2023-07-27T10:46:41-05:00 2022-12-31 390859910 BAKER TILLY US LLP 777 E WISCONSIN AVE 32ND FLOOR MILWAUKEE WI 53202 990 2022-01-01 742587416 ELECTRIC RELIABILITY COUNCIL OF TEXAS INC ELEC 5122257000 8000 METROPOLIS DR BUILDING E 10 AUSTIN TX 78744 SEAN TAYLOR VP AND CFO 5122257000 2023-07-25 1 SEAN TAYLOR 999009999 0 TROY MARINE CPA P00187863 4147775500 2023-07-25 2 AAL1 IAL1 2022 2023-04-26 12:10:37Z ERCOT PABLO VEGA 8000 METROPOLIS DR BUILDING E 100 AUSTIN TX 78744 355423897 0 X WWW.ERCOT.COM X 1990 TX SEE SCHEDULE O 8 8 913 10 0 0 0 0 252435343 327408004 199832 28015893 0 0 252635175 355423897 0 0 0 0 123829378 134015039 0 0 0 133458860 194521862 257288238 328536901 -4653063 26886996 3229605813 6964387654 3099131308 6809285480 130474505 155102174 WE SERVE THE PUBLIC BY ENSURING A RELIABLE GRID, EFFICIENT ELECTRICITY MARKETS, OPEN ACCESS AND RETAIL CHOICE. 0 0 195979859 275046856 ERCOT SUCCESSFULLY MANAGES THE FLOW OF ELECTRICITY TO MORE THAN 26 MILLION CUSTOMERS IN THE STATE OF TEXAS, WHICH INCLUDES THE MANAGEMENT OF FINANCIAL SETTLEMENT FOR THE COMPETITIVE WHOLESALE BULK-POWER MARKET AND THE ADMINISTRATION OF ELECTRIC PROVIDER ACCOUNT SWITCHING IN COMPETITIVE CHOICE AREAS. 24112024 24112024 ERCOT ACTS AS THE SERVICER AND ADMINISTRATOR FOR THE SUBCHAPTER M BONDS. UNDER THE ERCOT NODAL PROTOCOLS RELATING TO THE SUBCHAPTER M DEFAULT BALANCE SECURITIZATION, ERCOT BILLS MARKET PARTICIPANTS MONTHLY IN AMOUNTS SUFFICIENT TO PROVIDE PAYMENTS OF DEBT SERVICE AND OTHER REQUIRED AMOUNTS AND REMITS THOSE FUNDS TO THE TRUSTEE. 56172565 56172565 ERCOT ACTS AS THE SERVICER AND ADMINISTRATOR FOR THE SUBCHAPTER N BONDS. UNDER THE ERCOT NODAL PROTOCOLS RELATING TO THE SUBCHAPTER N UPLIFT BALANCE SECURITIZATION, ERCOT BILLS MARKET PARTICIPANTS DAILY IN AMOUNTS SUFFICIENT TO PROVIDE PAYMENTS OF DEBT SERVICE AND OTHER REQUIRED AMOUNTS AND REMITS THOSE FUNDS TO THE TRUSTEE. 276264448 0 0 0 0 0 0 0 1 0 1 0 0 1 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 1 288 0 913 1 0 0 0 0 0 0 0 0 X 8 8 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 X X SEAN TAYLOR VP AND CFO 5122257000 8000 METROPOLIS DR BUILDING E 100 AUSTIN TX 78744 PABLO VEGAS PART YEAR START BOARD MEMBER;PRESIDENT AND CEO 40.00 X X 929253 0 7740 BRAD JONES PART YEAR BOARD MEMBER; INTERIM PRES. AND CEO 40.00 X X 620831 0 71159 BILL FLORES BOARD MEMBER 12.00 X 106578 0 0 BOB FLEXON BOARD MEMBER 10.00 X 98453 0 0 CARLOS AGUILAR