1. Nodal Program Update Jason Iacobucci Nodal Program Manager Technical Advisory Committee 6 May 2010

2. 2 Technical Advisory Committee6 May 2010 Agenda Program Status DAM results Market Readiness Follow-Up Discussion

3. 3 208 Days to Go-Live Technical Advisory Committee6 May 2010 Phase 5: Full Functionality 0 Items Impacting Go-Live Date

4. 4 208 Days to Go-Live Achievements within Market Trials: Market Trials has been running for 13 weeks Phase 2.1: Market Connectivity Real Time / Day Ahead Qualifications 95% of the QSEs have qualified 99% of network model has been validated CRR Two monthly CRR auctions have been run and invoiced Phase 3.0: Real Time Markets Six month LMP analysis started on March 1 st The $2,250 cap on prices has only been reached a few times since 03/04/10 Phase 4.0: DAM / RUC Nine DAM runs have been completed Running twice a week DRUC DAM / Real Time Settlement Strong participation from the Market Participants (191 QSEs on Thursday April 29 th ) Technical Advisory Committee6 May 2010 Phase 5: Full Functionality Market Quality Testing and Operational Readiness Upcoming Milestones for Market Trials: Reporting support for DAM/RUC/SAS CMM Module DAM / RUC 3x/wk DAM / RUC 5x/wk Closed Loop LFC Phase 5: Full Functionality 168 HR Test System Cut-Over

5. 5 Integrated Nodal Timeline – Go-Live December 1 st, 2010 Technical Advisory Committee6 May 2010

6. 6 2010 Market Trials Timeline – Go-Live December 1 st, 2010 Technical Advisory Committee6 May 2010

7. 7 208 Days to Go-Live Technical Advisory Committee6 May 2010 DAM Summary Issues with DAM: Intermittent issues with CRR performance and availability since Monday, May 3 rd Correcting Market Bid/Offer IDs with special characters (4/29) The AS Awards file had an issue with publishing after DAM. (4/27) Encountered a known issue where MMS cannot handle multiple Load Resources mapped to a single Load point in the model (4/13, 4/15)

8. 8 208 Days to Go-Live Tuesday May 4 th for Operating Day Wednesday May 5 th 174 QSEs participated 20,261 - 27,435 MWs Solution Range $13.69 - $47.34 Solution Price Range Several Issues involving the first full run Credit limit data was missing for Op Day 5/5. Cause was linked to the DSV load yesterday. DAM submission timeline extended until 11am. DAM Operators tried to work around the outages defect (Patch 7 fixes the issue). NDP errored out due to missing data in the RDB database. ERCOT is investigating a possible ABB defect. Once issue was fixed, DAM was rerun. DAM then errored out due to the known issue with the decimal combination in a few specific bids. Implemented manual workaround. Reran DAM. Results posted around 2:50 pm. DRUC was delayed until 3:52pm, but completed and was published. Technical Advisory Committee6 May 2010 Market Trials 5.0: Full Functionality: Day 1 Summary

9. 9 Communication Channels For Market Participants Issue Management –Market Participants will report all issues using the markettrials@ercot.com email addressmarkettrials@ercot.com –Business oriented issues Initially reviewed by the ERCOT Wholesale Client Services Account Managers If required, issues are escalated to the Market Trials Lead responsible for that functional area More complex or in-depth questions will be ultimately escalated to a Subject Matter Expert (SME ) –Technical issues Initially reviewed by the Market Trials Technical Generalist for initial triage If required, issues will be escalated to IT Production Support If determined to be a variance / defect, ERCOT will leverage our existing defect management process to estimate, analyze and prioritize the resolution –Our goal is that all questions will be responded to within 24 hours Typically responses are that same business day If you have not received a response within 24 hours, feel free to re-forward –ERCOT will maintain a known issues spreadsheet for each functional area on the Nodal Readiness center Will be updated every Friday by EOB (note that if no new known issues are discovered or closed, the spreadsheet will remain static) Known issues will be added as a standing agenda item on the Friday Market calls Technical Advisory Committee6 May 2010

10. 10 Test Activities CRRRTMDAMOSEMSCOMS NMMS CMMREGREPORTS Functional Stability System Stability Business Stability Go-Live Functional Completeness Solution/ Data Completeness Solution/ Data Quality FA/SA TEST INTEGRATION TEST BUSINESS PROCESS TEST PERFORMANCE & LOAD TEST Model Load /Validation Processes MARKET TEST UI Performance Improvements Contingencies ICCP Quality SE Quality DRUC DAM RTM CRR INVOICES HRUC SASM SCED Model Baseline ICCP Point Checkout Technical Advisory Committee6 May 2010 Business Quality Integration 1 Day Dual Entry Testing May Auction Integrated Credit Management Integration Phase 5:Full Functionality Phase 4: DAM/RUC Phase 5:Full Functionality RARF SEM MT 2.1 MT 3.0 MT 4.0MT 5.0

11. 11 Nodal Defects Trends - High Priority (Must Fix Before Go-Live) Technical Advisory Committee6 May 2010 Defect counts decreased due to planned defect migrations into Nodal ITest. Primary source for Open defect counts are EIP, EMS, MMS, and NMMS.

12. 12 Nodal Program Risks & Issues Technical Advisory Committee6 May 2010 Risk/IssueImpacted Milestone TargetCategoryProbabilitySeverityStatus Market Interaction Operating Level Agreements (OLAs) Need to determine operating level agreements associated with market interactions to assist ERCOT in establishing operational thresholds: -Network Model Management -CRR sizing -Reporting ProgramApril/ May 2010 Scope / Budget HighLowPhase 4 OLA definitions complete Phase 5 OLA definitions drafted, pending approval Regular updates to NATF and NDSWG 200,000 submissions total; TAC vote on 5/6/10 Reports continue to become available as Market Trials activities ramp-up. Performance monitoring continues Market Design Assessment Risk around the protocol traceability project and the market results as each phase of market trials becomes active. ProgramAugust 2010 Scope / Budget LowHigh Building experienced market design team to review and assess design and protocol alignment with market trials results

13. Vikki Gates Readiness & Transformation Market Readiness

14. 14 2010 Participant Readiness Touch Points Technical Advisory Committee6 May 2010 Meetings Training Outreach Market trials August July June May NATF 5/4 Nodal 101 Transmission 101 Generation 101, 201 CRR – instructor-led NMMS Economics of LMP NOIE QSE Operations Standby site visits Metrics monitoring Bi-weekly TSP calls MRS #4 Cutover Weekly Trials calls 2 hr system-wide LFC test Phase 5 Market Trials initiates NATF 6/1 and 6/29 Nodal 101 LSE 201 Generation 101, 201 Economics of LMP CC Workshop VC Workshop AS Workshop Retail Workshop TSP Outage Scheduler Road Show begins Phase 5 Metrics launch Weekly Trials calls 8 hr system-wide LFC test Full market trials functionality continues TBD Qualification assessment (MP17) Standby site visits Weekly Trials calls 48 hr system-wide LFC test Verifiable costs in execution NPRR206 in execution Nodal 101 Transmission 101 Generation 101, 201 Basic Training Program NOIE QSE Operations Settlements 301 Weekly Trials calls Prepare for 168 hr test NATF 8/3 and 8/31 Nodal 101 Transmission 101 Generation 101, 201 Basic Training Program NOIE QSE Operations Settlements 301 Standby site visits

15. 15 Next 60-days of Classes and Settlement Workshops Technical Advisory Committee6 May 2010 Course Start DateLocation Economics of LMPMay 10Energy Plaza (Dallas) ERCOT Nodal 101May 10ERCOT Met Center (Austin) Congestion Revenue RightsMay 11ERCOT Met Center (Austin) Generation 101May 12TXU (Dallas) Transmission 101May 18CPS Energy (San Antonio) Network Model ManagementMay 20CPS Energy (San Antonio) Basic Training ProgramMay 24Energy Plaza (Dallas) NOIE QSE OperationsMay 24Austin Energy Town Lake Center (Austin) MRS #4 CutoverMay 25Hilton – Austin Airport (Austin) Generation 201May 26TXU (Dallas) Enrollment at: http://nodal.ercot.com/training/courses/index.htmlhttp://nodal.ercot.com/training/courses/index.html

