1. Nodal Program Update Jason Iacobucci Nodal Program Manager Technical Advisory Committee 5 August 2010

2. 2 Technical Advisory Committee5 August 2010 Agenda Program Status Full System Market and Reliability Test Overview NMMS Update Cut-Over Overview Cut-Over Certification – Outage Scheduler & CRR Market Readiness Follow-Up Discussion

3. 3 Integrated Nodal Timeline – Go-Live December 1, 2010 Technical Advisory Committee5 August 2010

4. 4 2010 Market Trials Timeline – Go-Live December 1, 2010 Technical Advisory Committee5 August 2010

5. 5 2010 Cut Over Timeline – 4 month outlook 5 August 2010Technical Advisory Committee

6. 6 117 Days to Go-Live Technical Advisory Committee5 August 2010 Market Trials has been running for 26 weeks Market Quality Testing and Operational Readiness Achievements within Market Trials: CRR Six monthly CRR auctions and one Balance of the Year auction have been completed and invoiced Real Time Markets Real Time settlements –Occurring daily for 15 weeks DAM / RUC / WRUC DRUC has been running in conjunction with DAM for 13 weeks DAM Settlements are being executed Settlement and extract data has been available since Mid-May 12 Operational scenarios were successfully run in June WRUC has been running twice a week for 3 weeks Ancillary Services Procured in every DAM for production quantities Supplemental AS Market tested as needed Full System Market and Reliability Test 8 hour test occurred on June 17th 5 hour test occurred on July 21st Credit Credit Module went into effect on May 14 th Cut-Over Market Readiness Seminar #5 was held on July 28 th

7. 7 117 Days to Go-Live Technical Advisory Committee5 August 2010 Market Trials has been running for 26 weeks Upcoming Milestones for Market Trials: Full System Market Reliability Tests 24 hour test scheduled for the week of August 2nd Additional Full System Market and Reliability Test – Duration will be based on results of 24-Hour Tests Week of August 30th, 168 hour Full System Market and Reliability Test Additional Market Readiness Assessment / Market Simulation will take place, including a multiday test in early Sept DAM/RUC/SASM Scenarios Planning more operational scenarios for August DAM will run continuously for 7 consecutive days starting on 8/9/2010 through 8/16/2010 DRUC, WRUC, and HRUC will run 24x7 all 7 days Reduce the number of DAMs to create more resource availability to support additional Full System Market and Reliability Tests Market Changes in trials for August / September NPRR206- Change in Credit Management Collateral calculations for Day-Ahead Market NPRR202- Posting of ERCOT network model (redacted version for all MPs) NPRR169- Posting Real-Time Prices after every SCED run QSEs and TSPs begin maintaining outages for September and post Go-Live System Cut-Over / Go-Live Sept/Oct 2010– Network Modeling, Outage Scheduling November 2010- Go-Live CRR Auction November 30 th DAM December 1 st – First Operating Day

8. 8 Upcoming Dates for Go-Live Sign Off System (Protocol) TAC ApprovalBoard of Directors Approval Congestion Revenue Rights (CRR)August 5 th August 17 th Outage Scheduling (OS)August 5 th August 17 th Full Nodal OperationsOctober 7 th October 19 th 5 August 2010 The table below outlines key approval dates for TAC and Board Signoff Technical Advisory Committee

9. 9 Test Activities CRRRTMDAMOSEMSCOMS NMMS CMMREGREPORTS Functional Stability System Stability Business Stability Go-Live Functional Completeness Solution/ Data Completeness Solution/ Data Quality FA/SA TEST INTEGRATION TEST BUSINESS PROCESS TEST PERFORMANCE & LOAD TEST Model Load /Validation Processes MARKET TEST UI Performance Improvements Contingencies ICCP Quality SE Quality DRUC DAM RTM HRUC SASM SCED Model Baseline ICCP Point Checkout Technical Advisory Committee5 August 2010 Business Quality Integration 1 Day Dual Entry May Auction Integrated Credit Management Phase 5:Full Functionality Phase 5: Full Functionality RARF SEM MT 2.1 MT 3.0 MT 4.0MT 5.0 NPRR 206 Integration

10. 10 Nodal Program Risks & Issues Technical Advisory Committee5 August 2010 Risk/IssueImpacted Milestone TargetCategoryProbabilitySeverityStatus Network Model Management Performance and availability issues around the NMMS. ProgramJuly 2010 Schedule / Budget MedHighWorking closely with vendor to correct all issues Working through issues list with NDSWG and NATF Market Design Assessment Risk around the protocol traceability project and the market results as each phase of market trials becomes active. ProgramAugust 2010 Scope / Budget LowHigh Performing risk assessment associated with four identified issues for August board meeting Operational Readiness Operational readiness of the Nodal systems and business processes are an increasing risk at this point in the program ProgramSeptember 2010 Scope / Schedule/ Budget MedHighOrganizational capability assessments and improvement recommendations are under review by executive management The PMO has and will continue to identify critical deficiencies and implement mitigation strategies to ensure delivery

