NOTICE DATE: March 1, 2012

NOTICE TYPE: W-B030112-01 Financial/Credit

SHORT DESCRIPTION: AIL calculation correction

INTENDED AUDIENCE: Counter-Parties, CRRAHs and QSEs

DAYS AFFECTED: Operating Days February 24 – 29, 2012

LONG DESCRIPTION: Per Protocol Section 16.11.4.4, Determination of Counter-Party Aggregate Incremental Liability (AIL), the Real-Time Liability (RTL) for Operating Days that are a) completed but not settled (CNS) and b) are not completed (NC) are calculated based on estimated volumes and prices.

ERCOT has determined that the prices utilized in the daily estimates for Operating Days February 24, 2012, through February 29, 2012, do not reflect prices experienced in the market. ERCOT continues to research the issue and work toward a resolution.

Until the issue is resolved, ERCOT will adjust the RTLCNS and RTLNC components of the AIL calculation for the affected Counter-Parties for the impacted days. Currently, ERCOT is using the daily estimated Real-Time Imbalance from the AIL report multiplied by an average price of $20. ERCOT will monitor prices and may change the average price utilized in the calculation if needed.

A resolution will be implemented as quickly as possible. Once a resolution is in place, ERCOT will continue to adjust the RTLCNS and RTLNC values until the affected days are settled, when estimated data will be replaced with settled data.

Because of the need to calculate and post adjustments, the AIL and impacted summary reports were posted late today, around 13:00.

CONTACT: If you have any questions, please contact Vanessa Spells at [log in to unmask], (512) 225-7014, Rizaldy Zapanta at [log in to unmask], (512) 225-7015, Maruthi Gaddam at [log in to unmask] (512) 275-7441 or Cheryl Yager at [log in to unmask], (512) 225-7029. Additional questions can be directed to your assigned ERCOT Account Manager, [log in to unmask] or the general ERCOT Client Services phone number (512) 248-3900.

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