16. 16 Next 60-days of Classes and Settlement Workshops (continued) Technical Advisory Committee6 May 2010 Course Start DateLocation Transmission 101June 1ERCOT Met Center (Austin) Combined Cycle WorkshopJune 2Suez Energy (Houston) Verifiable Cost WorkshopJune 3Suez Energy (Houston) Generation 101June 8LCRA (Austin) Market Settlements 301June 9Suez Energy (Houston) Generation 201June 17LCRA (Austin) Basic Training ProgramJune 21ERCOT Met Center (Austin) Load Serving Entity 201June 23Austin Energy Town Lake Center (Austin) ERCOT 101 for Wind GenerationJune 28ERCOT Met Center (Austin) Transmission 101June 29Energy Plaza (Dallas) Transmission 101July 13CenterPoint Energy (Houston) Enrollment at: http://nodal.ercot.com/training/courses/index.htmlhttp://nodal.ercot.com/training/courses/index.html

17. 17 Technical Advisory Committee Metrics Roadmap PURPLE ORANGE Timing and Design Confirmed Timing subject to change, design in progress MP15A MP16 MP20 MP3 MP6 MP11 MP14C E9 E1 N2 EMO9(B) CRR3 EMO6 MO4 MO5 CO1 CO2 CO3 CO4 CO5 CO6CO7 CO8CO9 C10 E7 E11 E12 EMO2 EMO3 C1-C10 EMO13 MO7 CRR4 E5 IMM1 R0 R2 R3 MP15B MP3 N1 E3 E10 R1 MP17 EMO9(D) EMO1 MO9 MO8 MO3 MO10 EMO10 EMO9(C) EMO7 EMO9(A) EMO8 New Metric MP23 6 May 2010

18. 18 CRR Metrics Technical Advisory Committee Metric Name Current Score Applies to WeightGreen %Yellow %Red % Not Scored % Primary CriteriaNotes Market Participant Metrics MP15(B) CRR Connectivity Qualification GreenCRRAHs Even weighting 91.4%0.0%4.3% Successful submission CRR transactions 64/70 CRRAHs qualified. CRR3 Operation of CRR Auctions and Allocations GreenCRRAHs Even weighting 93.8%0% 6.2% Participation in at least one of the last two auctions or allocations. AMBER/RED scores light up 5/5/2010. 60/64 CRRAHs with adequate participation in May or Balance of Year auction or allocation ERCOT Metrics CRR3 Operation of CRR Auctions and Allocations AmberERCOTN/A Auction results distributed to participants per schedule in CRR Handbook 5/2 “2010 Balance of year auction results” moved to 5/5 due to Nexant resources onsite. 5/6/2010ERCOTN/A Allocated Revenue Rights in statistical sample = 100% accurate Results of Source/Sink prices / CRR Clearing prices report (avail 5/6) CO8 Verify CRR Auction Invoices GreenERCOTN/A CRR Auction Result for MP(n) – CRR Auction Invoices for MP(n) = 0$ S&B validated that auction invoices reflected awards per CRRAH for March, April, and May auctions,. GreenERCOTN/A100%0% System Generated CRR Auction Invoices not posted = 0 March 2010 Monthly = 40 of 40 April 2010 Monthly = 38 of 38 May 2010 Monthly = 48 of 48 Active Phase 3 Metric Notes: 1. Added CRR3 participation threshold (market segment) - >= 80% participation (GREEN), >= 50% and < 80% (AMBER), < 50% (RED) 6 May 2010