11. 11 Network Model Management System Update Improvement in stability since two patches installed on July 2 nd and July 22 nd –No unscheduled restarts since the July 22 nd installation Navigation Performance: –Vendor delivered performance patch which is being tested in the sandbox test environment –Initial results indicate navigation improvements but testing is ongoing The plan is to install this week if the patch continues to test well Validation Performance: –Programmers are assessing validation and testing potential improvements Technical Advisory Committee5 August 2010

12. Kenneth Ragsdale Market Trials Full System Market and Reliability Test Overview

13. 13 5-Hour LFC Test Update TimeActivity 0800 Hotline call was made by the ERCOT Operator announcing the 1100 start time for the test 0929ERCOT Operators activated an OC3 for solving congestion in Zonal 1100 Hotline call what made announcing the test was starting and the VDI was issued 1119First participating QSE confirms switch over to Nodal control 1214Final participating QSE confirms switch over to Nodal control 1218 Hotline call what made announcing that all participating QSEs on Nodal control 1531 Hotline call what made announcing that participating QSEs were being switched back to Zonal 1535First participating QSE confirms switch back to Zonal control 1616Final participating QSE confirms switch back to Zonal control 5 August 2010Technical Advisory Committee

14. 14 5-Hour LFC Test Update Constraints Encountered During the Test StartConstraintReason 10:00Roanoke Switch OC3Loss of Roanoke Switch T1 345/138KV autotransformer overloads West Denton - Fort Worth Substation 138KV - 108% of 218 MVA rating. 12:20Jack County - Reno OC3Loss of Jack County - Reno 138KV overloads Wise County - Bridgeport TU 138KV - 105% of 199 MVA rating. 5 August 2010Technical Advisory Committee

15. 15 5-Hour LFC Test Update Completion Criteria: –The rolling CPS1 one minute average score must equal or exceed 100% during the test period. Note that CPS1 metric will not apply to periods during testing wherein system tuning is being performed by either ERCOT or Market Participants –HE12-73, HE13-112, HE14-103, HE15-120, HE16-103 –Zonal Commercially Significant Constraints (CSCs) and Closely Related Elements (CREs) managed below thermal limits. The Zonal CSCs were not activated during the test –Local Congestion managed below thermal limits. Two local constraints binding during the test –Stability limits managed below transfer limits No stability limits were activated during the test –No NERC Disturbance Control Standard (DCS) failure if applicable Not applicable during the test –No LFC-SCED system issues that result in termination of the test. No issues –Procedural and software fixes have been verified to address lessons learned from previous rounds of testing There were no shift factors transfer failures during the test. 5 August 2010Technical Advisory Committee

16. 16 GREDP Performance Summary For this analysis; X=5%, Y=5, MW, and Z=10% Performance does not appear to have varied drastically from the 8- hour test Percent of Non-IRR Generation Resources that Met the Protocol Criteria All Resources 79.74% Resources Providing Regulation 86.90% Combined Cycle Resources 93.22% Coal and Lignite Resources 97.50% Diesel Resources 100.00% Gas Steam (Non-Reheat Boiler) Resources 25.00% Gas Steam (Reheat Boiler) Resources 72.22% Gas Steam (Supercritical Boiler) Resources 33.33% Hydro Resources 88.89% Nuclear Resources 100.00% Simple Cycle (Greater than 90 MW) Resources 100.00% Simple Cycle (Less than 90 MW) Resources 34.04% Percent of IRRs that Met the Protocol Criteria 33.33% Number of IRRs that had an Interval for which GREDP was scored 9 5 August 2010Technical Advisory Committee

17. Nodal Go-Live Update Review of Outage Scheduler and CRR Go-Live Items Kenneth Ragsdale Market Trials

18. 18 Readiness Methodology ERCOT will measure readiness by the following categories: System Readiness – an evaluation of a particular system needed to support identified market activities Process Readiness – an evaluation of the Processes and Procedures necessary to support identified market activities People Readiness – an evaluation of ERCOT and Market Participant capabilities to support identified market activities ERCOT plans to review the Market Readiness Criteria at NATF and subsequently request a vote from TAC per Section 21.12.3, Notice to Market Participants of Effective Date for Nodal Protocol Provisions and Retirement of Zonal Protocol Provision 5 August 2010Technical Advisory Committee

19. 19 Protocol 21.12.3 21.12.3 Notice to Market Participants of Effective Date for Nodal Protocol Provisions and Retirement of Zonal Protocol Provision No part of the nodal market design may start operation until all the Market Readiness Criteria for that part of the nodal market design have been met. Certification that all Market Readiness Criteria have been met must be made at least by each of the following: the Technical Advisory Committee (TAC), ERCOT and the ERCOT Board. Upon such certification, ERCOT shall issue two Notices alerting Market Participants to the effective date of Nodal Protocol sections and the retirement of Zonal Protocol sections, as applicable. ERCOT shall issue the first Notice no less than thirty (30) days prior to the effective date or retirement date, as applicable, and the second Notice no less than ten (10) days prior to the effective date or retirement date, as applicable. The Notice shall include: (1)The Nodal Protocol Sections to become effective; and (2)The Zonal Protocol Sections to be retired, if any 5 August 2010Technical Advisory Committee

