1. Commercial Operations Subcommittee Update to TAC September 7, 2012 Harika Basaran, COPS Chair 2012 Jim Lee, COPS Vice Chair 2012

2. COPS Working Group Activities in Progress PWG (Profiling Working Group) LPGRR to modify the language in Section 9.1.1 and the Profile Decision Tree to eliminate the need for COPS and TAC approval of the annual validation usage window reducing the need for meeting time for such and yet keep the annual validation language current. LPGRR to add AMS back into annual validation process to assist with ERCOT load forecasting accuracy (not a consensus yet) LPGRR to change language to comply with NPRR454 Removal of Unfunded Project List Language Next PWG meeting is on November 14, 2012. 2

3. COPS Working Group Activities in Progress CSWG (Communications and Settlement Working Group) NPRR 347 and NPRR 391 present significant changes to the current settlement and invoicing timeline NPRR 347 combines DAM and Real Time settlements to a single daily invoice NPRR 391 ramps up the due date to 2-days (bank business days) and eliminates ACH as a method of payment of invoices CSWG continues to follow progress of the project at the monthly meetings with project staff reporting on status and milestones ERCOT provided at July CSWG meeting a transition plan for the implementation of these changes (see next slide) Initial XML document outlining the invoice format will be available in advance for participants to begin formatting their systems for the changes Limited Testing will be available to ensure Market Participants can retrieve invoices in their new format Participants are encouraged to continue to follow CSWG for updates and information 3

4. COPS Working Group Activities in Progress CSWG (Communications and Settlement Working Group) Transition Plan for NPRR 347/400: Last DAM Invoice is for Operating Day 11/7, Posts on 11/9 Payments due to ERCOT on 11/15, on the 3rd BBD Last RTM Invoice posts on 11/15 Payments due to ERCOT on 11/26, on the 5th BBD First Settlement Invoice posts on 11/12 Payments due to ERCOT on 11/14, on the 2nd BBD Settlement Calendar Entries for Settlement Invoices will be added in October DAM Invoice and RTM Invoice entries will be deleted in November Link to ERCOT presentation: http://www.ercot.com/calendar/2012/07/20120716- CSWG 4

5. COPS Working Group Activities in Progress CSWG is also monitoring implementation of NPRR 322: Real-Time PTP Option Modeling Still on track for October 2012 production release All PTP Options and PTP Options with Refund will be settled in the Day-Ahead Market NOIES can purchase a PTP Obligation with links to a PTP Option in the DAM Must have same source and sink pair MWs on obligation must be less than or equal to the MWs on the option The PTP Obligation will settle in Real Time as the positive difference between the sink and source settlement point prices If price difference is negative, the NOIE QSE will not be charged in Real Time Removing Real Time PTP Option and Real Time PTP Option with Refund CRR settlements CRR Settlement changes affect ALL CRRAHs. Changes to DAM and RTM settlements and CRR Shortfall calculation potentially affect all QSEs and CRRAHs in terms of the extracts. Next CSWG meeting is on September 17, 2012. Link to ERCOT presentation for NPRR 322: http://www.ercot.com/calendar/2012/07/20120716-CSWG 5

6. ERCOT Updates to COPS 2 nd Quarter 2012 Unregistered Distributed Generation (DG) Report –(Click Here for a copy of the posted report) Here 6 Load ZoneAggregate MW kWh exported to the grid during the prior 12 months LZ_CPS0.22500011,003 LZ_HOUSTON0.39790017 LZ_NORTH3.911863936,946 LZ_SOUTH1.563990415,925 LZ_WEST0.395380117,818 NOTE1: Current DG registration threshold = 1MW NOTE2: Report includes un-registered DG above 50kW and equal to or below the DG threshold NOTE3: Installed capacity limit per load zone = 10 MW

7. ERCOT Updates to COPS Settlement System Upgrade Project (ERCOT replacing Lodestar with internally developed software) (on track same as last update) Currently in Execution Phase Currently developing the framework platform that runs the code Currently developing on Release 1 of code Existing Challenges: Resource constraints Other projects Approved NPRR’s Ensuring that all PROD changes (stabilization, NPRR’s, etc.) are captured within the new code Release 1Generation Aggregation & Interval data Recorder Estimation is estimated to be in Production Q4 2012 Release 2 Remainder of Data Aggregation Functionality is estimated to be in Production Q4 2013 Release 3 Settlements & Billing is estimated to be in Production Q2 2014 Release 4 Invoices & Data Loading is estimated to be in Production Q4 2014 7

8. Questions or comments