Protocol Revision Subcommittee

1. Protocol Revision Subcommittee Presentation to the ERCOT Technical Advisory Committee September 8, 2005

2. PRS Summary • 6 PRRs for Approval • 2005 System Priority Changes • 3 PRR Rejections

3. PRR 567 – Simplified 3-Part Bidding for Ancillary Services • PRR submitted by Constellation (IPM) • PRR creates parameters for start-up costs, capacity offers, minimum operating costs and others that would allow ERCOT to reduce AS costs and provides for make-whole payments where appropriate • Benefit: Increases participation and reduces costs in AS markets • Amended by a PRS Task Force

4. PRR 567 – Simplified 3-Part Bidding for Ancillary Services • PRS recommended approval with 8 “no” votes and 4 abstentions • All market segments were present • Effective upon system implementation • PRS recommended a 3.3 priority

5. PRR 567 – Simplified 3-Part Bidding for Ancillary Services Impact Analysis No Impact Impact Description Item Reviewed Budget $1 to $3 Million Staffing Computer Systems Impacts several systems Business Functions Grid Operations Credit Monitoring/Liability

6. PRR 593 – Behind the “Fence” Reporting of Load • Remanded at July TAC to address TIEC concerns regarding the reporting of net load • PRR submitted by CenterPoint (IOU) on behalf of GATF addressing generation adequacy • PRS reviewed TIEC’s proposed language requiring reporting of net generation • PRS recommended approval unanimously • All market segments were present • Effective November 1, 2005

7. PRR 593 – Behind the “Fence” Reporting of Load Impact Analysis No Impact Impact Description Item Reviewed Budget Staffing Computer Systems Business Functions Grid Operations Credit Monitoring/Liability

8. PRR 598 – Charge Against OOM Start-Up • Remanded at August TAC meeting to address AEP comments to exclude nuclear, hydro, coal and lignite units and ERCOT comments to specify that generic fuel cost for upward instructions be used • PRS reviewed AEP & ERCOT comments • PRS unanimously recommended approval • All market segments were present • Effective upon system implementation • Priority 1.1, Rank 32.3

9. PRR 598 – Charge Against OOM Start-Up Impact Analysis No Impact Impact Description Item Reviewed Budget < $100 K Staffing Computer Systems Minor Lodestar coding Business Functions Grid Operations Credit Monitoring/Liability

10. PRR 602 – Ancillary Service Obligations for DC Tie Exports • PRR submitted by Tenaska (IPM) • PRR removes allocation of AS associated with DC Tie exports • Benefit: Accurately reflects the impact of the exporting QSE to the ERCOT grid • PRS recommended approval with 2 “no” votes and 8 abstentions • All market segments were present • Effective upon system implementation • Priority 1.1, Rank 32.5

11. PRR 602 – Ancillary Service Obligations for DC Tie Exports Impact Analysis No Impact Impact Description Item Reviewed Budget < $100 K Staffing Impacts Lodestar Computer Systems Business Functions Grid Operations Credit Monitoring/Liability

12. PRR 606 – User Security Administrators & Digital Certificates • PRR submitted by ERCOT in response to Audit findings • PRS approved “Urgent” status • PRR defines user security administrators and responsibilities, sets forth requirements on market participant regarding digital certificates including annual audits • Benefit: Assures proper digital certificate use • Amended by TDTWG after several meetings • PRS recommended approval with 2 “no” votes and 4 abstentions • All market segments were present • Effective October 1, 2005

13. PRR 606 – User Security Administrators & Digital Certificates Impact Analysis No Impact Impact Description Item Reviewed Budget Staffing Computer Systems Business Functions Grid Operations Credit Monitoring/Liability

14. PRR 612 – Replacement Reserve Service Bid Cap • PRR submitted by Tenaska (IPM) on behalf of the QSEMWG • Allows for the update of AS bids after notice of ERCOT’s intent to procure AS in the adjustment period • Benefit: AS stack likely to be more sufficient • Amended by ERCOT • PRS recommended approval unanimously • All market segments were present • Effective November 1, 2005

15. PRR 612 – Replacement Reserve Service Bid Cap Impact Analysis No Impact Impact Description Item Reviewed Budget Staffing Computer Systems Revises procedures/training Business Functions Grid Operations Credit Monitoring/Liability

16. Recommended TAC Actions • Approval • PRR 567 – Simplified 3-Part Bidding for AS • PRR 593 – Reporting of Net Generation & Load • PRR 598 – Charge Against OOM Start-Up • PRR 602 – AS Obligations for DC Tie Export • PRR 606 – User Security Administrators & Digital Certificates • PRR 612 – AS Procurement During the Adjustment Period

17. Recommended TAC Actions • 2005 Priority Changes • PRR 565 – Calculation of Losses for Settlement • Priority 1.1, Ranking 32.6 • PRR 577 – Availability of Aggregated Load Data by TDSP • Priority 1.2 • SCR 743 – QSE Dispute Extract • Priority 1.2

18. Other PRS Actions • PRR Rejections (No TAC action required) • PRR 356 – SCE Performance Requirement • PRR 358 – Negative Impact SCE • PRR 462 – Market Solution Definition