1. Protocol Revision Subcommittee Sandy Morris October 6, 2011

2. 2 Summary of Revision Requests 4 NPRRs Recommended for Approval

3. 3 Items for a Vote Unanimous Recommendations with No Impacts –NPRR399, Updates to Protocol Sections Related to Settlements and Billing Unanimous Recommendations with Impacts –NPRR395, CRR Auction Offer Award Disclosure –NPRR400, Eliminate Unsecured Credit for CRR Auctions and for Future Credit Exposure and Eliminate Netting of FCE with CCE - URGENT Non-unanimous Recommendations –NPRR398, Changes to Resource Category Minimum-Energy Generic Heat Rates Rejections or Withdrawals –None this month

4. 4 NPRRs Recommended for Approval

5. 5 NPRR395, CRR Auction Offer Award Disclosure Purpose (DC Energy) This NPRR adds a requirement for ERCOT to post CRR Auction offer awards following each CRR Auction in the exact fashion CRR Auction bid awards are currently posted on the Market Information System (MIS) Public Area. PRS VoteOn 8/18/11, PRS unanimously voted to recommend approval of NPRR395 as amended by the 8/12/11 Wholesale Market Subcommittee (WMS) comments. On 9/22/11, PRS unanimously voted to endorse and forward the 8/18/11 PRS Report as amended by the 9/22/11 DC Energy comments and Impact Analysis for NPRR395 to TAC with a recommended Priority of High and rank of 19.5. Effective Date/PriorityUpon System Implementation – Priority High; Rank 19.5 ERCOT Impact$40k - $50, Impacts to Congestion Revenue Rights (CRR) systems Business Case Highlights Symmetry in the CRR market result posting leads to greater transparency and more efficient CRR Auction pricing outcomes; Positive impact to consumer segment in the form of increased value to cost convergence of CRR instruments; Sponsor believes that all other RTOs/ISOs post information on awarded CRR offers in the same fashion that information is posted regarding awarded bids.

6. 6 NPRR398, Changes to Resource Category Minimum-Energy Generic Heat Rates Purpose (ERCOT) This NPRR changes the Resource Category Minimum-Energy Generic Heat Rates for several fuel type Resource categories as described below. PRS VoteOn 8/18/11, PRS voted to recommend approval of NPRR398 as submitted. There were two opposing votes from the Independent Generator and Independent Power Marketer (IPM) Market Segments and one abstention from the IPM Market Segment. On 9/22/11, PRS voted to endorse and forward the 8/18/11 PRS Report and Impact Analysis for NPRR398 to TAC. There was one opposing vote from the Independent Generator Market Segment and two abstentions from the IPM Market Segment. Effective Date/PriorityJanuary 1, 2012 ERCOT ImpactLess than $5k (O&M), minor impacts to Settlement and Billing (S&B) and Market Management System (MMS) Business Case Highlights Reduce Minimum-Energy Cost Guarantee while ensuring that Resources are able to recover their actual costs; QSEs may have to update their Settlement systems to accept new generic heat rates; Consumers will not be impacted directly except with possible lower Make-Whole Payment charges.

7. 7 NPRR399, Updates to Protocol Sections Related to Settlements and Billing Purpose (ERCOT) This NPRR includes updates to miscellaneous, non-substantive corrections to various Protocol sections related to Settlements and billing. Revisions include corrections to Protocol references and variable clarifications. PRS VoteOn 8/18/11, PRS unanimously voted to recommend approval of NPRR399 as submitted. On 9/22/11, PRS unanimously voted to endorse and forward the 8/18/11 PRS Report as amended by the 9/14/11 ERCOT comments and Impact Analysis for NPRR399 to TAC. Effective Date/PriorityJanuary 1, 2012 ERCOT ImpactNo Impacts. Business Case Highlights Improved accuracy and clarity of Protocols.

8. 8 NPRR400, Eliminate Unsecured Credit for CRR Auctions and for Future Credit Exposure and Eliminate Netting of FCE with CCE - URGENT Purpose (ERCOT) This NPRR requires that the Future Credit Exposure (FCE) component of the collateral calculation and the CRR Auction credit limit be collateralized with cash, letter of credit or a surety bond. This NPRR also eliminates netting of FCE with Current Credit Exposure (CCE) for all Counter-Parties. PRS VoteOn 9/22/11, PRS unanimously voted to recommend approval of NPRR400 as amended by the 9/19/11 ERCOT comments with a recommended Priority of Critical and rank of 9.44 and to forward NPRR400 and the preliminary Impact Analysis to TAC. Effective Date/PriorityUpon System Implementation – Priority Critical; Rank 9.44 ERCOT Impact$230k - $255k, impacts to Credit Monitoring and Management (CMM), Information Services Master (ISM) and MIS. Business Case Highlights Reduces credit risk; maximizes the efficiency of collateral utilization; helps to meet CFTC conditions to achieve exemption from the Commodity Exchange Act; will likely increase collateral costs for Market Participants who currently use unsecured credit and guarantee agreements to satisfy CRR Auction and CRR forward market to market related collateral requirements; Credit WG endorsed NPRR400, noting it has positive credit implications by eliminating use of unsecured credit and guarantee for CRR activity and eliminating netting of CRR and non-CRR activity.