Market Trials Congestion Revenue Rights

1. Market TrialsCongestion Revenue Rights Weekly Update April 16, 2010 http://nodal.ercot.com 1

2. Antitrust Admonition ANTITRUST ADMONITION ERCOT strictly prohibits Market Participants and their employees who are participating in ERCOT activities from using their participation in ERCOT activities as a forum for engaging in practices or communications that violate the antitrust laws. The ERCOT Board has approved guidelines for members of ERCOT Committees, Subcommittees and Working Groups to be reviewed and followed by each Market Participant attending ERCOT meetings. If you have not received a copy of these Guidelines, copies are available at the Client Relations desk. Please remember your ongoing obligation to comply with all applicable laws, including the antitrust laws. DISCLAIMER All presentations and materials submitted by Market Participants or any other Entity to ERCOT staff for this meeting are received and posted with the acknowledgement that the information will be considered public in accordance with the ERCOT Websites Content Management Operating Procedure. http://nodal.ercot.com 2

3. Agenda • Anti-trust Admonition • Environment Report • Planned / unplanned outages • Known Issues • Standing Reports and Updates • General reminders / updates • Qualification Update • Question and Answers / General Discussion • FAQ • Multi-month vs Monthly Auctions (24 hour bids and Credit) ERCOT asks that Market Participants log into the WebEx session using their company name and then their name. This will allow ERCOT to take roll-call offline http://nodal.ercot.com 3

4. Market Trials 2010 Roadmap http://nodal.ercot.com 4

5. Day-to-day operations summary: Planned / Unplanned Outages of EDS • Planned Outages • None planned during normal operating hours next week • Failover testing • Taylor to Austin ~15 minutes of outage • Tuesday, 04/20/2010 18:00-19:30 CDT timeframe • Austin to Taylor ~15 minutes of outage • Thursday, 04/22/2010 18:00-19:30 CDT timeframe • 04/23/10 – 04/25/10 • ERCOT will be performing the initial release for Phase 5 on 4/23 • Due to the size and complexity of the release, it will be necessary to take systems down periodically throughout the weekend • ERCOT will be running a series of test that Sunday which may result in notifications and / or data in the Nodal Production systems that are associated with that test. • Unplanned Outages • 04/12/2010 – midnight - ~9:30 am – CRR Account Holders were unable to upload bids due to a misconfiguration of the settlement points. • 04/12/2010 – Afternoon – The MPIM experienced a significant slowdown causing some participants to be unable to download their digital certificates this afternoon. • Network Model Load/Refresh • CRR updated the sources and sinks and the account holder data on 04/14/2010 • WFCOGEN_12 -> WFCOGEN_13 • WFCOGEN_34 -> WFCOGEN_24 http://nodal.ercot.com 5

6. Environment Report: Known Issues • Reminder: ERCOT will post known issues every Friday to the readiness center at: http://nodal.ercot.com/readiness/markettrials/crr/index.html • No new known issues to report http://nodal.ercot.com 6

7. Standing Reports and Updates: General reminders / updates • Next week’s activities • ERCOT will publish results for the May 2010 Monthly Auction on Monday morning 04/19/2010 • ERCOT will issue invoices for the May 2010 Monthly Auction on Tuesday 04/20/2010 • Credit submitted to May 2010 Monthly Auction will free up on Tuesday, 04/20/2010 • Counterparties can submit credit to CRR Auctions any time next week. • Further in the Future • The Bid Submission Window for the Balance of Year auction opens Monday Morning 04/26/2010 • The Credit for the Balance of Year auction closes Monday 04/26/2010 at 5pm • The Market Trials Phase 5 kickoff meeting (Webex only) will be held on Thursday, 04/29/2010. Check ERCOT calendar for more details. http://nodal.ercot.com 7

