2021-10-13T19:06:45-05:00 2020-12-31 390859910 BAKER TILLY US LLP 777 E WISCONSIN AVE 32ND FLOOR MILWAUKEE WI 53202 990 2020-01-01 742587416 ELECTRIC RELIABILITY COUNCIL OF TEXAS INC ELEC 5122257000 7620 METRO CENTER DRIVE AUSTIN TX 787441613 SEAN TAYLOR VP AND CFO 5122257000 2021-10-13 1 SEAN TAYLOR 999009999 TROY MARINE CPA P00187863 4147775500 2021-09-28 2 AAL1 IAL1 2020 2022-09-23 18:48:47Z ERCOT BRAD JONES 7620 METRO CENTER DRIVE AUSTIN TX 787441613 242749480 0 X WWW.ERCOT.COM X 1990 TX SEE SCHEDULE O 15 14 833 18 0 0 0 0 239814233 238451207 20405583 4298273 0 0 260219816 242749480 0 0 0 0 115748677 119617218 0 0 0 109805630 113033717 225554307 232650935 34665509 10098545 1750295213 1930199146 1625255700 1795075572 125039513 135123574 WE SERVE THE PUBLIC BY ENSURING A RELIABLE GRID, EFFICIENT ELECTRICITY MARKETS, OPEN ACCESS AND RETAIL CHOICE. 0 0 175861110 242657497 ERCOT SUCCESSFULLY MANAGES THE FLOW OF ELECTRICITY TO APPROXIMATELY 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. 175861110 0 0 0 0 0 0 0 1 0 1 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 319 0 833 1 0 0 0 0 0 0 0 0 X 15 14 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 X SEAN TAYLOR VP AND CFO 5122257000 7620 METRO CENTER DRIVE AUSTIN TX 787441613 RICK BLUNTZER BOARD MEMBER 1.00 X 0 0 0 TERRY BULGER BOARD MEMBER 9.00 X 92600 0 0 MARK CARPENTER BOARD MEMBER 4.00 X 0 0 0 LORI COBOS BOARD MEMBER 15.00 X 0 0 0 SETH COCHRAN BOARD MEMBER 3.00 X 0 0 0 PETER CRAMTON BOARD MEMBER 5.00 X 87000 0 0 CRAVEN CROWELL BOARD MEMBER 15.00 X 99800 0 0 NICK FEHRENBACH BOARD MEMBER 6.00 X 0 0 0 KEVIN GRESHAM BOARD MEMBER 5.00 X 0 0 0 SAM HARPER BOARD MEMBER 5.00 X 0 0 0 CLIFTON KARNEI BOARD MEMBER 4.00 X 0 0 0 KARL PFIRRMANN BOARD MEMBER 10.00 X 92600 0 0 JACKIE SARGENT BOARD MEMBER 2.00 X 0 0 0 DEANN WALKER BOARD MEMBER 20.00 X 0 0 0 JUDY WALSH BOARD MEMBER 8.00 X 94500 0 0 KEITH EMERY SEGMENT ALTERNATE 4.00 X 0 0 0 MIKE KEZAR SEGMENT ALTERNATE 4.00 X 0 0 0 GLEN LYONS SEGMENT ALTERNATE 4.00 X 0 0 0 STEVE MADDEN SEGMENT ALTERNATE 2.00 X 0 0 0 JENNIFER RICHIE SEGMENT ALTERNATE 0.50 X 0 0 0 EDWARD ROSS SEGMENT ALTERNATE 2.00 X 0 0 0 STEVE SCHLEIMER SEGMENT ALTERNATE 2.00 X 0 0 0 MARK SCHWIRTZ SEGMENT ALTERNATE 5.00 X 0 0 0 WADE SMITH SEGMENT ALTERNATE 2.00 X 0 0 0 IAN TAYLOR SEGMENT ALTERNATE 2.00 X 0 0 0 WILLIAM MAGNESS BOARD MEMBER, PRESIDENT AND CEO 40.00 X X 833922 0 71197 SALLIE BETTY DAY VP, GOVERNANCE, RISK & COMPLIANCE 40.00 X 307122 0 67360 JERRY DREYER SR. VP AND CIO 40.00 X 534846 0 37523 THERESA GAGE VP, EXTERNAL AFFAIRS & CORPORATE 40.00 X 341342 0 50089 VICKIE LEADY ASST. GENERAL COUNSEL AND ASST. CORP. SEC 40.00 X 227192 0 55486 KENAN OGELMAN VP, COMMERCIAL OPERATIONS 40.00 X 341846 0 47819 JAYAPAL PARAKKUTH VP & CIO 40.00 X 219836 0 52819 DWAYNE RICKERSON VP, GRID PLANNING & OPERATIONS 40.00 X 341600 0 69183 CHAD SEELY SR. VP, GENERAL COUNSEL & GOV 40.00 X 417418 0 71469 MARA SPAK VP, HUMAN RESOURCES 40.00 X 338792 0 49374 JEYANT TAMBY SR. VP AND CAO 40.00 X 435607 0 66315 SEAN TAYLOR VP & CFO 40.00 X 346258 0 65198 JOHN MESSER DIRECTOR, IT APPLICATION DEVELOPMENT 40.00 X 212339 0 59754 MARK RUANE DIRECTOR, SETTLEMENTS RETAIL & CR 40.00 X 244880 0 48661 AMANDA BAULD SR. DIRECTOR, PROJECT MANAGEMENT 40.00 X 228155 0 33212 NATHAN BIGBEE ASST. GENERAL COUNSEL, REGULATORY 40.00 X 246497 0 67585 BRYAN HANLEY DIRECTOR, IT INFRASTRUCTURE 40.00 X 244335 0 64397 JOEL MICKEY SR. DIRECTOR WHOLESALE MARKET 40.00 X 241152 0 31380 DAN WOODFIN SR. DIRECTOR, SYSTEM OPERATIONS 40.00 X 267250 0 59744 6836889 0 1068565 516 0 1 0 NEXTSOURCEINC 1040 AVE OF THE AMERICAS 24TH FL NEW YORK NY 10018 CONTINGENT WORKFORCE 9757015 ABB INC PO BOX 88868 CHICAGO IL 606951868 IT CONSULTING 4150030 POTOMAC ECONOMICS LTD 9990 FAIRFAX BLVD STE 560 FAIRFAX VA 22030 INDEPENDENT MARKET MONITOR 3925004 GRID SOLUTIONS LLC PO BOX 88808 CHICAGO IL 606951808 IT CONSULTING 1190473 INTEGRAL GIS INC 1511 THIRD AVE SUITE 531 SEATTLE WA 98101 IT CONSULTING 1122861 31 ELECTRIC RELIABILITY PROGRAM SERV 221000 199518993 199518993 MUNICIPAL SERVICE PROGRAM REVENUE 221000 38573174 38573174 MEMBERSHIP DUES 221000 359040 359040 238451207 4298273 4206290 91983 242749480 242657497 0 91983 6421747 2585588 3836159 83122980 69366342 13756638 12848835 11029659 1819176 10292779 8526083 1766696 6930877 5844910 1085967 342099 342099 261950 129500 132450 15425562 13781406 1644156 1485974 1020705 465269 3796355 3758028 38327 4634318 469358 4164960 299292 215848 83444 735404 339493 395911 1576896 1576896 30141890 25512807 4629083 2371854 2371854 HARDWARE AND SOFTWARE E 30095614 28967850 1127764 RELIABILITY ORGANIZATIO 19400063 19400063 DUES AND SUBSCRIPTIONS 2355953 1955118 400835 ALL OTHER EXPENSES 110493 -13439 123932 232650935 175861110 56789825 0 1750228 5347037 1577206635 1752513438 8373235 7630031 29594655 26787903 971442846 834564291 133370460 136878555 1042182 1750295213 1930199146 13304702 16345558 5693525 5844857 1051258859 1066430329 50829664 46826906 504168950 659627922 1625255700 1795075572 X 125039513 135123574 125039513 135123574 1750295213 1930199146 X 10098545 -14484 X 0 1 X 1 0 0 1 X 947096 947096 93696120 44274578 49421542 8171457 8171457 0 121922513 110688184 11234329 746705660 671430072 75275588 136878555 CRRAH/QSE SECURITY DEPOSITS 658558776 ACCR. POST RET. BENEFIT OBLIGATION 352040 OPERATING LEASE LIABILITY 717106 659627922 X 223349416 0 223349416 19400064 19400064 242749480 213265355 0 213265355 19385580 19385580 232650935 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 XI, LINE 4B - OTHER ADJUSTMENTS: RELIABILITY ORGANIZATION PASS-THROUGH REVENUE 19,400,064. PART XII, LINE 4B - OTHER ADJUSTMENTS: CHANGE IN DEFERRED PENSION COSTS -14,484. RELIABILITY ORGANIZATION ASSESSMENT 19,400,064. PART XI, LINE 4B -- OTHER ADJUSTMENTS AFTER ADOPTING ASU NO. 2016-08, RELIABILITY ORGANIZATION PASS-THROUGH REVENUE AND RELATED RELIABILITY ORGANIZATION ASSESSMENT EXPENSE ARE REPORTED NET ON THE FINANCIAL STATEMENTS. PART IX, LINE 1: 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. PART X, LINE 4 AND LINE 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 WILLIAM MAGNESS BOARD MEMBER, PRESIDENT AND CEO 833922 0 0 0 0 0 38929 0 32268 0 905119 0 0 0 JERRY