TASOR TF Report to TAC Nov. 6, 2008

2 Overview MCWG recommendation (possible vote) CIPWG recommendation RMS and COPS recommendation PRS and COPS voting rules recommendation

3 MCWG recommendation Current Credit Work Group membership is restricted to credit professionals only Need Market Credit Work Group with broader market expertise to evaluate potential market impacts of credit policies CWG and MCWG are not redundant but serve different roles –CWG advises Board F&A, focus on ERCOT, Inc. –MCWG advises WMS, focus on ERCOT market design

4 MCWG recommendation TASOR TF recommends TAC direct WMS to form the Market Credit Work Group (MCWG) MCWG charter should include the following elements: –Participation open to all stakeholders –Review relevant PRRs/NPRRs for market credit impacts –Review credit policies and models for market credit impacts –Appoint liaison to CWG MCWG charter should also specify: –MCWG does not perform the oversight function currently performed by ERCOT Staff

5 CIPWG recommendation Critical Infrastructure Protection Advisory Group (CIP AG) serves as an advisory committee to ERCOT and stakeholders on cyber security, physical security, and CIP standards CIP AG is not part of TAC structure and does not conform to TAC procedures, voting rules, etc. Through discussion of CIP AG interaction with NERC CIPC, it appears TAC has not met requirements of ERCOT Bylaws Sec. 5.4 –Section 5.4 Other Appointments. If requested by NERC, TAC shall elect representatives to the various NERC committees and associated subcommittees, task forces, and working groups. The selection of TAC representatives to NERC shall require an act of TAC as set forth in Section 5.1(c). If more than one representative is requested, TAC should consider selecting representatives from different Segments.

6 CIPWG recommendation TASOR TF recommends TAC direct ROS to create a CIPWG to improve stakeholder communication and action on critical infrastructure protection standards, advisories, and best practices The CIPWG should be allowed to develop closed meeting procedures similar to PDCWG when circumstances require discussion of sensitive critical infrastructure vulnerabilities or security procedures First assignment of CIPWG should be to review ERCOT Protocols, guides, practices, and procedures to ensure compliance with applicable NERC standards and industry best practices

7 Keep RMS and COPS separate Question raised whether RMS and COPS have enough issue overlap that the subcommittees could be combined Although some overlap or common issues exist, the two groups have distinct focus and perform distinct work Recommend no change to COPS or RMS at this time

8 PRS and COPS voting rules recommendation Voting rules differ amongst TAC subgroups –RMS, ROS, and WMS representative voting –PRS and COPS have weighted segment voting by all corporate members –TPTF has unique voting rules adopted by TAC Lack of uniform voting rules across committees sometimes causes confusion No change to voting rules recommended –All ERCOT members should have a voice in market rules and settlement issues at PRS and COPS. –Representative voting is appropriate for other subcommittees –TPTF rules were specifically crafted for its task