1. http://nodal.ercot.com 1 Weekly Market Call Weekly Update November 19, 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 Full Market Trials Agenda General Updates and Reminders Market Facing Test Update Nodal Cutover Update Question and Answers / General Discussion ERCOT asks that Market Participants log into the WebEx session using their company name and then their name. This will allow ERCOT to take roll- call offline

4. http://nodal.ercot.com 4 General Updates / Reminders

5. http://nodal.ercot.com 5 Day-to-day operations summary: Planned / Unplanned Outages Unplanned Outages 11/18/2010 9:20 A.M. - 11/18/2010 10:15 A.M. Extended latencies were noted in delivery of asynchronous bidset notifications via the external web services interface. Root cause analysis in currently underway to address the issue. ERCOT development has identified a configuration change (no code change) for this issue and are working to get that into the Nodal Production environment in the next couple of days Next update on the Monday Market Call Network Model Loads 11/17/2010 – Completed as scheduled 11/24/2010 – Last update prior to Go-Live

6. http://nodal.ercot.com 6 General Updates and Reminders ERCOT has released several new user public displays on www.ercot.com for both Day-Ahead Market and Real-Time prices. On the Nodal Real-Time Market page at http://www.ercot.com/mktinfo/rtm/, you’ll find three new displays:http://www.ercot.com/mktinfo/rtm/ –Real-Time LMPs for Latest SCED Run Display – shows the LMPs at the Resource Nodes, Load Zones, and Trading Hubs with the most recent SCED timestamp –Real-Time LMPs for Load Zones and Trading Hubs Display – shows just the LMPs at the Load Zones and Trading Hubs with the most recent SCED timestamp –Real-Time Settlement Point Prices Display – keeps a running tally of the RT SPPs for the Operating Day (yesterday and today are available) On the Nodal Day-Ahead Market page at http://www.ercot.com/mktinfo/dam/, you’ll find two new displays:http://www.ercot.com/mktinfo/dam/ –DAM Clearing Prices for Capacity Display – MCPCs for yesterday, today, and tomorrow –DAM Settlement Point Prices Display - DAM SPPs for yesterday, today, and tomorrow

7. http://nodal.ercot.com 7 General Updates and Reminders Monday Market Call for 11/22/2010 will occur as scheduled at 10 AM Reminder: Soft Launch continues through next week Submissions should reflect realistic values Twice Daily Market Calls begin on 11/23/2010 10:30 AM Market Call on 11/24 will cover topics typically covered in the Friday Market calls due to the holiday No Market Calls on 11/25 and 11/26 Twice daily Market Calls begin again on Saturday 11/27 November 24 Hour LFC test GREDP results have been distributed to the QSEs with Resource’s project managers Note that this is last GREDP that will be sent manually by ERCOT In the future, MPs can retrieve this information from the MIS

8. NOVEMBER 2010 SUNDAYMONDAYTUESDAYWEDNESDAYTHURSDAYFRIDAYSATURDAY 123456 78910111213 1415 10:00AM – Market Call 1617 3:00PM – TSP Market Call 1819 9:00AM –Market Call 20 2122 10:00AM – Market Call 23 10:30AM / 4:30PM – Daily Market Call 24 10:30AM / 4:30PM – Daily Market Call 25 ERCOT HOLIDAY 26 ERCOT HOLIDAY 27 10:30AM / 4:30PM – Daily Market Call 28 10:30AM / 4:30PM – Daily Market Call LFC Market Call 11:00AM – 5:00PM 29 10:30AM / 4:30PM – Daily Market Call *LFC Market Call 30 10:30AM / 4:30PM – Daily Market Call *LFC Market Call * LFC Market Call – Beginning at 6:00AM on 11/29 and continuing through 11:59 PM on 12/1 http://nodal.ercot.com 8

9. DECEMBER 2010 SUNDAYMONDAYTUESDAYWEDNESDAYTHURSDAYFRIDAYSATURDAY * LFC Market Call – Beginning at 6:00AM on 11/29 and continuing through 11:59 PM on 12/1 1 10:30AM / 4:30PM – Daily Market Call *LFC Market Call 2 10:30AM / 4:30PM – Daily Market Call 3 9:00AM –Market Call 4:30PM – Market Call 4 10:30AM / 4:30PM – Daily Market Call 5 10:30AM / 4:30PM – Daily Market Call 6 10:30AM / 4:30PM – Daily Market Call 7 10:30AM / 4:30PM – Daily Market Call 8910 9:00AM –Market Call 11 1213 10:00AM – Market Call 1415 3:00PM – TSP Market Call 1617 9:00AM –Market Call 18 1920 10:00AM – Market Call 212223 ERCOT HOLIDAY 24 ERCOT HOLIDAY 25 2627 10:00AM – Market Call 2829 3:00PM – TSP Market Call 3031 9:00AM –Market Call http://nodal.ercot.com 9