DREYER SR. VP AND CIO 177152 0 0 0 357694 0 25779 0 11744 0 572369 0 0 0 JEYANT TAMBY SR. VP AND CAO 424241 0 0 0 11366 0 41325 0 24990 0 501922 0 0 0 CHAD SEELY SR. VP, GENERAL COUNSEL & GOV 417343 0 0 0 75 0 40450 0 31019 0 488887 0 0 0 SEAN TAYLOR VP & CFO 346108 0 0 0 150 0 41325 0 23873 0 411456 0 0 0 DWAYNE RICKERSON VP, GRID PLANNING & OPERATIONS 341550 0 0 0 50 0 40704 0 28479 0 410783 0 0 0 THERESA GAGE VP, EXTERNAL AFFAIRS & CORPORATE 341292 0 0 0 50 0 40628 0 9461 0 391431 0 0 0 KENAN OGELMAN VP, COMMERCIAL OPERATIONS 341796 0 0 0 50 0 37823 0 9996 0 389665 0 0 0 MARA SPAK VP, HUMAN RESOURCES 338692 0 0 0 100 0 37500 0 11874 0 388166 0 0 0 SALLIE BETTY DAY VP, GOVERNANCE, RISK & COMPLIANCE 307022 0 0 0 100 0 41325 0 26035 0 374482 0 0 0 DAN WOODFIN SR. DIRECTOR, SYSTEM OPERATIONS 259787 0 7463 0 0 0 37999 0 21745 0 326994 0 0 0 NATHAN BIGBEE ASST. GENERAL COUNSEL, REGULATORY 245159 0 1338 0 0 0 36442 0 31143 0 314082 0 0 0 BRYAN HANLEY DIRECTOR, IT INFRASTRUCTURE 240227 0 4108 0 0 0 35747 0 28650 0 308732 0 0 0 MARK RUANE DIRECTOR, SETTLEMENTS RETAIL & CR 244880 0 0 0 0 0 35722 0 12939 0 293541 0 0 0 VICKIE LEADY ASST. GENERAL COUNSEL AND ASST. CORP 221722 0 5470 0 0 0 33610 0 21876 0 282678 0 0 0 JAYAPAL PARAKKUTH VP & CIO 219836 0 0 0 0 0 31725 0 21094 0 272655 0 0 0 JOEL MICKEY SR. DIRECTOR WHOLESALE MARKET 116089 0 0 0 125063 0 17105 0 14275 0 272532 0 0 0 JOHN MESSER DIRECTOR, IT APPLICATION DEVELOPMENT 210429 0 1910 0 0 0 31120 0 28634 0 272093 0 0 0 AMANDA BAULD SR. DIRECTOR, PROJECT MANAGEMENT 228055 0 0 0 100 0 32981 0 231 0 261367 0 0 0 PART I, LINE 4A PURSUANT TO AN AGREEMENT WITH ERCOT, JERRY DREYER RECEIVED A SEVERANCE PAYMENT OF $357,694 AND JOEL MICKEY RECEIVED A SEVERANCE PAYMENT OF $125,063. PART II, COLUMN B(III): IN ADDITION TO THE SEVERANCE PAYMENTS EXPLAINED ABOVE, JEYANT TAMBY RECEIVED A RELOCATION PAYMENT OF $11,316. 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 46,500 MILES OF TRANSMISSION LINES AND 710+ 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 1 PURSUANT TO SECTION 39.151 OF THE TEXAS PUBLIC UTILITY REGULATORY ACT (SEPTEMBER 1, 2019), THE ERCOT BOARD OF DIRECTORS IS COMPOSED OF SIXTEEN MEMBERS. FIFTEEN OF THE MEMBERS HAVE VOTING RIGHTS; THE CHAIR OF THE PUBLIC UTILITY COMMISSION OF TEXAS IS AN EX-OFFICIO NON-VOTING MEMBER. EIGHT OF THE VOTING DIRECTORS REPRESENT SEVEN SEGMENTS OF INDUSTRY IN THE ERCOT ELECTRICITY MARKET (AS THE CONSUMER SEGMENT IS FURTHER DIVIDED INTO SUBSEGMENTS); EACH SUCH MARKET SEGMENT DIRECTOR HAS AN ELECTED ALTERNATE (SEGMENT ALTERNATE) WHO CAN ATTEND MEETINGS IN THE ABSENCE OF THE MARKET SEGMENT DIRECTOR AND VOTE ON THE ABSENT MARKET SEGMENT DIRECTOR'S BEHALF IN THE EVENT THAT SUCH MARKET SEGMENT DIRECTOR CANNOT ATTEND A BOARD MEETING. TWO OTHER VOTING DIRECTORS ARE ALSO EX-OFFICIO DIRECTORS -- ONE REPRESENTS A SUBSEGMENT OF THE CONSUMER SEGMENT AS PUBLIC COUNSEL AND THE OTHER IS THE CHIEF EXECUTIVE OFFICER OF ERCOT -- AND NEITHER HAS A SEGMENT ALTERNATE. THE OTHER FIVE VOTING DIRECTORS ARE UNAFFILIATED WITH RESPECT TO ANY MARKET SEGMENT AND DO NOT HAVE ANY SEGMENT