BOARD MEMBER 10.00 X 94250 0 0 ZIN SMATI PART YEAR BOARD MEMBER 4.00 X 94250 0 0 JOHN SWAINSON BOARD MEMBER 4.00 X 94250 0 0 PEGGY HEEG BOARD MEMBER 10.00 X 91203 0 0 JULIE ENGLAND BOARD MEMBER 4.00 X 87000 0 0 CHRIS EKOH PART YEAR BOARD MEMBER 10.00 X 0 0 0 PAUL FOSTER BOARD MEMBER 15.00 X 0 0 0 COURTNEY HJALTMAN BOARD MEMBER (PART YEAR: START) 20.00 X 0 0 0 PETER LAKE BOARD MEMBER 4.00 X 0 0 0 JEYANT TAMBY SR. VP AND CAO & CHIEF OF STAFF 40.00 X 473558 0 76638 CHAD SEELY VP, GENERAL COUNSEL 40.00 X 448116 0 74730 JAYAPAL PARAKKUTH VP & CIO 40.00 X 365374 0 75199 DWAYNE RICKERSON VP, SYSTEM PLANNING & WEATHERIZATION 40.00 X 366004 0 74225 SEAN TAYLOR VP & CFO 40.00 X 369318 0 69639 KENAN OGELMAN VP, COMMERCIAL OPERATIONS 40.00 X 368106 0 51358 MARA SPAK VP, HUMAN RESOURCES 40.00 X 361410 0 53118 DAN WOODFIN VP, SYSTEM OPERATIONS 40.00 X 344404 0 60318 SALLIE BETTY DAY VP, SECURITY & COMPLIANCE AND CCO 40.00 X 328982 0 70582 KRISTI HOBBS VP, CORP. STRATEGY & PUC RELATIONS 40.00 X 317417 0 71332 JONATHAN LEVINE ASST. GC & ASST. CORP. SEC. 40.00 X 227290 0 53668 WILLIAM BLACK PART YR START VP, PUBLIC AFFAIRS 40.00 X 161833 0 18752 MARK RUANE PART YEAR SR. DIR. SETTLEMENTS RETAIL & CREDITS 40.00 X 278031 0 49260 AJAY MANNEPALLI DIRECTOR, IT ARCH. & STRATEGY 40.00 X 240542 0 61686 NATHAN BIGBEE DEPUTY GENERAL COUNSEL 40.00 X 289115 0 73885 MICHAEL ALLGEIER PART YEAR SR. DIRECTOR, CIS AND CSO 40.00 X 299232 0 60163 BRYAN HANLEY SR. DIRECTOR, IT INFRASTRUCTURE 40.00 X 270508 0 70311 DAVID KEZELL DIRECTOR, PSE WEATHERIZATION 40.00 X 266634 0 71300 BRANDON GLEASON DEPUTY GENERAL COUNSEL 40.00 X 263378 0 51111 8255320 0 1266174 554 0 1 0 NEXTSOURCEINC 1040 AVE OF THE AMERICAS 24TH FL NEW YORK NY 10018 CONTINGENT WORKFORCE 6256941 MUNSCH HARDT KOPF & HARR PC 500 NAKARD STE 3800 DALLAS TX 75201 LEGAL SERVICES 4569825 POTOMAC ECONOMICS LTD 10560 ARROWHEAD DR STE 400 FAIRFAX VA 22030 INDEPENDENT MARKET MONITOR 4513331 HITACHI ENERGY USA 901 MAIN CAMPUS DR RALEIGH NC 27606 IT CONSULTING 3520341 WINSTEAD PC 2728 N HARWOOD ST STE 500 DALLAS TX 75201 LEGAL SERVICES 3404160 43 ELECTRIC RELIABILITY P 221000 206743473 206743473 SECURITIZATION CHARGES 221000 80789223 80789223 MUNICIPAL SERVICE PROG 221000 39457688 39457688 MEMBERSHIP DUES 221000 417620 417620 327408004 28015893 27923441 92452 355423897 355331445 0 92452 7805858 3122821 4683037 92986909 76434879 16552030 14110269 11963042 2147227 