Verifiable Cost Working Group (VCWG) Update Presentation to the ERCOT Wholesale Market Subcommittee March 24, 2010

VCWG Summary NPRR for Standard O & M Costs. Once VC are approved with actual O & M by ERCOT they may not elect for Standard O & M Costs with the exception of those entities that have filed VC prior to implementation of this concept. QSE’s and Resource Entities that have previously filed prior to the NPRR approval have 90 days to resubmit VC Costs with either actual O & M or elect for Standard O & M Costs. Election for Standard Costs will be available through a check box in the Verifiable Costs Template.

Election will only allow for the Standard O & M Costs to be used in place of actual O & M Costs defined in Protocols and Verifiable Cost Handbook. Need Recommendation by WMS: Option 1: ERCOT notifies the QSE or Resource Entity to update their Verifiable Costs as defined in section 5.6.1 (9). or 5.6.1(10). If a resource is receiving Standard O & M Costs they may reelect for Standard O & M Costs when resubmitting. Option 2: ERCOT notifies the QSE or Resource Entity to update their Verifiable Costs as defined in section 5.6.1 (9). or 5.6.1(10). The QSE or Resource Entity will be required to file Verifiable O & M Costs and may not elect for Standard O & M Costs. Escalation of Standard O & M Costs ERCOT should verify the VOM Numbers on a 5 year basis from implementation of Nodal. VCWG Summary

VCWG Summary Standard Costs Table Plant Type Cold Start-up Warm Start-up Hot Start-up Variable O & M Start Year = 2009 $/Start $MWH Advanced simple Cycle $1,000.00 $3.94 Diesel $487.00 $5.09 Simple Cycle Commissioned Before 1996 ≤ 90 MW $2,300.00 Simple Cycle Commissioned Before 1996 > 90 MW $5,000.00 Combined Cycle $6,810.00 $5,107.50 $2,553.75 $3.19 Gas-Steam Non-Reheat Boiler $2,310.00 $1,732.50 $866.25 $7.08 Gas-Steam Reheat Boiler $3,000.00 $2,250.00 $1,125.00 Gas-Steam Supercritical Boiler $4,800.00 $3,600.00 $1,800.00 Nuclear, Coal Lignite and Hydro $7,200.00 $5,400.00 $2,700.00 $5.02 Renewable NA $5.50 VCWG Summary

Next VCWG meeting April 15, 2010. ?’s VCWG Summary