8. MAY 2010 Auction statistics • Number of CPs submitting Credit - 52 • Number of AH submitting bids - 48 • Number of Buy Bids • Peak WD – 1,276 • Peak WE – 1,555 • Off-peak – 1,700 • 24 Hour – 1,454 Number of Sell Offers Peak WD – 7 Peak WE – 7 Off-Peak - 7

9. Qualification Update • 65 / 69* CRRAHs are qualified • Nodal Scorecard will update on 05/05/2010 • The CRR Dashboard • The dashboard will be updated every Friday at 7pmhttp://nodal.ercot.com/readiness/markettrials/crr/index.html http://nodal.ercot.com 9

10. Q&A FAQ/Follow Up http://nodal.ercot.com 10

11. 11 Are bid price guardrails off for the May CRR auction?  Can we bid above $15/MWh?  Guardrails were taken off the May and BOY auctions, and will likely be kept off for the rest of market trials. ERCOT does request that you keep your bids/offers realistic so as not to skew the market results in ways that would not mirror what you would do in production. 1/4/2020

12. You must assign it to an auction first – you have to click on the portfolio name on this screen, then select the appropriate auction from the Select Auction pull down.  You may or may not lose the dates – if it turns yellow and errors out after you click save, scroll all the way to the right and assign dates. 12 Why do I not have a Submit hyperlink to the May auction on my Auction Portfolio List screen? 1/4/2020

13. 13 How do we know if we have entered our credit and portfolios in correctly? You can always send an email to markettrials@ercot.com to request the CRR Team to double check. Please ensure you do this before credit is locked and/or the bid window closes, so that if changes are required you will have time to make them. 1/4/2020

14. 14 Can you provide me with the steps I should follow for auctions? Receive Market Notice about the upcoming auction Log onto CRR application using your Counter Party (9999) certificate and apply credit to the auction. {Optional}Go to CRR MIS site (https://mis.ercot.com/pps/tibco/mis/Pages/Market+Information/CRR) to download: • CRR Network Model • Auction Notice {Optional}Use the network model and baseload CRR information  to determine which CRRs you wish to buy/sell in the auction When the Bid Window opens, log onto CRR application using your Account Holder (5000) certificate • Add New or Upload a Qualification Portfolio • Add new is good only if you have a few (i.e., several) bids/offers to be included in the auction.  Everything is manual, so it takes a lot of time doing it this way. • Uploading a portfolio – • NOTE: You can use as a template the CRR Qualification Portfolio used when you qualified, just make sure you rename the fill in A1, referencing the appropriate auction. • NOTE: Bid IDs are only needed when you are selling CRRs that you already own.  You would get this from  the Downloads tab, buy downloading your existing CRRs under Private>Existing CRRs .   Keep this column blank when you are offering to buy CRRs. •  Make sure the appropriate auction is selected in the “Select Auction” pull-down • Make sure the start date/end date columns are populated with the appropriate dates • NOTE:  if adding a new portfolio, these columns don’t show up until you select an auction.  If uploading a portfolio, you can include these dates in the file you upload. • Click SAVE once you are done.  You’ll be returned to the Auction Portfolio List screen • Click the “Submit” hyperlink to submit it to the auction.  • NOTE: If you need to make changes to the portfolio, click the “Remove” hyperlink on this page, then update the portfolio as needed.  Be sure to save your changes, then click “Submit” again, to ensure your updated portfolio is submitted to your auction. The first time or two, you may want to email or call us to have us check it’s gone through correctly.  Best email is:  markettrials@ercot.com . 1/4/2020

15. The behavior of 24 Hour bids in the CRR Monthly Auctions • 24 hour bids can be entered into CRR Monthly auctions • The auction engine treats a 24 hour bid as a single bid across the three time of use network models (Peak WD, Peak WE, Off-peak) • Single MW amount • Single $/MW-hr bid price (not to exceed) • If the Bid Price is higher than the weighted (by number of hours) average of the three times of use clearing prices(Peak WD, Peak WE, Off-peak) then the CRR bid will be awarded fully (assuming there is no active budget constraint). • If the Bid Price is lower than the weighted average of the three times of use clearing prices then the CRR bid will not be awarded. • If the Bid Price is equal to the weighted average of the three times of use clearing prices then the CRR bid will be awarded at some level between 0 and 100%, but the same in each time of use..