20. 20 OS and OS UI (12 defects) as of 7-29-10 All 12 are expected to be fixed in NPROD by 8-13-10. 8 of the 12 are market facing. 5 August 2010Technical Advisory Committee

21. 21 Outage Scheduling – Go Live System ReadinessPlanned Completion Status Outage Scheduler released to Market Trials 2/01/10Complete Outages Scheduler Integrated with DAM, RUC 4/15/10Complete Outage Scheduler Qualification Connectivity Qualification (MP20) 4/01/10Green Process Readiness Verify Outage Evaluation System Functionality (EMO3 #1) 6/23/10Green Outage Coordination Procedures 7/16/10Complete Nodal Protocol Transition Plan Updated for Outage Scheduling 7/29/10Complete Outage Scheduling Transition Plan Established 7/08/10Complete 5 August 2010Technical Advisory Committee

22. 22 Outage Scheduling – Go Live People ReadinessPlanned Completion Status ERCOT Staff Support of Market Trials OngoingGreen ERCOT Staff Trained on System and Processes 09/03/10Green Market Participant Training Delivered 7/15/10 NMMS/OS class added Overall Readiness NATF Review 7/08/10, 07/29/10 Complete ERCOT Management Signoff 8/04/10 TAC Approval 8/05/10 BOD Approval 8/17/10 30 Day Market Notice 10/01/10 10 Day Market Notice 10/21/10 5 August 2010Technical Advisory Committee

23. 23 Outage Scheduling On July 8 th, NATF approved a motion to recommend to TAC that the Outage Scheduling Market Readiness Criteria have been met. ERCOT Management Sign-off in progress as of 7-29-10. It will be posted once signed. 5 August 2010Technical Advisory Committee

24. 24 Technical Advisory Committee5 August 2010 Outage Scheduler with Zonal Outage Transfer Delete all Outages and run Zonal to Nodal Transfer Tool Friday, 8/13 (Note that 80% to 85% of the outages are transferred) A Market Notice will be sent out once the purge and transfer is complete Email MarketTrials@ERCOT.com by 8/9/10,1700 if the transfer is NOT desiredMarketTrials@ERCOT.com Resource Outages will not be transferred by the Transfer tool The target is to make available for outage transfer validation and outage submissions Monday 8/16, 7:00 am, for the upcoming tests, optional months of October & November and for December and beyond Request list of Outages not transferred from MarketTrials@ERCOT.comMarketTrials@ERCOT.com Send email to Market MarketTrials@ERCOT.com confirming outages have been validated by 9/17 for all Outages December and beyondMarketTrials@ERCOT.com First production pull of OS data is scheduled for 10/2 for the first CRR Auction TSPs and QSEs are responsible to ensure that the outages in the Nodal Outage Scheduler are correct Outages previously approved in zonal will be automatically approved in Nodal Outage Scheduler Transition Timeline

25. 25 TAC’s Outage Scheduler Certification Approval WHEREAS, Protocols Section 21.12.3 (Notice to Market Participants of Effective Date for Nodal Protocol Provisions and Retirement of Zonal Protocol Provisions) provides that before a “part of the nodal market design may start operation,” a vote of the Technical Advisory Committee (TAC) is required affirming that the “Market Readiness Criteria for that part of the nodal market design have been met” WHEREAS, the Section 21.12.3 certification by TAC, Electric Reliability Council of Texas, Inc. (ERCOT) staff, and the ERCOT Board of Directors regarding the satisfaction of “Market Readiness Criteria” for a particular part of the nodal market design will result in ERCOT issuing “two Notices alerting Market Participants to the effective date of Nodal Protocol sections and the retirement of Zonal Protocol sections, as applicable”; WHEREAS, the Protocols do not define the term “Market Readiness Criteria,” and ERCOT, in conjunction with Market Participants, has developed specific metrics and a Nodal Readiness Scorecard that are used to determine the progress of specific parts of the nodal market design in meeting the criteria necessary for implementing the Nodal Protocols and starting operations; WHEREAS, the members of TAC recognize that there are issues that remain to be addressed regarding the implementation and operation of the Outage Scheduler before the Texas Nodal Market Implementation Date (TNMID), but that none of those issues should prevent the Outage Scheduler Go-Live on November 1, 2010, which is an integral occurrence in the progress toward meeting the TNMID on schedule; WHEREAS, TAC has reviewed the market readiness metrics documentation underlying ERCOT staff’s recommendation regarding the Outage Scheduler part of the nodal market design, and has conducted due diligence on ERCOT staff’s conclusion that the Outage Scheduler has satisfied all of the steps necessary to make the declaration of market readiness required by Section 21.12.3, in order to authorize Outage Scheduler Go-Live on November 1, 2010; THEREFORE be it RESOLVED, that this Resolution shall serve as the TAC certification that all Market Readiness Criteria have been met, for purposes of ERCOT Protocols Section 21.12.3, regarding Outage Scheduler Go-Live on November 1, 2010; 5 August 2010Technical Advisory Committee

