Protocol Revision Subcommittee Presentation to the ERCOT Technical Advisory Committee June 3, 2010

Items for a Vote Unanimous Recommendations PRR849, Suspension of Annual CSC Determination NPRR212, Disputing Fuel Oil Price (FOP) Costs NPRR217, Resolution of Alignment Item A58 - Use of Different Computational Modules NPRR223, Resolution of Alignment Item A73 – Removal of IMM and PUC Staff Nightly Report NPRR222, Half-Hour Start Unit RUC Clawback (Companion to NPRR207) Parking Deck Recommendation Non-Unanimous Recommendations PRR845, Definition for IDR Meters and Optional Removal of IDR Meters at a Premise Where an Advanced Meter Can be Provisioned PRR846/NPRR213, Deadlines for Initiating Alternative Dispute Resolution NPRR210, Wind Forecasting Change to P50, Synchronization with PRR841 NPRR221, Day-Ahead Market and Real-Time Market Default Allocation Changes NPRR225, Standard Cost Option in Verifiable Costs

PRS Summary 3 PRRs for Approval 6.5 NPRRs for Approval 1.5 NPRRs for Parking Deck Consideration 0 Rejection 0 Withdrawal Current Discussions

PRR845, Definition for IDR Meters and Optional Removal of IDR Meters at a Premise Where an Advanced Meter Can be Provisioned Purpose(RMWG) Clarifies the meaning of Interval Data Recorder (IDR) Meter and provides for optional removal of IDR Meters under certain conditions for Premises where an Advanced Meter can be provisioned by the Transmission and/or Distribution Service Provider (TDSP). Protocol references to IDR and/or IDR Meter are being updated to ensure appropriate understanding and usage of the terms. Market Impact N/A System Change NoN/A PRS Vote PRS unanimously voted to recommend approval of PRR845 as amended by the 4/8/10 RMWG comments. PRS voted to endorse and forward the PRS Report and Impact Analysis for PRR845 to TAC. There was one abstention from the Municipally Owned Utility (MOU) Market Segment. All Market Segments were present. CEO Determination No Opinion Effective Date August 1, 2010

PRR845, Definition for IDR Meters and Optional Removal of IDR Meters at a Premise Where an Advanced Meter Can be Provisioned Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

PRR846/NPRR213, Deadlines for Initiating Alternative Dispute Resolution Purpose (Horizon Wind) This PRR/NPRR amends Section 20.3, Informal Dispute Resolution, to establish deadlines for the Alternative Dispute Resolution (ADR) procedures. Market Impact N/A System Change NoN/A PRS Vote PRS voted to endorse and forward the 3/25/10 PRS Report as amended by the 5/17/10 Horizon Wind Energy comments and as revised by PRS and Impact Analysis for PRR846 to TAC via roll call vote. All Market Segments were present. CEO Determination No Opinion on the PRR, Necessary for Go-Live for Nodal Effective Date August 1, 2010 and upon Texas Nodal Market Implementation

PRR846/NPRR213, Deadlines for Initiating Alternative Dispute Resolution Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

PRR849, Suspension of Annual CSC Determination - URGENT Purpose (ERCOT ) Revises Section to suspend Commercially Significant Constraint (CSC) analyses for 2010 Market Impact N/A System Change NoN/A PRS Vote PRS unanimously voted to recommend approval of PRR849 as revised by PRS. All Market Segments were present. CEO Determination Necessary prior to Go-Live Effective Date July 1, 2010

PRR849, Suspension of Annual CSC Determination - URGENT Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact Pending

PRR210, Wind Forecasting Change to P50, Synchronization with PRR841 Purpose (Morgan Stanley) Changes the wind forecasting methodology to use a 50% probability of exceedance calculation instead of an 80% for Reliability Unit Commitment (RUC) considerations. This NPRR would align the Nodal Protocols with changes made to the zonal Protocols pursuant to PRR841. Market Impact N/A System Change No*N/A PRS Vote PRS voted to recommend approval of the 3/25/10 PRS Report as revised by PRS with a priority of High. There was one abstention from the IREP Market Segment. All Market Segments were present. CEO Determination Partially necessary prior to the Texas Nodal Market Implementation Date. Grey-boxed item (2) of Section 5.7.4, is not necessary prior Texas Nodal Market Implementation Date. Impact Analysis for the grey boxed section will be performed at a later date. Effective Date Partially Upon Texas Nodal Market Implementation. Grey-boxed item (2) of Section 5.7.4, RUC Make-Whole Charges, will be Post Texas Nodal Market Implementation Date.

