1. Report to TAC February 2010

2. In Brief WMS 2010 Goals WMS 2010 Goals WMS Leadership for 2010 WMS Leadership for 2010 Chair: Barbara Clemenhagen Chair: Barbara Clemenhagen Vice Chair: Jennifer Troutman Vice Chair: Jennifer Troutman Working Group Reports Working Group Reports CMWG CMWG Goals: CSC for 2011, PCAPs and Nodal Competitive Constraint Test, Bus Mapping Goals: CSC for 2011, PCAPs and Nodal Competitive Constraint Test, Bus Mapping DSWG DSWG LaaR Performance LaaR Performance EILS Report - W-B012010-02 REVISED EILS Procurement for Feb-May 2010 EILS Report - W-B012010-02 REVISED EILS Procurement for Feb-May 2010 MCWG MCWG NPRR 206 – DAM Credit Requirements, Short-Pay Fund, DAM Collateral Requirements NPRR 206 – DAM Credit Requirements, Short-Pay Fund, DAM Collateral Requirements VCWG VCWG NPRR for FOP dispute (to be submitted), Nodal Start-up Offer for RMR (no variable) NPRR for FOP dispute (to be submitted), Nodal Start-up Offer for RMR (no variable) QMWG QMWG PRR 833 Primary Freq Res from WGR, PRR 841 (endorsed), Load Forecast Accuracy PRR 833 Primary Freq Res from WGR, PRR 841 (endorsed), Load Forecast Accuracy NPRR 091 – concerns raised regarding length of mitigation and what is capped NPRR 091 – concerns raised regarding length of mitigation and what is capped

3. In Brief Task Forces Task Forces MIGTF – Protocol Changes to be Drafted (91 days / IA Requirements / Minimal Cost) MIGTF – Protocol Changes to be Drafted (91 days / IA Requirements / Minimal Cost) GATF – March presentation to TAC GATF – March presentation to TAC WCATF – Two proposals – will report on the how not the should WCATF – Two proposals – will report on the how not the should Other Activities Other Activities Timing of Trades in Nodal related to Standard Form Contracts Timing of Trades in Nodal related to Standard Form Contracts

4. WMS Leadership for 2010 Subcommittee Subcommittee Chair, Barbara Clemenhagen, Topaz Power (GEN) Chair, Barbara Clemenhagen, Topaz Power (GEN) Vice Chair, Jennifer Troutman, AEP (IOU) Vice Chair, Jennifer Troutman, AEP (IOU) CMWG CMWG Chair: Marguerite Wagner – PSEG TX (GEN) Chair: Marguerite Wagner – PSEG TX (GEN) Vice-Chair: Eric Goff – Reliant Energy (REP) Vice-Chair: Eric Goff – Reliant Energy (REP) DSWG DSWG Chair: Mary Anne Brelinsky, EDF Trading North America (REP) Chair: Mary Anne Brelinsky, EDF Trading North America (REP) Co-Vice Chair: Nelson Nease, Nucor Steel (CONSUMER) Co-Vice Chair: Nelson Nease, Nucor Steel (CONSUMER) Co-Vice Chair: Timothy Carter, Constellation New Energy (REP) Co-Vice Chair: Timothy Carter, Constellation New Energy (REP) MCWG MCWG Chair: Morgan Davies, Calpine (GEN) Chair: Morgan Davies, Calpine (GEN) Vice-Chair: Eric Goff – Reliant Energy (REP) Vice-Chair: Eric Goff – Reliant Energy (REP) VCWG VCWG Chair: Heddie Lookadoo, NRG (GEN) Chair: Heddie Lookadoo, NRG (GEN) Vice Chair: Ian Davis, Topaz Power (GEN) Vice Chair: Ian Davis, Topaz Power (GEN) QMWG QMWG Chair: David Detelich, CPS (MUNI) Chair: David Detelich, CPS (MUNI) Vice Chair: Jeremy Carpenter, Tenaska (IPM) Vice Chair: Jeremy Carpenter, Tenaska (IPM)