10. http://nodal.ercot.com 10 Day Ahead Market / Reliability Unit Commitment

11. DAM testing this week http://nodal.ercot.com 11 On average, 70 QSEs participated in DAM over this period

12. http://nodal.ercot.com 12 Submission Overview for Monday Nov 15 DAM submission overview 61 QSEs participated for Op Day 11/16 Energy Bids totaled 9,983 to 15,562 MW per hr Cleared 8,735 to 13,641 MW energy bids per hr Cleared 16,119 to 21,053 MW net energy transactions per hr - 59% to 71% of the forecasted load Cleared 10,150 to 11,398 PTP bids per hr Four major Load Zone prices ranged from $23.51 to $42.76

13. http://nodal.ercot.com 13 Submission Overview for Tuesday Nov 16 DAM submission overview 68 QSEs participated for Op Day 11/17 Energy Bids totaled 8,139 to 10,912 MW per hr Cleared 7,620 to 10,250 MW energy bids per hr Cleared 20,001 to 21,894 MW net energy transactions per hr - 63% to 83% of the forecasted load Cleared 15,975 to 18,610 PTP bids per hr Four major Load Zone prices ranged from $17.52 to $28.78

14. http://nodal.ercot.com 14 Submission Overview for Wednesday Nov 17 DAM submission overview 74 QSEs participated for Op Day 11/18 Energy Bids totaled 10,916 to 14,278 MW per hr Cleared 9,358 to 11,966 MW energy bids per hr Cleared 18,469 to 21,074 MW net energy transactions per hr - 61% to 78% of the forecasted load Cleared 11,843 to 13,282 PTP bids per hr Four major Load Zone prices ranged from $23.71 to $35.68

15. http://nodal.ercot.com 15 Submission Overview for Thursday Nov 18 DAM submission overview 78 QSEs participated for Op Day 11/19 Energy Bids totaled 10,308 to 15,766 MW per hr Cleared 9,216 to 12,877 MW energy bids per hr Cleared 17,975 to 21,572 MW net energy transactions per hr - 61% to 72% of the forecasted load Cleared 12,777 to 14,608 PTP bids per hr Four major Load Zone prices ranged from $22.20 to $34.00

16. Binding Constraints in DAM http://nodal.ercot.com 16 ODCONTINGENCY_NAMECONSTR_NAMEMax Shadow Price 11/16/10SBBSJEW540__A34.25 11/16/10DLYTZOR5125T184_115.54 11/17/10DSNG_TB5SNGTHW98_A4.16 11/17/10SMUESPR8BOW_FMR126.12 11/17/10XNE2D58NEDIN_138L14.24 11/17/10SGYRDPW8GBYLYD70_A5.00 11/18/10SALAN_S8AIRLIN_CABANI1_111.56

17. RUC testing this week http://nodal.ercot.com 17

18. http://nodal.ercot.com 18 Real Time Market / LFC

19. Real Time Market Update http://nodal.ercot.com 19 11/13 – 11/18 System Lambda at $180 offer cap for 325 intervals 11/13 – 11/18 System Lambda above $180 for 63 intervals; Max penalty price for power balance constraint changed from $3001 to $2251 on 11/16 11/13 – 11/18 Four constraints; only W_TO_N was ever binding for a short period of time on 11/17 BASE CASE - N_TO_H BASE CASE - W_TO_N DSNG_TB5 - SNGTHW98_A XHHG58H - HGT_T2H

20. Real Time Market Update http://nodal.ercot.com 20 SCED intervals not at offer cap or higher typically between $20 and $40

