1. 1 Summary of TAC Procedures May 5, 2005

2. 2 Revision of TAC Procedures Project began in October 2004 to incorporate the Commercial Operations Subcommittee into the TAC Procedures In January 2005, the project was expanded to provide more clarity and information related to the structure and voting process for TAC and all the subcommittees (PRS, RMS, ROS, WMS) Several conference calls have been conducted to discuss areas of concern by parties The primary goal was to add more information and clarity Some changes have also been proposed

3. 3 Functions of TAC Current Budget The TAC shall submit an annual budget to the ERCOT CEO covering expenditures for projects proposed by TAC. These expenditures will be included in the annual budget submitted to the Board for approval at the ERCOT Annual Meeting. Proposed Prioritization of Projects Proposed by the Market The TAC shall be responsible for setting the priority of projects approved through the PRR, SCR and guide revision processes. TAC may delegate the responsibility for recommending the priority of market projects to one of its subcommittees.

4. 4 TAC Membership – PUCT Staff Current [No reference in current procedures] Proposed The PUCT may designate a PUCT staff person to be an ex-officio, non-voting member of TAC.

5. 5 Designation Of Alternate Rep. Current - timeframe If used, a designated Alternate Representative and proxy must be sent to ERCOT for each TAC meeting and shall only be valid for such meeting. Proposed - timeframe If the TAC Representative wishes to designate an Alternate Representative or proxy, a notification of the designation of such Alternate Representative or proxy must be sent to ERCOT and shall be valid for the time period designated by the TAC Representative.

6. 6 Voting Language related to voting was updated to reflect the current ERCOT Bylaws

7. 7 TAC E-Mail Voting Current E-mail votes may be utilized when the Chair determines a matter is urgent or requires action prior to the next meeting. E-mail vote requests will be accompanied by supporting documentation. Proposed [same as current, plus] Provide notification to TAC. A quorum must participate, by casting a vote or abstaining. Votes submitted to ERCOT and tallied in same manner as a regular meeting. Tally distributed to TAC and posted.

8. 8 Subcommittee Designation Of Alternate Rep. Current – No language in TAC procedures, but included in subcom. procedures, similar to current TAC] If used, a designated Alternate Representative and proxy must be sent to ERCOT for each subcommittee meeting and shall only be valid for such meeting. Alternate Representatives, if not employed by the voting member thereby represented, must be confirmed in writing by such member (signed by a duly authorized representative of the member). Proposed – change to timeframe If the Standing Representative wishes to designate an Alternate Representative or proxy, a notification of the designation of such Alternate Representative or proxy must be sent to ERCOT and shall be valid for the time period designated by the Standing Representative. Alternate Representatives, if not employed by the voting member thereby represented, must be confirmed in writing by such member (signed by a duly authorized representative of the member).

9. 9 Subcommittee Designation Of Alternate Rep. No revisions recommended by any subcommittee COPS voted to endorse the proposed revision

10. 10 Subcommittee Meetings and Notification Current – No language in TAC procedures, but included in subcom. procedures Meetings called by the Chair and notice sent to each member and posted on website at least 1 week prior to the meeting, unless an emergency condition should suggest otherwise. In addition to the above, subcom. Meetings are normally attended by an ERCOT Staff Member who provides support for meeting arrangements, subcom. meeting minutes, meeting notes and other administrative support. Proposed – minor change Meetings called by the Chair and notices sent to each SR, the subcom. distribution list and posted on website at least 1 week prior to meeting unless an emergency condition requires a shorter notice. In addition, subcommittee meetings are attended by ERCOT Staff person(s) who coordinate ERCOT support of the meeting, including meeting arrangements, meeting minutes, and ERCOT Staff participation in the meeting.

11. 11 Subcommittee Meetings and Notification No revisions recommended by any subcommittee COPS voted to endorse the proposed revision

12. 12 Subcommittee Membership – COPS & PRS Current – PRS Standing Membership shall consist of 2 Standing Representatives from each Segment. Current – COPS The Standing Reps on the COPS consist of 14 SRs, 2 from each of the 7 market segments. Term: The term of the SRs is one year. Proposed – no sig. change Membership shall consist of 2 Standing Representatives from each Segment. Subcommittee Review No objection from PRS or COPS