5. Working Group Reports CMWG Presentation available at http://www.ercot.com/content/meetings/wms/keydocs/2010/0120/06_cmwg_update_to_wms_100120.ppt Presentation available at http://www.ercot.com/content/meetings/wms/keydocs/2010/0120/06_cmwg_update_to_wms_100120.ppt http://www.ercot.com/content/meetings/wms/keydocs/2010/0120/06_cmwg_update_to_wms_100120.ppt Main topics Main topics Goals for 2010 Goals for 2010 Nodal Competitive Constraint Test Nodal Competitive Constraint Test Pre Contingency Action Plans Pre Contingency Action Plans 2011 CSCs 2011 CSCs Bus mappings for Load Zones for Nodal Bus mappings for Load Zones for Nodal Operational Insights Operational Insights Voltage issues at Kendall Voltage issues at Kendall Installation of Yellow Jacket Phase Shifter Installation of Yellow Jacket Phase Shifter

6. Working Group Reports CMWG Main topics Main topics Nodal Competitive Constraint Test Nodal Competitive Constraint Test Annual Competitive Constraint Process—thought is to mimic existing CSC process. CMWG to work with ERCOT and make recommendation to WMS Annual Competitive Constraint Process—thought is to mimic existing CSC process. CMWG to work with ERCOT and make recommendation to WMS Pre Contingency Action Plans Pre Contingency Action Plans ERCOT committed to check on posting use of PCAPs in RT ERCOT committed to check on posting use of PCAPs in RT One idea was to post at: http://oldercot.ercot.com/ercotPublicWeb/Message/MessageSe arch.asp One idea was to post at: http://oldercot.ercot.com/ercotPublicWeb/Message/MessageSe arch.asp http://oldercot.ercot.com/ercotPublicWeb/Message/MessageSe arch.asp http://oldercot.ercot.com/ercotPublicWeb/Message/MessageSe arch.asp This would enable posting in RT and not require system changes This would enable posting in RT and not require system changes Next Meeting: TBA (post-WMS Meeting held on January 27 th ) Next Meeting: TBA (post-WMS Meeting held on January 27 th )

7. Working Group Reports DSWG Presentation available at http://www.ercot.com/content/meetings/wms/keydocs/2010/0120/07_dswg_update_to_wms_100120.ppt Presentation available at http://www.ercot.com/content/meetings/wms/keydocs/2010/0120/07_dswg_update_to_wms_100120.ppt http://www.ercot.com/content/meetings/wms/keydocs/2010/0120/07_dswg_update_to_wms_100120.ppt

8. Working Group Reports DSWG LaaR Performance Protocol Revision to 6.10.5.4 LaaR Performance Protocol Revision to 6.10.5.4

9. Working Group Reports DSWG EILs Contract Period February – May 2010 EILs Contract Period February – May 2010 The revised and final procurement results are as follows: Business Hours 1 HE 0900 through 1300, Monday thru Friday except ERCOT Holidays; 425 hours MW Procured or Self Arranged350.8 Number of EILS Resources90 (includes 61 aggregations) Projected cost$1,157,273.30 Average cost per MW per hour$7.76 Business Hours 2 HE 1400 through 1600, Monday thru Friday except ERCOT Holidays; 255 hours MW Procured or Self Arranged346.7 Number of EILS Resources90 (includes 61 aggregations) Projected cost$685,237.28 Average cost per MW per hour$7.75 The revised and final procurement results are as follows:

10. Working Group Reports DSWG EILs Contract Period February – May 2010 EILs Contract Period February – May 2010 The revised and final procurement results are as follows: Business Hours 3 HE 1700 through 2000, Monday thru Friday except ERCOT Holidays; 340 hours MW Procured or Self Arranged323.0 Number of EILS Resources89 (includes 60 aggregations) Projected cost$920,209.32 Average cost per MW per hour$8.38 Non-Business Hours All other hours; 1,859 hours MW Procured or Self Arranged284.1 Number of EILS Resources81 (includes 55 aggregations) Projected cost$3,930,275.49 Average cost per MW per hour$7.44 The revised and final procurement results are as follows:

11. Working Group Reports MCWG Presentation available at http://www.ercot.com/content/meetings/wms/keydocs/2010/0120/09_mcwg_update__to_wms_100120.ppt Presentation available at http://www.ercot.com/content/meetings/wms/keydocs/2010/0120/09_mcwg_update__to_wms_100120.ppt http://www.ercot.com/content/meetings/wms/keydocs/2010/0120/09_mcwg_update__to_wms_100120.ppt Main topics Main topics WMS endorsed DAM NPRR: WMS endorsed DAM NPRR: Expanded loss mutualization for entire market and accelerated DAM Expanded loss mutualization for entire market and accelerated DAM NPRR will be available prior to Feb WMS meeting NPRR will be available prior to Feb WMS meeting NPRR 206 NPRR 206 Update on Short-Pay Fund - a subgroup has been set up to discuss Update on Short-Pay Fund - a subgroup has been set up to discuss

