Protocol Revision Subcommittee

1. Protocol Revision Subcommittee Presentation to the ERCOT Technical Advisory Committee January 12, 2006

2. PRS Summary • 5 PRRs for Approval • 0 System Changes – IA/CBA • 5 Non-System Changes – IA only • Prioritization Process

3. PRR 543 – Schedules & Emergency Assistance Over CFE-ERCOT DC Ties

4. PRR 543 – Schedules & Emergency Assistance Over CFE-ERCOT DC Ties Impact Analysis No Impact Impact Description Item Reviewed Budget Staffing Computer Systems Contract required prior to ERCOT use of PRR Business Functions Grid Operations Risk exists when energy flows to CFE from ERCOT Credit Monitoring/Liability

5. PRR 627 – RMR Transmission Issues & RMR Contract Extension

6. PRR 627 – RMR Transmission Issues & RMR Contract Extension Impact Analysis No Impact Impact Description Item Reviewed Budget Staffing Computer Systems Business Functions Grid Operations Credit Monitoring/Liability

7. PRR 638 – Change Settlement Invoice Due Date from 16 Calendar Days to 5 Bank Business Days

8. PRR 638 – Change Settlement Invoice Due Date from 16 Calendar Days to 5 Bank Business Days Impact Analysis No Impact Impact Description Item Reviewed Budget Staffing Computer Systems Business Functions Grid Operations Credit Monitoring/Liability

9. PRR 639 – Notification of Repairs to EPS Facilities Under Emergency Conditions

10. PRR 639 – Notification of Repairs to EPS Facilities Under Emergency Conditions Impact Analysis No Impact Impact Description Item Reviewed Budget Staffing Computer Systems Business Functions Grid Operations Credit Monitoring/Liability

11. PRR 646 – Establish a Floor for Responsive Reserve Service -- URGENT

12. PRR 643 – Shorten Payment Default Timelines -- URGENT Impact Analysis No Impact Impact Description Item Reviewed Budget Staffing Computer Systems Business Functions Grid Operations Credit Monitoring/Liability

13. Recommended TAC Actions • Approval • PRR 543 – Schedules & Emergency Assistance Over CFE-ERCOT DC Ties • PRR 627 – RMR Transmission Issues & RMR Contract Extension • PRR 638 – Change Settlement Invoice Due Date from 16 Calendar Days to 5 Bank Business Days • PRR 639 – Notification of Repairs to EPS Meter Facilities Under Emergency Conditions • PRR 646 – Establish a Floor for Responsive Reserve Service Bids -- URGENT

14. Amendment to System Project Prioritization Process

15. 2006 System Change Prioritization Criteria • PRS reviewed categorization of system projects based on review of 2005 Prioritization Process • New criteria would be used to review existing and future system prioritizations

16. 2006 System Change Prioritization Criteria • Priority Designations • #1 – Projects required by statute, PUCT Order, NERC Compliance or critical reliability of grid operations, IT infrastructure or commercial settlement • #2 – High value for a majority of market segments or ERCOT • #3 – High value for one or two segments • #4 -- Medium value for a majority of market segments or ERCOT • #5 – Medium value for only one segment • #9 – Parking lot for non-prioritized projects

17. 2006 System Change Prioritization Criteria • Important considerations • Consistent application by all parties is critical • Definitions • Critical – operational necessity that must be addressed immediately • High Value – operational requirement that if left unaddressed will become critical • Medium Value – important to improve service or efficiency of operations of the market • Effective project prioritization is a combination of the following elements: • Change Request • Impact Analysis • CBA Output • Other