26. 26 CRR Allocation and Auction (5 defects) [as of 7-29-10] 1.Topology Processor (TP) cannot properly consume outage information. With TP version 8 delivered in early July it was identified that the outages were not properly consumed. Working with Siemens and also working on manual work-around. 2.HUB PNODES mismatch between TP and DSV model database. Defect resolved and currently being retested. 3.Incorrect Load Zone Designation from TP. (Possible data issue. Continue to investigate with Siemens.) 4.Resource Nodes missing from output file produced by TP. (Possible data issue. Continue to investigate with Siemens.) 5.Islanding in PSSE network model. (Possible data issue. Continue to investigate with Siemens.) 5 August 2010Technical Advisory Committee

27. 27 CRR Allocation and Auction – Go Live System ReadinessPlanned Completion Status CRR System released to Market Trials 2/01/10Complete CRR Integrated in Market Trials 5/01/10Complete CRR Account Holder Connectivity Qualification MP 15 (B) 9/17/10Red** Operation of CRR Auctions and Allocations (CRR3) OngoingGreen Verify CRR Auction Invoices (CO8) OngoingGreen Process Readiness CRR Procedures 6/25/10Complete Nodal Protocol Transition Plan Updated for CRR 7/29/10Complete TCR to CRR Transition Plan (CRR4) 9/29/09Complete ** Red due to MPs registering but not working to get qualified. (inflated denominator) 5 August 2010Technical Advisory Committee

28. 28 CRR Allocation and Auction – Go Live People ReadinessPlanned Completion Status ERCOT Staff Support of Market Trials OngoingGreen ERCOT Staff Trained on System and Processes 06/25/10Complete Market Participant Training Delivered 07/15/09Complete Overall Readiness ERCOT Management Signoff 08/04/10 NATF Review 07/08/10, 07/29/10 TAC Approval 08/05/10 BOD Approval 08/17/10 30 Day Market Notice 09/13/10 10 Day Market Notice 10/03/10 5 August 2010Technical Advisory Committee

29. 29 CRR Allocation and Auction – Go Live (as of 7-29-10) Scheduled to be reviewed again at 8-3-10 NATF meeting. ERCOT Management Sign-off is in progress as of 7-29-10. It will be posted once signed. 5 August 2010Technical Advisory Committee

30. 30 TAC’s Congestion Revenue Rights Certification Approval WHEREAS, Protocols Section 21.12.3 (Notice to Market Participants of Effective Date for Nodal Protocol Provisions and Retirement of Zonal Protocol Provisions) provides that before a “part of the nodal market design may start operation,” a vote of the Technical Advisory Committee (TAC) is required affirming that the “Market Readiness Criteria for that part of the nodal market design have been met” WHEREAS, the Section 21.12.3 certification by TAC, Electric Reliability Council of Texas, Inc. (ERCOT) staff, and the ERCOT Board of Directors regarding the satisfaction of “Market Readiness Criteria” for a particular part of the nodal market design will result in ERCOT issuing “two Notices alerting Market Participants to the effective date of Nodal Protocol sections and the retirement of Zonal Protocol sections, as applicable”; WHEREAS, the Protocols do not define the term “Market Readiness Criteria,” and ERCOT, in conjunction with Market Participants, has developed specific metrics and a Nodal Readiness Scorecard that are used to determine the progress of specific parts of the nodal market design in meeting the criteria necessary for implementing the Nodal Protocols and starting operations; WHEREAS, the members of TAC recognize that there are issues that remain to be addressed regarding the implementation and operation of the Congestion Revenue Rights before the Texas Nodal Market Implementation Date (TNMID), but that none of those issues should prevent the Congestion Revenue Rights Go-Live on October 13, 2010, which is an integral occurrence in the progress toward meeting the TNMID on schedule; WHEREAS, TAC has reviewed the market readiness metrics documentation underlying ERCOT staff’s recommendation regarding the Congestion Revenue Rights part of the nodal market design, and has conducted due diligence on ERCOT staff’s conclusion that the Congestion Revenue Rights has satisfied all of the steps necessary to make the declaration of market readiness required by Section 21.12.3, in order to authorize Congestion Revenue Rights Go-Live on October 13, 2010; THEREFORE be it RESOLVED, that this Resolution shall serve as the TAC certification that all Market Readiness Criteria have been met, for purposes of ERCOT Protocols Section 21.12.3, regarding Congestion Revenue Rights Go- Live on October 13, 2010; 5 August 2010Technical Advisory Committee

31. Brandon McElfresh Readiness & Transformation Market Readiness

32. 32 Reminder – Nodal Registration Cutoff – QSEs and CRRAHs Technical Advisory Committee Scope What is the cutoff date for QSEs and CRRAHs to begin registration for Nodal Go-Live (based on ERCOT resource availability)? Registration must begin by these dates to be qualified for Nodal Go-Live August 13 th, 2010 QSEs with Resources with a new WAN connection * CRRAHs (to be qualified for the 10/13 PCRR nomination and for the 11/11 December 2010 CRR Auction) * ~ October 1 st, 2010 QSE with Resources using a Nodal qualified service provider * QSEs without Resources * Sub-QSEs using a Nodal qualified parent QSE * Mechanics Qualification will follow the Nodal production qualification process and all testing will be done in the MOTE environment MPs that want to begin registration past these deadlines will be examined on a case-by-case basis Nodal Metric MP22 will measure progress of new entrants * QSE Application or CRRAH Application must be submitted, which includes Credit Application ~ Doesn’t include NOIE Allocation Eligibility Form, which must be submitted by 6/30 for CRRAHs eligible for PCRRs QSERs (new wan), CRRAHs QSERs (existing wan), Sub-QSERs, QSEs w/o Resources 5 August 2010

