1. Demand Side Working Group April 27 th, 2012

2. © 2008. CONSTELLATION ENERGY GROUP, INC. THE OFFERING DESCRIBED IN THIS PRESENTATION IS SOLD AND CONTRACTED BY CONSTELLATION NEWENERGY, INC., A SUBSIDIARY OF CONSTELLATION ENERGY GROUP, INC. BRAND NAMES AND PRODUCT NAMES ARE TRADEMARKS OR SERVICE MARKS OF THEIR RESPECTIVE HOLDERS. ALL RIGHTS RESERVED. ERRORS AND OMISSIONS EXCEPTED. 2 Antitrust Admonition ERCOT strictly prohibits Market Participants and their employees who are participating in ERCOT activities from using their participation in ERCOT activities as a forum for engaging in practices or communications that violate the antitrust laws. The ERCOT Board has approved guidelines for members of ERCOT Committees, Subcommittees and Working Groups to be reviewed and followed by each Market Participant attending ERCOT meetings. If you have not received a copy of these Guidelines, copies are available at the Client Relations desk. Please remember your ongoing obligation to comply with all applicable laws, including the antitrust laws. Disclaimer All presentations and materials submitted by Market Participants or any other Entity to ERCOT staff for this meeting are received and posted with the acknowledgement that the information will be considered public in accordance with the ERCOT Websites Content Management Operating Procedure.

3. © 2008. CONSTELLATION ENERGY GROUP, INC. THE OFFERING DESCRIBED IN THIS PRESENTATION IS SOLD AND CONTRACTED BY CONSTELLATION NEWENERGY, INC., A SUBSIDIARY OF CONSTELLATION ENERGY GROUP, INC. BRAND NAMES AND PRODUCT NAMES ARE TRADEMARKS OR SERVICE MARKS OF THEIR RESPECTIVE HOLDERS. ALL RIGHTS RESERVED. ERRORS AND OMISSIONS EXCEPTED. 3 Evacuation Route

4. © 2008. CONSTELLATION ENERGY GROUP, INC. THE OFFERING DESCRIBED IN THIS PRESENTATION IS SOLD AND CONTRACTED BY CONSTELLATION NEWENERGY, INC., A SUBSIDIARY OF CONSTELLATION ENERGY GROUP, INC. BRAND NAMES AND PRODUCT NAMES ARE TRADEMARKS OR SERVICE MARKS OF THEIR RESPECTIVE HOLDERS. ALL RIGHTS RESERVED. ERRORS AND OMISSIONS EXCEPTED. 4 Demand Side Working Group Agenda

5. © 2008. CONSTELLATION ENERGY GROUP, INC. THE OFFERING DESCRIBED IN THIS PRESENTATION IS SOLD AND CONTRACTED BY CONSTELLATION NEWENERGY, INC., A SUBSIDIARY OF CONSTELLATION ENERGY GROUP, INC. BRAND NAMES AND PRODUCT NAMES ARE TRADEMARKS OR SERVICE MARKS OF THEIR RESPECTIVE HOLDERS. ALL RIGHTS RESERVED. ERRORS AND OMISSIONS EXCEPTED. 5 DSWG Goals for 2012 #Goal DescriptionDeliverable Scheduled Completion Market Champion ContributorsStatus 1Load Resource Alternatives to RMR NPRR detailing how LRs can participate as an RMR alternate Sep-12Mark Smith Tim C, Jay Z, Sarah G, John V, Melissa T, Ino G, Eric G, Floyd T 2 Modify EILS Rules to Increase Available Capacity NPRR and Technical Requirements document change to accommodate PUCT EILS Rule change Jun-12Ed EcholsTim C, Mark S, Betty M, Joel O 3Load Participation in SCED Support Load participation of Load Resources in the design of the Look Ahead SCED project Dec-12John Varnell Tim C, Jay Z, Mark S, Floyd T, Eric R, Parviz A, Joel O, Ed E, Manny M, Laura R, Melissa T 4 Develop proposals for DR Products with different ramp periods and temperature sensitive loads Functional requirements developmentDec-12Mark Smith Tim C, Mark S, Eric R, Joel O, John T, Ed E, Laura R, Jay Z, Nelson N, Justin L, Ed R, Cyrus R, Melissa T 5 Improve access to ERCOT market data to assist in DR business decisions NPRR for changes to MIS ReportsMay-12Eric RothschildMark S, Floyd T, Parviz A 6 Aggregations of Small Customers as Load Resources Functional requirements and possible proof of concept test for aggregations of small customers to qualify as Load Resources Sep-12Ed Echols Jay Z, Eric R, Parviz A, John T, Justin L, Laura R, Manny M, Ed R, Cyrus R, Rob C 7Adjust DR Capacity for T&D Losses Potential NPRR to bring DR impacts up to a wholesale level Oct-12Tim CarterEd E, Melisssa T 8 Update Load Participation in ERCOT Markets document Revised and Updated DocumentSep-12Tim CarterEric R, Joel O 9 Explore Settlement Improvements for Price Sensitive Loads Develop NPRR for five minute settlement option for Loads Sep-12 Mark Smith Floyd Trefny Eric R, Parviz A, Ed E, Nelson N, John V 10Review DR components of CDR and SARASuggest improvements if necessarySep-12Cyrus RJay Z, Manny M 114CP / Price Response Study Write NPRR requiring a public version of this report to be posted Jun-12Jay ZEric R, Ed E, John S, Floyd T 12 Expand Sources of Frequency Data for UFR Events Formulate recommendation to ERCOT for use of additional TDSP data Dec-12John VarnellEd E

