Revisions to M2 and RT Final Component of UFTA CWG/MCWG ERCOT Public January 22, 2014

1. Revisions to M2 and RT Final Component of UFTA CWG/MCWG ERCOT Public January 22, 2014

2. Revisions to M2 <vote> M2, “Multiplier for URTA”, represents “unbilled historical real-time activity based on historical activity.” It was reduced in 2013 to reflect the settlement cycle revisions resulting from NPRR 509. Commensurate with the additional settlement cycle revisions in NPRR 570, “Reduce RTM Settlement Timeline to Operating Day Plus Five”, ERCOT staff recommends an additional reduction of M2 to 8 days. ERCOT Public

3. Revisions to M2 <vote> NPRR 570 also reduces the posting date of the Final Settlement Statement from the 57th day after the Operating Day to the 55th day following the Operating Day effective May 1, 2014. This is used in the calculation of OUT – Outstanding Unpaid Transactions. • Outstanding, unpaid transactions of the Counter-Party, which include (a) outstanding Invoices to the Counter-Party; (b) estimated unbilled items to the Counter-Party, to the extent not adequately accommodated in the RTLE calculation (including resettlements and other known liabilities); and (c) estimated CRR Auction revenue available for distribution for operating days in the previous two months, to the extent not invoiced to the Counter-Party. Invoices will not be considered outstanding for purposes of this calculation until the Business Day after that Invoice payment is received • UFTA = (Average of the CP-level total of RTM Final Statements by Operating Date for the last 21 Calendar Days * 58) + (Average of CP level total of RTM True-Up Statements for the last 21 Calendar Days by Operating Date * 180) In conjunction with reducing M2, ERCOT staff recommends reducing the number of days in the UFTA for Real Time Final statements from 58 days to 55 days after the Operating Day. ERCOT Public

4. Revisions to M2 Questions ERCOT Public