Update from ERCOT Market Services for TAC November 6, 2002

1. Update from ERCOT Market Services for TAC November 6, 2002

2. Retail Market Update Topics • ERCOT’s Master Project Plan • Move-In/Move-Out Issues/Initiatives • GISB 1.4 Update • ETS Update • Quick Recovery Team Update • Market Synchronization Activities

3. Master Project Plan Update

4. Master Project Plan • 2002 Planned Projects • 46 Projects in progress • 27 Projects completed between August 1st and November 1st • 5 Projects continuing on into 2003 for completion • 5 Projects removed from the 2002 plan (require reprioritization for 2003) • 2003 Project Continuing into 2003 for completion include: • PR-20153 Amended POLR Process • PR-20117 Internal Map Testing and Verification • PR-20111 ERCOT Transaction Processing Hardening Initiative • PR-20079 Change Deployment Instructions_PRR281 • PR-20067 Simultaneous Procurement of Ancillary Services

5. Master Project Plan (cont.) • 2002 Projects removed from active status (would require reprioritization to proceed) • PR-20068 Interzonal Congestion Management: Interim Fix completed; any further effort will be a new project and go through prioritization process • PR-20071 Two Settlement System: Manual fix announced to market and ERCOT Board of Directors. If automated solution desired a new project request will be submitted and prioritized • PR-20080 Define OOME as Instructed Deviation: PRR282 withdrawn and project canceled • PIP106 Direct Load Control: Deleted from 2002 Active Project List and has been prioritized for 2003 and included in the Master Priority List • PR-20083 Ratcheting of OOME: Project withdrawn

6. Master Project Plan (cont.) • Next Steps… • Conduct Project Management Office Procedures Training in the month of November • Available ERCOT resources aligned and scheduled against Q1 2003 projects by December 6th 2002 • Start High Priority Projects identified in master priority list resources as resources are available • Monthly project prioritization adjustments and recommendations: • ERCOT Executive Steering Committee • Market Committees and Subcommittees • ERCOT IT and Business Support Teams • Finalize and distribute documentation on the project request/prioritization process

7. Bus.Align/ Scope Risk Financial Risk Staffing Risk Technical Risk Schedule Risk Overall PR-20134 GISB 1.4 Executive Summary of Status • Development of code is complete • Server build out is complete • Database configuration is complete • Working on application configuration • Working on network configuration Project Scope/Deliverables • Provide a GISB 1.4 implementation to replace FTP • Provide a migration path toward NAESB 1.6, which is a secure data transport • Deliverables • Support for HTTPS and GISB 1.4 • Roll-out to production • Migration of Market Participants to HTTPS or GISB 1.4 Financial Milestones Timeline 10/15 10/25 10/28 11/1 2/15 3/17 4/1 BudgetYTDForecastVar. Capital$0.70M $0.103M $0.140M [$0.070M] Expense $0.0M $0.00M $0M $0.0 Development Configuration Testing Sign off by ERCOT Migration of Market Participants Completed In Progress Scheduled Upcoming Milestones/Market Impacts Issues/Actions • Outbound network configuration is not complete. Working with Network group to get the port opened to proxy server. • End of Sept Labor Recorded 492hrs (Original SOW states 400hrs) • Sign off by ERCOT • Migration of Market Participants • All of these could be affected by any delays experienced in network configuration/setup.

8. Move-In / Move-Out Task Force

9. MP Visits • Purpose • ‘Root out’ all sources of pain associated with Move-Ins • Get each MPs opinion of worst problems • Discuss possible solutions • Find out if identified problems are common among all types of market participants • Discuss concepts with consumer advocacy group • Verify that all participants are dedicated to solving the problems and aware of the possible systemic impacts • Discuss deployment of workarounds (Safety Net, Same CR Move-Ins, etc.)

10. MP Visits • Audience • TDSPs (5 - CenterPoint, AEP, Oncor, Entergy, TNMP) • AREPs (4 - Reliant Retail, AEP, TXU ES, Entergy) • CREPs (6 - Coral, GEXA, Republic, TCE, Constellation New Energy, Green Mountain) • Vendors (2 - Exolink, EC Power) • Consumer Protection (1 - Public Utility Council)

11. MP Visits • Results • Identified several issues that were not previously identified • Confirmed several common problems across many Market Participants • Discussed concepts for solving identified issues • Developed an average ‘pain’ level and frequency for major issues based on input from each MP • Discussed several concepts with consumer advocacy group to verify compliance with Customer Protection • Revealed inconsistencies and improper executions of workarounds

12. MIMO Workshop • Methods • Three type of issues; System, Execution, & Market Gaps • Two criteria for identifying order of discussion for issues • pain level • quantity of ESI Ids affected. • The issues that are being pursued: • those that rank high on the pain level and quantity affected and are easy to repair • those that either are easy to fix but don’t rank high on the measurements or rank high on the measurements and are difficult to fix. • The last category (rank low on pain and quantity, but are difficult to fix) are those that are most likely to remain as workarounds for a longer period of time. • Three time frames for solutions: • Short-Term (solutions to be implemented as soon as possible and prior to next April) • Mid-Term (solutions that can be implemented next year after April) • Long-Term (solutions that can be implemented after 1/1/2004)

