Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 1 Settlement Invoices Business Requirements Settlements and Billing September 29, 2006

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 2 Agenda Settlement Invoice Types Highlights of Business Requirements –Dependency Maps –Outstanding Issues or Assumptions

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 3 Settlement Invoice Types DAM-Ahead Market Invoices: –DAM Invoice (PR 9.3) –DAM Late Fee Invoice (PR 9.4.5) Real-Time Market Invoices: –RTM Invoice (PR 9.6) –RTM Late Fee Invoice (PR 9.7.5) –RTM Uplift Invoice (PR 9.7.3) CRR Invoices: –CRR Auction Invoice (PR 9.8) –CRR Auction Revenue Distribution Invoice (PR 9.10) –CRR Balancing Account Invoice (PR 9.12) Other Invoices: –Miscellaneous Invoice

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 4 DAM Invoice Highlights (1)

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 5 DAM Invoice Highlights (2) DAM Invoices are issued for each DAM Statement on the 2 nd business day after Operating Day, which is the same day that DAM Statements for the same DAM are issued. DAM Invoices are issued for each DAM Resettlement Statement, on the same day that the DAM Resettlement Statements for the same DAM are issued. The due date of any DAM Invoice is the 4 th Bank Business Day after the DAM Invoice date. This day must also be a Business Day. Late Fees will be charged on unpaid DAM Invoice amounts. DAM Invoice Recipients include: –QSEs –CRR Owners ______________________________________________________________________________________________________________ Issues: –DAM Statement / DAM Invoice Merge –DAM Resettlement Statement / Dam Invoice Merge –Change due date from 4 th Business Day to 4 th Bank Business Day.

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 6 DAM Late Fee Invoice Highlights (1)

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 7 DAM Late Fee Invoice Highlights (2) DAM Late Fee Invoices are issued for each month, on the 10 th Calendar Day after the last day of the month. All late fees, both charges and credits, calculated within the month due to unpaid DAM Invoices will be reflected on the monthly DAM Late Fee Invoice. The due date for DAM Late Fee Invoices is the 4 th Bank Business Day after the DAM Late Fee Invoice date. This day must also be a Business Day. DAM Late Fee Invoice Recipients include: –QSEs –CRR Owners ____________________________________________________________________________________________________________ Assumption: –Change due date from 4 th Business Day to 4 th Bank Business Day. –If no DAM Late Fees are calculated within the month, ERCOT shall not post zero value DAM Late Fee Invoices for that month. The Market shall be notified if this condition occurs.

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 8 RTM Invoice Highlights (1)

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 9 RTM Invoice Highlights (2) RTM Invoices are issued weekly, on Thursdays, on a net basis for each RTM Invoice Cycle. RTM Invoice Cycles include all RTM Statements posted within a 7 day period, including: –7 RTM Initial Statements; –7 RTM Final Statements; –7 RTM Trueup Statements; and –Any ad-hoc RTM Resettlement Statements. The due date of any DAM Invoice is the 5 th Bank Business Day after the RTM Invoice date. This day must also be a Business Day. Late Fees will be charged on unpaid RTM Invoice amounts. RTM Invoice Recipients include: –QSEs –CRR Owners ______________________________________________________________________________________________________________ Issues: –None

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 10 RTM Uplift Invoice Highlights (1)

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 11 RTM Uplift Invoice Highlights (2) RTM Uplift Invoices are issued when the conditions set forth in Nodal Protocols Section are met. RTM Uplift conditions include: –An RTM Invoice remains unpaid in full for 180 days after its due date; and –The short-paying Entity is not in compliance with a payment plan. RTM Uplift Invoices are uplifted to QSEs representing LSEs on a Load Ratio Share basis. The Load Ratio Share used is the LRS for the calendar month 3 months before the RTM Uplift Invoice date. Funds collected from the RTM Uplift Invoice will be used to pay Entities that were previously short-paid. No amount greater than $2,500,000 may be scheduled for uplift per month. Late Fees will be charged on unpaid RTM Uplift Invoice amounts. Un-paid RTM Uplift Invoice amounts will be uplifted.