33. 33 Next 60-days of Nodal Classes/Workshops Course Start DateLocation Basic Training ProgramAugust 10Calpine (Houston) NPRR206 E-Factors WorkshopAugust 10Hilton Austin Airport (Austin) ERCOT Nodal 101August 10ERCOT Met Center (Austin) Basic Training ProgramAugust 10Calpine (Houston) Network Model/Outage Scheduler Workshop (new) August 10ERCOT (Taylor) Load Serving Entity 201August 16Reliant Energy (Houston) Market Settlements 301August 17City of Garland Fire Administration Building (Dallas) Network Model/Outage Scheduler Workshop (new) August 18ERCOT (Taylor) GCPA Retail WorkshopAugust 19Centerpoint (Houston) 5 August 2010 Enrollment at: http://nodal.ercot.com/training/courses/index.htmlhttp://nodal.ercot.com/training/courses/index.html Technical Advisory Committee

34. 34 Next 60-days of Nodal Classes/Workshops - continued Course Start DateLocation NOIE QSE OperationsAugust 20City of Garland Fire Administration Building (Dallas) Congestion Revenue RightsAugust 24University of Delaware (Newark, DE) Generation 201August 25University of Delaware (Newark, DE) Congestion Revenue RightsAugust 31ERCOT Met Center (Austin) Generation 201September 1Hilton Austin Airport (Austin) Economics of LMPSeptember 13ERCOT Met Center (Austin) ERCOT 101 for Wind GenerationSeptember 13Optim Energy (Dallas) ERCOT Nodal 101September 14StarTex Power (Houston) Generation 101September 15Hilton Austin Airport (Austin) Basic Training ProgramSeptember 20LCRA (Austin) Load Serving Entity 201September 27ERCOT Met Center (Austin) Enrollment at: http://nodal.ercot.com/training/courses/index.htmlhttp://nodal.ercot.com/training/courses/index.html 5 August 2010Technical Advisory Committee

35. 35 RED/AMBER Metrics Summary ERCOT Metrics Market Participant Metrics Metric Name Current Score Applies to WeightGreen %Yellow %Red % Not Scored % Primary CriteriaNotes Market Participant Metrics MP15(B) CRR Connectivity Qualification RedCRRAHs Even weighting 94.2%0.0% 5.8% Successful submission CRR transactions 66/74 CRRAHs qualified. Greater than 5% RED. MP16 DAM Participation AmberQSEs Even Weighting 78.6%6.6%12.6%1.1% Participation in 50% of the Day-Ahead Market runs 143/182 QSEs w/o Resources Metric Name Current Score Applies to WeightGreen %Yellow %Red % Not Scored % Primary CriteriaNotes ERCOT Metrics EMO9(A) State Estimator Convergence AmberERCOTN/A 95.44N/A State Estimator converges 97% of runs during a monthly test period. 95.44% Convergence for State Estimator for the month of May. EMO9(B) RTCA Modeling Differences RedERCOTN/A 84.33%N/A 95% of load tap setting values matched between Zonal/Nodal 84.33% Match for transformer tap settings. 1430 transformers in Nodal. Technical Advisory Committee5 August 2010

36. 36 Questions ? 5 August 2010Technical Advisory Committee

37. 37 Appendix 5 August 2010Technical Advisory Committee

38. 38 Nodal Program Risks & Issues: Definitions 5 August 2010 Definitions for Category, Probability and Severity of Risks & Issues: Category –Scope : Will require a scope change –Schedule: Will require a schedule change –Budget: Will require a budget change Probability –High : Probability to occur is ≥ 90%; perceived impact would require a Change Request over the next 1-3 months –Medium: Probability to occur is between 31 – 89%; perceived impact would require a Change Request over the next 4 -10 months –Low: Probability to occur is ≤ 30 %; not expected to require a Change Request Severity –High: Milestone impact, or budget impact >$250,000 –Medium: Milestone impact - but expected to be mitigated, or budget impact between $0 - $250,000 –Low: No milestone impact, or no budget impact Technical Advisory Committee

39. 39 60 Day Outlook : August Market Activities Functional Area Real-Time Market Congestion Revenue Rights Day-Ahead Market Reliability Unit Commitment Outage Scheduler COMS/Settlements Network Modeling Nodal Reports Credit Full Integration Targeted Activities for August 2010 August is reserved for focusing on any issues or scenarios encountered in the first 3 months of Phase 5 Real time submission continue ERCOT executes August Monthly CRR Auction SASM executed as needed JanFebMarAprMayJuneJulyAug 5 August 2010Technical Advisory Committee