21. November Full System Reliability and Market Test Results Generation Resource Energy Deployment Performance (GREDP) Measure of how well resources follow dispatch instructions Non-Wind, Non-DSR Generators and DSR Portfolios must have a GREDP less than 8% or 8 MW for 85% of the intervals in which GREDP was scored Percent of Non-WGRs Generation Resources that Met the Protocol Criteria Average Percent of Total Generation During the Test by Fuel Type All Resources 90.97%NA Resources Providing Regulation 92.31%NA Combined Cycle Resources 87.18%27.30% Coal and Lignite Resources 94.44%41.02% Diesel Resources 100.00%0.03% Gas Steam (Non- Reheat Boiler) Resources 100.00%0.00% Gas Steam (Reheat Boiler) Resources 85.71%0.92% Gas Steam (Supercritical Boiler) Resources NA0.00% Hydro Resources 75.00%0.08% Nuclear Resources 100.00%12.21% Simple Cycle (Greater than 90 MW) Resources 92.31%1.52% Simple Cycle (Less than 90 MW) Resources 88.89%0.75% Percent of DSR Portfolios that Met the Protocol Criteria All DSRs0.00% DSRs Providing Regulation NA Non-WGRs/ Non-DSRs DSRs http://nodal.ercot.com 21

22. November Full System Reliability and Market Test Results Generation Resource Energy Deployment Performance (GREDP) Measure of how well resources follow dispatch instructions Wind Generators must have a GREDP less than 10% or the output must be less than their expected output for 95% of the intervals in which GREDP was scored Wind Generators are only scored during curtailment Percent of WGRs that Met the Protocol Criteria 20.51% Number of WGRs that had an Interval for which GREDP was scored 39 Average Percent of Total Generation During the Test from WGRs 16.16% WGRs http://nodal.ercot.com 22

23. http://nodal.ercot.com 23 Final Full-System Market and Reliability Test (Nov 28 – 30)

24. http://nodal.ercot.com 24 Final Full-System Test: Timeline Final Full-System Test: –ERCOT will conduct the final Full-System Testing activities Nov 28 to Dec 1 Market WebEx call will be open from 11:00 to 17:00 on Nov 28 Call will re-open at 06:00 on Nov 29 Call will remain open through 23:59 PM on Dec 1 –From Nov 28 to Dec 1, issues will be fielded by testing support staff and through the Market WebEx –After Dec 1, issues will be fielded through the issues management process and during the twice daily market calls –Additional notices will be sent during the week of Nov 22 to confirm the testing window Operational Scenarios: –No Operational scenarios are planned –Non-Spin and Emergency Base Points will be deployed as needed

25. http://nodal.ercot.com 25 Final Full-System Test: Tuning Windows If you plan to be ONTEST for unit testing: –Confirm this intention with ERCOT by 4:00 pm the day prior to the Operating Day wherein ONTEST will be used –Note: The Request for Unit Testing can be found at http://www.ercot.com/mktrules/guides/procedures/index http://www.ercot.com/mktrules/guides/procedures/index To Be ONTEST on this Date:Confirm by 4:00pm on: Nov 28Nov 27 Nov 29Nov 28 Nov 30Nov 29 Dec 1Nov 30

26. http://nodal.ercot.com 26 Credit Update

27. Soft Start CMM Soft Start – Key Dates –November 15 th - Initial CMM reports generated and published –November 16 th – First DAM run with credit constraints –November 18 th – ERCOT is now using CMM as the system of record for Zonal credit requirements CMM Soft Start - General –Total Potential Exposure (TPE) will use a) Zonal data and b) binding Nodal data. No non-binding Nodal data (e.g. practice DAM runs) will be included in the soft start TPE calculations. Collateral included will be actual collateral held. Some Zonal data will be included at a summary level only (e.g. AIL) or as adjustments (e.g. payment of Zonal invoices) –CPs participating in the DAM during the soft start are operating with a “real” ACL –Since the data used in the soft start TPE calculations is binding, ERCOT will use CMM exposures published beginning November 18 th as the bases for binding Zonal collateral requirements as well as Nodal “soft start” –ERCOT will produce Credit Reports and ACLs on non-business days during soft start Note: Please validate your Credit Reports this week. Please send questions to markettrials@ercot.com with a cc: to ercotcredit@ercot.com.markettrials@ercot.comercotcredit@ercot.com http://nodal.ercot.com 27

