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© Copyright 2010, NASDAQ OMX Commodities Clearing Company. All rights reserved.

NASDAQ OMX Commodities

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© Copyright 2010, NASDAQ OMX Commodities Clearing Company. All rights reserved.

NASDAQ OMX Commodities Clearing Company - Agenda

Welcome• NASDAQ OMX Commodities Clearing Company overview

NASDAQ OMX current Structure for OTC single counterparty services

NASDAQ OMX proposal to outsource single counterparty services

NASDAQ OMX advantages to single counterparty services

Q&A/Closing

This proposal, including the PowerPoint presentation, additional materials that may be provided NASDAQ OMX Commodities Clearing Company (NOCC) and any discussions by employees and representatives of NOCC (the “Proposal”) represents a general overview of single counterparty services that may be provided by NOCC for power transactions in ERCOT. This Proposal is preliminary and for discussion purposes only, and any or all components thereof may change prior to developing a final proposal. This Proposal is for the purposes of exploring the feasibility of NOCC offering services as a single counterparty, and should not be construed as an offer of services. NOCC makes no representation as to the feasibility of the Proposal or commercial results if the Proposal is

implemented.

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NASDAQ OMX COMMODITIES – NOCC History

• 2003-2004 - North American Energy Credit and Clearing (NECC) is created to Clear OTC Power and Natural Gas Transaction

• 2005 - NECC is accepted as a Qualified Scheduling Entity (QSE) at ERCOT

• 2006 - NECC clears its first Electricity and first Natural Gas transactions

• 2010 - NASDAQ OMX Commodities Clearing Company, a wholly owned subsidiary of NASDAQ OMX Group, Inc. purchases the business of North American Energy Credit and Clearing (NECC), a Chicago – based single counterparty for over-the-counter (OTC) power and natural gas markets

NASDAQ OMX Commodities/Nord Pool – The Largest Power Exchange

Members

NASDAQ OMX Commodities 394

EEX 199

APXEndex 68NASDAQ

OMX Commodities

OMEL

N2EXAPX

APXEndex

EEX

Gielda Energii

Powernext

Borzen

EX AA

GME

EPEX Spot

HUPX

Belpex

OPCOMOMIP

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© Copyright 2010, NASDAQ OMX Commodities Clearing Company. All rights reserved.

NOCC Collateral Annex & Special Provisions

NASDAQ OMX Commodities Clearing uses the ISDA Master Agreement in its current ‘riskless-principal’ trading business

FERC Market-Based Rate Authority

Physical gas scheduling at over 50 gas market centers including 31 pipeline pooling locations

Eligible contract participant

payment on 22nd , sellers receive funds 25th day of the month following delivery

Net Exposures for Margining•Current (AR/AP)•Variation (MtM)•Potential

Collateral Support•Cash•Non-cash (letters of credit)

Submit all physically settled transaction information quarterly

ISO/RTO/NERC registered to schedule and transfer title

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© Copyright 2010, NASDAQ OMX Commodities Clearing Company. All rights reserved.

NASDAQ OMX Proposal to provide Single Counterparty services to ERCOT

• NOCC proposes a Three Phased approach- Phase One – Designate NASDAQ OMX Commodities Clearing

Company (NOCC) as single counterparty on behalf of ERCOT, thereby taking title to all transactions with market participants in order to take advantage of some bankruptcy law requirements and better protect ERCOT member’s in the event of another member’s default.

• No changes to ERCOT operations

- Auction and scheduling

- Settlements and invoicing

- Default Allocations

• Minimal revisions to ERCOT collateral and credit management

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© Copyright 2010, NASDAQ OMX Commodities Clearing Company. All rights reserved.

NASDAQ OMX Proposal to provide Outsourced Clearing services to ERCOT

• NOCC proposes a Three Phased approach (con’t.)

- Phase Two

• Evaluate and provide an assessment on changes to protocols that could reduce member’s default uplift risks

• provide guidelines to incorporate the ability to Off-set Market Obligations (improved netting) within ERCOT.

- Phase Three – NOCC will outline ways to improves liquidity and capital efficiencies through multi-RTO market as well as multi-fuel commodity netting.

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© Copyright 2010, NASDAQ OMX Commodities Clearing Company. All rights reserved.

NASDAQ OMX Proposal to provide Outsourced Clearing services to ERCOT

• Advantages to NOCC

• Takes and transfers physical title to the commodity using standard commercial agreements and practice

• Currently provides similar single counterparty access for ERCOT market participants via inter-QSE schedules

• The only single counterparty entity that is a FERC licensed power marketer thus allowing NOCC the ability to explore the use of ERCOT positions to net against NOCC OTC physical positions

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© Copyright 2010, NASDAQ OMX Commodities Clearing Company. All rights reserved.

NASDAQ OMX Commodities

Questions and Answers