1. December 15, 2003ERCOT Market Operations Group1 PRR 371 LSL clarification Chris Ngai Market Project Group

2. December 15, 2003ERCOT Market Operations Group2 Recap of LSL discussion at WMS on 9/17 Interim period is defined as the period between the implementation date of PRR371 and PRR359. LSL values will be collected through Addendum form from ERCOT during interim period Change of LSL is possible through NCI or updated Addendum Form

3. December 15, 2003ERCOT Market Operations Group3 Issue 1 : 29 units has no LSL values Reasons tardiness planning to resubmit incorrect format multiple values submitted not planning to submit

4. December 15, 2003ERCOT Market Operations Group4 Proposed solution to Issue 1 : 29 units has no LSL values If ERCOT does not receive the LSL values in time for the implementation date of PRR 371 ERCOT will use Minimum Capacity in GARF If ‘Minimum Capacity’ not exist in GARF Use 3 month average LOL in RP The average will be calculated once for the whole interim period If 3 month average LOL in RP is not available LSL = 0

5. December 15, 2003ERCOT Market Operations Group5 Proposed solution to Issue 1: 29 units has no LSL values, cont’d The value will be used for the whole interim period until the Resource owner submit its own LSL value to ERCOT.

6. December 15, 2003ERCOT Market Operations Group6 Issue 2: Process to change LSL values during Interim Period All units are allowed to change their own LSL value using the Addendum Form or NCI for future trade days

7. December 15, 2003ERCOT Market Operations Group7 Proposed solution to Issue 2: Process to change LSL values during Interim Period The existing process of NCI will be followed Effective dates of change in LSL must be a minimum of 3 days from receipt of NCI or addendum form Faxing the forms in while mailing the original forms is recommended to expedite the changes in LSL LSL values will not be changed for any trade day that occurs in the past Note: The NCI form itself requires 30 days notice (unless otherwise specified in the Protocols); however, due to the nature of the information needed, a shorter timeline will be implemented.

8. December 15, 2003ERCOT Market Operations Group8 Issue 3: Treatment of Combined-Cycle Plants unique characteristic of Combined-Cycle plants different mode of operation different LSL limitation of LSL during interim period constant for the entire operating day needs at least 3 days in advance to change the value for the operating date

9. December 15, 2003ERCOT Market Operations Group9 Proposed solution to Issue 3: Treatment of Combined-Cycle Plants minimum value on file allows Combined-Cycle units to change LSL values used in Settlement if they can sign an affidavit that their LSL was different from the one ERCOT has on record at the time of instruction sends LSL changes before Finals is recommended only to the interim period

10. December 15, 2003ERCOT Market Operations Group10 Questions and comments?