1 Protocol Revision Subcommittee Presentation to the ERCOT Technical Advisory Committee January 6, 2004

2 PRS Summary 5 PRRs for Approval 5 PRRs for Approval PRR 562 for TAC Vote PRR 562 for TAC Vote

3 PRR 547 – Trading Hubs Establishes definitions of trading hubs (specific buses) and process for establishing future trading hubs Establishes definitions of trading hubs (specific buses) and process for establishing future trading hubs PRS recommended approval by 70%; with 2 no votes and 3 abstentions PRS recommended approval by 70%; with 2 no votes and 3 abstentions All market segments were present All market segments were present Reviewed ERCOT study and considered MOD comments – no resulting change (not unanimous) Reviewed ERCOT study and considered MOD comments – no resulting change (not unanimous) TAC received comments from MOD/ERCOT TAC received comments from MOD/ERCOT Effective March 1, 2005 Effective March 1, 2005

4 PRR 547 – Trading Hubs Impact Analysis Item Reviewed Description NoImpact Credit Monitoring/Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

5 PRR 548 – Settlement for Mismatched Inter-QSE Energy Schedules Reduces ERCOT BES usage when Inter-QSE trades don’t match Reduces ERCOT BES usage when Inter-QSE trades don’t match Allows ERCOT to settle disputed portion of mismatch at MCPE Allows ERCOT to settle disputed portion of mismatch at MCPE PRS recommended approval; with 2 no votes and one abstention PRS recommended approval; with 2 no votes and one abstention All market segments were present All market segments were present Effective upon system implementation - - Priority 1.1; Rank 34.5 Effective upon system implementation - - Priority 1.1; Rank 34.5

6 PRR 548 – Settlement for Mismatched Inter-QSE Energy Schedules Impact Analysis Item Reviewed Description NoImpact Credit Monitoring/Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact Requires Lodestar changes Minor amount impact Supports – reduced credit risk

7 PRR 551 – Security Interest Adds provisions to increase Market Participant protection in event of bankruptcy Adds provisions to increase Market Participant protection in event of bankruptcy PRS recommended approval with one no vote and one abstention PRS recommended approval with one no vote and one abstention All market segments were present All market segments were present Effective March 1, 2005 Effective March 1, 2005

8 PRR 551 – Security Interest Impact Analysis Item Reviewed Description NoImpact Credit Monitoring/Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

9 PRR 552 – Clarification of Relaxed Balanced Schedules Clarifies that QSEs may schedule load or generation even though they do not represent load or generation Clarifies that QSEs may schedule load or generation even though they do not represent load or generation PRS recommended approval with two abstentions PRS recommended approval with two abstentions All market segments were present All market segments were present Reviewed in December and amended per ERCOT comments Reviewed in December and amended per ERCOT comments Effective March 1, 2005 Effective March 1, 2005

10 PRR 552 – Clarification of Relaxed Balanced Schedules Impact Analysis Item Reviewed Description NoImpact Credit Monitoring/Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

11 PRR 553 – Scheduling Trading Hubs Modifies ERCOT scheduling requirements to accommodate transactions to trading hubs Modifies ERCOT scheduling requirements to accommodate transactions to trading hubs PRS recommended approval with one abstention PRS recommended approval with one abstention All market segments were present All market segments were present Effective upon system implementation - - Priority 2.1; no ranking Effective upon system implementation - - Priority 2.1; no ranking

12 PRR 553 – Scheduling Trading Hubs Impact Analysis Item Reviewed Description NoImpact Credit Monitoring/Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact Impacts ERCOT systems

13 PRR 562 – Permanent Elimination of Market Solution for Local Congestion Current market solution payment suspension expires February 1, 2005 Current market solution payment suspension expires February 1, 2005 PRR would eliminate payment for market solution for local congestion PRR would eliminate payment for market solution for local congestion PRS declared “Urgent” due to deadline PRS declared “Urgent” due to deadline PRS recommended approval with 6 no votes and 2 abstentions PRS recommended approval with 6 no votes and 2 abstentions All market segments were present All market segments were present Effective February 1, 2005 Effective February 1, 2005

14 PRR 562 – Permanent Elimination of Market Solution for Local Congestion Impact Analysis Item Reviewed Description NoImpact Credit Monitoring/Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

15 Recommended TAC Actions Approval Approval PRR 547 – Trading HubsPRR 547 – Trading Hubs PRR 548 – Settlement for Mismatched Inter-QSE Energy SchedulesPRR 548 – Settlement for Mismatched Inter-QSE Energy Schedules PRR 551 – Security InterestPRR 551 – Security Interest PRR 552 – Clarification of Relaxed Balanced SchedulesPRR 552 – Clarification of Relaxed Balanced Schedules PRR 553 – Scheduling Trading HubsPRR 553 – Scheduling Trading Hubs TAC VOTETAC VOTE PRR 562 – Permanent Elimination of Market Solution for Local Congestion PRR 562 – Permanent Elimination of Market Solution for Local Congestion

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