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1. Insert Title Here 800.830.5923 www.sel.com Date June 8,2005

2. AGENDA • Strategic Energy, LLC • Background on Issue with Final Settlements • Efforts to Resolve through RBA Process • Market Participants Need Vehicle to Address this Situation for Purposes of Fairness and Finality • Next Steps

3. Strategic Energy, LLC • NEPOOL Member in Good Standing since April 1996 • Operate in six RTO/ISOs • Supplier with load in MA • First Time Strategic has: • Encountered problem with final settlement • Submitted RBA • Presented settlement issue to Markets Committee for escalation to Participants Committee

4. Background on Issue with Final Settlement • Preliminary Settlement Statements – January 2004 • Correct in all material respects • Usage data for billing – January 2004 • Correct in all material respects • Final Settlement Statement – January 2004 • Posted 5/24/04 • Irreconcilable with Preliminary Settlement Statement • Eight operating days in question: • January 23 – 31, 2004

5. Background on Issue with Final Settlement • Preliminary Settlement Statements - February 2004 • Correct in all material respects • Usage data for billing – February 2004 • Correct in all material respects • Final Settlement Statement –February 2004 • Posted 6/22/04 • Irreconcilable with Preliminary Settlement Statement • Ten operating days in question: • February 1 – 10, 2004

6. Background on Issue with Final Settlement • Strategic reviewed Preliminary Settlement Statement and billing data • Strategic relied on data for purposes of billing customers • Data was correct in all material respects • Final settlement, however, contained erroneous data

7. Background on Issue with Final Settlement • Supplier and Meter Reader Immediately Informed ISO of Error • Multiple attempts by Meter Reader to submit correct data for Final Settlement • Attempts failed • Faulty meter data imported to ISO for final settlement

8. Background on Issue with Final Settlement • Total Negative Imbalance of 13,612 MWh • Resulting Adjustment of $843,378.34

9. Efforts to Resolve through RBA Process • Strategic RBA – 7/30/04 • Market Rule 1, Section 3.6.1 • “Data Correction Billing. The ISO will reconcile Participant data errors and corrections after the correction limit for such data has passed.” • OATT, Attachment N, NEPOOL Billing Policy, Section 5.3 • Disputing party must submit its Requested Billing Adjustment within 3 months of the date that the Invoice or Remittance Advice containing the Disputed Amount was issued by the ISO unless the Disputing Party could not have reasonably known of the existence of the alleged error within such time.

10. Efforts to Resolve for RBA Process • Strategic RBA • Manual 29 on Billing • Errors in Participant’s statements resulting from errors in settlement software, errors in data entry by ISO personnel, settlement production problems and other errors in implementing applicable market rules or tariffs in the settlement process that, in each case, do not affect the Day-Ahead schedule or Real-Time system dispatch, will be corrected as promptly as possible.

11. Efforts to Resolve through RBA Process • RBA Comments by Assigned Meter Readers • New England Assigned Meter Readers that are Host Participants • 4/13/04 Markets Committee Meeting • Discussed how meter data errors discovered after the 90-day resettlement process should be addressed • Meter Reader and Committee support for position that if Participant was financially harmed as a result of a meter data error discovered after 90-day resettlement period, Participant could seek relief from NEPOOL Markets Committee • Based on Total Claim Amount of RBA and fact that NEPOOL Rules and Manual 28 do not provide mechanism for Meter Readers to submit revised meter data values following 90-day resettlement, Meter Readers strongly support investigation of RBA

12. Efforts to Resolve through RBA Process • RBA – ISO’s Response • ISO strictly interpreted 90-day rule • Because corrected data was not submitted by the Assigned Meter Reader within 90 days from Preliminary Settlement, ISO denied RBA. • ISO settled operating days with data supplied by Assigned Meter Reader and/or Host Participant

13. Market Participants Need Vehicle to Address • Balance Competing Interests: • Important Goal of Finality • Important Goals of Equity, Fairness, Just and Reasonable Rates

14. Market Participants Need Vehicle to Address • PROBLEM FOR ALL PARTICIPANTS: • ISO’s Interpretation of Market Rules provides no mechanism for addressing the exceptional situation when an erroneous meter data submission appears post 90 days

15. Market Participants Need Vehicle to Address • April 13,2004 Markets Committee Meeting • Supported position that participant financially harmed by meter data error discovered after 90-day resettlement could seek relief from Markets Committee.

16. Next Steps • Discussion with Market Committee • Fairness to all Participants • Escalate to Participants Committee: • Strategic is a participant that has been financially harmed by a meter data error discovered after 90-day resettlement and deserves relief in the form of resettlement of the operating days from January 23, 2004 through February 10, 2004. • Participants Committee could clarify Rules to ISO • Show ISO interpretation too narrow • Participants Committee could Identify and Support alternative Vehicle for Relief under Market Rules