1. Nodal Program Update and SEWG Update COPS 5/10/2011 Jim Galvin

2. 2 Settlement Observations- Load Zone to Hub Mar/Apr 2011 Meeting Title (optional)Date Load Zone/HUB RTSPPPeriod:Apr-11 Location AverageZone over HUB Comparison LocationRTSPP AverageRow LabelsAverage RTSPPLocationAverage RTSPPZone over HUB Delta HB_HOUSTON$32.90LZ_HOUSTON$33.11HB_HOUSTON$32.90$0.21 HB_NORTH$30.36LZ_NORTH$30.41HB_NORTH$30.36$0.05 HB_SOUTH$30.97LZ_SOUTH$31.02HB_SOUTH$30.97$0.05 HB_WEST$18.49LZ_WEST$19.89HB_WEST$18.49$1.40 LZ_HOUSTON$33.11 LZ_NORTH$30.41 LZ_SOUTH$31.02 LZ_WEST$19.89 LZ_LCRA$31.10 LZ_AEN$31.17 LZ_CPS$31.42 Total Average$29.17 Load Zone/HUB RTSPPPeriod:Mar-11 Location AverageZone over HUB Comparison LocationRTSPP AverageRow LabelsAverage RTSPPLocationAverage RTSPPZone over HUB Delta HB_HOUSTON$28.03LZ_HOUSTON$28.02HB_HOUSTON$28.03-$0.01 HB_NORTH$28.40LZ_NORTH$28.33HB_NORTH$28.40-$0.07 HB_SOUTH$27.71LZ_SOUTH$27.46HB_SOUTH$27.71-$0.25 HB_WEST$16.27LZ_WEST$17.02HB_WEST$16.27$0.75 LZ_HOUSTON$28.02 LZ_NORTH$28.33 LZ_SOUTH$27.46 LZ_WEST$17.02 LZ_AEN$27.29 LZ_CPS$27.13 LZ_LCRA$27.86 Total Average$25.78

3. 3 Cost to Serve Load- March 2011 v 2010 Cost to Serve Load Summary:Mar-11$1.87Mar-10$2.32 2010 Congestion Costs:Mar-10$0.41 Mar-11 Arithmetic Average Related Charges Non-Spin Rsrv Chrg Reg Dn Srvc Chrg Reg Up Srvc Chrg Rspnsv Rsrv Srvc Chrg Revenut Neutrality Adj On-Peak$0.40$0.15$0.27$0.91$0.12 Off-Peak$0.39$0.26$0.27$0.98-$0.01 Average$0.40$0.21$0.27$0.95$0.05 Congestion Charges- 2010 Mar-10Feb-10 Arithmetic Average Related Charges Non-Spin Rsrv Chrg Reg Dn Srvc Chrg Reg Up Srvc Chrg Rspnsv Rsrv Srvc Chrg BENA OOM Energy OOM Capacit y Local Balanci ng Energy Replace ment Reserve On-Peak$0.41$0.59$0.56$1.02-$0.13On-Peak$0.35$0.06$0.01$0.00 Off-Peak$0.28$0.61$0.48$1.02-$0.33Off-Peak$0.21$0.17$0.00 Average$0.37$0.60$0.53$1.02-$0.20 Average$0.30$0.10$0.01$0.00

4. 4 Cost to Serve Load- April 2011 v 2010 Meeting Title (optional)Date Cost to Serve Load Summary:Mar-11$1.42Apr-10$1.13 2010 Congestion Costs:Apr-10$0.52 Apr-11 Arithmetic Average Related Charges Non-Spin Rsrv Chrg Reg Dn Srvc Chrg Reg Up Srvc Chrg Rspnsv Rsrv Srvc Chrg Revenut Neutrality Adj On-Peak$0.48$0.11$0.19$0.77$0.14 Off-Peak$0.27$0.14$0.20$0.76-$0.17 Average$0.36$0.13$0.20$0.76-$0.03 Congestion Charges- 2010 Apr-10 Arithmetic Average Related Charges Non-Spin Rsrv Chrg Reg Dn Srvc Chrg Reg Up Srvc Chrg Rspnsv Rsrv Srvc Chrg BENA OOM Energy OOM Capacit y Local Balanci ng Energy Replace ment Reserve On-Peak$0.15$0.21$0.35$0.60-$0.06On-Peak$0.36$0.11$0.00 Off-Peak$0.05$0.20$0.25$0.53-$0.13Off-Peak$0.35$0.27$0.00 Average$0.12$0.20$0.32$0.57-$0.08 Average$0.36$0.16$0.00

5. 5 Cost to Serve Load March 2011- –AS $1.87 (March) $1.42 (April) down from February which was $4.24 (primarily driven by Non-spin during winter weather events –BPD Uplift charges are a credit to Loads at $0.02 per MWh ( $370K March and $440K April) –RUC Uplift Charges remain negligible as most charges are assigned to entities short at RUC periods Mar-2011 RUC payments $680 K Apr-2011 RUC payments $3.0 M RUC Continues to be assigned to entities short in the market –Revenue Neutrality uplift to Loads normalizing from $0.05 /MWh (March) to $(0.03) /MWh April Settlement Observations- Cost to Serve Load January

6. 6 ERCOT discussed the balance of year CRR Auction process which will auction CRRs for July – December 2011 –Same format, unique invoice as this is separate from Monthly Auction process Market Default- –ERCOT corrected previous schedule for uplift of recent market default –Default will be allocated in September 2011, as opposed to spread out over September and October 2011 –Current uplift amount is approximately $732K Settlement Updates to SEWG

7. 7 NPRR 347 NPRR 347- Single Daily Invoice and Counter Party Invoice, as submitted by ERCOT to assist in simplifying the settlement process by reducing statements and aggregating to a single invoice –SEWG and MCWG endorse the concept, NPRR just posted and will be reviewed at next meeting SEWG vetted NPRR 347 and provided comments to PRS for consideration Concern raised on confidentiality with the “Counter Party” Invoice as entities with counter party relationships may not want other invoice totals or information shared across entities SEWG comments focused on maintaining the Single Daily invoice concept but to the entity level (QSE, Sub-QSE(s), CRRAH(s) etc.) PRS accepted comments and unanimously passed NPRR 347

8. 8 SEWG Summary- Nodal Settlement Guide SEWG Leadership has secured volunteers to assist in adding detail to the Nodal Settlement Guide –Harika Basaran (Vice Chair), Lori Williams (BTU), Alana Lewis (NRG) and Heather Boisseau (LCRA) –Approach will be a “divide and conquer” and collaboration on individual efforts as we prepare the document for draft submittal to COPS SEWG will provide in June COPs meeting updated examples of documentation for comment and discussion SEWG will provide initial draft late summer (Aug target) for COPS consideration Meeting Title (optional)Date

9. 9 Extract Issues Update Events are on the decline and reports and extracts are posting timely with few exceptions ERCOT remains focused on stabilization of the systems SEWG has requested that posting statistics no longer are required for monthly update and will continue to track performance and issues via the monthly report from ERCOT IT ERCOT continues to post and monitor events as were done in Nodal and report to SEWG regularly at the link below: http://www.ercot.com/services/sla/

10. 10 Questions? Meeting Title (optional)Date