Market Trials Update NATF March 2, 2010 http://nodal.ercot.com 1

General Reminders / Updates Market Trials Currently Activity Updates Agenda General Reminders / Updates Market Trials Currently Activity Updates 90 Day Look Ahead http://nodal.ercot.com 2

Market Trials 2010 Roadmap http://nodal.ercot.com 3

General Reminders / Updates Weekly Market Call Changes – March 2010 ERCOT will be changing the Market Call format the week of 3/22/2010 There will be one call, starting at 9am every Friday This call will be online until 2pm (excepting 12pm – 1pm) Each functional area will have a time slot allocated for its weekly update In between weekly updates, ERCOT will hold a Q&A session as needed The order and schedule of weekly updates will be shared via a market notice and on an upcoming Friday market call The weekly Monday kick off meeting will remain in place, unchanged Environment Availability for March 2010 The Nodal Production Environment will be available Monday – Friday from 8am – 6pm for all systems except EMS / SCADA and SCED EMS / SCADA and SCED will now be supported 24x7 ERCOT test transactions will be limited to using Sundays as trade dates (e.g. regression testing and performance testing) http://nodal.ercot.com 4

Market Trials Activity Update Connectivity and Qualification Testing 256 / 276 Total QSEs Qualified as of 1/29/2010 82 / 86 QSEs w/ Resources 174 / 190 QSEs w/o Resources ~99.9% of generation currently qualified Nodal Telemetry Outreach QSE Telemetry 1 point required for State Estimator still missing (~99% complete for nodal telemetry) 8 points required for SCED execution still missing (~99% complete for nodal telemetry) The updated QSE Telemetry Dashboard is posted on the Nodal Readiness Center at http://nodal.ercot.com/readiness/markettrials/rtm/index.html Load Resource Telemetry 20 points added due to additional Load Resources (up from 0 last week) TSP Telemetry 345 Circuit Breaker and Load points still missing/unresolved 987 Disconnect points missing—these points represent new requests in the nodal telemetry outreach effort The updated TSP Telemetry Dashboard is posted on the Nodal Readiness Center at http://nodal.ercot.com/readiness/markettrials/rtm/index.htm http://nodal.ercot.com 5

Market Trials Activity Update CRR Qualification 61 / ~76 CRRAHs Qualified CRR Auction March Auction Completed and Invoiced Successfully April Auction Opens on 3/8/2010 Outage Scheduler Qualification 43 / 86 QSEs with Resources Qualified 5 / 25 TSPs Qualified http://nodal.ercot.com 6

Market Trials Activity Update LOAD = BLUE LINE ALL OTHER COLORS = Representative LMPs SCED WEEK 1 SCED WEEK 2 SCED WEEK 3 SCED WEEK 4

Market Trials Activity Update Prices continue to reflect Market conditions Running out of offer curves appropriately send offers to $2250 Adding constraints observe price separation, as expected There are a number of Market input issues still to be resolved Telemetry data quality Offer curves not consistently submitted Output schedules not submitted in lieu of offer curves From week to week offer submissions have substantially improved Morning peak is the only time we are still hitting $2250 Currently 85% of the expected offer curves are in place http://nodal.ercot.com 8

Market Trials Activity Update ERCOT is giving the green light to start 6 Month LMP Posting as scheduled on 3/1/2010 The following criteria were agreed on with the Market in 2007 as defining “reasonable” which also serves as the entry criteria for 6 Month LMP LMP is Greater than or equal to offer price at maximum limit (HDL) for a Resource which is dispatched at maximum limit (HDL) LMP is less than or equal to offer price at minimum limit (LDL) for a Resource which is dispatched at minimum limit (LDL) LMP is equal to offered price at dispatched MW point for a Resource which is dispatched within minimum limit (LDL) and maximum limit (HDL) Shadow Price is zero for a transmission constraint which is not binding Shadow Price is non-zero for a transmission constraint which is binding Base Points are between HDL and LDL ERCOT has reviewed a representative sample of SCED solutions since Feb 11, 2010 and has found no error associated with the above criteria During 6 Month LMP, ERCOT will be reviewing more closely offer curve submissions and telemetry quality ERCOT’s price validation process applies 21 additional tests to further analyze SCED solution quality Additionally, we will report on the performance of SCED solutions and # failed solves http://nodal.ercot.com 9

90 Day Outlook: March Market Activities Jan Feb Mar Apr May June July Aug Functional Area Targeted Activities for March 2010 ERCOT Publishes Market Trials Handbooks for Phase 5 ERCOT executes Monthly CRR Auction CRR bilateral trading tested Individual QSE LFC begins (include Emergency Base Point and Non-Spin deployments) Initial DST Test (short day for Mar 14) * CIM/Network Model loading process operational for bi-weekly loads ERCOT posts CRR network model for Multi-Month auction Real-Time Market Congestion Revenue Rights Day-Ahead Market Reliability Unit Commitment Outage Scheduler COMS/Settlements Network Modeling Nodal Reports Credit Full Integration * Note that DST testing will only be support to the market for Submissions testing only

90 Day Outlook : April Market Activities Jan Feb Mar Apr May June July Aug Functional Area Targeted Activities for April 2010 ERCOT executes Monthly CRR Auction ERCOT executed Multi-Month CRR Auction ERCOT executes DAM / DRUC 2x / week ERCOT Executes limited HRUC ERCOT Executes SASM Individual QSE LFC continues Settlements published Real-Time Market Congestion Revenue Rights Day-Ahead Market Reliability Unit Commitment Outage Scheduler COMS/Settlements Network Modeling Nodal Reports Credit Full Integration

90 Day Outlook : April Market Activities Jan Feb Mar Apr May June July Aug Functional Area Targeted Activities for April 2010 ERCOT executes Monthly CRR Auction ERCOT releases credit integration ERCOT ramps to DAM / DRUC 5x / weekly SASM executed as needed ERCOT executes limited HRUC ERCOT ramps to reflect protocol timelines on a best effort basis 2hr LFC closed loop tests executed Real-Time Market Congestion Revenue Rights Day-Ahead Market Reliability Unit Commitment Outage Scheduler COMS/Settlements Network Modeling Nodal Reports Credit Full Integration

Q&A Q&A / Open Forum http://nodal.ercot.com 13