11400931 9281301 2119630 7711072 6400272 1310800 8709418 259477 8449941 370835 187185 183650 98605 98605 15195140 12676407 2518733 1295177 964976 330201 3531530 3481201 50329 4918679 114342 4804337 526035 327037 198998 729817 399583 330234 80957069 79904916 1052153 26260211 20172300 6087911 12238120 12238120 HARDWARE AND SOFTWARE 36949461 36196680 752781 DUES AND SUBSCRIPTIONS 2552368 2138828 413540 ALL OTHER EXPENSES 189397 1081 188316 328536901 276264448 52272453 0 36722171 34717030 2198505584 4195436322 28106188 24221179 25381963 36147002 1058651051 878099884 155841446 180551167 785048461 2493314954 3229605813 6964387654 26699467 96284433 6533540 7669988 1075478021 2349256338 840945331 2934992842 1149474949 1421081879 3099131308 6809285480 X 130474505 155102174 130474505 155102174 3229605813 6964387654 26886996 -2259327 0 X 0 1 X 1 0 0 1 X 2242310 2242310 111182720 50439258 60743462 148055512 121328996 26726516 797170509 706331630 90838879 180551167 SECURITIZATION CHARGES RECEIVABLE, NON-CURRENT 2441798471 SECURITIZATION CHARGES, CURRENT 50615297 OPERATING LEASE ROU ASSET, NON-CURRENT 901186 2493314954 CRRAH/QSE SECURITY DEPOSITS 1420166014 ACCR. POST RET. BENEFIT OBLIGATION 293847 OPERATING LEASE LIABILITY, NON-CURRENT 448800 OPERATING LEASE LIABILITY, CURRENT 173218 1421081879 X PART IV, LINE 2B: ERCOT IS THE CENTRAL COUNTERPARTY FOR ALL TRANSACTIONS SETTLED BY ERCOT PURSUANT TO ERCOT PROTOCOLS AND IS DEEMED TO BE THE SOLE BUYER TO EACH SELLER, AND THE SOLE SELLER TO EACH BUYER, OF ALL ENERGY, ANCILLARY SERVICES, RELIABILITY UNIT COMMITMENTS (RUCS), EMERGENCY RESPONSE SERVICE (ERS), AND OTHER PRODUCTS OR SERVICES FOR WHICH ERCOT MAY PAY OR CHARGE A MARKET PARTICIPANT EXCEPT FOR THOSE PRODUCTS OR SERVICES THAT ARE SELF-ARRANGED BY MARKET PARTICIPANTS. ERCOT PERFORMS SETTLEMENTS FOR ALL TRANSACTIONS SUBJECT TO THE FINANCIAL SETTLEMENT PROCESS IN ACCORDANCE WITH ERCOT PROTOCOLS. THE SETTLEMENT PROCESS IS USED TO RESOLVE FINANCIAL OBLIGATIONS FOR MARKET SERVICES PROCURED THROUGH ERCOT FOR REGISTERED MARKET PARTICIPANTS. ADDITIONALLY, AS REQUIRED BY ERCOT PROTOCOLS, ERCOT EXECUTES AUCTIONS FOR CONGESTION REVENUE RIGHTS MONTHLY AND ANNUALLY AND DISTRIBUTES PROCEEDS FROM THESE AUCTIONS TO MARKET PARTICIPANTS AS REQUIRED BY ERCOT PROTOCOLS. PART X, LINE 2: ERCOT IS EXEMPT FROM FEDERAL INCOME TAX UNDER SECTION 501(A) OF THE INTERNAL REVENUE CODE AS AN ORGANIZATION DESCRIBED IN SECTION 