16. 24 Hour Example in Monthly Market • 24 hour CRR bid for February 2013 Monthly Auction • 28 x 8 = 224 Off-peak hours • 8 x 16 = 128 PeakWE hours • 20 x 16 = 320 PeakWD hours • 28 x 24 = 672 total hours • For a certain path prices are as follows • Off-peak 2$/MW-hr (arbitrary number for this example) • PeakWE 3$/MW-hr (arbitrary number for this example) • PeakWD 8$/MW-hr (arbitrary number for this example) • 24 hour = (224x2 + 128x3 + 320x8)/672 = $5.048/MW-hr • Note that a 24 hr bid of $6/MW-hr would be fully awarded in each time of use even though it was less than the clearing price in the PeakWD time of use. • Also note that a 24 hr bid of $4/MW-hr would not be awarded at all, even though it was more than the clearing price in the Off-peak and PeakWE times of use.

17. The behavior of 24 Hour bids in the CRR Annual Auctions • 24 hour bids can be entered into CRR Annual auctions • The auction engine treats a 24 hour bid as a short cut for entering three separate bids in the three time of use network models (Peak WD, Peak WE, Off-peak) • If the Bid Price is higher than the clearing price in a given time of use (Peak WD, Peak WE, Off-peak) then the CRR bid will be awarded fully in that time of use (assuming there is no active budget constraint). • If the Bid Price is lower than the clearing price in a given time of use then the CRR bid will be not be awarded in that time of use. • If the Bid Price is equal to the clearing price in a given time of use then the CRR bid will be awarded at some level between 0 and 100% in that time of use.

18. 24 Hour Example in Annual Market • 24 hour CRR bid for February 2013 in 2012/2013 Annual Auction • For a certain path prices are as follows • Off-peak 2$/MW-hr (arbitrary number for this example) • PeakWE 3$/MW-hr (arbitrary number for this example) • PeakWD 8$/MW-hr (arbitrary number for this example) • Note that a 24 hr bid of $6/MW-hr would be fully awarded in PeakWE and Off-peak, but not awarded in PeakWD • Also note that a 24 hr bid of $4/MW-hr would also be fully awarded in PeakWE and Off-peak, but not awarded in PeakWD

19. Credit Submission (Constraint) in Monthly and Multi-month Auctions • Monthly Auctions • All three times of use optimized simultaneously (three network models in one optimization) • Only one credit submission per auction • Balance of Year Auction • Each time of use optimized separately (seven network models in each optimization) • Three credit submissions for BOY auction (One per optimization) • Annual Auction • Each time of use/year combination optimized separately (twelve network models in each optimization) • Six credit submissions for Annual auction (One per optimization)

20. Screenshot of credit screen for Monthly and Balance of Year auctions

21. Q&A Q&A / Open Forum http://nodal.ercot.com 21

22. Appendix Appendix http://nodal.ercot.com 22

23. Environment Report: Changes to Supported Environment Hours • Outage Scheduler Environment Availability for February - March 2010 • The Nodal Production Environment will be available Monday – Friday from 8am – 6pm • Outside of these hours, ERCOT will be executing performance testing and patch migrations based on testing results • For those MPs that provided ERCOT test certificates, there will be test notifications sent to your listeners (where applicable) during these internal ERCOT tests • ERCOT will coordinate with a when submitting to avoid qualification transactions • Please note that only functionality that pertains to the Outage Scheduler qualification activities has been validated and are supported • Other features (such as reports and other MIS functionality) may be present in the environment but may have issues • ERCOT is still in the process of validating features to be released in later Market Trials Phases http://nodal.ercot.com 23