28. Soft Start As CPs validate Credit Reports, please consider: Highest ADTE –Reflects the highest ADTE of the last six (now seven) weeks - will continue to increase weekly to nine weeks AIL –Zonal data is included at a summary level only –“Mismatched” volume is not displayed in the AIL report although imbalance dollars and imbalance volumes are correct (display difference only) OUT – Adjusted for TCR revenues –Initially reflected the same adjustment as in most recent Zonal report –As of Thursday, reflects an estimate of TCR Revenues for November and 90% CRR Revenues for December based on load ratio share from October disbursement OIA – Adjusted to reflect payments made on zonal invoices prior to due date (e.g. prepayments) CRR invoices and inventory are included in the Credit Reports CRR invoice payments are being posted as received –payments received before 12:00 noon will be included for the ACL available for the next day’s DAM (e.g. received by noon Monday will be reflected in Tuesday’s DAM ACL) –payments received after 12:00 noon will be included for the next day’s Credit Reports and the following day’s ACL (e.g. received after noon Monday will be reflected in Wednesday’s DAM ACL) http://nodal.ercot.com 28

29. Soft Launch Treasury –CRR invoice payments are being posted as received –CRR invoices are due today (Friday, November 19 th ) If an invoice is due and a payment has not been received, ERCOT will send out an e-mail reminder to –CRRAH authorized rep and back up –CP authorized rep and back up –Credit contact and back up Note: Please be sure that ERCOT has updated contact information for your company – notices will be an automated process and will use the information in ERCOTs Registration system. http://nodal.ercot.com 29

30. Soft Launch DAM DAM credit parameters are set for Soft Start as they will be set for Go Live –DAM is currently using the 90 th percentile for both the “uth” parameter and the RT DA spread (as approved by the BOD on Tuesday) DAM historical values used for credit constraints – see next slide “ e” factors were reset to 1/0/1 on Friday, November 5 th –Will be effective through Soft Start and through operating day -December 14 th –Notices went out by two methods E-mail to CP authorized rep and back up and CP Credit contact and back up is the primary communication tool Written notices went out by regular mail CPs desiring “favorable treatment” should complete and return the Request for Change in “e” Factor Treatment Form to ercotcredit@ercot.comercotcredit@ercot.com http://nodal.ercot.com 30

31. Historical prices used for credit exposure in DAM Proxy prices to be used for purposes of calculating DAM credit exposure for go-live is covered in Protocol Section 4.4.10(8) Implementation: –All nodal settlement points have been mapped to 2010 congestion management zones Spreadsheet with the mapping is posted as item 11 at http://www.ercot.com/calendar/2010/11/20101102- NATF)http://www.ercot.com/calendar/2010/11/20101102- NATF –DAM historical settlement point prices Import hourly average of zonal MCPEs over the last 30 days as a proxy –SCED historical settlement point prices Import 110% of zonal MCPEs over the last 30 days as a proxy for Real-Time SPPs (this ensures the 10% Day-Ahead/Real-Time price difference called out in 4.4.10(8)(b)). –Ancillary Services historical prices Import zonal MCPCs as a proxy for nodal MCPCs –As nodal data is created, the zonal data will roll off, so that 30 days after go-live, all prices used for credit exposure calculations will be nodal prices. –Imported zonal prices will be trued-up with any price corrections the next business day (timeline of zonal price correction posting). Note that this process will be used during the soft start –On Nov 15, had 15 days of (zonal) data loaded, not full 30 days –By go-live, as a daily automated process runs to import the zonal data, there will be a full 30 days of historical zonal pricing data available http://nodal.ercot.com 31

32. Go Live CMM Go Live – Key Dates –Monday, November 29 th - Send ACL for initial binding DAM (afternoon) (TPE excludes zonal invoice published on November 29 th ) –Tuesday, November 30 th - Initial binding DAM - “e” factors set at 1/0/1 - Credit Report include zonal invoice published on Nov 29 th –Wednesday, December 1 st – “Go Live” CMM Go Live – General –See Appendix for detail of how exposure components will be addressed. Updates are in red. December 1-3 - “ramp up" for DALE - multiply the UDAA by a factor of five (5) each day until the first DAM invoice is published. December 4-5 (Sat/Sun) - discount DALE by 25% since the first DALE is calculated on a weekend. DALE will be calculated at 100% beginning with Credit Reports posted Monday, December 6, 2010 and ACLs sent Monday evening for Tuesday, December 7, 2010. See slide on expected impact of ACP on FMM in FCE calculation –If a Counter-Party believes that their Zonal ADTE is not representative of their anticipated Nodal RT activity, they can provide an estimate of anticipated RT activity and ERCOT will consider revising their ADTE. http://nodal.ercot.com 32