501(C)(4). THE COMPANY IS ALSO EXEMPT FROM STATE INCOME TAXES. ACCORDINGLY, NO PROVISION FOR INCOME TAXES OR UNCERTAIN TAX POSITIONS HAS BEEN REFLECTED IN THE FINANCIAL STATEMENTS. PART X, LINE 1, ROWS 4 AND 5: AFTER ADOPTING ASU NO. 2016-02, LESSEES ARE REQUIRED TO RECOGNIZE THE RIGHTS AND OBLIGATIONS RESULTING FROM LEASES AS ASSETS AND LIABILITIES. ERCOT'S NON-CANCELABLE OPERATING LEASES ARE FOR OFFICE FACILITIES AND OFFICE AND TELECOMMUNICATION EQUIPMENT. 1 X X X X X X 1 0 0 0 0 0 0 0 0 PABLO VEGAS PART YEAR START BOARD MEMBER;PRESIDENT AND CEO 247434 0 631500 0 50319 0 0 0 7740 0 936993 0 0 0 BRAD JONES PART YEAR BOARD MEMBER; INTERIM PRES. AND CEO 419487 0 169641 0 31703 0 44225 0 26934 0 691990 0 0 0 JEYANT TAMBY SR. VP AND CAO & CHIEF OF STAFF 473558 0 0 0 0 0 44225 0 32413 0 550196 0 0 0 CHAD SEELY VP, GENERAL COUNSEL 448116 0 0 0 0 0 42972 0 31758 0 522846 0 0 0 JAYAPAL PARAKKUTH VP & CIO 365374 0 0 0 0 0 40500 0 34699 0 440573 0 0 0 DWAYNE RICKERSON VP, SYSTEM PLANNING & WEATHERIZATION 366004 0 0 0 0 0 43573 0 30652 0 440229 0 0 0 SEAN TAYLOR VP & CFO 369318 0 0 0 0 0 44225 0 25414 0 438957 0 0 0 KENAN OGELMAN VP, COMMERCIAL OPERATIONS 368106 0 0 0 0 0 40500 0 10858 0 419464 0 0 0 MARA SPAK VP, HUMAN RESOURCES 361410 0 0 0 0 0 40500 0 12618 0 414528 0 0 0 DAN WOODFIN VP, SYSTEM OPERATIONS 299007 0 0 0 45397 0 40500 0 19818 0 404722 0 0 0 SALLIE BETTY DAY VP, SECURITY & COMPLIANCE AND CCO 328982 0 0 0 0 0 44225 0 26357 0 399564 0 0 0 KRISTI HOBBS VP, CORP. STRATEGY & PUC RELATIONS 317417 0 0 0 0 0 40500 0 30832 0 388749 0 0 0 NATHAN BIGBEE DEPUTY GENERAL COUNSEL 288784 0 331 0 0 0 40500 0 33385 0 363000 0 0 0 MICHAEL ALLGEIER PART YEAR SR. DIRECTOR, CIS AND CSO 208563 0 0 0 90669 0 33212 0 26951 0 359395 0 0 0 BRYAN HANLEY SR. DIRECTOR, IT INFRASTRUCTURE 270508 0 0 0 0 0 39524 0 30787 0 340819 0 0 0 DAVID KEZELL DIRECTOR, PSE WEATHERIZATION 250542 0 0 0 16092 0 37064 0 34236 0 337934 0 0 0 MARK RUANE PART YEAR SR. DIR. SETTLEMENTS RETAIL & CREDIT 254338 0 0 0 23693 0 39871 0 9389 0 327291 0 0 0 BRANDON GLEASON DEPUTY GENERAL COUNSEL 263378 0 0 0 0 0 38413 0 12698 0 314489 0 0 0 AJAY MANNEPALLI DIRECTOR, IT ARCH. & STRATEGY 216170 0 0 0 24372 0 31643 0 30043 0 302228 0 0 0 JONATHAN LEVINE ASST. GC & ASST. CORP. SEC. 227290 0 0 0 0 0 33067 0 20601 0 280958 0 0 0 WILLIAM BLACK PART YR START VP, PUBLIC AFFAIRS 55223 0 106610 0 0 0 16191 0 2561 0 180585 0 0 0 PART I, LINE 4A