PRR210, Wind Forecasting Change to P50, Synchronization with PRR841 (non-grey boxed section) Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

NPRR212, Disputing Fuel Oil Price (FOP) Costs Purpose (CPS Energy) This NPRR allows for disputes of FOP. Market Impact N/A System Change NoN/A PRS Vote PRS unanimously voted to endorse and forward the 2/18/10 PRS Report as amended by the 5/17/10 CPS Energy comments and as revised by PRS and the Impact Analysis to TAC. All Market Segments were present. CEO Determination No Opinion Effective Date Upon Texas Nodal Market Implementation

NPRR212, Disputing Fuel Oil Price (FOP) Costs Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

NPRR217, Resolution of Alignment Item A58 - Use of Different Computational Modules Purpose(ERCOT) Clarifies the Security Sequence since ERCOT does not use the same computational modules to perform both the Real-Time sequence and Day-Ahead and hour-ahead security analysis. Market Impact N/A System Change NoN/A PRS Vote PRS voted to recommend approval of NPRR217 as submitted. There was one abstention from the Independent Generator Market Segment. PRS unanimously voted to endorse and forward the 4/22/10 PRS Report and Impact Analysis to TAC. All Market Segments were present. CEO Determination Necessary for Nodal Implementation Effective Date Upon Texas Nodal Market Implementation

NPRR217, Resolution of Alignment Item A58 - Use of Different Computational Modules Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

NPRR221, Day-Ahead Market and Real-Time Market Default Allocation Changes Purpose(MCWG) Changes the way default amounts (amounts owed to ERCOT by defaulting Counter-Party 180 days after the default occurs) in the DAM and Real-Time Market (RTM) are allocated. This NPRR assigns a share of the default to each Counter-Party based on the greatest of the Counter-Party’s MWh activity in either the Congestion Revenue Right (CRR) market or DAM or RTM at the Counter-Party level for the calendar month prior to the month in which the default occurs. Market Impact N/A System Change No*Manual workaround for go-live – implementation to follow PRS Vote PRS voted to recommend approval of NPRR221 as revised by PRS. There was one opposition from the Consumer Market Segment and one abstention from the IPM Market Segment. PRS voted to endorse and forward the PRS Report as amended by the ERCOT comments and Impact Analysis for NPRR221 to TAC. There was one opposing vote from the Consumer Market Segment. All Market Segments were present. CEO Determination Necessary for Nodal Implementation Effective Date Upon Texas Nodal Market Implementation

NPRR221, Day-Ahead Market and Real-Time Market Default Allocation Changes Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact Pending

NPRR223, Resolution of Alignment Item A73 – Removal of IMM and PUC Staff Nightly Report Purpose(WMS) This NPRR removes a reporting requirement. There are no specific reporting requirements from the Independent Market Monitor (IMM) and Public Utility Commission of Texas (PUCT) for ERCOT to provide a nightly report. Based on IMM requirements, a nightly report is not required. Market Impact N/A System Change NoN/A PRS Vote On 4/22/10, PRS unanimously voted to recommend approval of NPRR223 as submitted. On 5/20/10, PRS unanimously voted to endorse and forward the 4/22/10 PRS Report and Impact Analysis for NPRR223 to TAC. CEO Determination Necessary for Nodal Implementation Effective Date Upon Texas Nodal Market Implementation

NPRR223, Resolution of Alignment Item A73 – Removal of IMM and PUC Staff Nightly Report Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

NPRR225, Standard Cost Option in Verifiable Costs Purpose(WMS) Provides the option for the election of standard Operations and Maintenance (O&M) costs as a component of Startup Costs and minimum energy costs in place of filing verifiable costs. Market Impact N/A System Change NoN/A PRS Vote PRS voted to recommend approval of as amended by the CPS Energy comments and as revised by PRS. There was one opposing vote from the Consumer Market Segment and two abstentions from the IOU and IREP Market Segments. PRS voted to endorse and forward the PRS Report as amended by the ERCOT comments and Impact Analysis for NPRR225 to TAC. There was one opposing vote from the Consumer Market Segment and one abstention from the IREP Market Segment. All Market Segments were present. CEO Determination No Opinion Effective Date Upon Texas Nodal Market Implementation

NPRR225, Standard Cost Option in Verifiable Costs Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

Parking Deck Priority NPRR210, Wind Forecasting Change to P50, Synchronization with PRR841 – NPRR210, Wind Forecasting Change to P50, Synchronization with PRR841 – PRS recommends a Priority of High NPRR222, Half-Hour Start Unit RUC Clawback (Companion to NPRR207) - NPRR222, Half-Hour Start Unit RUC Clawback (Companion to NPRR207) - PRS recommends a Priority of High