13. 13 Subcommittee Quorum – RMS, ROS, WMS Current – At least 1 representative from each of 4 market segments and a majority of the subcommittee members must be present at a meeting to constitute a quorum. Proposed – same as current, plus Standing Representatives may participate in the meeting via telephone, but participation via telephone shall not count towards a quorum. Subcommittee Review No objection from any subcommittee

14. 14 Subcommittee Quorum – COPS & PRS Current – PRS In order to take action, at least one standing member from each of 4 market segments must be present. Current – COPS In order to take action, a quorum must be present. A quorum is at least 1 Standing Rep in each of at least 4 segments. Proposed – no change In order to take action, a quorum must be present. A quorum is defined as at least 1 SR in each of at least 4 Segments. Subcommittee Review PRS did not comment; COPS voted to support

15. 15 Subcommittee Voting Entities – COPS & PRS Current – COPS & PRS Entities entitled to vote (Voting Entities) are ERCOT Corporate Members, ERCOT Adjunct Members, and entities who are not ERCOT Corporate Members, but who could qualify as a member within the definition of a particular Segment. Voting Entities must align themselves each calendar year with a Segment for which they qualify or, for Adjunct Members, a Segment to which they are similar. Proposed – same as current, plus Voting Entities that align themselves with a Segment must be aligned with that same Segment for all TAC subcommittees, and remain aligned with that Segment for the entire calendar year.

16. 16 Subcommittee Voting Entities – COPS & PRS PRS did not object to the additional language. COPS voted to support the additional language.

17. 17 Subcommittees – E-Mail Voting, RMS, ROS, WMS Current – E-mail voting is permitted to expedite processes provided the Chair distributes to the roster (e- mail) a detailed description of the issue or proposition. The chair will submit meeting minutes wherein the vote is recorded for review of accuracy at the next scheduled subcommittee meeting. (Individual exceptions will be made where needed to accommodate members who do not have e-mail addresses.) “Discussion Required” votes count as “No”.

18. 18 Subcommittees – E-Mail Voting, RMS, ROS, WMS Proposed – An e-mail vote is permitted provided a notification is distributed to the subcommittee distribution list that includes a detailed description of the issue or proposition. A request for an e-mail vote can only be initiated by the Chair or Vice Chair. A quorum of Standing Reps must participate in the e-mail vote. Participation requires casting a vote, or abstaining. Votes shall be submitted to ERCOT for tallying by the close of two (2) Business Days after notification of the vote. Votes are tallied in the same manner as a regular meeting. The final tally shall be distributed to the subcommittee distribution list and posted on the MIS

19. 19 Subcommittees – E-Mail Voting, RMS, ROS, WMS No revisions recommended by any subcommittee

20. 20 Subcommittee Voting – COPS & PRS Current – PRS Recommendations for Protocol revisions from the PRS must be supported by a majority of the votes cast by the entities present in accordance with segment fractional voting. Votes will be tallied and records retained by ERCOT. COPS The act of the majority of the votes represented by members present and a minimum of three (3) votes will be the act of the subcommittee. Proposed – A motion of the subcommittee passes when 1) a majority of the aggregate of the fractional Segment votes are affirmative and 2) a minimum of three (3) Segment Votes are affirmative. A Segment Vote is considered affirmative when the majority of Standing Representatives of the Segment voted affirmatively. The results of all votes taken will be reported to TAC, whether or not the vote passed.

21. 21 Subcommittee Voting – PRS Recommendation Current – PRS Recommendations for Protocol revisions from the PRS must be supported by a majority of the votes cast by the entities present in accordance with segment fractional voting. Votes will be tallied and records retained by ERCOT. COPS The act of the majority of the votes represented by members present and a minimum of three (3) votes will be the act of the subcommittee. Proposed – A motion of the subcommittee passes when 1) a majority of the aggregate of the fractional Segment votes are affirmative and 2) a minimum of three (3) Segment Votes are affirmative. A Segment Vote is considered affirmative when the majority of votes cast for the Segment are affirmative. The results of all votes taken will be reported to TAC, whether or not the vote passed.

22. 22 Subcommittee Voting Entities – COPS & PRS COPS voted to support the language as proposed by PRS.

23. 23 Subcommittee - Abstentions Current – [No current language in TAC or subcom. procedures on treatment of abstentions except that abstentions during roll call votes will be recorded.] Proposed – In the event that a voting member, their designated Alternate Representative, or proxy, is not present during a roll call vote, or abstains from voting, that member’s fractional vote will be reallocated equally among the remaining voting members of that Segment; except for the Consumer Segment. NOTE: Alternative language for abstention: [For purposes of voting, an abstention is treated as if the individual did not cast a vote. A vote is cast as an “aye” or a “nay” vote. An abstention is not a vote.] In the event that a voting member, their Designated Alternate Representative, or proxy, abstains from a vote, the Segment Vote is allocated among the members casting a vote.

