Energy Consultants From CRA International and Resero Consulting Provide Updated Cost Benefit Analysis of Proposed Texas ERCOT Nodal Market Conversion

Consulting firms CRA International, Inc. (Nasdaq: CRAI) and Resero Consulting today announced their role in providing an updated cost-benefit analysis for the proposed Texas ERCOT nodal market conversion. The firms were retained by the Public Utility Commission of Texas (PUCT) to prepare an update on the 2004 Cost-Benefit Assessment (CBA) of the Texas Nodal Market and to analyze the incremental costs and benefits given changes that have transpired since the 2004 assessment and the Commission’s subsequent decision to implement a nodal market. The new analysis, titled "Update on the ERCOT Nodal Market Cost-Benefit Analysis”, was developed by the same consulting team that conducted the 2004 analysis. The latest findings were released on December 18, 2008 by the Public Utility Commission of Texas (PUCT). Despite rising conversion costs, the new analysis shows potential consumer cost savings of $5.6 billion from shifting to fully locational pricing of wholesale electricity in ERCOT.

Currently, Texas uses a "zonal” design for its wholesale electrical market in which prices are determined over relatively large geographic areas within which out-of-market redispatch is used to manage localized transmission congestion. The proposed "nodal” design would allow for spot energy prices at a much more granular level that better reflect actual costs for producing and delivering energy to various locations on the grid. Nodal markets are used in the Northeast, Mid-Atlantic and Midwest regions and proponents of nodal markets believe they provide more accurate, realistic economic signals that in turn guide the operating and capital investment decisions made by electricity producers and consumers.

The updated 2008 cost benefit analysis concluded that:

• Energy savings have declined somewhat since the 2004 CBA, partly because of new transmission upgrades that have been completed and lower forecasts for growth in electricity demand
• The overall production cost savings resulting from a Texas Nodal Market are estimated to be $520 million (vs. an estimate of nearly $675 million in 2004)
• In comparison, net costs yet to be spent to complete and operate the Texas Nodal Market through year 2020 are estimated to be $222 million
• During the first ten years of operation of the Texas Nodal Market, the savings to consumers are estimated to be approximately $5.6 billion (vs. an estimate of $7.3 billion in 2004)
• There are other benefits not readily quantified that are likely to be greater than estimated in 2004 due to the summer 2008 price spikes, the addition of significant wind resources and other events that have transpired in ERCOT since 2004; this finding is supported by recent experience in other nodal markets

The consultants who led the updated analysis include Alex Rudkevich and Chris Russo from CRA International and Ellen Wolfe from Resero Consulting. Representatives from both firms will appear at the January 14, 2009 open meeting of the Public Utility Commission of Texas to discuss their findings with the Commissioners.

A copy of the full report may be obtained at: http://www.puc.state.tx.us/hot_topics.cfm.

About Resero Consulting

Resero is an energy and environmental consulting firm focused on the US electricity industry. Its consultants use a broad background in engineering, economics and public policy to assist clients in regulatory processes, litigation support, business strategy, carbon policy, modeling and analytic support. Resero’s clients include RTOs, large and small energy producers and marketers, governments, legal firms and non-profits. Resero’s extensive engagement history includes large-scale policy studies, market design, high profile litigation and arbitration cases, modeling and analytics to support business strategy, contract negotiation and industry group advocacy. Headquartered near Sacramento, California, Resero has been in business since 2005. To find out more about Resero, visit www.resero.com, or contact Ellen Wolfe at 916-791-4533 or ewolfe@resero.com.

About CRA International’s Energy and Environment Practice

CRA's Energy and Environment Practice provides expert economic and business consulting services to a wide range of electricity industry clients around the world. With years of industry experience and exceptional strength in analytics, the practice’s consultants offer management and economic expertise in every phase of the electricity production cycle—from fuel procurement to retail strategy—as well as hands-on experience helping clients manage market power, environmental policy and regulatory issues. CRA has pioneered techniques and models that have become industry standards, including competitive market designs, efficient bidding mechanisms, creative financial transactions and methodologies to assess market power.

Electric transmission system owners, operators and users, as well as the regulatory agencies that oversee them turn to CRA for its unique combination of economic and engineering expertise in transmission issues. CRA’s consultants have provided input for all of the major U.S. regulatory policy debates and have authored more publicly-reviewed cost/benefit studies of Regional Transmission Organizations (RTOs) than any other consulting firm. Whether developing tariff design or performing strategic studies, CRA delivers rigorous economic analyses of the industry's most technical function.

CRA is also the premier economic consulting firm on competitive electricity market design and restructuring. CRA has been involved in all of the market design proceedings in North America and has restructured electricity markets worldwide. Expertise spans wholesale, retail and transmission markets, including the regulatory structures that govern them, and focuses on three core areas: efficient electricity market design, implementation and transition.

About CRA International

Founded in 1965, CRA International is a leading global consulting firm that offers economic, financial and business management expertise to major law firms, businesses, accounting firms and governments. CRA’s consultants combine uncommon analytical rigor with practical experience and in-depth understanding of industries and markets. CRA is adept at handling critical, tough assignments with high-stakes outcomes. CRA’s analytical strength enables it to reach objective, factual conclusions that help clients make important business and policy decisions and resolve critical disputes. Headquartered in Boston, CRA has offices throughout North America, Europe, the Middle East and Asia. Detailed information about CRA is available at www.crai.com.