January 15, 2008Board of Director's Meeting

Market Operations Presentation

Note: New Slide #6. It shows Settlement & Billing Performance Measures. These measures tie to the ERCOT Protocols and the Corporate Goals and Objectives.

2ERCOT Public -

Board of Director's Meeting - 2January 15, 2008

Agenda and Commentary

Retail Activity• Overall Activity – switching activity is down 13% compared to last year. Move In/Move Out activity

is comparable to last year.

• Migration From Native AREPs – no significant change from last month.

• Transaction Performance Measures – excellent performance in November.

Wholesale Activity• Settlements & Billing Performance Measures – system issues in November significantly

impacted posting deadlines for statements & invoices. Performance in prior months of 2007 exceeded 99.99%.

• Energy Services – increase in November volume versus last year due to colder weather. The colder weather this fall has increased volumes which offset the lower volumes experienced during the summer. As a result, year-to-date 2007 volumes are comparable to levels seen in 2006. Balancing activity is as expected given ERCOT load.

• Summary Hub Price Data – prices were lower in November than October which corresponded with a decrease in the natural gas price index.

• REPs and QSEs Added/Deleted– 3 new REPs

– 3 new QSEs

3ERCOT Public -

Board of Director's Meeting - 3January 15, 2008

Overall Activity

Transaction Type

Switches 669,678

Move - Ins 2,169,913

Move Out

CSA 325,883

Drop to AREP 853

Total 4,389,180

Since June 1, 2001 25,945,168

Retail Transactions Summary

11/30/2007

768,015

2,235,584

276,076

11,406

4,582,904

11/30/2006

49,346

182,093

102,362

19,854

2

353,657

2007

57,775

185,297

112,701

25,893

836

382,502

2006

YTD November

1,222,853 1,291,823

4ERCOT Public -

Board of Director's Meeting - 4January 15, 2008

Residential

Small Non-Residential

Large Non-Residential

ESI IDs and Load served by providers other than Affiliate REP

% of ESI IDs

36%

37%

72%

41%

44%

71%

45%

66%

70%

% of Load 1

at11-30-07

at11-30-07

at11-30-06

1 - % of Deregulated (Non-NOIE) Peak Demand on 08-17-06

5ERCOT Public -

Board of Director's Meeting - 5January 15, 2008

Retail Performance Measures – November 2007

SwitchesEnrollment and Meter Read Scheduling

Request Reject to TDSP Schedule to New CR to Old CR from Old CR52,895 2,806 50,084 50,976 50,772 21,281 35,886

% in Protocol n/a 100.0% 100.0% 100.0% 100.0% 100.0% 99.1%

Historical Usage (H) and Initial (I) Meter Read DeliveriesH to ERCOT H to CR I to ERCOT I to CR

46,987 46,931 48,994 46,915% in Protocol 100.0% 100.0% n/a 100.0%

Move In / Move OutEnrollment and Meter Read Scheduling

Request Reject to TDSP Schedule to New CR to Old CR from Old CR198,230 3,421 194,518 192,947 191,817 71,325 78,713

% in Protocol n/a 98.6% 99.9% 100.0% 100.0% 99.8% 98.4%

Historical Usage (H) and Initial (I) Meter Read DeliveriesH to ERCOT H to CR I to ERCOT I to CR

113,901 113,741 183,152 183,091% in Protocol 99.6% 100.0% n/a 100.0%

6ERCOT Public -

Board of Director's Meeting - 6January 15, 2008

Settlements & Billing Performance Measures – November 2007

11/30/07 11/30/06 2007 2006

Settlement Statements:Total 110,731 94,116 11,245 9,017Late 634 346 632 -Balance 110,097 93,770 10,613 9,017% Within Protocol 99.43% 99.63% 94.38% 100.00%

Invoices:Total 6,023 5,327 669 599Late 134 - 134 -Balance 5,889 5,327 535 599% Within Protocol 97.78% 100.00% 79.97% 100.00%

Grand Total:Total 116,754 99,443 11,914 9,616Late 768 346 766 -Balance 115,986 99,097 11,148 9,616% Within Protocol 99.34% 99.65% 93.57% 100.00%

YTD November

7ERCOT Public -

Board of Director's Meeting - 7January 15, 2008

Energy Services

11/30/07 11/30/06 2007 2006• Market Perspective:

Approximate Retail Market (at $.10/kWh PTB) $28,338.1 28,450.9 2,236.9 2,105.4Volume (GWh) 283,381 284,509 22,369 21,054% Increase -0.4% 6.2%Natural Gas Price Index ($/MMBTU) 6.6 6.3 6.2 6.7% Increase 4.8% -7.5%

• Balancing Energy:

Balancing Energy - Up $618.8 $656.1 $44.4 $36.6% Increase -5.7% 21.3%Up (GWh) 8,695.0 9,246.7 683.9 633.8% Increase -6.0% 7.9%% of Market 3.1% 3.3% 3.1% 3.0%

Balancing Energy - Down -$388.4 -$294.8 -$14.1 -$28.5% Increase 31.8% -50.5%Down (GWh) -9,311.0 -7,888.9 -553.3 -792.2% Increase 18.0% -30.2%% of Market 3.3% 2.8% 2.5% 3.8%

YTD($'s in millions)

November ($'s in millions)

8ERCOT Public -

Board of Director's Meeting - 8January 15, 2008

Hub Summary Data

• ERCOT Hubs

Balancing Energy Weighted Average Price ($/MWH)

HUBNov2007

Oct2007

Sep2007

Aug2007

July2007

June2007

May2007

Apr2007

Mar2007

Feb2007

Jan2007

Dec2006

South $53.03 $45.36 $63.41 $59.13 $50.85 $59.54 $59.53 $56.64 $55.75 $53.41 $54.71 $53.80North $40.10 $48.04 $68.73 $60.38 $50.57 $54.70 $51.68 $51.63 $55.53 $51.48 $52.59 $53.86Houston $55.99 $52.94 $65.73 $63.38 $49.83 $56.88 $64.23 $65.36 $58.72 $56.30 $55.11 $60.84West $32.54 $46.23 $80.17 $59.86 $58.44 $75.18 $58.92 $70.75 $63.86 $63.95 $56.86 $56.91ERCOT Hub $47.42 $48.12 $67.44 $60.60 $51.33 $58.99 $57.21 $56.78 $57.39 $53.65 $54.33 $55.55ERCOT Bus $47.32 $48.37 $67.44 $60.69 $51.14 $58.70 $57.12 $56.84 $57.41 $53.57 $54.06 $55.63% Change -28.3% -28.3% 11.1% 18.7% -12.9% 2.8% 0.5% -1.0% 7.2% -0.9% -2.8% 22.0%NGPI % Change -7.5% 11.7% -1.6% 3.4% -19.2% -2.7% 2.7% 10.6% -9.6% 15.9% -3.1% -3.0%

HUBNov2006

Oct2006

Sept2006

Aug2006

July2006

June2006

May2006

Apr2006

Mar2006

Feb2006

Jan2006

Dec2005

South $40.95 $44.54 $40.81 $71.99 $55.08 $53.66 $58.30 $63.14 $57.19 $55.16 $58.79 $89.00North $46.29 $41.08 $38.09 $65.01 $65.89 $55.31 $58.27 $66.04 $54.87 $55.19 $50.59 $96.26Houston $48.05 $40.35 $40.46 $70.69 $61.17 $56.52 $60.27 $68.50 $54.92 $51.77 $52.18 $86.11West $52.06 $45.04 $44.57 $73.06 $66.29 $64.50 $81.01 $92.11 $59.41 $58.20 $54.06 $93.14ERCOT Hub $46.06 $42.23 $39.72 $68.51 $62.41 $56.30 $60.08 $67.35 $55.89 $55.30 $53.37 $91.70ERCOT Bus $45.60 $42.03 $39.68 $68.16 $63.02 $56.07 $60.38 $67.81 $55.91 $55.04 $53.35 $92.16% Change 8.5% 5.9% -41.8% 8.2% 12.4% -7.1% -11.0% 21.3% 1.6% 3.2% -42.1%NGPI % Change 24.1% 12.5% -31.4% 20.7% -4.9% 1.7% -13.0% 6.2% -9.7% -5.3% -32.1%

9ERCOT Public -

Board of Director's Meeting - 9January 15, 2008

REPs and QSEs Added/Deleted – December 2007

• Added Reps • Added QSEs Airtricity QSE Southwest, LLC Prier Energy, Inc. Juice Energy, Inc.

Chain Lakes Power, LP HWY 3 MHP, LLC d/b/a Etricity Juice Energy, Inc.

• Deleted Reps • Deleted QSEs None None