Impact Analysis and Feasibility Study Review – NPRR164, NPRR169 and SCR752 Troy Anderson ERCOT Program Management Office January 15, 2009

2 2 Summary of Estimated Impacts ItemDescriptionCost ImpactSchedule ImpactComments NPRR164Resubmitting Ancillary Service Offers in SASM $100k-$250k for effort -- PLUS -- $6M-$8M due to delay in Go-Live date 4 week extension of Go-Live date SASM logic is very complex and requires extensive testing – risk of additional defects if more change is introduced NPRR169Clarify the Calculation and Posting of LMPs for the Load Zone and LMPs for each Hub TBD Our ABB resources and MMS subject matter experts are currently engaged on the current release of MMS5. After MMS5 completes FAT testing in Q3 2009, resources will begin planning an implementation of this NPRR. This NPRR will be placed at the top of the priority list for implementation. SCR752Nodal: Allow QSEs to Enter Outages for All Assets Preliminary Estimate $1M for effort -- PLUS -- $18M-$24M due to delay in Go-Live date 12 week extension of Go-Live date Additional considerations being reviewed by ROS and OWG

NPRR Change Control Process Review Troy Anderson ERCOT Program Management Office January 15, 2009

4 4 Agenda – Updated NPRR Review and Approval Steps Replaced by “NPRR Review and Approval” Visio swim lane diagram – NPRR Review and Approval Swim Lanes TPTF role in process Suggested change to have NPRRs enter the stakeholder process at PRS Options to expedite NPRRs in the process – NPRR Tracking Sheet Updated through 1/9/2009

5 5 NPRR Review and Approval Steps – REPLACED BY NPRR Review & Approval Swim lane PRS TAC CCB Draft NPRR Final IA Approved NPRR Integrated into Nodal Project BoD ERCOT Impact Analysis Development Stakeholder Approval Revised November 19, 2008 Key Documents Legend IA Drafted Nodal SME Impact ERCOT input into approval decision If Board approves… Process Flows Executive Input Business VP Program Director CEO ERCOT Staff Steps A – Market Rules receives draft NPRR and submits to PRS B – ERCOT completes high-level Impact Categorization (IC) C – ERCOT Business VP comments on essentiality status for consideration by Nodal Program Director D – Program Director authorizes resources to assess impact (if Program Director disagrees with essentiality status, Comments will be filed) E – Impact Analysis (IA) drafted F – Change Control Board (CCB) considers IA for completeness and accuracy G – Final IA document prepared for posting H – ERCOT CEO reviews IA I – Change incorporated into Nodal schedule Stakeholder Steps 1 – Draft NPRR submitted to Market Rules (to expedite, the NPRR could be submitted by TPTF – this reduces the likelihood that Step 3 will be necessary) 2 – PRS considers NPRR language 3 – PRS may remand to TPTF for input and essentiality status 4 – PRS approves NPRR language (to expedite, PRS can also consider the IA, if it is available, and vote to immediately submit to TAC) 5 – PRS approves Impact Analysis 6 – TAC approves NPRR and IA 7 – Board approves NPRR and IA C D E G F H I IC (1-4) B Approved Language Market Rules TPTF 3 1 A Comments (if necessary) Options to Expedite Submitted by TPTF Submitted by Individual Final IA submitted to PRS Approved language used to complete IA 4

6 6 NPRR Review and Approval Swim Lanes