40. 40 DAM/RUC/SASM Operational Scenarios 5 August 2010Technical Advisory Committee

41. 41 DAM/RUC/SASM Operational Scenarios 5 August 2010Technical Advisory Committee

42. 42 ACTIVE NODAL METRICS Metric #Metrics NameCategoryERCOTQSERsQSEsTSPsCRRAHsREs MO4Verify SCED Execution QualityRTGreenN/A MO5Generate LMPs for 6 monthsRTGreenN/A CRR3 (ERCOT)Operation of CRR Auctions and AllocationsCRRGreenN/A MO9Generate Day-Ahead LMPsDAMGreenN/A MO10DRUC ExecutionDAMGreenN/A CO8Verify CRR Auction InvoicesCOMSGreenN/A EMO9(A)State Estimator ConvergenceNMAmberN/A EMO9(B)RTCA Modeling DifferencesNMRedN/A EMO10Anomalous/Auto-Disabled Telemeted PointsNMGreenN/A E1ERCOT Internal TrainingREADGreenN/A E9Develop Nodal ProceduresREADGreenN/A MP3Market Submissions Connectivity QualificationCONNGreen N/A MP15BCRR Connectivity QualificationCONNRedN/A RedN/A MP20Outage Scheduler Connectivity QualificationCONNGreen N/AGreenN/A EMO6Individual LFC TestingRTN/AGreenN/A MP15AReal-Time Market Daily ParticipationRTN/AGreenN/A EMO6Individual LFC TestingRTN/AGreenN/A CRR3Operation of CRR Auctions and AllocationsCRRN/A GreenN/A MP16DAM ParticipationDAMN/AGreenAmberN/A MP20Outage Scheduler Connectivity QualificationOSN/AGreenN/AGreenN/A N2Telemetry/ICCP System FailoverNMN/AGreenN/A MP6(SE)Telemetry Compliance 3.10.7.5NMN/AGreenN/A MP6(SCED)Telemetry Compliance 3.10.7.5NMN/AGreenN/A MP6 (TSP)Telemetry Compliance 3.10.7.5NMN/A GreenN/A MP14BParticipation in NOMCR TrialsNMN/A GreenN/A MP14CNetwork Model ValidationNMN/A GreenN/A MP11Resource RegistrationRESN/A Green Active Nodal Metrics Technical Advisory Committee5 August 2010

43. 43 Metrics Roadmap PURPLE ORANGE Timing and Design Confirmed Timing subject to change, design in progress MP15A MP16 MP20 MP3 MP6 MP11 MP14C E9 E1 N2 EMO9(B) CRR3 EMO6 MO4 MO5 CO1 CO2 CO3 CO4 CO5 CO6CO7 CO8CO9 C10 E7 E11 E12 C1-C10 EMO13 MO7 CRR4 E5 IMM1 R0 R2 R3 MP15B MP3 N1 E3 E10 R1 MP22 EMO9(D) MO9 MO8 MO3 MO10 EMO10 EMO9(C) EMO7 EMO9(A) New Metric MP23 EMO2 EMO8 Technical Advisory Committee5 August 2010

44. 44 CRR Metrics Metric Name Current Score Applies to WeightGreen %Yellow %Red % Not Scored % Primary CriteriaNotes Market Participant Metrics MP15(B) CRR Connectivity Qualification RedCRRAHs Even weighting 90.7%0.0%9.3%0.0% Successful submission CRR transactions 68/75 CRRAHs qualified. Greater than 5% RED. CRR3 Operation of CRR Auctions and Allocations GreenCRRAHs Even weighting 87.8%0%12.2%0.0% Participation in at least 1of the last 2 auctions or allocations. > 80% total participating 58/66 CRRAHs with adequate participation in June or July auction or allocation ERCOT Metrics CRR3 Operation of CRR Auctions and Allocations GreenERCOTN/A Auction results distributed to participants per schedule in CRR Handbook 6/21 2010 June Monthly Auction results posted to market. TBDERCOTN/A100%0% Allocated Revenue Rights in statistical sample = 100% accurate Source – Sink prices = CRR Clearing prices for obligations for BOY auction. ERCOT working on similar validation process for options. CO8 Verify CRR Auction Invoices Green ERCOTN/A100%0% CRR Auction Result for MP(n) – CRR Auction Invoices for MP(n) = 0$ S&B validated invoices reflected awards for each CRRAH in the March, April, May, June, and July auctions,. Green ERCOTN/A100%0% System Generated CRR Auction Invoices not posted = 0 6/22 July CRR auction invoices submitted to all 48 CRRAHs who participated Technical Advisory Committee5 August 2010

