1. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 1 Nodal Dispute Management System Business Requirements ERCOT Market Services Commercial Operations October 10, 2006

2. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 2 Agenda Highlights of Business Requirements –Integration of new Statement and/or Invoice Recipient type “CRR Account Holder” into Dispute Management System for Nodal Market –Statement and Invoice recipients may Open disputes for both the RTM and DAM –Outstanding Issues or Assumptions

3. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 3 Settlement and Billing Dispute Details Notice of Dispute (NP §9.14.2(1), NP §9.14.2(2), NP §9.14.2(3)) Contents of Notice (NP §9.14.3(1), NP § 9.14.3(2), NP § 9.14.3(3), NP § 9.14.3(4), 9.14.3(5), and 9.14.3(6)) ERCOT Processing of Disputes (NP §9.14.4(1), NP §9.14.4(2), NP §9.14.4(3), NP §9.14.4(4)) Status of Disputes (Issue and Resolution Statuses) (NP §9.14.4.1 (Open), NP §9.14.4.2 (Denied), NP §9.14.4.3 (Granted), NP §9.14.4.4 (Granted with Exceptions), NP §9.14.4.5 (Closed))

4. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 4 Settlement and Billing Dispute Details Cont. Reporting Capability for Disputes (NP §9.14.6) DAM Settlement Charge Types (NP §9.2.3) Real-Time Market Settlement Charge Types (NP §9.5.3)

5. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 5 Settlement and Billing Dispute Resolution Status - Granted

6. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 6 Settlement and Billing Dispute Resolution Status – Granted with Exception

7. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 7 Settlement and Billing Dispute Resolution Status - Denied

8. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 8 Dispute Management Issues 9.14Settlement and Billing Dispute Process 9.14.2Notice of Dispute (2)Settlement and billing disputes received after ten (10) Business Days of the posting of the RTM True-Up Statement will not be accepted. Once validated, a RTM True-Up Statement is binding on the Statement Recipient to which it relates, unless ERCOT performs a subsequent resettlement pursuant to this Section An NPRR is required to clarify that billing disputes received after (10) Business Days of the posting of the Initial or Resettlement DAM Statement or Invoice will not be accepted.

9. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 9 Dispute Management Issues 9.14Settlement and Billing Dispute Process 9.14.2Notice of Dispute (1)If the Settlement Statement or Invoice Recipient wishes to dispute any of these items or calculations and the relevant data extracts are complete, then it shall register the Settlement and billing dispute with ERCOT by electronic means within 10 Business Days after the date the Settlement Statement or Invoice was issued. It is assumed that the dispute deadline for the DAM statement and invoice shall be 10 days once the statement and invoice has been posted, pending the filing of a NPRR to establish this within Protocols.

10. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 10 Dispute Management Issues 9.14Settlement and Billing Dispute Process 9.14.4ERCOT Processing of Disputes (5)Each dispute has a status as defined in the following sections (9.14.4.1 (Open), 9.14.4.2 (Denied), 9.14.4.3 (Granted), 9.14.4.4 (Granted with Exceptions), 9.14.4.5 (Closed) A clean up NPRR is needed to clarify that there are two separate fields, one field for Dispute resolution status and another field for dispute status.

11. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 11 Dispute Management Issues 9.14Settlement and Billing Dispute Process 9.14.4ERCOT Processing of Disputes, CONT. (5)Each dispute has a status as defined in the following sections (9.14.4.1 (Open), 9.14.4.2 (Denied), 9.14.4.3 (Granted), 9.14.4.4 (Granted with Exceptions), 9.14.4.5 (Closed) Proposed Resolution Statuses: Denied Granted Granted with Exception Proposed Dispute Statuses: Not Started Open Closed Withdrawn Rejected Incomplete ADR

12. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 12 Summary The following Protocol versions were used as the basis for the Dispute Management System Requirements: –Section 9 (007NPRR as approved by BOD on 07/18/2006)

13. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 13 Next Steps Comments due from Market Participants: –10/18/06 (Proposed) Review of Comments Received and Vote of Approval: –10/25/06 (Proposed)

14. Texas Nodal © 2005 - 2006 Electric Reliability Council of Texas, Inc. All rights reserved. 14 Questions ?