12. Working Group Reports MCWG Parking Lot and Goals for 2010 Parking Lot and Goals for 2010 Goals to be address at February WMS Goals to be address at February WMS Parking Lot: Parking Lot: Direction of invoice timing change Direction of invoice timing change Perform bottom up review of existing creditworthiness standards (after CCRO Best Practices efforts) Perform bottom up review of existing creditworthiness standards (after CCRO Best Practices efforts) Reduction of settlement cycle due to PRR 568 (7days) Reduction of settlement cycle due to PRR 568 (7days) Further reductions in settlement cycles Further reductions in settlement cycles This includes looking at the potential to reduce the settlement cycle 30% with improved metering This includes looking at the potential to reduce the settlement cycle 30% with improved metering

13. Working Group Reports QMWG Presentation available at Presentation available at http://www.ercot.com/content/meetings/wms/keydocs/2010/0120/10_qmwg_update_to_wms_100120.ppt Main Topics Main Topics Review 30 minute NSRS deployments Review 30 minute NSRS deployments WGRPP Forecast Accuracy Update WGRPP Forecast Accuracy Update Zonal RPRS unit de-selection Zonal RPRS unit de-selection PRR841 Revise Total ERCOT Wind Power Forecast – WMS endorsed PRR841 Revise Total ERCOT Wind Power Forecast – WMS endorsed Load Forecasting Accuracy Load Forecasting Accuracy Definition of WGR Definition of WGR SCR757, Real Time Wind Production by Zone SCR757, Real Time Wind Production by Zone PRR833, Primary Frequency Response requirement from Existing WGRs PRR833, Primary Frequency Response requirement from Existing WGRs Draft PRR: Decommitment process for RUC Draft PRR: Decommitment process for RUC Next QMWG Meeting: March 8 th Next QMWG Meeting: March 8 th

14. Working Group Reports VCWG Presentation available at Presentation available at http://www.ercot.com/content/meetings/wms/keydocs/2010/0120/11_vcwg_update_to_wms_01202010.ppt Main Topics Main Topics Options for Filing RUC Cost Options for Filing RUC Cost Verifiable Costs or Standard Costs Verifiable Costs or Standard Costs Proxy Heat Rate Proxy Heat Rate review DRUC and HRUC after the first 3 months of Nodal to determine if the Proxy heat rate should be changed review DRUC and HRUC after the first 3 months of Nodal to determine if the Proxy heat rate should be changed NPRR Language for allowing disputes for FOP NPRR Language for allowing disputes for FOP To be submitted by CPS To be submitted by CPS ERCOT bidding of RMR Units – no variable ERCOT bidding of RMR Units – no variable Sent to NATF Sent to NATF Next VCWG Meeting: February 10 th Next VCWG Meeting: February 10 th

15. Active Task Forces Generation Adequacy Task Force Generation Adequacy Task Force http://www.ercot.com/content/meetings/wms/keydocs/2010/0120/14_gatf_report_to_wms_100120_.doc WMS expected to vote in February WMS expected to vote in February CDR Inputs, Calculations and Format CDR Inputs, Calculations and Format Installed Capacity Assumptions – use RARF Installed Capacity Assumptions – use RARF New Unit Additions – affirmative declaration New Unit Additions – affirmative declaration Renewables - ELCC Renewables - ELCC Mothballed Capacity – no change Mothballed Capacity – no change DC Tie Capacity – no change DC Tie Capacity – no change Switchable” Capacity - RARF Switchable” Capacity - RARF Netting of Generation and Load – no change Netting of Generation and Load – no change Retired Capacity – introduce “pending unit requirements” line Retired Capacity – introduce “pending unit requirements” line CDR Format – move Summer and Winter Capacities closer to front CDR Format – move Summer and Winter Capacities closer to front