PURSUANT TO AN AGREEMENT WITH ERCOT, MICHAEL ALLGEIER RECEIVED A SEVERANCE PAYMENT OF $71,936. PART II, COLUMN B(III): IN ADDITION TO THE SEVERANCE PAYMENT EXPLAINED ABOVE, RELOCATION PAYMENT AND VACATION PAYOUT WERE REPORTED HERE. FORM 990, PART I, LINE 1: ELECTRIC RELIABILITY COUNCIL OF TEXAS, INC. (ERCOT) LESSENS THE BURDENS OF GOVERNMENT, SERVES THE PUBLIC INTEREST BY, AND FULFILLS ITS STATUTORY OBLIGATION BY: (I) ENSURING OPEN ACCESS TO TRANSMISSION AND DISTRIBUTION SYSTEMS; (II) MAINTAINING SYSTEM RELIABILITY AND OPERATIONS; (III) ENABLING RETAIL CHOICE; (IV) OPERATING FAIR AND COMPETITIVE WHOLESALE MARKETS; (V) MAINTAINING THE RENEWABLE ENERGY CREDITS REGISTRY; AND (VI) PROVIDING LEADERSHIP AND INDEPENDENT EXPERTISE TO IMPROVE SYSTEM RELIABILITY AND MARKET EFFICIENCY. ERCOT MANAGES THE FLOW OF ELECTRIC POWER TO MORE THAN 26 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 52,700 MILES OF TRANSMISSION LINES AND 1,100 GENERATION UNITS. ERCOT ALSO PERFORMS FINANCIAL SETTLEMENT FOR THE COMPETITIVE WHOLESALE BULK-POWER MARKET AND ADMINISTERS RETAIL SWITCHING FOR NEARLY 8 MILLION PREMISES IN COMPETITIVE CHOICE AREAS. FORM 990, PART VI, SECTION A, LINE 1A ERCOT IS GOVERNED BY A BOARD OF DIRECTORS COMPOSED OF 11 DIRECTORS (NINE VOTING, WITH ONE SEAT PRESENTLY VACANT, AND TWO NON-VOTING). EIGHT OF THE VOTING DIRECTORS ARE SELECTED BY A STATUTORILY CREATED ERCOT BOARD SELECTION COMMITTEE AND MAY NOT HAVE FIDUCIARY DUTY OR ASSETS IN THE ERCOT REGION. THE REMAINING VOTING DIRECTOR IS AN EX OFFICIO DIRECTOR, THE PUBLIC COUNSEL. THE TWO NON-VOTING DIRECTORS ARE ALSO EX OFFICIO, THAT IS, THE CHAIR OF THE PUBLIC UTILITY COMMISSION OF TEXAS AND ERCOT'S CHIEF EXECUTIVE OFFICER. FORM 990, PART VI, SECTION A, LINE 6 AS OF DECEMBER 31, 2022, ERCOT'S MEMBERSHIP INCLUDED 295 VOTING AND NON-VOTING MEMBERS. ERCOT MEMBERS MAY BE CORPORATE MEMBERS, ASSOCIATE MEMBERS, OR ADJUNCT MEMBERS. CORPORATE AND ASSOCIATE MEMBERS QUALIFY IN ONE OF SEVEN SEGMENTS: COOPERATIVE; INDEPENDENT GENERATOR; INDEPENDENT POWER MARKETER; INDEPENDENT RETAIL ELECTRIC PROVIDER; INVESTOR OWNED UTILITY; MUNICIPAL (I.E. A MUNICIPAL-OWNED UTILITY OR A RIVER AUTHORITY); OR CONSUMER (WHICH HAS SUBSEGMENTS INCLUDING COMMERCIAL, INDUSTRIAL AND RESIDENTIAL). AN ENTITY MAY BE APPROVED FOR ADJUNCT MEMBERSHIP BY THE BOARD OF DIRECTORS IF SUCH ENTITY DOES NOT MEET THE DEFINITIONS AND REQUIREMENTS TO JOIN AS A CORPORATE OR ASSOCIATE