Protocol Revision Subcommittee

1. Protocol Revision Subcommittee Report to ERCOT Technical Advisory Committee October 9, 2003

2. PRS Report Overview • Six PRRs with recommendations to approve • One PRR with recommendation to reject • ERCOT System Change Prioritization Report with recommendation to approve

3. PRR 381 – Update QSE Designation • Outlines the process when a QSE terminates its agreement with an LSE or Resource Entity • Protocols do not specify a timeline or the process for a QSE to terminate an LSE or Resource Entity • PRR previously remanded to PRS from Board/TAC

4. PRR 381 – Update QSE Designation • QSE provides 5 days notice prior to termination • ERCOT notifies LSE of credit requirements 3 days prior to termination • LSE, if new QSE not designated, may become an “Emergency QSE” and may schedule • After 7 days, “Emergency QSE” must designate new QSE or meet QSE requirements • Failure could result in PUC action up to and including mass drop

5. PRR 381 – Update QSE Designation • Impact Analysis • Staffing impact • Manual process due to anticipated infrequency • No cost/budget impact predicted • Actual event will require intensive effort from several ERCOT departments • May implement immediately • No ERCOT computer system impact • Business Functions • Difficult to assess impact of anticipated infrequent occurrences • EQSE may not be able to submit schedules resulting in manual processes

6. PRR 427 – RMR General Clarifications • Objective is to clarify RMR provisions • Further defined “Eligible Costs” • Defined the non-fuel “Eligible Cost” budgeting process • Documentation standards • Changed Incentive Factor applied to actual Eligible Costs to 10% from 8% • Clarified reduction for non-availability

7. PRR 427 – RMR General Clarifications • Impact Analysis • 1 FTE required in 2004 for RMR settlements • New process effective with new RMR contracts effective January 2004 • No ERCOT computer system impact • Business Functions • Manual processing of Eligible Costs • No operating practices impact • No interim solutions to evaluate

8. PRR 428 – RMR Scheduling Clarifications • Defines Static and Dynamic Responsibility Transfer (RT) scheduling of energy from RMR units • Sets forth principles for RMR RTs

9. PRR 428 – RMR Scheduling Clarifications • Impact Analysis • No direct staffing impact • No cost/budget impact • ERCOT computer system impact • Change being evaluated; contingent on RT testing for RT other than QSE to QSE • Business Functions • Requires procedure changes for increased monitoring and verification of RMR RT changes • No operating practices impact • Procedure changes and increased monitoring • No interim solutions to evaluate

10. PRR 428 – RMR Scheduling Clarifications • Impact Analysis • Alternatives for Implementation • New ERCOT comments • Clarification of PRR language for consistency • Addresses lost signal situation • If use last known value, no system change • If indicative schedule used, system change required potentially for all RTs

11. PRR 444 – Move-In/Move-Out (MIMO) Stacking • Implements RMS protocol changes for handling multiple non-sequential transactions on a single ESI ID

12. PRR 444 – Move-In/Move-Out (MIMO) Stacking • Impact Analysis • Staffing impact • Project in flight so staff has absorbed certain changes • Request 7 FTEs in 2004 for FasTrak and exception monitoring • No additional cost/budget impact (in-flight) • Project completion – August 2004 • In-flight, impacts commercial systems • Business Functions • Adjusted processes for MIMO changes • No operating practices impact

13. PRR 447 – TCR Credit Limit Constraint Based on Clearing Prices • Does not change calculation of clearing prices (struck for further development) • Clarifies calculation of PCR prices by adding formula • Clarifies that only awardees will be posted

14. PRR 447 – TCR Credit Limit Constraint Based on Clearing Prices • Impact Analysis • No staffing impact • No cost/budget impact • No estimated time requirements • No ERCOT computer system impact • No settlement system impact • Business Functions • Language clarification only reflecting current process • No operating practices impact • No interim solutions to evaluate

15. PRR 460 – CSC Exemption Criteria • Establishes process for CSC exemptions • Not change annual average shift factor by more than +/-5% • No commercial impact/gain for requestor

16. PRR 460 – CSC Exemption Criteria • Impact Analysis • Staffing impact • Request for exemption verifications could require additional FTEs even though data for independent review is available to market participants • No cost/budget impact • May be implemented immediately • May impact ERCOT computer system • May impact business functions • May impact operating practices • Alternative is to limit exemptions to NOIEs

17. PRRs for Approval • PRR 381 – Update QSE Designation • Effective November 1, 2003 • PRR 427 – RMR General Clarifications • Effective November 1, 2003 • PRR 428 – RMR Scheduling Clarifications • Effective upon system implementation • PRR 444 – MIMO Stacking • Effective for some portions on November 1, 2003; remainder effective upon system implementation • PRR 447 – TCR Credit Limit Constraint • Effective November 1, 2003 • PRR 460 – CSC Exemption Criteria • Effective November 1, 2003 if limited to NOIEs; otherwise upon addition of ERCOT FTEs

18. PRRs for Rejection • PRR 445 – Amendment to PRR Designation & Review Time Period for those PRRs deemed as “Urgent” and the Urgent Review Timeline • PRS recommended rejection at last TAC meeting • Requires TAC action

19. System Prioritization • Reviewed prioritization of all 2004 proposed system changes • System changes related to making existing ERCOT instructions “instructed” included in EMMS implementation • No proposed changes to overall priority list • Recommend approval