1. Lead from the front Texas Nodal http://nodal.ercot.com 1 Texas Nodal Congestion Revenue Rights (CRR) EDS 3 Release 7 - Overview EDS 3 Phase 2 MP Planning Workshop July 11, 2007

2. Lead from the front Texas Nodal http://nodal.ercot.com 2 CRR EDS3-R7 Overview CRR will begin conducting Market Trials in early February of 2008 as part of EDS 3 Release 7 (EDS3-R7) CRR EDS3-R7 will consist of 4 phases CRR EDS3-R7 will take approximately 4-5 months, ending in May 2008 Market Participants wishing to participate in CRR EDS3-R7 will have to complete some activities in advance (e.g. Registration) The CRR EDS3-R7 plans are currently based on Market Participants interacting with the CRR User Interface, NOT an API/Machine to Machine interface –This is per the ERCOT Board of Directors statement that CRR API is currently out of scope

3. Lead from the front Texas Nodal http://nodal.ercot.com 3 Pre-Activity Registration and digital certification; NOIE PCRR contract submission Market Participants will have to register with ERCOT CRR Account Holders and have an appropriate digital certificate (by mid January 2008) NOIEs must send contracts and desired entitlements (by early December 2007) NOIEs wishing to identify themselves as Competitive Load Zones shall indicate their intention to do so (by early December 2007) Wind Generators within the boundaries of the McCamey Area must identify themselves for McFRI eligibility (by early December 2007) ERCOT to verify receipt to ERCOT of contracts and entitlements information; input into system (prior to Phase 1)

4. Lead from the front Texas Nodal http://nodal.ercot.com 4 Phase 1 – beginning early February 2008 UI connectivity, data upload; limited Market Participants (~2 weeks) Limited number of Market Participants based on MPs prepared by early deadlines CRR environment for Market Participant EDS Activities made available Verify CRR Account Holders’ ability to connect to the CRR System using a digital certificate Verify CRR Account Holders’ ability to utilize Online User Interface to retrieve market information, submit nominations, bids and offers

5. Lead from the front Texas Nodal http://nodal.ercot.com 5 Phase 2 Mock Auction (ERCOT provided bids/offers), mock bilateral trades; expanded Market Participants (~3 weeks) Expanded number of Market Participants; verify expanded CRR Account Holders’ ability submit nominations, bids and offers via UI Conduct mock monthly allocation with Account Holders self-created nominations Conduct mock monthly auction with ERCOT provided bids and offers and defined Credit Verify CRR Account Holders’ ability to download market results via UI Verify bilateral trade functionality orchestrated by ERCOT

6. Lead from the front Texas Nodal http://nodal.ercot.com 6 Phase 3 Mock Monthly Auction (MP created bids/offers) (~3 weeks) Conduct a mock CRR Monthly Auction with CRR AH created bids and offers Verify bilateral trade functionality as created by AHs Credit constraint will self defined within ERCOT identified boundaries

7. Lead from the front Texas Nodal http://nodal.ercot.com 7 Phase 4 Mock Multi-Month Auction (MP created bids/offers) (~4 weeks) Conduct a mock CRR Multi-Month Allocation with CRR AHs created nominations Conduct a mock CRR Multi-Month Auction with CRR AHs created bids and offers

8. Lead from the front Texas Nodal http://nodal.ercot.com 8 Outstanding Items The following items must be included in one of the above phases of the EDS 3 Release 7 or must result in a new phase: Additional ‘practice’ Auctions – if Market Participants wish, additional rounds of practice bidding may be possible (current phases run though April, EDS3-R7 is scheduled to end June 2007) Credit – based on design decisions and detailed development timeline, the implementation and testing timeline for Credit data input module TBD Training – an 8 hour training course is currently planned for Fall 2007 delivery. However, there may be additional hands on UI training that is TBD Note: Settlements and Billing will produce invoices as part of EDS4, auction and allocation results will be available for each CRR phase

9. Lead from the front Texas Nodal http://nodal.ercot.com 9 JanFebMarAprMayDec CRR EDS3-R7 – One-Pager Objectives Validate MP CRR Digital Certificate rights Validate AH system connection – uploads and downloads System Needs (incremental) CRR/MIS CRR External UI Data / Stubs Registration Network Model Testing Tools Defect tracking & communication process / tool Infrastructure EDS 3 Hardware Objectives (Incremental) Conduct mock CRR monthly auction – ERCOT directed bids Conduct mock CRR monthly allocation – AH created nominations Verify market result download Verify bilateral trade functionality System Needs (incremental) CRR No Change Data / Stubs No Change Testing Tools No Change Infrastructure No Change Objectives (Incremental) Conduct mock CRR monthly auction – AH determined bids Conduct secondary trading – AH directed Verify Credit constraint in optimization System Needs (incremental) CRR Bug fixes only Data / Stubs CMM Testing Tools No Change Infrastructure No Change SME Support levels: 8 * 5 support for CRR SMEs available to MPs per schedule SME Support levels: 8 * 5 support for CRR SMEs available to MPs per schedule SME Support levels: 8 * 5 support for CRR SMEs available to MPs per schedule Objectives (Incremental) Conduct mock CRR annual auction – AH determined bids Conduct mock CRR annual allocation – AH created nominations System Needs (incremental) CRR Bug fixes only Data / Stubs No Change Testing Tools No Change Infrastructure No Change SME Support levels: 8 * 5 support for CRR SMEs available to MPs per schedule Objectives Registration of MPs as CRR Account Holders Assign MP CRR Digital Certificate rights NOIE contract receipt and entitlement creation in the system NOIE load zone identification System Needs CRR CRR System (Market Operator) NMMS Network Model w/ NOIE load zones Network Model output for CRR Registration CRR AH Registration Data/Stubs None Infrastructure CRR FAT SME Support levels: Estimated at 1man day per week Pre EDS3-R7 ActivitiesPhase 1Phase 2Phase 3Phase 4 TBD Interface timing from NMMS, Registration, CMM Interface timing to S&B, MMS, CMM EDW Data Extract functionality Credit data input module