ERCOT Financial Summary For the Month Ended September 30, 2005 Presented to ERCOT Board of Directors October 18, 2005

September 2005 Financial Dashboard ($ in millions)  

Financial Dashboard – YTD Operating Expenses ($ in millions) _____________________________________________ Variance Explanation Labor & Benefits - $1,180K Lower employee headcount by 51 (561 budget vs. 510 actual) - $574K Greater use of employee staff for capital projects - $606K Contractors - $960K favorable variance Favorable variance primarily relating to: Lower Project Management due to delayed project starts - $257K Lower Cyber Security delayed work until security analysis was completed - $447K Lower Resource Planning due to delay in two projects (“Loss & Load Probability Study” and “Must Run Alternative”) - $124K Other Expenses - $1,860K favorable variance: Lower Tools & Equipment purchases in Facilities - $235K Lower Equipment Purchases in Physical Security - $102K Lower Rent and Telecom - $266K Lower Office Supplies - $311K due to conservation efforts Lower Employee expenses – $308K due to Lower travel Lower Insurance premiums – $167K Lower Market Operations’ Sponsored Meetings - $229K

2005 Year End Forecast vs. 2005 Budget 2006 Budget is Very close to the 2005 Forecast = $1.8M above 2005 Forecast (2%): Increases to 2006: Full Year Staff $1.1M Market Monitoring $3.0M Other increases: $0.2M ----------- $4.3M Reductions: Special Audits ($2.5M) Net Increase $1.8M

Financial Dashboard – YTD Revenue ($ in millions) Annual Budget $126.2M Annual Forecast $127.2M Increase in projected Total Revenue by $1.0 million or 0.8% due to higher Megawatt Hour usage of 2,000,000 September was the Hottest month on record for several areas in Texas!

ERCOT Operating Expenses 2006 Budget is Very close to the 2005 Forecast = $1.8M above 2005 Forecast (2%): Increases to 2006: Full Year Staff $1.1M Market Monitoring $3.0M Other increases: $0.2M ----------- $4.3M Reductions: Special Audits ($2.5M) Net Increase $1.8M

Financial Dashboard – YTD Capital Expenditures ($ in millions) ______________________________________________ Revised September Capital Expenditure Year-End Forecast compared to Prior Month Forecast: August Sept. Change Forecast $21.5M $18.2M -$3.2M Worst Case 18.3M 15.7M - 2.6M

Financial Dashboard - Debt ($ in millions) Left Chart – Interest Rate for Term Loan is reset quarterly. Next reset date expected ~10/31/05 Right Chart - Payment for 2005 Senior Note ($13.6M) has already been made. *Anticipated 4Q term loan renewal rate at end of Oct-05

Financial Dashboard – Human Resources Total contractors increased by 2 from prior month.

Staff and Contractor Summary September Staff hiring = 7 Sept Employee Attrition = (6) ------- Net Gain for September = 1 (ugh!)

Financial Dashboard – Time Tracking * Equivalent ___ ____ 510 Time tracking is currently done manually with spreadsheets submitted by each employee. Timecard Reporting compliance is approximately 83%. When an automated method of timecard reporting, compliance should be 100%. * Phase 1 of time tracking manual time card submission process.

Financial Dashboard – Market Settlement ($ in millions) QSE advance receipts fluxuates significantly on a daily basis. The net balance is a function of market activity and QSE decisions regarding the timing of wiring funds to ERCOT.

Financial Dashboard – Cash Flow ($ in millions) September Ending Cash Primary Components: Prepayments from Market = $42.8 Available Cash to use = $18.4 Net change from prior month for: Prepayments to market $ 25.9 M Available Cash to use - $ 1.0 M Net Cash change $ 24.9 M

Annual Cost Savings $ 907,000 cost savings identified in 1st Qtr 2005 $ 512,000 cost savings identified in 2nd Qtr 2005 $ 115,000 cost savings identified in July $ 300,000 cost savings identified in August $ 350,000 cost savings identified in September Greater use of less expensive in-house and web based training with a related benefit of lower employee travel expenses _____________________ $2,184,000 Sept YTD Realized Cost Savings Identified $ 66,000 Additional Targeted Cost Savings ____________________ $2,250,000 Total Cost Savings Estimated for 2005 For September: Greater use of in house and web based training with related lower employee travel expenses. -Travel related expenses for airfare, lodging, and meals were $307K lower than budget for September YTD.

Completion Status By Audit 61 to complete There were Nine (9) audit points completed between September 14th and October 10th . (Drop from 70 to 61)

Projected Audit Point Progress This Audit Point Progress chart shows the monthly balance of the remaining 61 audit points. The majority of the audit points, 52 out of the 61 (85%), are projected to be completed by year-end 2005! The anticipated completion of all of the audit points is in Nov-06

ICMP Update for D&T Actionable Gaps Here is an overall summary of the status for the 217 D&T gaps: Planning = 65 % Execution = 33 % Completed = 2 % --------- Total = 100%