45. 45 Real-Time Metrics Metric Name Current Score Applies to WeightGreen %Yellow %Red % Not Scored % Primary CriteriaNotes Market Participant Metrics MP3 Market Submissions Connectivity Qualification GreenQSERs Generation Ratio Share 99.0%1.0%0.0% Successful submission of RT and DAM transactions 79/81 QSERS qualified GreenQSEs Even weighting 98.9%1.1%0.0% 178/182 QSEs qualified. EMO6 Individual LFC Testing GreenQSERs Generation Ratio Share 96.9%0% 3.1% 80% of system-wide generation has completed individual QSE tests for LFC 70/73 QSERs completed their individual LFC test or provided attestation MP15-A Real-time Market Participation GreenQSERs Generation Ratio Share 100.0%0.0% Weekly average of daily SCED submissions 79/79 QSERs above 95% weekly average for SCED submissions. ERCOT Metrics MO3 Verify SASMGreenERCOTN/A100%N/A Multiple SASMs are successfully executed during Market Trials and the 168 hour test. SASMs successfully run on 4/28, 4/30, 5/4, 5/6, 5/7, 5/12, 5/14, 6/9, and 6/10. No issues reported. MO4 Verify SCED Execution Quality GreenERCOTN/A100%0% All successful SCED executions passed the post-execution price validations. 6/1 - 6/14 period - 4,035 Price Validation runs with no rule violations MO5 Generate 6 Months of LMPs GreenERCOTN/A98.1%.0%1.9%0% 95% of SCED executions completed with LMPs posted on MIS. 6/1 - 6/14 period, 3,971 out of 4,031 SCED runs with LMPs posted. CO5 Verify RTM Settlement Statements/CO6 Verify RTM Settlement Invoices GreenERCOTN/A100%0% System Generated RT Statement Dollars- Independently Generated RT Calculation Dollars =$0 6660 RTM Statements; 1609 RTM Invoices All validated $$ = system generated (with some rounding differences) GreenERCOTN/A100%0% System Generated RT Statements/Invoices not posted = 0 6660 RTM Statements; 1609 RTM Invoices All posted on time Technical Advisory Committee5 August 2010

46. 46 Day-Ahead Market Metrics Metric Name Current Score Applies to WeightGreen %Yellow %Red % Not Scored % Primary CriteriaNotes Market Participant Metrics MP16 DAM Participation GreenQSERs Generation Ratio Share 99.0%1.0%0.0% Participation in 50% of the Day-Ahead Market runs 78/79 QSEs with Resources AmberQSEs Even Weighting 78.6%6.6%12.6%1.1% 143/182 QSEs w/o Resources CO10 Credit Calculations 6/30/2010 QSERs, QSEs Gen Ratio Share, Even Weighting N/A <= 25% of MPs credit limits inconsistent with protocols To be determined ERCOT Metrics MO8 Verify DAM Execution Quality Report in Progress ERCOTN/A Red DAM executions pass the post-execution price validations Report in progress MO9 Generate DAM LMPs GreenERCOTN/A 95 percent DAM execution as evidenced by DAM LMP postings 6/1 – 6/14 – 7/7 DAM runs execute(doesn’t measure quality) MO10 DRUC Execution GreenERCOTN/A 95 percent DRUC execution 6/1 – 6/14 - 7 out of 7 DRUC runs executed (doesn’t measure quality) CO3 Verify DAM Settlement Statements/CO7 Verify DAM Invoices GreenERCOTN/A100%0% System Generated RT Statement Dollars- Independently Generated RT Calculation Dollars =$0 4715 DAM Statements and Invoices All validated $$ = system generated (with some rounding differences) GreenERCOTN/A100%0% System Generated RT Statements/Invoices not posted = 0 4715 DAM Statements and Invoices All posted on time CO10 Credit Calculations 6/30/2010 ERCOTN/A ERCOT performs credit calcs for a stat. sample of MPs To be determined 1.MP16 – Metric is based on a 2 week rolling average (6/7 – 6/18 – 9 runs). 2.MP16 – 97% Load participating. Technical Advisory Committee5 August 2010

47. 47 Metric Name Current Score Applies to WeightGreen %Yellow %Red % Not Scored % Primary CriteriaNotes Market Participant Metrics MP14-C TSP Model Validation GreenTSPs Ownership Ratio Share 99.9%.1%0.0% Network Model data validated by TSP 24/28 TSPs have submitted model validation e-mail to ERCOT. MP6 Telemetry Compliance with Nodal Protocols 3.10.7.5 GreenQSERs Generation Ratio Share 100%0.0% Expected State Estimator telemetry submitted. 78/78 complete. 3502 total SE points provided GreenQSERs Generation Ratio Share 100%0.0% Expected SCED telemetry submitted. 78/78 complete. 7629 SCED points provided GreenTSPs Ownership Ratio Share 99.3%0.0%.7% Expected TSP telemetry per ICCP Handbook submitted 14/17 TSPs above 98% threshold for GREEN. 143 points outstanding N2 Telemetry ICCP System Failover Green/White only QSERs Generation Ratio Share 68.9%0% 31.1% ICCP Failover test completed successfully prior to the 8-hour LFC test. 37/78 QSERs completed ICCP telemetry failover test. MP18 Mapping of Resources and Loads in Private Use Networks 6/30/2010QSERs Generation Ratio Share N/A # of QSE(n) PUN Points Provided / # of QSE(n) PUN Points Expected 306 points across 7 QSEs with Resources. 15 points still assigned to TSP. MP21 WGRs ICCP Meteorological Telemetry 6/30/2010 REs (only WGRs) Registered MW Capacity Ratio Share N/A WGRs must meet reasonability tests for MET ICCP To be determined MP23 Telemetry Quality (MP to ICCP server) 6/30/2010TSPs Ownership Ratio ShareN/A # of TSP(n) Suspect/Bad points provided / # of TSP(n) points total 1077 Suspect/Bad points (98.3% good quality). 6/30/2010QSERs Generation Ratio Share N/A # of QSER(n) Suspect/Bad points provides / # of QSER(n) points total 277 Suspect/Bad points (98% good quality) Network Modeling Metrics 1.MP6 does not include 405 QSE CB and DSC points from TSP outreach. ERCOT is determining whether these rollback into the QSER MP6 measurement. Technical Advisory Committee5 August 2010