6. © 2008. CONSTELLATION ENERGY GROUP, INC. THE OFFERING DESCRIBED IN THIS PRESENTATION IS SOLD AND CONTRACTED BY CONSTELLATION NEWENERGY, INC., A SUBSIDIARY OF CONSTELLATION ENERGY GROUP, INC. BRAND NAMES AND PRODUCT NAMES ARE TRADEMARKS OR SERVICE MARKS OF THEIR RESPECTIVE HOLDERS. ALL RIGHTS RESERVED. ERRORS AND OMISSIONS EXCEPTED. 6 ERS QSE Level Compliance Doesnt fit nodal design Nodal is primarily meant to optimize economic dispatch – ERS is dispatched as a group for reliability reasons Loads can participate in different ways than generation – such as cycling of home air conditioners Individual loads are evaluated – and are paid according to their contributions QSE level compliance vetted and accepted by ERCOT and PUCT staff

7. © 2008. CONSTELLATION ENERGY GROUP, INC. THE OFFERING DESCRIBED IN THIS PRESENTATION IS SOLD AND CONTRACTED BY CONSTELLATION NEWENERGY, INC., A SUBSIDIARY OF CONSTELLATION ENERGY GROUP, INC. BRAND NAMES AND PRODUCT NAMES ARE TRADEMARKS OR SERVICE MARKS OF THEIR RESPECTIVE HOLDERS. ALL RIGHTS RESERVED. ERRORS AND OMISSIONS EXCEPTED. 7 ERLS QSE Level Compliance Concerns of poor performers moving to different QSEs Shared amongst many QSEs Suggest ERID process provides a historical account of compliance for each ESIID and for each past Contract Period Suggest nine codes: 1) Individual availability problem 2) Individual performance problem 3) Individual availability and performance problem 4) Individual testing problem 5) Aggregation availability problem 6) Aggregation performance problem 7) Aggregation availability and performance problem 8) Aggregation testing problem 9) No problems

8. © 2008. CONSTELLATION ENERGY GROUP, INC. THE OFFERING DESCRIBED IN THIS PRESENTATION IS SOLD AND CONTRACTED BY CONSTELLATION NEWENERGY, INC., A SUBSIDIARY OF CONSTELLATION ENERGY GROUP, INC. BRAND NAMES AND PRODUCT NAMES ARE TRADEMARKS OR SERVICE MARKS OF THEIR RESPECTIVE HOLDERS. ALL RIGHTS RESERVED. ERRORS AND OMISSIONS EXCEPTED. 8 DSWG – Next Meetings DR Product Options Subgroup ? Load Provided Capacity for Anticipated Critical Condition Subgroup ? DSWG 06/01/12

9. Tim Carter 713-646-5476 tim.carter@constellation.com