1. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 1 NPRR to Clarify RUC Capacity Shortfall Ratio Share Formula August 29, 2007

2. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 2 Section 4.4.4 DC Tie Schedules Section 4.4.4 DC Tie Schedules paragraph (3) A DC Tie Schedule for hours in the Operating Day that is reported to ERCOT before 1430 in the Day-Ahead creates a capacity supply or for the equivalent Resource or an obligation for the equivalent load of the DC Tie in the DRUC process. DC Tie Schedules submitted after 1430 in the Day-Ahead for the Operating Day create a capacity supply or obligation in any applicable HRUC processes executed after the DC Tie Schedule is reported to ERCOT. DC Tie Schedules submitted after the RUC snapshot are considered in the Adjustment Period snapshot in accordance with the market timeline.

3. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 3 Current Formula vs. Proposed Change Import (Generation) Current Proposed RUCSFSNAP 1000 Current: Max (0, (RTAML x 4) – RUCCAPSNAP) Proposed: Max (0, (RTAML x 4) + RTDCEXP – RUCCAPSNAP) RTAML (50 x 4) 200200 RUCCAPSNAP100200 Current: Total HASLSNAP Proposed: Total HASLSNAP + DCIMPSNAP Total HASLSNAP100100 Resource 1 HASL 50 Resource 2 HASL 50 DCIMPSNAP100100

4. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 4 Current Formula vs. Proposed Change Export (Load) Current Proposed RUCSFSNAP 050 Current: Max (0, (RTAML x 4) – RUCCAPSNAP) Proposed: Max (0, (RTAML x 4) + RTDCEXP – RUCCAPSNAP) RTAML (50 x 4) 200200 RTDCEXP5050 RUCCAPSNAP200200 Current: Total HASLSNAP Proposed: Total HASLSNAP + DCIMPSNAP Total HASLSNAP200200 Resource 1 HASL 100 Resource 2 HASL 100