1. 1 TSP Update NATF Review July 8, 2010

2. 2 Today’s Objectives Goal: Successful Implementation of Go-Live Ensure there are no “Show Stoppers” Ensure there are no “Show Stoppers” Create a clear implementation plan to resolve TSP issues for Go-live including mitigation such as work-arounds and process changes Create a clear implementation plan to resolve TSP issues for Go-live including mitigation such as work-arounds and process changes 1. High level review of the issues list - effort by TSPs (IOUs, Municipals, Coops) identifying issues and potential solutions which reduce the likelihood of consequences during Go-Live for the benefit of all Market Participants and ERCOT. 2. Provide documentation to NATF of those issues and potential solutions which we believe need to be implemented. 3. Reduce the Anxiety shared by Market Participants that there is a workable solution 4. Provide NATF, TAC, and the Board some basis for issues related to certifying moving forward with the Nodal market.

3. July 8, 2010 3 Today’s Situation Metrics reflect progress. However the substantive functionality and practical application are really tested in the field. Metrics reflect progress. However the substantive functionality and practical application are really tested in the field. Concern among TSPs and other Market Participants on the growing number of issues that have functional daily impacts and have serious consequences that have been characterized as “Market Participant Expectations” Concern among TSPs and other Market Participants on the growing number of issues that have functional daily impacts and have serious consequences that have been characterized as “Market Participant Expectations” TAC wants more assurance to move forward with Nodal Certification. TAC wants more assurance to move forward with Nodal Certification.

4. July 8, 2010 4 TSP Issues List 47 Identified Issues Rated as: 47 Identified Issues Rated as: 1 = Show stopper; Needs resolution before Go-live can be accomplished. (0 issues) 2 = High priority issue that should be resolved by Go-live. Issues needed to be resolved to properly run the ERCOT systems and provide the most accurate market data. (18 issues) 3 = Needed but can be implement post Go-live with work-around or alternative business practices by TSPs. (11 issues) 4 = Needed for Planning Go-Live (roughly 3/1/11). ( 15 issues) Issues in 8 Different Categories Issues in 8 Different Categories 1. Priority Issues for a Successful Go-Live 2. Documentation Needs 3. Modeling Issues 4. Reports 5. Issues being Tracked by other Stakeholder Groups 6. Planning Model Issues 7. Grey Box Issues 8. Parking Lot

5. July 8, 2010 5 Available Options Joint effort between ERCOT and TSPs to develop alternative solutions and an action plan to meet deadlines. Joint effort between ERCOT and TSPs to develop alternative solutions and an action plan to meet deadlines. Work autonomously and risk developing solutions that fail to acknowledge ERCOT and TSP limitations. Work autonomously and risk developing solutions that fail to acknowledge ERCOT and TSP limitations. Do Nothing – Accept the Consequences Do Nothing – Accept the Consequences

6. July 8, 2010 6 Recommendation 1. TSPs and ERCOT work together 1. Review list and proposed solutions 2. Develop a plan to resolve the issues 3. Work the Plan 2. ERCOT share any Business Process issues with other systems (Outage Scheduler, State Estimator, ….) to help resolve these issues at the time issues are discovered.

7. July 8, 2010 7 Key Takeaways 1. Progress on the TSP Issues List will reduce concerns related to Go-Live and provide support for Nodal Certification. Issues identified and categorized with proposed solutions. Issues identified and categorized with proposed solutions. No Show Stoppers at this point. No Show Stoppers at this point. 2. ERCOT doesn’t need to carry the ball by themselves this is a team effort. If there are other system issues, share them.