48. 48 Network Model Metrics Network Modeling Metrics Metric Name Current Score Applies to WeightGreen %Yellow %Red % Not Scored % Primary CriteriaNotes ERCOT Metrics EMO9(A) State Estimator Standards Performance AmberERCOTN/A State Estimator converges 97% during monthly test period 95.44% Convergence for State Estimator for the month of May. EMO9(B) RTCA Modeling Differences GreenERCOTN/A96.8%N/A 95% of impedance values matched between Zonal/Nodal 97.9% match for impedances for lines and transformers. 6718 lines and transformers in Nodal. GreenERCOTN/A96.8%N/A 95% of dynamic line ratings matched between Zonal/Nodal 97.5% match for ratings for lines. 5288 lines in Nodal. RedERCOTN/A 84.33N/A 95% of load tap setting values matched between Zonal/Nodal 84.3% Match for transformer tap settings. 1430 xfrms in Nodal. EMO10 Anomalous / Auto-Disabled Telemetered Points GreenERCOTN/A1.91%N/A The % of Anomalous and Auto-Disabled Measurements < 2% of Total Measurements April Nodal 2.58% May Nodal 1.92% June Nodal 1.91% EMO9(C) RTCA CSC Comparison 7/14/2010ERCOTN/A CSC Pre-contingency SE Flows within 5% (Hourly snapshot) Measurement establishes baseline flows on Commercial lines to indicate the significance of Psuedo modeling and multi- section lines on the SE flows. EMO9(D) Validate Zonal and Nodal Security Analysis Results 9/8/2010ERCOTN/A 90% of active constraints in Zonal RTCA are also detected in Nodal RTCA To be determined Technical Advisory Committee5 August 2010

49. 49 Other Readiness Metrics Metric Name Current Score Applies to WeightGreen %Yellow %Red %Not Scored %Primary CriteriaNotes Market Participant Metrics MP20 Outage Scheduler Connectivity Qualification GreenQSERs Generation Ratio Share 98.9%0.0% 1.1% Successful submission of OS transactions 78/79 QSERS qualified. GreenTSPs Ownership Ratio Share 99.7%0%.3%20/23 TSPs qualified. MP11 Resource Registration GreenREs Registered MW Capacity Ratio Share 99.6%0.0%.4%0.0% Decision Making Authority form submitted, and GENMAP validated 154/157 Resources completed. CO2 Verify Dispute Process 7/14/2010 QSERs, QSEs Generation Ratio Share, Even Weighting N/A >=1 dispute submit per MP. # of unprocessed disputes by 168 = 0 To be determined ERCOT Metrics E1 ERCOT Staff Completes Training GreenERCOTN/A100% N/A Training plans must be adhered to for highly impacted departments 15 out of 15 highly impacted departments are up to date with their training plans. E9 Develop Nodal Procedures GreenERCOTN/A100% N/A Procedures developed 1 month prior an exercised in the appropriate Market Trials Phase All MT4 and MT5 are developed and the MT4 procedures exercised as scheduled in MT4. EMO3 Verify Outage Evaluation System Functionality GreenERCOTN/A A test of the Outage Management Process is completed OS to OE integration tested throughout Market Trials and reviewed at 6/23 NATF Technical Advisory Committee5 August 2010

50. 50 Participant Readiness Touch Points 2010 Meetings Training Outreach Market trials September August July NATF 7/8 MRS #5 168 Hour Test (Tentative) Dispute & Reports Metrics Standby site visits Weekly Trials calls 48 hr system-wide LFC test Verifiable costs loaded into N-Prod Nodal 101 Transmission 101 Generation 101, 201 Basic Training Program NOIE QSE Operations Settlements 301 Weekly Trials calls Prepare for 168 hr test NATF 8/19 Nodal 101 Transmission 101 Generation 101, 201 Basic Training Program NOIE QSE Operations Settlements 301 Standby site visits Weekly Trials calls Execute 168 hr test NATF 9/14 Nodal 101 Transmission 101 Generation 101, 201 NOIE QSE Operations Settlements 301 MMS & MIS GUI (Online only) Standby site visits October Preparation for Nodal Go-Live NATF 10/5 TBD Technical Advisory Committee5 August 2010