PRR210, Wind Forecasting Change to P50, Synchronization with PRR841 Purpose (Morgan Stanley) Changes the wind forecasting methodology to use a 50% probability of exceedance calculation instead of an 80% for Reliability Unit Commitment (RUC) considerations. This NPRR would align the Nodal Protocols with changes made to the zonal Protocols pursuant to PRR841. Market Impact N/A System Change No*N/A PRS Vote PRS voted to recommend approval of the 3/25/10 PRS Report as revised by PRS with a priority of High. There was one abstention from the IREP Market Segment. All Market Segments were present. CEO Determination Grey-boxed item (2) of Section 5.7.4, is not necessary prior Texas Nodal Market Implementation Date. Impact Analysis for the grey boxed section will be performed at a later date. Effective Date Grey-boxed item (2) of Section 5.7.4, RUC Make-Whole Charges, will be Post Texas Nodal Market Implementation Date.

NPRR222, Half-Hour Start Unit RUC Clawback (Companion to NPRR207) Purpose(WMS) Removes RUC Clawback on all Half-Hour Start Units (a) that participate in the DAM and (b) during Energy Emergency Alert (EEA) events. This NPRR also changes the RUC Clawback on all Half-Hour Start Units that did not participate in the DAM to 50%. Market Impact N/A System Change YesN/A PRS Vote PRS unanimously voted to endorse and forward the PRS Report and Impact Analysis for NPRR222 to TAC with a priority of High. CEO Determination Not Necessary before Nodal Implementation Effective Date Post-Texas Nodal Market Implementation

Withdrawals and Rejections None this month.

PRR/NPRR Summary Unanimous Recommendations PRR849, Suspension of Annual CSC Determination NPRR212, Disputing Fuel Oil Price (FOP) Costs NPRR217, Resolution of Alignment Item A58 - Use of Different Computational Modules NPRR223, Resolution of Alignment Item A73 – Removal of IMM and PUC Staff Nightly Report NPRR222, Half-Hour Start Unit RUC Clawback (Companion to NPRR207) Parking Deck Recommendation Non-Unanimous Recommendations PRR845, Definition for IDR Meters and Optional Removal of IDR Meters at a Premise Where an Advanced Meter Can be Provisioned PRR846/NPRR213, Deadlines for Initiating Alternative Dispute Resolution NPRR210, Wind Forecasting Change to P50, Synchronization with PRR841 NPRR221, Day-Ahead Market and Real-Time Market Default Allocation Changes NPRR225, Standard Cost Option in Verifiable Costs

2010 PRR Approval Cycle – Normal Timeline PRR Posting Deadline PRS Consideration PRS CBA/IA Review TAC Consideration Board Consideration Effective Date 23-Dec21-Jan18-Feb4-Mar23-Mar4/1/10 22-Jan18-Feb25-Mar8-Apr18-May6/1/10 26-Feb25-Mar22-Apr6-May15-Jun7/1/10 26-Mar22-Apr20-May3-Jun20-Jul8/1/10 23-Apr20-May17-Jun1-Jul20-Jul8/1/10 21-May17-Jun22-Jul5-Aug21-Sep10/1/10 25-Jun22-Jul19-Aug2-Sep21-Sep10/1/10 23-Jul19-Aug23-Sep7-Oct16-Nov12/1/10

Nodal Parking Deck - Approved by ERCOT Board Source Document TitlePriority Current Status NPRR131Ancillary Service Trades with ERCOTHigh Board Approved 1/19/10 NPRR181FIP Definition RevisionHigh Board Approved 1/19/10 NPRR153Generation Resource Fixed Quantity Block OfferMedium Board Approved 1/19/10 NPRR164Resubmitting Ancillary Service offers in SASMMedium Board Approved 1/19/10 SCR755ERCOT.com Website EnhancementsMedium Board approved 2/16/10

Nodal Parking Deck – Pending Approval Source Document Title Suggested Priority Current Status NPRR146ICCP Telemetry Information SubmittalsTBD Tabled at TAC PRS approved 2/19/09 NPRR207 Unit Deselection (formerly “Hour Start Unit Deselection and Half Hour Start Unit RUC Clawback”). TBD Tabled at TAC PRS approved 4/22/10 NPRR210 Wind Forecasting Change to P50, Synchronization with PRR841 (partial) High Pending at TAC PRS approved 5/20/10 NPRR222 Half-Hour Start Unit RUC Clawback (Companion to NPRR207). High Pending at TAC PRS approved 5/20/10 SCR756 Enhancements to the MarkeTrack Application Critical Pending at TAC PRS approved 5/20/10