Technical Advisory Committee Presentation to the ERCOT Board of Directors May 16, 2007

TAC Summary Notice of 2 Market Guide changes adopted. Notice of 2 Market Guide changes adopted. 3 PRRs for Approval 3 PRRs for Approval 1 System Change – IA/CBA 1 System Change – IA/CBA 3 Non-System Change – IA only 3 Non-System Change – IA only Appeal of PRR716 Appeal of PRR716 2 NPRRs for Approval 2 NPRRs for Approval Update on Reserve Margin format. Update on Reserve Margin format.

Guide Changes Adopted LPGRR020: Annual Validation Resolution Target—changes the issues resolution target to 99 percent. LPGRR020: Annual Validation Resolution Target—changes the issues resolution target to 99 percent. RMGRR049: Electronic Authorization for Historical Requests LOAs—allows REPs the optional use of an electronic authorization request when submitting a Letter of Authorization to the TDSP for historical usage data. RMGRR049: Electronic Authorization for Historical Requests LOAs—allows REPs the optional use of an electronic authorization request when submitting a Letter of Authorization to the TDSP for historical usage data.

PRR706 – Provisional Qualification for Ancillary Services Purpose (BTU on behalf of QMWG -- Muni) Provides for a provisional qualification time for Ancillary Service provision and discontinues the practice of “borrowing” units for AS qualification. Benefit Allows ERCOT to apply testing procedures to the very same units that will provide AS resulting in improved knowledge of QSE capabilities and improved system operation and reliability. Market Impact N/A System Change NoN/A AssumptionsN/A TAC Vote TAC unanimously voted to recommended approval; all Market Segments were present Effective Date June 1, 2007

PRR706 – Provisional Qualification for Ancillary Services Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

PRR707 – Prioritization/Timing of Transactions Based Upon PRR672 Collaborative Process & Retry Process for 814_20s Purpose(ERCOT) Outlines ERCOT transaction prioritization; revises transaction timing of Off-Cycle Switches and Off- Cycle Drops to AREP; and adds language regarding a retry process. Benefit Reduction in consumer complaints and allows TDSPs as much time as possible to accurately schedule and manage daily workload. Market Impact More timely transaction processing. System Change Yes Rank 2-High; Priority 8.5 (consistent with other PRR672 projects) Assumptions CBA Ratio 2.5 TAC Vote TAC recommended approval with 2 abstentions from the Consumer Segment; all Market Segments were present. Effective Date Upon System Implementation

PRR707 – Prioritization/Timing of Transactions Based Upon PRR672 Collaborative Process & Retry Process for 814_20s Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact <$100K

PRR708 – Data Provided by ERCOT to TDSPs Purpose (AEP -- IOU) Requires ERCOT to provide Generation/Load IDR adjusted interval data to TDSPs involved in planning activities, subject to Sec. 1.3, Protected Information. Benefit Assists in transmission/distribution planning. Market Impact N/A System Change NoN/A AssumptionsN/A TAC Vote TAC unanimously recommended approval; all Market Segments were present Effective Date June 1, 2007

PRR708 – Data Provided by ERCOT to TDSPs Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

PRR716 – Self-Provision of Emergency Interruptible Load Service -- URGENT Purpose (CPS Energy, Muni) Amends EILS protocol to allow for self-provision by all QSEs; addresses PUC Subst. R (i); update ERCOT forms following initial RFP Benefit Allows QSEs to self-provide EILS Market Impact May increase LRS cost to QSEs not self-providing System Change NoN/A AssumptionsN/A TAC Vote TAC rejected the PRR with seven opposed (Consumer (3), IREP (4)) and six abstentions (Coop (2), IOU (3) and IPM (2)); all Market Segments were present. Effective Date N/A

PRR 716 – Self-Provision of Emergency Interruptible Load Service -- URGENT Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact Managed w/in current budget May require minor system modifications

NPRR046 – Real-Time ICCP Communications Only Purpose(ERCOT) Requires all real-time communications will use ICCP. Benefit Ensures that required data volume can be supported and meet data quality requirements. Market Impact N/A System Change NoN/A AssumptionsN/A TAC Vote TAC unanimously recommended approval; all Market Segments were present. Effective Date N/A

NPRR 046 – Real-Time ICCP Communications Only Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact Managed w/in current budget and schedule

NPRR054 – Update of Nodal Protocols to Comply with NERC Name Change Purpose(ERCOT) Updates Protocol references to NERC; reflects name change from North American Electric Reliability Council to North American Electric Reliability Corporation; companion NPRR to PRR711. Benefit Conforms Protocols to current NERC name. Market Impact N/A System Change NoN/A AssumptionsN/A TAC Vote TAC unanimously recommended approval; all Market Segments were present. Effective Date N/A

NPRR054 – Update of Nodal Protocols to Comply with NERC Name Change Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact