NOTICE DATE: February 3, 2011

NOTICE TYPE: W-B020311-01 Financial/Credit

SHORT DESCRIPTION: Day-Ahead Market (DAM) “u^th” factor adjustment

INTENDED AUDIENCE: Market Participants who participate in ERCOT DAM

DAYS AFFECTED: DAM runs for February 4 – 7, 2011, for Operating Days February 5 – 8, 2011

LONG DESCRIPTION: Due to this week’s unusual activity, ERCOT has changed the “u^th” percentile used to determine exposure for Point-to-Point (PTP) Obligation Bids in the DAM from the 90^th percentile to the 80^th percentile, to become effective for the time period beginning with the DAM run on February 4, 2011, for Operating Day February 5, 2011, through the DAM run on February 7, 2011, for Operating Day February 8, 2011. ERCOT will re-evaluate on February 7, 2011, whether to continue at the 80^th percentile for an additional period of time or move back towards the 90^th percentile.

ERCOT will continue to monitor credit exposure over the next few days and may take additional actions to adjust Total Potential Exposure (TPE) and/or DAM parameters as needed.

CONTACT: If you have any questions, please contact Vanessa Spells at [log in to unmask], (512) 225-7014, or Kyle Prall at [log in to unmask], (512) 275-7412. You may also send credit inquiries to [log in to unmask].

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