13. MIMO Workshop • Results • 32 Concepts were discussed as follows: • 7 Concepts were eliminated for various reasons • 1 Concept was determined as addressed in Version 1.5 • 23 Concepts were discussed and addressed as follows • 4 Concepts were tabled until additional information can be obtained • 19 Concepts were discussed at length and proposed for possible recommendation to RMS • 10 Short-Term • 9 Mid-Term • 1 additional concept was not discussed (lack of time)

14. RMS Approved Recommendations • 6 of 10 Short Term Recommendations were subsequently approved at RMS • Safety Net Guidelines • Guidelines to help the Safety Net process run smoothly and to avoid unnecessary manual intervention (to be implemented ASAP) • Expediting ESI ID Creates • Help minimize occurrence of rejects for Invalid ESI ID when issue is timing (to be implemented ASAP. Each TDSP to detail what steps they are taking) • ERCOT Monitoring • Pro-active monitoring of rejected transactions and BPIs that are aged (to be implemented ASAP) • Programmatically prohibit back-dated transactions • Minimize occurrences of back-dated Move-Ins and Move-Outs (to be implemented ASAP) • Effective Date on Meter Number Correction • Tying meter number to usage to minimize billing problems due to usage failure (TDSPs have already implemented) • Date Reasonableness at ERCOT • Basic date validation on effective dates done at ERCOT to speed up response to CR (to be implemented on December 15th)

15. Next Steps • MIMO Taskforce meetings • November 11 & 12 in Austin • Following up at RMS with enforcement and follow-ups to approved recommendations • Taking 7 additional (combination of short and long term) concepts to RMS for vote on November 14 • Recommendations to RMS at December RMS meeting • Potentially 8 additional concepts to be presented for approval • Release of implementation timelines • Timelines will be developed by MIMO task force for each concept as they are approved by RMS • Development of Texas Set Change Controls, Protocol Revision Requests, and RFP • Deployment of Solutions • Re-Evaluation of Move-In/Move-Out processes

16. GISB 1.4 Update

17. GISB 1.4 Update • RMS agreed at August meeting to move forward with implementing GISB 1.4 at ERCOT • Internal testing and implementation of a GISB 1.4 interface is underway at ERCOT, • Production Sign-off scheduled delayed to 11/8 • All production components are in place as of 10/11 • Testing uncovered errors in outbound transmission requiring a vendor software patch; will be testing the week of 11/4 • Acceptance Testing and Market Participant Testing – 10/15-11/8 • TDTWG is surveyed market participants to finalize migration readiness dates • Preliminary migration schedule reviewed at 10-4-02 TDTWG • Market Participant migration will begin week of 11-8-02; ERCOT will work individually with participants in any change of date for testing and migration. • Goal is to complete migration by April 1, 2003

18. ERCOT Data Transparency(ETS)

19. ERCOT Data Transparency ERCOT/Market Issues • Issues facing ERCOT and Market Participants… • Market Participants are unable to see their submitted transactions • CRs do not know status of submitted requests • Unable to easily identify ‘if’, ‘when’, and ‘where’ transaction failures occur • ERCOT’s difficulty in identifying failed transactions • Data located throughout multiple databases • Unable to easily determine transaction failure point and cause of failure • Internal ERCOT system and component health • Unable to easily identify system or component failures • Unable to identify lost transactions when components fail or are restarted

20. ERCOT Data TransparencyERCOT/Market Requirements • What do Market Participants and ERCOT need to know? • PUC • How is the market performing over time? • Protocol compliance • Transaction Success (Business Process) • Market Participants • What is the status of my transactions? • Protocol compliance • Transaction status • View/Research transactions

21. ERCOT Data TransparencyERCOT/Market Requirements • ERCOT Retail Market Services • How is ERCOT and the Market performing now and over time? • Transaction Success • Protocol compliance • Backlog Transactions • State of current processing environment • Performance throughput and availability • ERCOT IT • How are ERCOT systems performing now and over time? • State of current processing environment • Backlog Transactions • Performance throughput and availability

22. ERCOT Data Transparency ERCOT/Market Requirements • What do Market Participants and ERCOT need to see? • Daily update on all CR transactions • All initiating transactions received • All ERCOT responses • List of all other associated transactions • All requests sent to TDSP • All transactions returned by TDSP • Timeliness of responses • Transactions both ‘in’ and ‘out’ of protocols • Failed Transactions • Transactions without a response • Cancelled Transactions

23. ERCOT Data Transparency Stakeholders and Needs State of Current Environment Protocol Compliance Transaction Success Transaction Status View and Research Backlogs Performance and Throughput PUC CRs TDSPs ERCOT Retail ERCOT IT

24. ERCOT Data Transparency Model For Improvement • Provide VISIBILITY into transactions within ERCOT Systems…. • See near “real-time” as well as relevant historical transaction data • