1. Protocol Revision Subcommittee Presentation to the ERCOT Technical Advisory Committee January 8, 2008

2. PRS Summary 5 PRRs for Approval 5 PRRs for Approval 3 Urgent Status 3 Urgent Status 3 NPRRs for Approval 3 NPRRs for Approval

3. Revision Requests Unanimously Recommended for Approval with No Impacts

4. PRR 782 – Clean-up & Corrections to Terminology & Transaction Timings in Protocol Section 15, Customer Registration Purpose (Green Mountain, IREP & CenterPoint Energy, IOU for TX SET) Corrects and clarifies the transaction timing descriptions to make them consistent with current processes and Appendix D, Transaction Timing Matrix, in the Retail Market Guide Benefit Clarifies current market processes. Market Impact Increased clarity and accuracy of the Protocols. System Change NoN/A AssumptionsN/A PRS Vote PRS unanimously recommended approval as amended by RMS comments; all Market Segments were present Effective Date March 1, 2009

5. PRR 782 – Clean-up & Corrections to Terminology & Transaction Timings in Protocol Section 15, Customer Registration Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

6. PRR 783 – Elimination of the Non-ERCOT LSE Fee Purpose (AEP, IOU) Eliminates language within Section 9.7.3 which describes the Texas Non-ERCOT Load Serving Entity Fee. Benefit Eliminates a fee of approximately $250K being charged to a single Market Participant for systems which are already fully depreciated. Market Impact N/A System Change NoN/A AssumptionsN/A PRS Vote PRS unanimously recommended approval; all Market Segments were present Effective Date March 1, 2009

7. PRR 783 – Elimination of the Non-ERCOT LSE Fee Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

8. PRR 792– Revised Renewable Portfolio Standards Allocation Process, Pursuant to PUC Subst. R. 25.173 -- URGENT Purpose (TIEC, Consumer) Modifies Protocols to comply with PURA §39.904 and PUC Subst. R. 25.173, Goal for Renewable Energy Benefit Implements PUC rule and accompanying order as adopted December 4, 2008. Market Impact Modifies the Renewable Portfolio Standard (RPS) allocation process to comply with PURA and PUC rules System Change NoN/A AssumptionsN/A PRS Vote PRS unanimously recommended approval as amended by PRS; all Market Segments Effective Date February 1, 2009

9. PRR 792– Revised Renewable Portfolio Standards Allocation Process, Pursuant to PUC Subst. R. 25.173 -- URGENT Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

10. NPRR 160– Elimination of the Non-ERCOT LSE Fee Purpose (AEP, IOU) Eliminates language within Section 9.16.2 which describes the Texas Non-ERCOT Load Serving Entity Fee. Benefit Eliminates a fee of approximately $250K currently being charged to a single Market Participant for systems which are already fully depreciated. Market Impact N/A System Change NoN/A AssumptionsN/A PRS Vote PRS unanimously recommended approval; all Market Segments Effective Date Upon Texas Nodal implementation; no incremental impact to nodal budget or schedule.

11. NPRR 160– Elimination of the Non-ERCOT LSE Fee Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

12. Revision Requests With Comments to TAC or Non-Unanimously Recommended for Approval with/without Impacts

13. PRR 788 – Ramp Rate Limits for Existing WGRs -- URGENT Purpose (FPL Energy, IGEN) Proposes a requirement that certain existing Wind- powered Generation Resources (WGRs) limit the unit ramp rate to 10% per minute of their nameplate capacity ratings as registered with ERCOT. Benefit Enhance system reliability by limiting frequency deviations associated with near-instantaneous ramping of WGRs. Market Impact Likely positive market impact associated with decreased need for Regulation Service procurement and deployment to compensate for variability in WGR production System Change NoN/A AssumptionsN/A PRS Vote PRS recommended approval as amended by Luminant and PRS with 1 abstention; all Market Segments were present Effective Date February 1, 2009

14. PRR 788 – Ramp Rate Limits for Existing WGRs Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

15. PRR 791 – Shortage Pricing Mechanism -- URGENT Purpose (J Aron, IPM) Creates “virtual QSEs” that can establish pricing during periods of energy shortage. Benefit Appropriate price development. Market Impact Potential additional cost for Market Participants purchasing from BES market. Higher prices may occur during shortage conditions System Change YesEMS AssumptionsN/A PRS Vote PRS recommended approval by a vote of 3.8 in favor, 0.45 opposed and 6 abstentions (IGEN and IREP segments did not vote yea or nay); the Independent Generator Segment was absent. Effective Date To be determined.