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 12 RTM Uplift Invoice Highlights (3) Clarification: –Is ERCOT expected to charge late fees if an RTM Uplift Invoice is short-paid? If so, who is allocated the Late Fee Credits? –Is ERCOT expected to re-uplift un-paid RTM Uplift Invoices? See Section 9.7.3(g), “Any short and late payments of RTM Uplift Invoices must be handled under Section 9.7.3, Partial Payments by Invoice Recipients for the RTM and Section 9.7.5, Late Fees and Late Fee Invoices for the RTM, respectively.” Issues: –Nodal protocols do not describe the RTM Uplift Invoice in detail. ERCOT will design the RTM Uplift Invoice similar to the RTM Invoice, described in Nodal Protocol Section 9.6, for consistency. ERCOT suggests a protocol revision to include specific information required by the Market for RTM Uplift Invoices in Nodal Protocol Section 9.

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 13 RTM Late Fee Invoice Highlights (1)

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 14 RTM Late Fee Invoice Highlights (2) RTM Late Fee Invoices are issued for each month, on the 10 th Calendar Day after the last day of the month. All late fees, both charges and credits, calculated within the month due to unpaid RTM and RTM Uplift Invoices will be reflected on the monthly RTM Late Fee Invoice. The due date for RTM Late Fee Invoices is the 4 th Bank Business Day after the RTM Late Fee Invoice date. This day must also be a Business Day. RTM Late Fee Invoice Recipients include: –QSEs –CRR Owners ____________________________________________________________________________________________________________ Assumption: –Change due date from 4 th Business Day to 4 th Bank Business Day. –Are Late Fees Charged on unpaid RTM Uplift Invoices? –If no RTM Late Fees are calculated within the month, ERCOT shall not post zero value RTM Late Fee Invoices for that month. The Market shall be notified if this condition occurs.

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 15 CRR Auction Invoice Highlights (1)

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 16 CRR Auction Invoice Highlights (2) CRR Auction Invoices will be issued for each CRR Auction on the 1 st Business Day following the completion of the CRR Auction. CRR purchases, sales and allocations awarded will be reflected on CRR Auction Invoices. The due date for CRR Auction Invoices is the 3 rd Bank Business Day after the CRR Auction Invoice date. This day must also be a Bank Business Day. ERCOT will not accept partial payments for CRR Auction Invoices. CRR Bids awarded and PCRRs allocated will be forfeit if the invoice is not paid in full. CRR Offers awarded will be honored. CRR Auction Invoice Recipients include: –CRR Account Holders _____________________________________________________________________________________________________ Issues: –None

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 17 CRR Auction Revenue Distribution Invoice Highlights (1)

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 18 CRR Auction Revenue Distribution Invoice Highlights (2) CARD Invoices are issued on a monthly basis, on the 1 st Business Day following the RTM Initial Statement posting of the last day of the month. ERCOT shall true up the monthly distribution of CRR Auction Revenues by posting additional CARD Invoices on the 1 st Business Day following the RTM Final Statement posting of the last day of the month. CRR Auction Revenues are distributed to QSEs on either: –2003 ERCOT CMZ Load Ratio Share; or –ERCOT-Wide Load Ratio Share. The due date for CARD Invoices is the 5 th Bank Business Day after the CARD Invoice date. This day must also be a Business Day. CARD Invoice Recipients include: –QSEs ____________________________________________________________________________________________________________________________________________ Issues: –None

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 19 CRR Balancing Account Invoice Highlights (1)

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 20 CRR Balancing Account Invoice Highlights (2) CRR Balancing Account Invoices are issued on a monthly basis, on the 1 st Bank Business Day following the RTM Initial Statement posting of the last day of the month. This day must also be a Business Day. The distribution of funds from the CRR Balancing Account will be paid to Invoice Recipients on the same day that CRR Balancing Account Invoices are issued. CRR Balancing Account Invoices are based on: –Monthly Refunds to Short-Paid CRR Owners; and –Payments to QSEs representing LSEs based on a monthly Load Ratio Share. CRR Balancing Account Fee Invoice Recipients include: –CRR Owners –QSES _________________________________________________________________________________________________________________________________________ Issues: –Should CRR Balancing Account Invoices be trued up when the Resettlement of Statements produce changes to the Balancing Account?

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 21 Miscellaneous Invoice Highlights (1) ERCOT requires the functionality to generate and post Invoices due to circumstances not detailed in the Nodal Protocols, such as ADR settlement. These Invoices must be created in, or importable to, the payment tracking system. Miscellaneous Invoices must have user defined fields that will be described in detail during the design phase. ____________________________________________________________________________________________________ Issues: –None

Texas Nodal © Electric Reliability Council of Texas, Inc. All rights reserved. 22 Summary The following Protocol versions were used as the basis of Settlement Invoice requirements: –Section 9 (007NPRR as approved by BOD on 07/18/2006)