24. 24 Subcommittee Abstentions RMS, ROS, WMS and PRS did not have an alternate recommendation.

25. 25 Subcommittee - Abstentions COPS Recommendation for COPS and PRS In the event that a Voting Entity, their Designated Alternate Representative, or proxy, abstains from a vote, the Segment Vote is allocated among the members casting a vote, except for the Consumer Segment. Alternate Suggestion: In the event that a representative of a Voting Entity abstains from a vote, the Segment Vote is allocated among the Voting Entities casting a vote, except for the Consumer Segment.

26. 26 Subcommittees – E-Mail Voting - PRS Current – Voting by E-Mail from the Standing Representatives may be used in consideration of an Urgent Revision Request, the need for an ERCOT Impact Analysis, and other administrative functions. The affirmative vote of eight (8) Standing Representatives shall be the act of the PRS by E- Mail vote. The structure for E-mail voting is as follows: A request for an E-mail vote can only be initiated by the Chair, Vice Chair or their designate of the PRS or approved designate in the absence of the Chair. Votes for an ERCOT Impact Analysis, and other administrative functions must be returned by the close of two (2) Business Days after issuance to be considered. Votes for Urgent Requests must be returned within 48 hours. All votes will be forwarded to ERCOT for tallying. The final tally will be sent to the Standing Representatives of the PRS, the sponsor of the revision request, and forwarded to the PRS distribution list and posted on the MIS.

27. 27 Subcommittees – E-Mail Voting - COPS Current – E-mail voting by the Standing Representatives is permitted to expedite processes provided the chair distributes to the ERCOT COPS public distribution list a detailed description of the issue or proposition. The chair will submit meeting minutes wherein the vote is recorded for review of accuracy at the next scheduled subcommittee meeting. The chair will establish appropriate timing for e-mail vote responses. (Individual exceptions will be made where needed to accommodate Standing Representatives who do not have e-mail addresses.) “Discussion Required” votes count as “No”.

28. 28 Subcommittees – E-Mail Voting – COPS & PRS Proposed – An e-mail vote is permitted provided a notification is distributed to the subcommittee distribution list that includes a detailed description of the issue or proposition. E-mail votes for COPS and PRS are primarily conducted for administrative purposes. A request for an e-mail vote can only be initiated by the Chair or Vice Chair. For e-mail votes, each Standing Representative shall have one (1) vote and a quorum of Standing Representatives must participate in the vote. [NOTE: This is different than the current requirement for PRS, which is “The affirmative votes of eight Standing Representatives shall be the act of the PRS by E-Mail vote.”] Participation requires casting a vote or abstaining. Votes shall be submitted to ERCOT for tallying by the close of two (2) Business Days after notification of the vote. A PRS e- mail vote on a request for Urgent Status shall be submitted to ERCOT for tallying within forty-eight (48) hours. Votes are tallied in the same manner as a regular meeting. The final tally shall be distributed to the subcommittee distribution list and posted on the MIS.

29. 29 Subcommittees – E-Mail Voting – COPS & PRS PRS did not have an alternate recommendation.

30. 30 Subcommittees – E-Mail Voting COPS Recommendation for COPS – E-mail voting by the Voting Entities is permitted to expedite processes provided the chair distributes to the ERCOT COPS public distribution list a detailed description of the issue or proposition. The chair will submit meeting minutes wherein the vote is recorded for review of accuracy at the next scheduled subcommittee meeting. The chair will establish appropriate timing for e-mail vote responses. (Individual exceptions will be made where needed to accommodate Voting Entities who do not have e- mail addresses.) “Discussion Required” votes count as “No”.

31. 31 Subcommittee Votes – COPS & PRS Current – PRS Each Segment has 1 vote and each entity entitled to vote and present at the meeting will receive an equal fraction of its Segment’s 1 vote. Current – COPS, same as PRS Proposed – expand Consumer Segement Vote to 1 1/2 At all meetings, each Segment shall have one (1) Segment Vote except the Consumer Segment, which shall have one and one-half Segment Votes. The SRs of each entity entitled to vote, present at the meeting and participating in the vote shall receive an equal fraction of its Segment’s vote, except for the CS which shall be divided into three subseg that receive one third of the CS vote. For the CS, if no rep from a subseg is present at a meeting or all reps from a subseg abstain, such subseg’s fractional vote is allocated equally to the subseg that are present and casting a vote.