16. PRR 791 – Shortage Pricing Mechanism -- URGENT Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact $100K – 200K EMS System Changes

17. NPRR 140– Revision to CRR Obligation Margin Adder Purpose (J Aron, IPM) Revises the margin adder for Point-to-Point (PTP) Obligations to a value of “x” to be determined by the TAC Subcommittee process. Benefit Will facilitate purchase of PTP Obligations which is necessary for appropriate transmission risk hedging in the nodal market. Market Impact N/A System Change NoN/A AssumptionsN/A PRS Vote PRS recommended approval as amended by ERCOT and PRS with 1 abstention; all Market Segments were present. Effective Date Upon Texas Nodal implementation; no incremental impact to nodal budget or schedule

18. NPRR 140– Revision to CRR Obligation Margin Adder Item Reviewed Description NoImpact Credit Monitoring/ Liability Budget Staffing Computer Systems Business Functions Grid Operations Impact

19. NPRR 169– Clarify the Calculation and Posting of LMPs for the Load Zone and LMPs for Each Hub Purpose (ERCOT for TPTF) Clarifies language that specifies the calculation and posting of LMPs for the Load Zone and “LMPs for each Hub”. Benefit Calculation and posting of LMPs for the Load Zone and Hubs for each SCED interval will be used by all Market Participants including those who need to project when demand response is needed. Used by retail customers who are consuming power at Real-Time prices and used by generators who may desire to sell energy at Hub prices. Market Impact Impacts REPs and retail customers who purchase energy at Real-Time prices. System Change N/AN/A Assumptions IA Pending PRS Vote PRS unanimously recommended approval as amended by CPS Energy and PRS; all Market Segments except for the IGEN segment were present Effective Date Upon Texas Nodal implementation

20. PRR/NPRR Summary Revision Requests Unanimously Recommended for Approval with No Impact Revision Requests Unanimously Recommended for Approval with No Impact PRR 782 – Clean-up & Corrections to Terminology & Transaction Timing in Protocol Section 15, Customer Registration PRR 782 – Clean-up & Corrections to Terminology & Transaction Timing in Protocol Section 15, Customer Registration PRR 783 – Elimination of the Non-ERCOT LSE Fee PRR 783 – Elimination of the Non-ERCOT LSE Fee PRR 792 – Revised Renewable Portfolio Standards Allocation Process, Pursuant to PUC Subst. R. 25.173 -- URGENT PRR 792 – Revised Renewable Portfolio Standards Allocation Process, Pursuant to PUC Subst. R. 25.173 -- URGENT NPRR 160 – Elimination of the Non-ERCOT LSE Fee NPRR 160 – Elimination of the Non-ERCOT LSE Fee Revision Requests with Comments to TAC or Non-Unanimously Recommended for Approval with/without Impact Revision Requests with Comments to TAC or Non-Unanimously Recommended for Approval with/without Impact PRR 788 – Ramp Rate Limits for Existing WGRs -- URGENT PRR 788 – Ramp Rate Limits for Existing WGRs -- URGENT PRR 791 – Shortage Pricing Mechanism – URGENT PRR 791 – Shortage Pricing Mechanism – URGENT NPRR 140 – Revision to CRR Obligation Margin Adder NPRR 140 – Revision to CRR Obligation Margin Adder NPRR 169 – Clarify the Calculation and Posting of LMPs for the Load Zone and LMPs for each Hub NPRR 169 – Clarify the Calculation and Posting of LMPs for the Load Zone and LMPs for each Hub

21. PRS 2008 Goals Report Process PRRs and NPRRs (Section 21 requirement) Process PRRs and NPRRs (Section 21 requirement) Processed 42 PRRs and 52 NPRRs Processed 42 PRRs and 52 NPRRs Conform alignment of ERCOT Protocols and procedures with NERC terminology Conform alignment of ERCOT Protocols and procedures with NERC terminology Established Nodal Protocol/Reliability Alignment Task Force Established Nodal Protocol/Reliability Alignment Task Force Will meet with TPTF to discuss issues (e.g., separation of terms for QSE and “Resource QSE” to describe NERC duties; possible renaming of “Non-Spin Reserve Service” to align definitions with NERC standards/descriptions) Will meet with TPTF to discuss issues (e.g., separation of terms for QSE and “Resource QSE” to describe NERC duties; possible renaming of “Non-Spin Reserve Service” to align definitions with NERC standards/descriptions) Alignment is tedious but important for Market Participants to be involved Alignment is tedious but important for Market Participants to be involved Facilitate and make recommendations for 2009 Project Priorities as requested by ERCOT Facilitate and make recommendations for 2009 Project Priorities as requested by ERCOT Reviewed prioritization process and recommended PPL to TAC Reviewed prioritization process and recommended PPL to TAC Review NPRRs necessary for “go-live” and collaborate with ERCOT PMO to structure a process for “releasing” NPRRs to be included in “go-live plus ‘x’” Review NPRRs necessary for “go-live” and collaborate with ERCOT PMO to structure a process for “releasing” NPRRs to be included in “go-live plus ‘x’” PRS deferred developing a process for NPRR releases until new schedule finalized PRS deferred developing a process for NPRR releases until new schedule finalized

22. PRR Statistics Between March 2001 and December 2008, 584 PRRs were submitted and, of those, 447 PRRs were approved. (The first “PRR” was PRR 211.)

23. PRR Statistics Between January 2004 and December 2008, the number of system changes required by PRRs has significantly declined.

24. Nodal PRR (NPRR) Statistics Between May 2006 and December 2008, 169 NPRRs were submitted and, of those, 126 NPRRs were approved.

25. Nodal PRR (NPRR) Statistics Between May 2006 and December 2008, the number of system changes required by NPRRs has significantly declined. The majority (>70%) of changes were addressed by the July 2007 “Baseline 1 & 2” activity.