MEMBER. CORPORATE MEMBERS HAVE THE RIGHT TO SELECT TECHNICAL ADVISORY COMMITTEE (TAC) AND TAC SUBCOMMITTEE REPRESENTATIVES AND THE RIGHT TO BE ELECTED OR APPOINTED TO TAC AND TAC SUBCOMMITTEES. ASSOCIATE AND ADJUNCT MEMBERS DO NOT HAVE THE RIGHT TO SELECT TAC AND TAC SUBCOMMITTEE RERESENTATIVES, AND ADJUNCT MEMBERS DO NOT HAVE THE RIGHT TO BE ELECTED OR APPOINTED TO TAC OR TAC SUBCOMMITTEES. FORM 990, PART VI, SECTION A, LINE 7A EIGHT OF THE ELEVEN DIRECTORS ARE APPOINTED BY THE ERCOT BOARD SELECTION COMMITTEE. THE ERCOT BOARD SELECTION COMMITTEE IS COMPRISED OF ONE MEMBER APPOINTED BY THE TEXAS GOVERNOR, ONE MEMBER APPOINTED BY THE TEXAS LIEUTENANT GOVERNOR, AND ONE MEMBER APPOINTED BY THE TEXAS SPEAKER OF THE HOUSE OF REPRESENTATIVES. THESE DIRECTORS MUST HAVE EXECUTIVE LEVEL EXPERIENCE IN ANY OF THE FOLLOWING PROFESSIONS: FINANCE, BUSINESS, ENGINEERING (INCLUDING ELECTRICAL ENGINEERING), TRADING, RISK MANAGEMENT, LAW, OR ELECTRIC MARKET DESIGN. THE REMAINING VOTING DIRECTOR IS THE EX OFFICIO PUBLIC COUNSEL DIRECTOR. THE TWO NON-VOTING DIRECTORS ARE ALSO EX OFFICIO DIRECTORS, THAT IS, CHAIR OF THE PUBLIC UTILITY COMMISSION OF TEXAS AND ERCOT'S CHIEF EXECUTIVE OFFICER (WHICH WAS PREVIOUSLY A VOTING DIRECTOR POSITION BUT IS NOW NON-VOTING). ALL ELEVEN DIRECTORS MUST BE RESIDENTS OF STATE OF TEXAS. FORM 990, PART VI, SECTION A, LINE 7B DECISIONS OF THE ERCOT BOARD ARE GENERALLY APPEALABLE TO THE PUBLIC UTILITY COMMISSION OF TEXAS, AN AGENCY OF THE STATE OF TEXAS. FORM 990, PART VI, SECTION B, LINE 11B THE 2022 FORM 990 WAS PREPARED INITIALLY BY THE FINANCE DEPARTMENT OF ERCOT. IT WAS REVIEWED BY ERCOT OFFICERS AS WELL AS INTERNAL LEGAL COUNSEL, AND SUBMITTED FOR REVIEW BY ERCOT'S INDEPENDENT AUDITORS. THE FORM 990 WAS PROVIDED TO THE BOARD OF DIRECTORS IN ADVANCE OF, AND FOR ITS CONSIDERATION AND INPUT AT ITS MEETING ON JUNE 20, 2023. THE FINAL VERSION OF THE 2022 FORM 990, INCORPORATING THE COMMENTS OF ALL FOREGOING, WAS THEN FILED WITH THE INTERNAL REVENUE SERVICE. FORM 990, PART VI, SECTION B, LINE 12C EACH DIRECTOR ANNUALLY MUST EXECUTE AN ETHICS AGREEMENT FOR DIRECTORS, AND EACH EMPLOYEE ANNUALLY MUST ATTEND INTERNAL TRAINING SESSIONS AND EXECUTE AN EMPLOYEE ETHICS AGREEMENT. PURSUANT TO EACH ETHICS AGREEMENT, A SIGNATORY HAS AN AFFIRMATIVE DUTY TO DISCLOSE ANY ACTUAL OR POTENTIAL CONFLICTS OF INTEREST OF THE SIGNATORY AND ALSO MUST DISCLOSE ALL PERSONAL RELATIONSHIPS WITH ERCOT