October 16, 2007Board of Director's Meeting

Market Operations Presentation

2Board of Director's Meeting - 2October 16, 2007

Agenda and Commentary

• Overall Activity – number of switches is down 9% as compared to last year. This seems reasonable given the expiration of PTB at the beginning of this year.

• Migration From Native AREPs – continued robust competition.

• Transaction Performance Measures – outstanding performance in August! Only minimal hiccups in IT processing – and IT and business recovery from those was quick and accurate.

• Energy Services – load is down 2.7% year to date as compared to last year. Balancing Up plus Balancing Down volumes are up compared to last year as a result of the lower than expected load.

• Summary Hub Price Data – prices continue to track natural gas prices with some lag.

• REPs and QSEs Added/Deleted

Retail Activity

Wholesale Activity

- 2 new REPs- 4 new QSEs

3Board of Director's Meeting - 3October 16, 2007

Overall Activity

Transaction Type

Switches 509,589

Move - Ins 1,588,193

Move Out 898,184

CSA 256,759

Drop to AREP 851

Total 3,253,576

Since June 1, 2001 24,809,564

Retail Transactions Summary

8/31/2007

559,011

1,638,406

932,555

195,629

8,799

3,334,400

8/31/2006

63,581

237,106

126,082

24,864

0

451,633

2007

72,727

237,696

134,915

40,372

1,465

487,175

2006

YTD August

4Board of Director's Meeting - 4October 16, 2007

Residential

Small Non-Residential

Large Non-Residential

ESI IDs and Load served by providers other than Affiliate REP

% of ESI IDs

32%

34%

72%

40%

42%

71%

44%

64%

70%

% of Load 1

at08-31-07

at08-31-07

at08-31-06

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

5Board of Director's Meeting - 5October 16, 2007

Performance Measures – August 2007

SwitchesEnrollment and Meter Read Scheduling

Request Reject to TDSP Schedule to New CR to Old CR from Old CR69,628 3,296 66,327 67,505 66,878 49,603 56,916

% in Protocol n/a 99.9% 99.9% 100.0% 100.0% 99.7% 98.8%

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

62,508 62,488 63,779 63,629% in Protocol 99.9% 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 CR256,436 4,670 251,207 249,980 248,076 139,769 124,841

% in Protocol n/a 98.5% 99.8% 97.3% 99.7% 100.0% 99.3%

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

147,394 147,278 242,387 241,887% in Protocol 99.3% 100.0% n/a 100.0%

6Board of Director's Meeting - 6October 16, 2007

Energy Services

08/31/07 08/31/06 2007 2006• Market Perspective:

Approximate Retail Market (at $.10/kWh PTB) $20,695.3 21,278.7 3,301.7 3,390.0Volume (GWh) 206,953 212,787 33,017 33,900% Increase -2.7% -2.6%Natural Gas Price Index ($/MMBTU) 6.7 6.6 6.1 7.0% Increase 1.5% -12.9%

• Balancing Energy:

Balancing Energy - Up $459.3 $547.0 $72.8 $67.8% Increase -16.0% 7.4%Up (GWh) 6,656.5 7,285.1 1,028.0 817.0% Increase -8.6% 25.8%% of Market 3.2% 3.4% 3.1% 2.4%

Balancing Energy - Down -$287.8 -$200.0 -$32.1 -$59.3% Increase 43.9% -45.9%Down (GWh) -6,617.3 -5,024.8 -716.1 -1,050.5% Increase 31.7% -31.8%% of Market 3.2% 2.4% 2.2% 3.1%

YTD($'s in millions)

August ($'s in millions)

7Board of Director's Meeting - 7October 16, 2007

Hub Summary Data

• ERCOT Hubs

Balancing Energy Weighted Average Price ($/MWH)

HUBAug2007

July2007

June2007

May2007

Apr2007

Mar2007

Feb2007

Jan2007

Dec2006

Nov2006

Oct2006

Sept2006

South $59.13 $50.85 $59.54 $59.53 $56.64 $55.75 $53.41 $54.71 $53.80 $40.95 $44.54 $40.81North $60.38 $50.57 $54.70 $51.68 $51.63 $55.53 $51.48 $52.59 $53.86 $46.29 $41.08 $38.09Houston $63.38 $49.83 $56.88 $64.23 $65.36 $58.72 $56.30 $55.11 $60.84 $48.05 $40.35 $40.46West $59.86 $58.44 $75.18 $58.92 $70.75 $63.86 $63.95 $56.86 $56.91 $52.06 $45.04 $44.57ERCOT Hub $60.60 $51.33 $58.99 $57.21 $56.78 $57.39 $53.65 $54.33 $55.55 $46.06 $42.23 $39.72ERCOT Bus $60.69 $51.14 $58.70 $57.12 $56.84 $57.41 $53.57 $54.06 $55.63 $45.60 $42.03 $39.68% Change 18.7% -12.9% 2.8% 0.5% -1.0% 7.2% -0.9% -2.8% 22.0% 8.5% 5.9%NGPI % Change 3.4% -19.2% -2.7% 2.7% 10.6% -9.6% 15.9% -3.1% -3.0% 24.1% 12.5%

8Board of Director's Meeting - 8October 16, 2007

REPs and QSEs Added/Deleted – September 2007

• Added Reps • Added QSEs Sure Electric, LLC d/b/a Riverway Power Brilliant Energy, LLC Energyco Marketing & Trading, LLC Leach Energy Trading, LLC

Reach Energy, LLC Brilliant Energy, LLC

• Deleted Reps • Deleted QSEs None None