1. http://nodal.ercot.com 1 Nodal Stabilization Market Call December 14, 2010

2. http://nodal.ercot.com 2 Antitrust Admonition ANTITRUST ADMONITION ERCOT strictly prohibits Market Participants and their employees who are participating in ERCOT activities from using their participation in ERCOT activities as a forum for engaging in practices or communications that violate the antitrust laws. The ERCOT Board has approved guidelines for members of ERCOT Committees, Subcommittees and Working Groups to be reviewed and followed by each Market Participant attending ERCOT meetings. If you have not received a copy of these Guidelines, copies are available at the Client Relations desk. Please remember your ongoing obligation to comply with all applicable laws, including the antitrust laws. DISCLAIMER All presentations and materials submitted by Market Participants or any other Entity to ERCOT staff for this meeting are received and posted with the acknowledgement that the information will be considered public in accordance with the ERCOT Websites Content Management Operating Procedure.

3. http://nodal.ercot.com 3 General Updates / Reminders

4. Model Load will occur tonight at 11:56 PM CRR Auction Results were published yesterday –Results were visible in the CRR Application at ~ 18:15. –Results were visible in the MIS later on that evening. –Due to internal miscommunication, the market notice was not posted until this morning. –CRR Staff and Vendor identified the root cause; a code fix is in development, but a work around has also been identified. Weekend Systems Issues – Friday 12/10/2010 –UPDATE: Root Cause - Incorrect configuration was applying the incorrect amount of CPUs to a back-up process. This has been corrected –Back-up processes caused a system performance issue –Hotline Emergency Notice issued from 2006 – 2306 –Net impacts: SCED did not run for the following intervals: 2000, 2005, 2010, 2025, 2050, 2100, 2105, 2125, 2130, 2200, 2205 (11 total intervals) Emergency Base Points (EBP) active during: 2137  2233 1 SPP was late posting for interval 2130 (posted at 2200) HRUC failed at 2000 and 2100 Weekend Systems Issues – Saturday 12/11/2010 –UPDATE: Root Cause – 2 memory modules failed causing a large server to also fail. Architecture of this system is being reviewed for options on preventing this lengthy of an outage in the future. –Server hardware failure starting at 0930 –Net Impacts: The following Market Facing systems were impacted: –Market Submissions (External Web Services (EWS))  Down from 1038 – 1236 –CDR  Returned to service at 1425 »LMP / Settlement Point Price (SPP) reports were posted Sunday 12 /13 in the evening –DAM results were held until 1444 waiting for CDR to return to service –DRUC started at 1615 (Hotline call issued) –CMM  Returned to service at 1600 –NMMS  Returned to service at 2310 Failover was performed in order to perform server maintenance on primary site –Hotline call was issued at 2000 –CDR was unavailable from 2030  2240 –SCED did not run for the following intervals: 2035  2100 (6 total intervals) –EBP from 2041  2112 http://www.ercot.com 4

5. http://nodal.ercot.com 5 Day Ahead Market

6. SASM awards for Combined Cycles Current Implementation: –For combined cycle resources in the SASM, if one configuration is providing OFFNS, the rest are OFF in the COP, and there are unexpired available AS Offers for the configurations that are OFF, online AS can be awarded to those configurations in the SASM. –This is under review. –To avoid receiving online AS Offers for alternative configurations when providing OFFNS, cancel or expire the remaining AS Offers prior to the beginning of the adjustment period http://www.ercot.com 6

7. FAQ Two items to note about PTP Obligation Bid awards 1.Invalid - A PTP Obligation Bid is invalid if the source or the sink settlement point is disconnected from the network. If the PTP Bid was invalid, the QSE will see a $0 price in the award report. However, note that a price is calculated for every settlement point, even if disconnected from the network (logic of this is in section 4.5.1(9) of the protocols). So while you may see a price that supports awarding your PTP Bid calculated based off the SPP report, the $0 in the award report alerts you that this PTP was invalid. http://www.ercot.com 7

8. FAQ Two items to note about PTP Obligation Bid awards (cont’d) 2.Rounding – Prices calculated by the DAM clearing engines are rounded to the penny before posting and sending to settlements. However, note that when MMS creates the PTP Bid award report, the price given for the PTP is calculated first, then rounded. This is for display purposes only. To calculate the official price, take the published sink SPP – published source SPP. It can be a penny different from the award report display. Example: Sink SPP $40.32694, Source SPP $30.2427 (as calculated by clearing engine) Official SPPs: Sink SPP $40.33, Source SPP $30.24 Official PTP Price: $10.09 [$40.33 - $30.24] Display PTP Price in award report : $10.08 [round($40.32694-30.2427)] http://www.ercot.com 8

9. http://nodal.ercot.com 9 Credit

10. Credit reports OD December 1 detail data in AIL report is incorrect –Display issue only – total dollars for OD December 1 st is correct; –Related to settlement point activation dates – for credit calculations –Do not plan to correct detail as data drops off AIL on Thursday when invoice is generated OD December 2 nd forward is correct http://nodal.ercot.com 10

11. Payment reminders ERCOT is seeing improvement in timeliness of remittance but still see some payments coming in late –If payments are not in on time Payment breach or late payment for CP Short pay for the market –Notice of who has not paid Draw from collateral –Cash –LCs –Guarantees Payment may be made by Wire transfer – by 5:00 pm on due date ACH – by 5:00 pm two bank business days before the due date Note: JPMorgan Chase uses a different ABA number for wires (EFT) versus ACH. –if a CP is paying by wire – use ABA - 021000021 –if a CP is paying by ACH – use ABA – 111000614 http://nodal.ercot.com 11

12. Treasury A number of invoices are for small $s –Still must be paid on time Options –Prepay payments or initiate wires as “future dated” –Send several payments together Clearly identify all invoices being paid Do not “net” from outbound payments –Set up a small cash prepay account from which small $ payments can be deducted http://nodal.ercot.com 12

13. http://nodal.ercot.com 13 Questions?