Pre-Pay Account Updates Matthew Tozer ERCOT CWGW 9/23/2013

Item 3 ERCOT Public 2 Prepay is a mechanism used by market participants to pay for and receive funds from settlement invoices without the use of wires Prepay money is categorized as market cash and has no effect on cash collateral or Available Credit Limit (ACL) Market Participants and ERCOT benefit from a reduction in wire fees What is Prepay?

Item 3 ERCOT Public 3 Not Standardized: Market participants use prepay accounts differently Protocols or Other Binding Documents don’t govern its use Invoices due to ERCOT are paid with prepay funds the day invoices are posted Manual process for ERCOT staff Current Prepay Process

Item 3 ERCOT Public 4 Implement protocols and guidelines to create consistency among prepay accounts Options will be: Pay all invoices due to ERCOT from prepay Hold all credit invoices in prepay Both pay all invoices due to ERCOT and hold all credit invoices Invoices due to ERCOT will be paid with prepay funds on the invoice due date based on the prepay survey sent to all market participants Automate process for ERCOT staff ERCOT legal staff will be reviewing the suggested changes which will be brought to CSWG/COPS before the NPRR is posted Future Prepay Process