ALTERNATES. FORM 990, PART VI, SECTION A, LINE 6 AS OF DECEMBER 31, 2020, ERCOT'S MEMBERSHIP INCLUDED 252 VOTING AND NON-VOTING MEMBERS. ERCOT MEMBERS MAY BE CORPORATE MEMBERS, ASSOCIATE MEMBERS, OR ADJUNCT MEMBERS. CORPORATE MEMBERS HAVE THE RIGHT TO VOTE ON ALL MATTERS SUBMITTED TO THE GENERAL MEMBERSHIP [SUCH AS THE ELECTION OF DIRECTORS, ELECTION OF TECHNICAL ADVISORY COMMITTEE (TAC) REPRESENTATIVES, AND AMENDMENTS TO THE CERTIFICATE OF FORMATION AND BYLAWS]. CORPORATE 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). ASSOCIATE AND ADJUNCT MEMBERS DO NOT HAVE THE RIGHT TO VOTE ON ANY MATTER SUBMITTED TO THE GENERAL MEMBERSHIP, AND ADJUNCT MEMBERS DO NOT HAVE THE RIGHT TO BE ELECTED OR APPOINTED TO THE ERCOT BOARD, TAC, OR ANY SUBCOMMITTEE OF THE BOARD OR TAC. FORM 990, PART VI, SECTION A, LINE 7A THIRTEEN OF THE FIFTEEN VOTING MEMBERS OF THE ERCOT BOARD OF DIRECTORS ARE ELECTED, OR APPOINTED IN LIMITED CIRCUMSTANCES, BY THE CORPORATE MEMBERS OR A PORTION OF SUCH CORPORATE MEMBERS. WITH RESPECT TO EACH OF THE SIX MARKET SEGMENT DIRECTORS WHO DO NOT REPRESENT THE CONSUMER SUBSEGMENTS, ONLY THE CORPORATE MEMBERS OF THE MEMBERSHIP SEGMENT REPRESENTED BY THE MARKET SEGMENT DIRECTOR ARE ALLOWED TO ELECT THE DIRECTOR AND THE SEGMENT ALTERNATE FOR THAT SEAT. THERE ARE THREE CONSUMER DIRECTORS, OF WHICH: (I) ONE IS THE PUBLIC COUNSEL, AN EX-OFFICIO VOTING MEMBER OF THE BOARD WHO IS DESIGNATED TO REPRESENT RESIDENTIAL CONSUMERS AND SMALL COMMERCIAL CONSUMERS; (II) ONE IS ELECTED OR APPOINTED BY THE LARGE COMMERCIAL CONSUMER CORPORATE MEMBERS; AND (III) ONE IS ELECTED BY THE CORPORATE MEMBERS OF THE INDUSTRIAL CONSUMER SUBSEGMENT. THE FULL CORPORATE MEMBERSHIP VOTES BY SEGMENT TO ELECT THE FIVE UNAFFILIATED VOTING DIRECTORS. THE REMAINING VOTING DIRECTOR IS THE CHIEF EXECUTIVE OFFICER OF ERCOT, WHO IS AN EX-OFFICIO VOTING MEMBER OF THE BOARD. FORM 990, PART VI, SECTION A, LINE 7B AS A MATTER OF STATE LAW OR ITS GOVERNING DOCUMENTS, CERTAIN MATERIAL MATTERS MUST BE SUBMITTED TO THE VOTING MEMBERS OF ERCOT FOR THEIR APPROVAL, INCLUDING AMENDMENTS TO THE CERTIFICATE OF FORMATION AND THE BYLAWS. 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 2020 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 AUGUST 10, 2021. THE FINAL VERSION OF THE 2020 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 AND SEGMENT ALTERNATE ANNUALLY MUST EXECUTE AN ETHICS AGREEMENT FOR DIRECTORS AND SEGMENT ALTERNATES, 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 HIS OR HER EMPLOYER, IN THE CASE OF DIRECTORS OR SEGMENT ALTERNATES), 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 OR SEGMENT ALTERNATE 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 IS 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 ANNUALLY 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. 15(B) 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. OFFICER AND KEY EMPLOYEE COMPENSATION IS REVIEWED ANNUALLY, AND ALL DECISIONS REGARDING OFFICER AND KEY EMPLOYEE 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). FORM 990, PART XI, LINE 9: DEFERRED PENSION COSTS -14,484.