VENDORS, INCLUDING BUSINESS OR DIRECT OR INDIRECT OWNERSHIP INTERESTS. ANY CONFLICT OF INTEREST ISSUE INVOLVING A DIRECTOR IS REFERRED TO THE ERCOT GENERAL COUNSEL WHO, IN CONSULTATION WITH THE BOARD CHAIR AND OUTSIDE LEGAL COUNSEL, IF AND WHEN NECESSARY, MAKES A LEGAL DETERMINATION AS TO WHETHER A CONFLICT EXISTS AND, IF SO, A RECOMMENDATION AS TO HOW IT MAY BE RESOLVED. ANY CONFLICT AND ITS RESOLUTION ARE REPORTED TO THE FULL BOARD OF DIRECTORS AND TO THE HUMAN RESOURCES AND GOVERNANCE (HR&G) COMMITTEE OF THE BOARD, AS NEEDED. ANY OBJECTION TO THE RECOMMENDATION IS RESOLVED BY THE HR&G COMMITTEE OR THE FULL BOARD. ANY ERCOT EMPLOYEE CONFLICTS ARE EVALUATED BY THE ERCOT LEGAL STAFF, AND THE LEGAL STAFF MAKES A RECOMMENDATION TO RESOLVE THE CONFLICT OF INTEREST. IF THE ERCOT LEGAL STAFF RECOMMENDS A RESOLUTION THAT IS OBJECTIONABLE TO THE MANAGER/DIRECTOR/OFFICER OF THE CONFLICTED EMPLOYEE, THE LEGAL DECISION REFERRED TO THE CHIEF EXECUTIVE OFFICER AND ULTIMATELY TO THE BOARD'S HR&G COMMITTEE. FORM 990, PART VI, SECTION B, LINE 15 IN DETERMINING COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER, ERCOT FOLLOWS A PROCEDURE WHICH ENSURES THAT (I) COMPENSATION IS APPROVED IN ADVANCE BY THE HR&G COMMITTEE OF THE BOARD OF DIRECTORS AND THE BOARD ITSELF, (II) THE BOARD AND THE HR&G COMMITTEE OBTAINS AND RELIES UPON APPROPRIATE DATA FOR COMPARABILITY, (III) THE BOARD AND THE HR&G COMMITTEE EACH ADEQUATELY DOCUMENTS THE BASIS FOR ITS RESPECTIVE DETERMINATION, AND (IV) THE PUBLIC UTILITY COMMISSION OF TEXAS REVIEWS ANY COMPENSATION TO BE PAID TO THE CHIEF EXECUTIVE OFFICER. IN PRACTICE, THE HR&G COMMITTEE OF THE BOARD OF DIRECTORS REVIEWS PROPOSED CHANGES TO CHIEF EXECUTIVE OFFICER COMPENSATION AND SUBMITS RECOMMENDATIONS TO THE BOARD FOR ITS APPROVAL BY ALL UNINTERESTED MEMBERS OF THE BOARD OF THE DIRECTORS (THAT IS, ALL BOARD MEMBERS EXCEPT THE CHIEF EXECUTIVE OFFICER, WHO IS REQUIRED TO ABSTAIN FROM SUCH VOTE). IN ITS REVIEW, THE HR&G COMMITTEE CAN REQUEST INFORMATION FROM INDEPENDENT COMPENSATION CONSULTANTS, AND THE COMMITTEE RECEIVES INFORMATION IN REGARD TO THE COMPENSATION LEVELS OF SIMILAR ORGANIZATIONS FROM FORMS 990 AND OTHER SOURCES. ADDITIONALLY, COMPENSATION SURVEYS/STUDIES ARE PERFORMED, AS NEEDED, TO PROVIDE INSIGHT INTO THE ELEMENTS OF COMPENSATION. THE COMPENSATION-RELATED INFORMATION AND HR&G COMMITTEE RECOMMENDATIONS ARE SUBMITTED TO THE BOARD OF DIRECTORS FOR