1. Paula Feuerbacher Strategic Projects Senior Advisor Tab 5.2: Recommendation Regarding Proposed 2013 ERCOT Key Performance Indicators (KPIs) Human Resources and Governance (HR&G) Committee ERCOT Public November 12, 2012 1

2. 2 Tab 5.2 ERCOT Public 2013 KPI Review and Development Process On September 17, 2012, the ERCOT Board of Directors held its annual Strategic Planning Event and provided guidance on the ERCOT Strategic Plan for 2013 – 2017. Members of the ERCOT leadership team met, reviewed the input from the Strategic Planning Event and drafted the final document. In parallel, the leadership team initiated the annual review of the KPIs of the organization to ensure: –Alignment with the goals and objectives of the organization; and –Accurate reflection of the risk appetite and tolerance within the various divisions of the organization. –The ERCOT Risk Management Committee and Advisory Risk Committee will continue to regularly review KPI performance and risk tolerance alignment.

3. 3 Request for Recommendation of Board Approval The ERCOT leadership team respectfully requests that the HR&G Committee votes to recommend that the Board of Directors approve the proposed 2013 KPIs as recommended by ERCOT staff. Please refer to Board Tab 12.1 for the corresponding Board decision template and proposed 2013 KPI Matrix. Tab 5.2 ERCOT Public