19. 19 Real-Time Metrics Technical Advisory Committee Metric Name Current Score Applies to WeightGreen %Yellow %Red % Not Scored % Primary CriteriaNotes Market Participant Metrics MP3 Market Submissions Connectivity Qualification GreenQSERs Generation Ratio Share 99.0%1.0%0.0% Successful submission of RT and DAM transactions 81/84 QSERS Qualified (includes QSEs with Load Resources). GreenQSEs Even weighting 96.7%.06%.05%2.2% 176/182 QSEs qualified. Below 95% threshold for overall GREEN. MP15-A Real-time Market Participation GreenQSERs Generation Ratio Share 99.0%1.0%0.0% Weekly average of daily SCED submissions 77/79 QSERs above 95% weekly average for SCED submissions. EMO6 Individual LFC Testing GreenQSERs Generation Ratio Share 91%0% 9% 80% of system-wide generation has completed individual QSE tests for LFC 56/76 QSERs completed their individual LFC test ERCOT Metrics MO4 Verify SCED Execution Quality GreenERCOTN/A100%0% All successful SCED executions passed the post-execution price validations. 4/6-4/19 period - 4,030 Price Validation runs with no rule violations MO5 Generate 6 Months of LMPs GreenERCOTN/A98.1%.0%1.9%0% 95% of SCED executions completed with LMPs posted on MIS. 4/6-4/19 period, 3,985 out of 4,063 SCED runs with LMPs posted. Active Phase 3 and 4 Metrics Notes: 1. ERCOT Criteria added to MP3 and MP15(B) – “ERCOT scores in connectivity will mirror the MP scores.” 6 May 2010

20. 20 Day-Ahead Market Metrics Technical Advisory Committee Metric Name Current Score Applies to WeightGreen %Yellow %Red % Not Scored % Primary CriteriaNotes Market Participant Metrics MP16 DAM Participation GreenQSERs Generation Ratio Share 98.9%0.0%1.1%0% Participation in 50% of the Day-Ahead Market runs 76/79 Rolling Average QSEs with Resources, 70/79 Regular AmberQSEs Even Weighting 79.1%6.0%12.1%2.8% 144/182 Rolling Average QSEs w/o Resources ERCOT Metrics MO8 Verify DAM Execution Quality 5/19/2010ERCOTN/A Red DAM executions pass the post-execution price validations Report in progress MO9 Generate DAM LMPs 5/19/2010ERCOTN/A 95 percent Day-Ahead Market execution as evidenced by Day- Ahead LMP postings Report in progress MO10 DRUC Execution 6/2/2010ERCOTN/A 95 percent DRUC execution Report in progress Notes: 1.MP16 – 10 DAM runs (as of the 5/4/2010 run) 2.MP16 – Metric is based on a 2 week rolling average. 3.MP16 – 96.5% Load participating. 6 May 2010

21. 21 Outage Scheduler Metrics Technical Advisory Committee Metric Name Current Score Applies to WeightGreen %Yellow %Red %Not Scored %Primary CriteriaNotes Market Participant Metrics MP20 Outage Scheduler Connectivity Qualification GreenQSERs Generation Ratio Share 98.1%0.0% 1.9% Successful submission of OS transactions 74/78 QSERS qualified. GreenTSPs Ownership Ratio Share 99.8%0%.02%23/25 TSPs qualified. ERCOT Metrics EMO3 Verify Outage Evaluation System Functionality 6/2/2010ERCOTN/A A test of the Outage Management Process is completed Will be reviewed at 6/1 NATF Active Phase 3 Metric 6 May 2010

22. 22 Network Modeling Metrics Technical Advisory Committee Metric Name Current Score Applies to WeightGreen %Yellow %Red % Not Scored % Primary CriteriaNotes Market Participant Metrics MP14-C TSP Model Validation GreenTSPs Ownership Ratio Share 99.9%.1%0.0% Network Model data validated by TSP 24/28 TSPs have submitted model validation e-mail to ERCOT. MP6 Telemetry Compliance with Nodal Protocols 3.10.7.5 GreenQSERs Generation Ratio Share 100%0.0% Expected State Estimator telemetry submitted. 78/78 complete. 3502 total SE points provided GreenQSERs Generation Ratio Share 100%0.0% Expected SCED telemetry submitted. 78/78 complete. 7629 SCED points provided GreenTSPs Ownership Ratio Share 99.3%0.0%.7% Expected TSP telemetry per ICCP Handbook submitted 16/17 TSPs above 95% threshold for GREEN. 357 points outstanding N2 Telemetry ICCP System Failover Green/White only QSERs Generation Ratio Share 11.8%0% 88.2% ICCP Failover test completed successfully prior to the 8-hour LFC test. 18/78 QSERs completed ICCP telemetry failover test MP18 Mapping of Resources and Loads in Private Use Networks 6/2/2010QSERs Generation Ratio Share N/A # of QSE(n) PUN Points Provided / # of QSE(n) PUN Points Expected 306 points across 7 QSEs with Resources. 15 points still assigned to TDSP. MP23 Telemetry Quality (MP to ICCP server) 7/14/2010TSPs Ownership Ratio ShareN/A # of TSP(n) Suspect/Bad points provided / # of TSP(n) points total 1356 Suspect/Bad points (97.9% good quality). 7/14/2010QSERs Generation Ratio Share N/A # of QSER(n) Suspect/Bad points provides / # of QSER(n) points total 871 Suspect/Bad points (94.9% good quality) Active 4 Metric Notes: 1.MP6 does not include 405 QSE CB and DSC points from TSP outreach. ERCOT is determining whether these rollback into the QSER MP6 measurement 6 May 2010

