1. TAC Report to the ERCOT Board December 16, 2003

2. Summary • Guides Approval Notification • Test Plan Timelines Revision Notification • Five Protocol Revisions for Approval

3. Guides Approval • Competitive Metering Guides • Initial version approved in preparation for January 1, 2004 • Operating Guide Revision 139 • Addresses Communications with Black Start Facilities

4. August 1, 2004 RMS Approved production roll out date for Version 2.0, including MIMO and Stacking transaction changes 3/05/04 Flight Ends 6 Wk. Test 3/12/04 Flight Kickoff Flight V1.6-0104 New CRs & DNPs 4/23/04 Flight Ends 6 Wk. Test 5/14/04 Flight Kickoff Flight Notice 1/6/04 7/23/04 Flight Ends Flight V1.6-0304 New CRs 10 Wk. Test Flight V2.0-0504 All Market Players & DNPs 9/10/04 Flight Kickoff 0504 Flight Notice 3/5/04 11/19/04 Flight Ends 10 Wk. Test Flight Notice 7/7/04 Flight V2.0-0904 New CRs 2004 2003 Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec NAESB Version 1.6 Phase 2 Test 1/5 - 2/13 NAESB Version 1.6 Phase 3 Test 2/16 - 3/26 2004 Market Test Time Line 1/23/04 Flight Kickoff

5. PRRs Recommended for Approval • 436 – Enhance LaaR/BUL Ability to Participate in Balancing Energy Up Service • 451 – Clarification of Ancillary Services Obligation Calculation • 466 – Extension of No Market Solution • 474 – Short Pay Payment Plan • 475 – Unit-Specific Deployment Based on Generic Cost

6. PRR436 – Enhance LaaR/BUL Ability to Participate in Balancing Energy Up Service • Facilitates demand response through BUL • Minor computer system and business practice impact, manual workaround will be employed, staffing requirement estimated at 0.2 FTE • Effective upon system implementation • TAC approved by a 26 to 0 vote with 2 abstentions

7. PRR451 – Clarification of Ancillary Services Obligation Calculation • Bases A/S obligation on actual metered Load Ratio Share • Improves accuracy of obligation • Computer system impact, staffing impact estimated at 0.1 FTEs, no workaround • Effective upon system implementation • TAC approved by a 21 to 2 vote with 5 abstentions

8. PRR466 – Extension of No Market Solution • Extends suspension of market solution from December 31, 2003 to February 1, 2005 • No impacts • Effective January 1, 2004 • TAC approved by a 24 to 2 vote with 2 abstentions

9. PRR474 – Short Pay Payment Plan • For short-pays, after 180 days, if payment plan implemented, ERCOT posts the plan, the expected payment amounts, and applicable invoice dates • Assists QSE financial reporting • Effective January 1, 2004 • TAC approved unanimously

10. PRR475 – Unit-Specific Deployment Based on Generic Cost • Sets unit specific bid prices at generic cost plus zero percent as interim patch until WMS approves a modified generic cost structure • Ensures economic deployment of units for local congestion, potentially lowering uplift amounts • No significant impacts • Effective January 1, 2004 • TAC approved unanimously