metrics Roadmap – Settlements/COMS 12 CO1 Settle Market for 7 Days (ERCOT) CO2 Verify Dispute Process (ERCOT) CO3 Verify DAM Statements (ERCOT) CO4 Zonal/Nodal Coordinated Settlements (ERCOT) CO5 Verify RTM Statements (ERCOT) CO6 Verify RTM Invoices (ERCOT) CO7 Verify DAM Invoices (ERCOT) CO8 Verify CRR Auction Invoices (ERCOT) CO9 Verify Financial Transfer (ERCOT) C10 Verify Credit Calculations (ERCOT) Settlements/COMS Metrics No specific MP Metrics for Settlements currently ERCOT will submit regular status reports and evidence of completion to NATF for each metric PURPLE ORANGE Timing and Design Confirmed Timing subject to change, design in progress

Metrics Roadmap – Nodal Reports 13 E3 Validate EDW Telemetry/State Estimator Access and Accuracy (ERCOT, QSER, QSE, TSP) E7 Validate EDW IMM and PUCT Access and Accuracy (ERCOT, IMM) E10 Validate EDW Commercial Systems Access and Accuracy (ERCOT, QSER, QSE, TSP) PURPLE ORANGE Timing and Design Confirmed Timing subject to change, design in progress Reporting/EDW Metrics ERCOT, MPs, and IMM will be required to verify access to and accuracy of Market Monitoring, Settlement, Operations, and Compliance EDW and MIS reports. E11 Validate EDW Compliance Access (ERCOT)

Metrics Roadmap – Cutover/Go-Live Sequence 14 PURPLE ORANGE Timing and Design Confirmed Timing subject to change, design in progress R1 Nodal Readiness Declaration (ERCOT) R0 Market Participant Operations Readiness (ERCOT, MPs) E5 Nodal SAS70 Readiness (ERCOT) C1-C10 Fallback and Contingency Plans (ERCOT) R2 Develop Nodal Market Launch Plan (ERCOT) R3 Complete 168 Hour Test (ERCOT) CRR4 Implement TCR To CRR Transition Plan (ERCOT) Readiness Metrics R0 – ERCOT asserts readiness of Market Participants for Nodal Go-Live. R1 – ERCOT, TAC, NATF, and the ERCOT Board of Directors assert readiness for Nodal Go- Live IMM1 – Market Monitor and PUCT asserts readiness of Market Monitoring systems IMM1 Market Monitor Systems Capability (IMM)

Metrics Roadmap – Other Readiness Metrics 15 MP11 – REs Resource Registration Scores based on submission of necessary Resource Registration data RARF Decision Making Authority Form GENMAP – Mapping of Resource Nodes to EPS Meters Active (first DMA scores – 1/27/2010) MP14-C – TSPs Network Model Validation Scores based on TSPs validating their portion of the network model Criteria and schedule to be discussed at 2/2/2010 NATF meeting PURPLE ORANGE Timing and Design Confirmed Timing subject to change, design in progress MP11 Resource Registration (RE) E1 ERCOT Staff Completes Training (ERCOT) E9 Develop Nodal Procedures (ERCOT) MP14C TSP Network Model Validation (TSP E12 MIS Compliance Test (ERCOT) EMO13 Operations Personnel And Facilities Readiness (ERCOT) MO7 Market Operations Personnel And Facilities Readiness (ERCOT)

Useful Documents Artifacts Nodal Scorecard ( Index of Nodal Metrics ( Others Artifacts on the Nodal Readiness Center ( Active Metric Inventory Completed Metric Inventory Removed Metric Inventory Metrics Update Calendar Metrics Roadmap - Metrics overlaid on the Market Trials Roadmap (will be published after Feb 2 nd NATF meeting) 16

Next Steps 17 February 2nd NATF Meeting Review Active Metric Scores Discuss criteria for MP6 SCED Telemetry and MP15-A Real-Time Market Daily Participation Discuss possible breakout of Sub-QSEs on the Nodal Scorecard Metrics Roadmap Next MP Metric Update February 11 th, 2010 First “AMBER” or “RED” scores for MP3 Market Submissions Activate MP15-A, MP20 Outage Scheduler Connectivity Qualification