WMS UPDATEWMS UPDATE

DisputesDisputesThere have been approximately 6,686 disputes There have been approximately 6,686 disputes

filed so far in 2003 categorized as follows:filed so far in 2003 categorized as follows: Balancing Energy – 3,628Balancing Energy – 3,628 OOM – 1,599OOM – 1,599 Ancillary Services – 910Ancillary Services – 910 RMR – 415RMR – 415 Fees – 62Fees – 62 Black Start – 53Black Start – 53 Congestion Management Energy – 16Congestion Management Energy – 16 Other – 2Other – 2

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Of the above disputes,Of the above disputes, 4,103 (61%) have been denied, 4,103 (61%) have been denied,

1,063 (16%) have been granted 1,063 (16%) have been granted with exceptions, 471 (7%) have with exceptions, 471 (7%) have been granted, and 1,049 (15%) are been granted, and 1,049 (15%) are open. Twenty-three ADRs have open. Twenty-three ADRs have been filed so far in 2003. been filed so far in 2003.

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OOME Instructed DeviationOOME Instructed DeviationWorkaroundWorkaround

1.1. QSE’s that get unit specific OOME QSE’s that get unit specific OOME instructions can request a Verbal Dispatch instructions can request a Verbal Dispatch Exception (VDE).Exception (VDE).

2.2. The VDE is a note to ERCOT Settlements that The VDE is a note to ERCOT Settlements that the OOME instruction should be treated as an the OOME instruction should be treated as an instructed deviation for settlement purposes instructed deviation for settlement purposes (URC calculation).(URC calculation).

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3.3. A VDE can only be requested due to a unit A VDE can only be requested due to a unit specific OOME instruction and must be specific OOME instruction and must be requested when the instruction is received.requested when the instruction is received.

4.4. The ERCOT operator approves the request The ERCOT operator approves the request and passes the information to Settlements.and passes the information to Settlements.

5.5. The amount of the VDE is the amount that The amount of the VDE is the amount that the zidup or ziddn shall be adjusted in the the zidup or ziddn shall be adjusted in the Settlement System. A VDE is not the same Settlement System. A VDE is not the same as a Zonal OOM Instruction.as a Zonal OOM Instruction.

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6.6. Settlements shall calculate the amount Settlements shall calculate the amount of the VDE based on the RP and IOL of the VDE based on the RP and IOL passed to Settlements from the MOS.passed to Settlements from the MOS.

The workaround cannot be effective The workaround cannot be effective until operating day January 15, 2004 or until operating day January 15, 2004 or later later

WMS UPDATEWMS UPDATEPRR 404 Credit IssuesPRR 404 Credit Issues

The ERCOT Settlements group has devised a method to The ERCOT Settlements group has devised a method to identify the required information one day after the Operating identify the required information one day after the Operating Day. Day.

Additional collateral will be required if MWhs required exceed Additional collateral will be required if MWhs required exceed the QSE’s schedule; however, the amount of that collateral the QSE’s schedule; however, the amount of that collateral required (as a percentage) has not yet been determined. required (as a percentage) has not yet been determined.

The same issue is unresolved for the incremental collateral The same issue is unresolved for the incremental collateral calculation although some of the required information for this calculation although some of the required information for this calculation is not available until seven days after the calculation is not available until seven days after the Operating Day. Operating Day.

The Credit Group continues to work on the outstanding issues The Credit Group continues to work on the outstanding issues and will provide it’s decision to WMS.and will provide it’s decision to WMS.

WMS UPDATEWMS UPDATEZone AdditionZone AdditionSystem ImpactSystem Impact

If more than five zones are selected, a re-architecture If more than five zones are selected, a re-architecture effort to improve the systems would be required. effort to improve the systems would be required.

Initially ERCOT will not change any timing on Initially ERCOT will not change any timing on deployment, but if processing delay times become deployment, but if processing delay times become apparent, the calculation start times would be adjusted. apparent, the calculation start times would be adjusted.

Similar effects are noted in both EMMS and Lodestar Similar effects are noted in both EMMS and Lodestar relative to processing times. relative to processing times.