23. 23 Network Model Metrics Technical Advisory Committee Network Modeling Metrics Metric Name0 Current Score Applies to WeightGreen %Yellow %Red % Not Scored % Primary CriteriaNotes ERCOT Metrics EMO9(A) State Estimator Standards Performance 5/19/2010ERCOTN/A State Estimator converges 97% during monthly test period March 91.4% convergence EMO9(B) RTCA Modeling Differences 5/19/2010ERCOTN/A 95% of values matched between Zonal and Nodal Network Models - Impedances - Dynamically and Non- dynamically Rated Lines - Load Tap Settings Measurement excludes pseudo switches and multi-section lines EMO9(C) RTCA CSC Comparison7/14/2010ERCOTN/A CSC Pre-contingency SE Flows within 5% (Hourly snapshot) Measurement establishes baseline flows on Commercial lines to indicate the significance of Psuedo modeling and multi- section lines on the SE flows. EMO9(D) Validate Zonal and Nodal Security Analysis Results 9/8/2010ERCOTN/A 90% of active constraints in Zonal RTCA are also detected in Nodal RTCA To be determined EMO10 Anomalous / Auto-Disabled Telemetered Points 6/2/2010ERCOTN/A The % of Anomalous and Auto-Disabled Measurements is less than 2% of Total Measurements April Nodal 2.58% March Nodal 3.17% Zonal hovers ~ 1.7% Notes: 1. SE performance requirements in EMO12 moved to EMO9(A) 6 May 2010

24. 24 Resource Entity Metrics Technical Advisory Committee Metric NameCurrent ScoreApplies toWeightGreen %Yellow %Red %Not Scored %Primary CriteriaNotes Market Participant Metrics MP11 Resource Registration GreenREs Registered MW Capacity Ratio Share 97.7%1.82%.5%0.0% Decision Making Authority form submitted, and GENMAP validated 151/157 Resources completed. 6 May 2010

25. 25 Readiness Metrics Technical Advisory Committee Metric NameCurrent Score Applies to Percentage (if applicable) Primary CriteriaNotes ERCOT Metrics E1 ERCOT Staff Completes Training GreenERCOT100% Training plans must be adhered to for highly impacted departments 15 out of 15 highly impacted departments are up to date with their training plans. E9 Develop Nodal Procedures GreenERCOT100% Procedures developed 1 month prior an exercised in the appropriate Market Trials Phase All MT4 and MT5 are now developed and the MT3 procedures were exercised during MT3 as scheduled. MT4 procedures on target to be exercised by the end of MT4. 6 May 2010

26. 26 Questions ?

27. 27 Appendix

28. 28 Nodal Program Risks & Issues: Definitions 6 May 2010Technical Advisory Committee Definitions for Category, Probability and Severity of Risks & Issues: Category –Scope : Will require a scope change –Schedule: Will require a schedule change –Budget: Will require a budget change Probability –High : Probability to occur is ≥ 90%; perceived impact would require a Change Request over the next 1-3 months –Medium: Probability to occur is between 31 – 89%; perceived impact would require a Change Request over the next 4 -10 months –Low: Probability to occur is ≤ 30 %; not expected to require a Change Request Severity –High: Milestone impact, or budget impact >$250,000 –Medium: Milestone impact - but expected to be mitigated, or budget impact between $0 - $250,000 –Low: No milestone impact, or no budget impact