16. Active Task Forces Joint ROS/WMS Multiple Interconnection of Generation Task Force (MIG TF) Joint ROS/WMS Multiple Interconnection of Generation Task Force (MIG TF) Market Participant Notification Period (Transmission outage) Market Participant Notification Period (Transmission outage) WMS endorsed 91 Days with 17 in favor 3 opposed and 3 abstentions WMS endorsed 91 Days with 17 in favor 3 opposed and 3 abstentions Interconnection Date for Protocol Considerations Interconnection Date for Protocol Considerations MIGTF shall draft protocols to introduce generation operation date. The generation operation date shall define what the generation unit is expected to do, and the Interconnection Date would define the requirements of equipment at the point of interconnection. Existing resources reconnecting to a different line would be grandfathered to the date of the original interconnection. MIGTF shall draft protocols to introduce generation operation date. The generation operation date shall define what the generation unit is expected to do, and the Interconnection Date would define the requirements of equipment at the point of interconnection. Existing resources reconnecting to a different line would be grandfathered to the date of the original interconnection. Motion carried (19), No opposing votes, 3 abstentions Motion carried (19), No opposing votes, 3 abstentions Planning Concept Endorsement Planning Concept Endorsement Option – B - Minimal Cost - As a default view TSPs would try to minimize the cost of Transmission, (ERCOT process does not change regarding optimization). Option – B - Minimal Cost - As a default view TSPs would try to minimize the cost of Transmission, (ERCOT process does not change regarding optimization). Motion carried with no abstentions and one opposed. Motion carried with no abstentions and one opposed. Approval of MIG Whitepaper – http://www.ercot.com/content/meetings/wms/keydocs/2009/1216/11_mig_draft_white_paper_091216.doc Approval of MIG Whitepaper – http://www.ercot.com/content/meetings/wms/keydocs/2009/1216/11_mig_draft_white_paper_091216.doc http://www.ercot.com/content/meetings/wms/keydocs/2009/1216/11_mig_draft_white_paper_091216.doc Next Step to Draft Protocol Revisions Next Step to Draft Protocol Revisions

17. Active Task Forces Wind Cost Allocation Task Force (WCATF) Wind Cost Allocation Task Force (WCATF) http://www.ercot.com/content/meetings/wms/keydocs/2010/0120/15_wcatf_update_to_wms_100120.ppt Task Force is working through a Reliant and Luminant proposals (see slides). Task Force is working through a Reliant and Luminant proposals (see slides). Participants continue to have concerns regarding goals of TF. Participants continue to have concerns regarding goals of TF. Next Meeting: February 8 th Next Meeting: February 8 th

18. WMS 2010 Goals Item [WMS to set prioritization]Item [WMS to set prioritization]WMS input/direction needed byWMS input/direction needed by Nodal Market TransitionNodal Market TransitionOn-going Market Participant Readiness Market Participant Readiness TCR to CRR Transition TCR to CRR Transition Nodal Protocol Tracebility Nodal Protocol Tracebility Nodal Parking Deck Nodal Parking Deck Nodal Test Evaluation Nodal Test Evaluation Nodal Verifiable Cost MethodologyNodal Verifiable Cost MethodologyOn-going (VCWG)On-going (VCWG) Consideration of necessary Zonal Market changesConsideration of necessary Zonal Market changesBefore Q2Before Q2 Review of Generation Adequacy in ERCOTReview of Generation Adequacy in ERCOTQ1 (GATF)Q1 (GATF) Market Issues Related to:Market Issues Related to: Credit issuesCredit issuesOn-going (MCWG)On-going (MCWG) EILSOn-going (DSWG)On-going (DSWG) Reliability & A/S Dispatch Impacts on Energy MarketsReliability & A/S Dispatch Impacts on Energy MarketsOn-going Market Event EvaluationMarket Event EvaluationOn-going Adv. meters & other demand response in A/S and Energy MarketsAdv. meters & other demand response in A/S and Energy MarketsOn-going (DSWG)On-going (DSWG) Wind & related renewable technology integrationWind & related renewable technology integrationOn-going (various WG)On-going (various WG) Criteria in Nodal for supplying A/S, Energy and Capacity MarketsCriteria in Nodal for supplying A/S, Energy and Capacity MarketsOn-going (WMS)On-going (WMS) Integration of Quick Start Resources into NodalIntegration of Quick Start Resources into NodalQSTF Power Storage DevicesOn-going (TBD) LaaR Responsive Reserve Performance Penalty On-going (DSWG)On-going (DSWG)