News Release

June 08, 2006

ERCOT at a Glance: News Update - June 8, 2006

TOPICS:

PUC Accepts Revised Employee Compensation Proposal

In a public workshop today, the Public Utility Commission unanimously accepted ERCOT’s revised employee compensation strategy eliminating management bonuses in favor of “pay for performance” annual merit increases.

ERCOT staff and the board of directors’ human resources and governance committee reevaluated the compensation program in response to the suggestions and questions raised by commissioners as part of the 2006 system administration fee approval application.

The revisions, recommended by the board committee, move from variable compensation toward a focus on competitive base pay and annual merit increases for employees demonstrating higher levels of performance.  Other recommendations include a performance recognition reward program for which all employees would be eligible – including non-monetary rewards and potential performance awards, up to 2 percent of total compensation.

ERCOT has retained Mercer Human Resource Consulting to assist in redesigning the salary structure.

Acting CEO Sam Jones made a presentation on the recommendations and rationale for the changes, and board member Bob Kahn from Austin Energy, chair of the human resources and governance committee, also spoke at the workshop.  Other board members on the committee include Andrew Dalton, industrial consumer segment representative, and Carolyn Gallagher, an independent member (unaffiliated with any market participants).

The presentation is posted on the ERCOT Web site.

Texas Nodal Launches Web Site, Newsletter

The Texas Nodal team announced the launch of the Texas Nodal Market Implementation Web site, http://nodal.ercot.com, dedicated to providing up-to-date information about the Texas Nodal program and projects. The site currently features documents presented or distributed at the nodal Transition Plan Task Force (TPTF) meetings. As the site expands, all project documents, presentations, status, training materials and announcements related to the Texas Nodal program will be included.

Phase II, now under construction, will include access to the nodal protocols and training materials and classes. Phase III will introduce the projects section, containing schedules, milestones, approved documents and other news related to the nodal projects.

In addition to the Web site, the nodal communications team has introduced Texas Nodal News, a subscription-based newsletter featuring nodal project news, announcements and activities. The premiere edition will publish tomorrow. Subsequent editions post bi-weekly on Fridays. To subscribe to the newsletter, visit the ERCOT Mailing Lists page and subscribe to Texas Nodal News.

New Replacement Reserve Service Reports Posted

ERCOT implemented a protocol revision June 6 to begin posting a new replacement reserve service (RPRS) daily report to the ERCOT Web site. The report contains the identity of units selected for local replacement as well as their low sustainable limits, the hours of deployments, the binding transmission constraints, the amount of zonal RPRS deployed and the market clearing price of capacity. This report is available on or before the second business day after each operating day.

Monthly reports, available on the 20th day of the following month, will be posted in the same location. These reports show the quantity of RPRS procured by hour for system capacity, based on the day-ahead estimate of total ERCOT load, versus the quantity of RPRS that, in hindsight, would have been the proper amount to procure, based on actual average adjusted metered load.

Human Resources Vice President Selected

Acting CEO Sam Jones announced that Nancy Capezzuti will be joining the ERCOT staff on June 15 as vice president of human resources.  Capezzuti comes with a strong background in human resources in the regulated utility industry having served as senior vice president of human resources for Southern Union Gas Company for over 12 years. She has a bachelor of science degree and a master’s degree from Texas State University.

Pam Fisher, director of human resources staffing, has served as the acting vice president of human resources and will continue in that capacity until Capezzuti arrives.

General Counsel Resignation Announced

Jones also announced the resignation of ERCOT’s general counsel, Carolyn Shellman.  Shellman has accepted the general counsel position at CPS Energy in San Antonio. “Her exemplary service to ERCOT will be greatly missed and we wish her the best in her new role,” Jones said.  Shellman will stay at ERCOT for a brief period to complete some projects underway and to assist in beginning a search for her replacement.  An interim general counsel will be named at a later date.

ERCOT Meeting Calendar

June 2006

The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to more than 25 million Texas customers -- representing about 90 percent of the state’s electric load. As the independent system operator for the region, ERCOT schedules power on an electric grid that connects more than 46,500 miles of transmission lines and 650+ generation units. It also performs financial settlement for the competitive wholesale bulk-power market and administers retail switching for nearly 8 million premises in competitive choice areas.

ERCOT is a membership-based 501(c)(4) nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature. Its members include consumers, cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities, transmission and distribution providers and municipally owned electric utilities.

Contact

media@ercot.com

512-275-7432