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BTU QSE SERVICES, INC.
(A LEVEL 4 ERCOT QUALIFIED SCHEDULING ENTITY)


BTU QSE Services, Inc., an independent local government corporation, is responsible for the wholesale power marketing, ancillary service bidding, energy scheduling and settlement activities on behalf of Bryan Texas Utilities. A Qualified Scheduling Entity (QSE) is required and certified by the Electric Reliability Council of Texas (ERCOT) to submit energy and ancillary service schedules for each 15-minute period. BTU QSE Services, Inc. maintains a 24-hour, seven days per week operation with qualified personnel for communicating with ERCOT for scheduling purposes and deployment of energy and ancillary services on a real-time basis. QSE personnel submit energy and ancillary services schedules by relevant transmission congestion zone for all entities for which it serves as QSE. QSE personnel also submit generation plans indicating unit availability and operating status, and provide bids for ancillary services. BTU QSE Services, Inc. is financially responsible to ERCOT for its defined share of energy and ancillary services for all entities which it serves.

In addition to providing QSE services for BTU, BTU QSE Services, Inc. offers these services to other ERCOT market participants. BTU QSE Services, Inc. is functionally (physically and financially) separated from other BTU operations, except as required to schedule and settle BTU’s internal load and generation.

The Wholesale Power Marketing Division has the primary objective of providing the lowest energy cost to customers by purchasing and selling electric power and ancillary services, or dispatching BTU generation on an economic basis, within the guidelines of the Risk Management Policy. The energy schedulers develop load forecasts using historical load and weather data to develop generation plans which optimize resources with purchase/sale opportunities. The optimization of BTU-owned generation and economic market transactions allow BTU to provide reliable, competitively-priced electricity to its customers. In addition to the day-ahead and real-time optimization, BTU’s power marketing personnel market any excess capacity, energy and ancillary services available from BTU-owned resources to other wholesale entities. The power marketing energy schedulers man the 24-hour, seven days per week QSE operation and perform the scheduling and operational responsibilities required of a QSE.

The Settlement Division, which is part of BTU’s Fiscal Services area, is responsible for settling all transactions created between the QSE, ERCOT, and other parties involved in wholesale energy transactions for BTU and BTU’s QSE clients. The settlement activities include verifying receivables and payables from wholesale transactions, validating charges and payments from ERCOT, assignment of cost responsibility for ancillary services to customers, and administering contracts with clients. The ERCOT market is settled every 15-minute interval and each operating day has three settlements: initial settlement based on profiled data will take place 10 calendar days after the operational day, final settlement will take place 45 calendar days after the operational day, and the market true-up will be six months after the operational day. The Settlement Division provides timely reporting to management and customers in accordance with the Risk Management Policy.

BTU QSE Services, Inc. is current on the ERCOT Nodal Market and will maintain a Level 4 QSE certification.

BTU QSE Services, Inc. welcomes the opportunity to discuss our QSE organization and the services we can provide. If you are interested or would like further information regarding BTU QSE Services, Inc., please contact any of the following BTU personnel:

Ken Lindberg
Division Manager, QSE-Power Marketing
klindberg@btutilities.com


Gary Miller
Group Manager, QSE-Power Marketing/Power Production
gmiller@btutilities.com