12/6/2015 ERCOT Production Issues Update ERCOT Matthew Tozer

2 Miscellaneous Invoices 12/6/2015 Overview: Miscellaneous Invoices posted on Tuesday, September 25 th to settle an ADR from 2007 were incorrect for app. half of the QSEs that were invoiced Issue: Incorrect DUNS numbers were used to create the invoices Root Cause: Human Error / Process Error –Miscellaneous Invoice creation is a manual process –There was an erroneous lookup to map QSE to DUNS –A different team than the one that created the invoices performed lookup to find QSEs from 2007 that are inactive –The above step was not part of normal process and generated erroneous list for invoice creation Resolution and Prevention Going Forward: Following stop payment on bad invoices, ERCOT issued new invoices on Wednesday, September 26 th ERCOT updated processes to ensure that the team creating the invoices is the team that performs the lookup to map QSE to DUNS

3 September 18 Initial Settlement 12/6/2015 Overview: Real Time Energy Imbalance and DC Tie Settlements posted on 9-27 for Operating Day 9-18 Initial Settlements were incorrect Issue: Energy Trade and DC Tie Schedule quantities that were settled were 4x the actual quantities Root Cause: ERCOT IT Operations conducted an on-cycle site failover on September 12 th, but due to issues encountered, certain systems were held and not failed over until September 19 th During on-cycle failovers, all ERCOT business support teams are notified of failover activity and halts processing The partial failover was an exception to standard process, and as a result, communication to some business teams was overlooked resulting in data continuing to process and a duplication of data

4 September 18 Initial Settlement Resolution: The Energy Trade and DC Tie quantities were fixed and the operating day was resettled Resettlement statements were posted on Friday, September 28 Because the settlements RTM billing cycle includes all settlements run from a Saturday through Friday, both the initial and resettlement statements were included in one invoice minimizing the financial impact to the market Prevention Going Forward: Settlements has added validation to check for duplicate events extracting data IT Operations procedures have been updated to accommodate non-standard failover scenarios 12/6/2015