32. 32 Subcommittee Votes – COPS & PRS PRS recommended that the current language be maintained. COPS voted to recommend that the current language be maintained.

33. 33 Subcommittee Membership – RMS, ROS, WMS Current – TAC Procedures Membership shall consist of 1 to 4 representatives from each Segment. Subcom. Procedures adds: The number of representatives for each Segment shall be determined by the TAC members representing that Segment. Representatives, if not employed by the voting member thereby represented, must be confirmed in writing by such member (Signed by a duly authorized representative of the member). Proposed – TAC Procedures Membership shall consist of 1 to 4 Standing Representatives from each Segment. Suggest adding: The number of Standing Representatives for each Segment shall be determined by the TAC Representatives for that Segment. Standing Representatives, if not employed by the voting member thereby represented, must be confirmed in writing by such member (Signed by a duly authorized representative of the member).

34. 34 Membership: Membership shall consist of one (1) to four (4) Standing Representatives from each Market Segment elected or appointed by the voting members of the respective Market Segment with the exception of the Consumer Segment. The Consumer Segment shall consist of three (3) subsegments (Residential, Commercial and Industrial). The number of Standing Representatives for each Market Segment shall be determined by the TAC members representing that Market Segment. Standing Representatives, if not employed by the voting member thereby represented, must be confirmed in writing by such member (signed by a duly authorized representative of the member). These will be the voting members of the subcommittee. The Standing Representatives of the subcommittee shall elect from amongst themselves a Chair and Vice-Chair, subject to confirmation by the TAC, for a one-year term on a calendar year basis. ERCOT shall appoint an appropriate staff member to attend and participate in the subcommittee meetings. Subcommittee Membership – RMS Recommendation

35. 35 Subcommittee Votes – RMS, ROS, WMS Current – Each Segment has 1 vote except the Consumer Segment, which will have 1 ½ votes. Votes are fractionally and equally divided among the representatives of each Segment. Proposed – same as current, plus Votes divided among the SRs of each segment present at the meeting and casting a vote, except the Consumer Segment which is divided into 3 subsegments, each of which has 1/3 of the segment vote. For CS, if no SR from a subseg. is present or all SRs from a subseg. abstain, the vote is allocated to subseg. present and casting a vote.

36. 36 Votes: Each Segment shall have a Segment Vote of 1.0 except the Consumer Segment, which shall have a Segment Vote of 1.5. Segment Votes shall be equally divided into Fractional Segment Votes among the Standing Representatives, designated Alternate Representatives and proxies of each Market Segment that cast a vote. The Consumer Segment Vote shall be equally divided into a Fractional Segment Vote of.5 for each of the three subsegments. The Fractional Segment Vote for each subsegment of the Consumer Segment is allocated to the Standing Representatives, designated Alternate Representatives, and proxies of the subsegment casting a vote. For the Consumer Segment, if no Standing Representative from a subsegment is present at a meeting or all Standing Representatives, designated Alternate Representatives and proxies of a subsegment abstain from the vote, the Consumer Segment vote is allocated equally to the subsegments that cast a vote. Subcommittee Votes – RMS Recommendation

37. 37 Subcommittee Voting – RMS, ROS, WMS Current – The act of a majority of the votes represented by members present and a minimum of three (3) votes will be the act of the subcommittee Proposed – same as current, plus Only Standing Representatives, their designated Alternate Representative, or proxy may vote. A motion of the subcommittee passes when 1) a majority of the aggregate of the fractional Segment votes are affirmative and 2) a minimum of three (3) Segment Votes are affirmative. A Segment Vote is considered affirmative when the majority of Standing Representatives of the Segment voted affirmatively. The results of all votes taken will be reported to TAC, whether or not the vote passed.

38. 38 Only Standing Representatives, their designated Alternate Representative, or proxy may vote. A motion of the subcommittee passes when a majority of the aggregate of the Fractional Segment Votes are 1) affirmative and 2) a minimum total of three (3). The results of all votes taken will be reported to TAC, whether or not the vote passed. Subcommittee Voting for RMS, ROS, WMS – RMS Recommendation