1. Draft for Discussion Day-ahead Settlement Timeline Options Commercial Operations Subcommittee May 23 rd, 2005

2. Draft for Discussion DAY 0 Day Ahead Day 1 Operating Day Day 4 Invoice Due Proposed Day-ahead Settlement Timeline - Option 1 Daily Invoice Day 2 Statement and Invoice Issued Day 3 Invoice Payments Due Operating Day = Monday DAM Settlement Statement for operating day Monday is scheduled to be posted by midnight Tuesday. DAM Invoice for operating day Monday is scheduled to be posted by midnight Tuesday. Payments due to ERCOT for the DAM Invoice for operating day Monday are due to ERCOT by 5:00 p.m. CPT on Thursday Funds owed to Invoice Recipients are due to them by 5:00 p.m. CPT on Friday. Sunday Monday Tuesday Wednesday Thursday Invoice Funds Paid Friday Day 5 or next Business Day

3. Draft for Discussion Proposed Day-ahead Settlement Timeline - Option 2 Operating Day = Monday DAM Settlement Statement for operating day Monday is scheduled to be posted by midnight Tuesday. DAM Invoice for operating day Monday is scheduled to be posted by midnight Tuesday. Payments due to ERCOT for the DAM Invoice for operating day Monday by 5:00 p.m. CPT on Friday. Funds owed to Invoice Recipients are due to them by 5:00 p.m. CPT on Monday. DAY 0 Day Ahead Day 1 Operating Day Day 2 Statement and Invoice Issued Day 3 Sunday Monday Tuesday Wednesday Thursday Invoice Funds Paid FridayMonday Day 6 or next Business Day Day 5 Invoice Due Daily Invoice Invoice Payments Due

4. Draft for Discussion Proposed Day-ahead Settlement Timeline - Option 3 Operating Day = Monday DAM Settlement Statement for operating day Monday is scheduled to be posted by noon Tuesday. DAM Invoice for operating day Monday is scheduled to be posted by midnight Tuesday. Payments due to ERCOT for the DAM Invoice for operating day Monday are due to ERCOT by 5:00 p.m. CPT on Thursday. Funds owed to Invoice Recipients are due to them by 5:00 p.m. CPT on Friday. DAY 0 Day Ahead Day 1 Operating Day Day 4 Invoice Due Day 2 Statement and Invoice Issued Day 3 Invoice Payments Due Sunday Monday Tuesday Wednesday Thursday Invoice Funds Paid Friday12:00 Noon Daily Invoice Day 5 or next Business Day

5. Draft for Discussion Proposed Day-ahead Settlement Timeline - Option 4 Operating Day = Monday DAM Settlement Statement for operating day Monday is scheduled to be posted by midnight Tuesday. DAM Invoice for operating days Monday through Sunday of the previous week scheduled to be posted by midnight Thursday. Payments for invoices for operating days Monday through Sunday of the previous week due to ERCOT by 5:00 p.m. CPT on Monday. Funds owed to Invoice Recipients are due to them by 5:00 p.m. CPT on Tuesday. DAY 0 Day Ahead Day 1 Operating Day Day 4 Invoice Due Weekly Invoice Day 2 Statement and Invoice Issued Day 3 Invoice Payments Due Sunday Monday Tuesday Wednesday Thursday Friday Invoice Funds Paid Statement for Monday Statement for Tuesday Statement for Wednesday 1 4 23 Sunday MondayTuesday Wednesday Thursday Friday 567 Saturday Previous Week Monday Tuesday

6. Draft for Discussion Proposed Day-ahead Settlement Timeline - Option 5 Operating Day = Monday DAM Settlement Statement per option-1. Real-time initial Statement per settlement calendar (assumed 10 days after operating day) Netted Invoice for Real-Time, DAM and CRRs for operating days Mon – Sun of week-1 posted by midnight Thursday (week-3). Payments due to ERCOT by 5:00 p.m. CPT on Monday. Funds owed to Invoice Recipients are due to them by 5:00 p.m. CPT on Tuesday. Monday Statement Tuesday Statement Wednesday Statement Week-1 Mon-Sun Week-2 Mon-Sun Week-3 Mon-Sun DAY 0 Day Ahead Day 1 Operating Day Day 4 Invoice Due Weekly Invoice Day 2 Statement and Invoice Issued Day 3 Invoice Payments Due Sunday Monday Tuesday Wednesday Thursday Friday Invoice Funds Paid Monday Tuesday

7. Draft for Discussion Options for Settlement of DAM 1. Settlement timeline proposed in the 3/2/05 presentation to TNT 2. Move payment date of Invoice out by one day 3. Move Statement publish date to noon of the day following the Operating Day (but move Operating Day trade adjustments to the real-time Statement). 4. Daily Statements but weekly Invoices 5. Synchronize DAM and real-time Invoices Note – Prefer one statement for DAM

8. Draft for Discussion Instructions: 1. Internal MP Review of 5 Options 2. Rank in descending order (least favorable at bottom) 3. Email list to Ted Hailu (Thailu@ercot.com) by close of business June 7 (Please use “DAM Options” as the subject of the e-mail)Thailu@ercot.com 4. ERCOT will compile 2 top options and begin drafting DAM Protocol language 5. COPS review top 2 options and vote for approval at June 14 meeting. Complete DAM Protocol Language 6. Review and vote for approval of DAM Protocol Language at June 28 meeting