Settlement and Billing Section 9 Proposed Changes and Items Under Discussion

1. Settlement and BillingSection 9Proposed Changes and Items Under Discussion Summary Update Update of Section 9 Discussion

2. Past Meetings • Aug. 20, 2004 - Reviewed §9.1 through 9.2.8 • Sept. 10, 2004 - Reviewed §9.3 through 9.6 • Sept. 29, 2004 - Discussed Processes • Oct. 20, 2004 - Discussion of Major Issues • Nov. 10 – In depth review of §9.1 through 9.5.3 Update of Section 9 Discussion

3. Future Meetings • Afternoon of 11/17 COPS meeting – update and resume review at §9.5.4 • After 12/1 DEV Task Force meeting – address issues related to Settlement and DEV timelines • Address issues related to TNT proposal Update of Section 9 Discussion

4. Settlement Timeline Changes • Renames settlement statements to reduce confusion • Moves the Settlement Statement days: • Initial to Day 10 - currently at Day 17 • Interim to Day 52 - currently at Day 59 & renamed • Resettlement (if any dispute amount granted) at Day 90 - new scheduled statement • Final at Day 130 - new scheduled statement • True-up (if dispute granted on Final) at Day 180 Update of Section 9 Discussion

5. Issues to be Resolved • Synchronizing the DEV process and Settlement Timeline – December 1 meeting of DEV TF • Address TNT proposed revisions • Number of dispute deadlines Update of Section 9 Discussion

6. Proposed Settlement Timeline Dispute Settlement (if needed) True-Up (if needed) Initial Interim Final Only run if timely disputes on Interim or Initial are granted. Deadline for Disputes on Initial, Interim, Scheduled Resettlement and any Resettlements before Day 90 Only run if dispute on Final is granted 10 Bus Days 10 Bus Days 20 Bus Days 10 Bus Days 75 Day DEV Process Time DAY 0 10 30* 52 72* 90 110 127 130 160* 180 200* - Time period for timely disputes * Calculated Day based on matching Settlement Date - Time period for dispute submission

7. Settlement Statement Information Change • Adds requirements to settlement statements • Statement type identifier • Date the statement is published • Date the aggregation was performed • Deadlines for submitting disputes • ERCOT is reviewing the required modifications to their systems to accomplish this proposal Update of Section 9 Discussion

8. Dispute Process Changes Changes incorporated • Timely disputes based on operating day and statement date – not Invoice date as well • Disputes granted or granted with exceptions within 10 days of Final will result in Resettlement run* - otherwise held for True-up • Redefines requirement between old final and old true-up settlements • $100 limit on Disputes after True-up • Allows multiple Days or Charge Types - up to 30 days - on 1 dispute • Allows dispute on True-Up for any changes to data from the last settlement Discussion • Should there be a Hard stop timeline for filing disputes? • *Do we want to have dollar level threshold? • Does the timeline adequately cover timing for DEV process completion? Update of Section 9 Discussion

9. IDR Data Threshold Requirements • Prescribes quantity of IDR data needed to issue Final Settlement Statement at 130 days • Clarifies that the IDR requirement applies to any settlement after Final • Amends the threshold requirements • At least 99% of the total IDR data must be in ERCOT • 90% of the IDR data for each meter reading entity that have ESI ID counts greater than 20 Update of Section 9 Discussion

10. True-Up Statements • 180 day statement is only in the event that a dispute was granted/granted with exceptions concerning the 130 Day Final Statement. • The ERCOT TNT White Paper does not allow for dispute of the True-Up Statements Update of Section 9 Discussion

11. Resettlement Statements Threshold • Alters the requirement that data errors must result in an impact of greater than 2% of the ERCOT Operating Day market transaction dollars in order to cause resettlement. • Changes the Threshold to greater of the net of the QSE’s settlement charges (decision point on what these thresholds should be) • $30,000 or • 30%. • Understanding gained that these thresholds refer to disputed amounts that would be held until the next scheduled settlement run date Update of Section 9 Discussion

12. 5 Dispute Status Designations • Previous market understanding of status types in Protocols • Opened • Denied • Granted • Granted with Exceptions • Closed • ERCOT staff to provide language to synch the protocols with actual system status types • ERCOT shall provide Notice when dispute designation changes Update of Section 9 Discussion

13. Late Fees • Removes previous proposal for the calculation and formula used to determine late fees be placed on the Invoice • Invoice includes operating dates for which late fees are assessed be placed and any interim payments • ERCOT is reviewing the required modifications to their systems to accomplish this proposal. Update of Section 9 Discussion

14. Continued discussion items for 11/17 – Resume at §9.5.4 • Proposes requirement on ERCOT to research and produce data elements prior to closing a dispute. • Precludes denial of a dispute when ERCOT is notified data extract(s) are incomplete. • ERCOT is drafting proposed alternative language. Update of Section 9 Discussion