ITS CONSIDERATION AND APPROVAL. A REVIEW OF THE CHIEF EXECUTIVE OFFICER'S COMPENSATION IS PERFORMED ANNUALLY EXCEPT IN THOSE LIMITED INSTANCES IN WHICH THE COMPENSATION HAS BEEN DETERMINED PURSUANT TO THE PROVISIONS OF AN EMPLOYMENT AGREEMENT FOR A TERM EXCEEDING A YEAR BETWEEN ERCOT AND THE CHIEF EXECUTIVE OFFICER, WHICH HAS BEEN APPROVED BY THE BOARD OF DIRECTORS, AND ALL DECISIONS REGARDING THE CHIEF EXECUTIVE OFFICER'S COMPENSATION ARE DOCUMENTED AND MAINTAINED. FURTHERMORE, THE PUBLIC UTILITY COMMISSION OF TEXAS SUBSTANTIVE RULES RELATED TO ERCOT GOVERNANCE REQUIRE THAT ALL COMPENSATION TO BE PAID TO THE CHIEF EXECUTIVE OFFICER IS SUBJECT TO REVIEW AND APPROVAL BY THE PUBLIC UTILITY COMMISSION OF TEXAS. FORM 990, PART VI, SECTION B, 15B: IN DETERMINING COMPENSATION FOR OFFICERS WHO ARE THE DIRECT REPORTS OF THE CHIEF EXECUTIVE OFFICER, ERCOT FOLLOWS A PROCEDURE WHICH ENSURES THAT (I) COMPENSATION IS FULLY DISCLOSED IN ADVANCE TO THE HR&G COMMITTEE OF THE BOARD OF DIRECTORS, (II) THE HR&G COMMITTEE OBTAINS AND RELIES UPON APPROPRIATE DATA FOR COMPARABILITY, AND (III) THE HR&G COMMITTEE ADEQUATELY DOCUMENTS THE BASIS FOR ITS DETERMINATION. FOR DIRECT REPORTS, THE CHIEF EXECUTIVE OFFICER INFORMS THE HR&G COMMITTEE OF PROPOSED OFFICER PAY AMOUNTS. FOR OFFICERS WHO ARE NOT THE DIRECT REPORTS OF THE CEO OR KEY EMPLOYEES, COMPENSATION IS REVIEWED AND DETERMINED BY THEIR APPROPRIATE OFFICER. FOR REVIEW OF ALL OFFICER AND KEY EMPLOYEE COMPENSATION, ERCOT USES PERFORMANCE AND DATA OBTAINED RELATING TO COMPARABLE COMPENSATION OF SIMILARLY QUALIFIED PERSONS IN COMPARABLE POSITIONS AT COMPARABLE ORGANIZATIONS, INCLUDING COMPENSATION SURVEYS AND FORMS 990. THE HR&G COMMITTEE CAN REQUEST INFORMATION FROM INDEPENDENT COMPENSATION CONSULTANTS. OFFICERS OF THE CHIEF EXECUTIVE OFFICER IS REVIEWED ANNUALLY, AND ALL DECISIONS REGARDING COMPENSATION ARE DOCUMENTED AND MAINTAINED. FORM 990, PART VI, SECTION C, LINE 19 ERCOT'S GOVERNING DOCUMENTS, CODE OF CONDUCT, AND AUDITED FINANCIAL STATEMENTS ARE AVAILABLE TO THE PUBLIC THROUGH THE ERCOT WEBSITE (WWW.ERCOT.COM). TEXAS ELECTRIC MARKET STABILIZATION FUNDING M LLC 8000 METROPOLIS DR BUILDING E SUITE AUSTIN TX 78744 742587416 SECURITIZATION BOND SERVICING DE 24112024 828780672 ERCOT TEXAS ELECTRIC MARKET STABILIZATION FUNDING N LLC 8000 METROPOLIS DR BUILDING E SUITE AUSTIN TX 78744 742587416 SECURITIZATION BOND SERVICING DE 56172565 2173100569 ERCOT