33. http://nodal.ercot.com 33 Cutover Update

34. MP Activities / Impacts Available Credit Limit is locked for CRRAHs CRRAHs can submit disputes against CRR Auction Invoice via the API or MIS CRRAHs can receive postings on MIS QSEs can begin DAM Bid submission (15 submission items) Market checkpoint calls begin to facilitate issues and readiness Daily Market Conference Bridge starts 11/23 Functional Area Settlements Credit Congestion Revenue Rights Disputes Market Management MayJuneJulyAugSeptOctNovDec Cut-Over Monthly Outlook – November Key Cut-Over Activities for November 2010 (11/8/2010 12:00pm) Credit: Collateral Posting Deadline (Dec Auction) (11/8/2010 5:00pm) CRR: Credit Lock for Dec CRR Auction (11/9/2010 – 11/11/2010) CRR: December CRR Auction Bid Open/Close (11/12/2010) CRR: December CRR Auction Executes (11/15/2010) CRR: December CRR Auction Results published (11/16/2010) Settlements: December CRR Auction Invoice published (11/16/2010) Disputes: Dispute submitted to ERCOT for CRR Invoice (11/19/2010) Credit: Payment Due for December CRR Auction Invoices (11/22/2010) Settlements: Payments to CRRAH (Dec Auction) (11/24/2010) Market Submission Opens (Remaining Protocol Go-Live) (11/24/2010) Model: Network Model Load (11/29/2010) Credit: ERCOT to Publish ACL for the initial Day-Ahead Market execution by ERCOT http://nodal.ercot.com 34

35. http://nodal.ercot.com 35 Questions

36. http://nodal.ercot.com 36 Appendix

37. Approach for establishing the initial exposure in CMM http://nodal.ercot.com 37

38. Approach for establishing the initial exposure in CMM http://nodal.ercot.com 38

39. Approach for establishing the initial exposure in CMM http://nodal.ercot.com 39

40. Go Live – FMM calculation http://nodal.ercot.com 40

41. Cut-Over Update – Go-Live Sequence of Events DateActionComments 11/15/2010 – 11/29/2010 ERCOT Initiates “Soft Launch” to Nodal Market Go-Live ERCOT will run non-binding DAM, RUC daily per Nodal protocol timelines. RTM will remain Open Loop, but continue to publish base points and LMPs. Note that credit will be set high on 11/15 11/15/2010 Credit posts ACLs and TPEs for non- binding DAM For Operating Day 11/15 credit will be manually set to high limits 11/16/2010First Credit Operating Day 11/16Credit reflects actual limits 11/17/2010 Market now able to submit transactions for first Nodal Operating Day (T-14d) 12/01 Operating Day open for Market submissions 11/24/2010 QSEs with Resources required to submit 7 days of rolling COPs 12/01 required on 11/23 11/28/2010 2:00 PM – 11/28/2010 3:00 PM Generation and Frequency Control switched to Nodal systems for final LFC test QSEs will begin following Nodal base points Settlements will continue to be Zonal 11/28/2010 2:00 PM – 11/30/2010 11:59:59 PM QSEs remain on Nodal Control while settling Zonally during the LFC test 11/29/2010 Last Non- Binding DAM for operating day 11/30 http://nodal.ercot.com 41

42. Cut-Over Update – Go-Live Sequence of Events (11/30/2010) TimeActionComments up to 10:00 Bids and Offer submission QSE submit bids and offers 10:00 Close DAM 10:00 Execute Dam Clearing Process 13:30 Approve DAM resultsDay Ahead results posted to MIS 13:30-14:30 Submit Post DAM COP updates 14:30 Close for RUC 14:30 Begin Execution of DRUC 16:00 Approve DRUC Results 16:00 Post DRUC Results 18:00 HRUC Begins Hourly Runs http://nodal.ercot.com 42

43. Cut-Over Monthly Outlook – Go-Live Sequence of Events Key Zonal Notes for 11/30/2010 and 12/01/2010 –QSEs will maintain: Balancing Energy Offers through Operating Day 12/01/2010 –Submitted on 11/30 for OD 12/1 Resource Plans through Operating Day 12/01/2010 –Maintained continuously through 12/01 to reflect actual Resource Plan Zonal Outages effective on Operating Day 12/01/2010 –Examples: Actual Start / End, Forced Outages, etc –On 11/30/2010 ERCOT will run: Zonal Ancillary Service Market –Zonal awards will be published Zonal RPRS –Run as a study only –Zonal commitments will not be published –Zonal prices will not be generated for 12/01/2010 –No Zonal Submissions or Markets for Operating Day 12/02/2010 or later –Note that all Zonal systems (ERCOT and MP) must remain in place until 1/1/2011 http://nodal.ercot.com 43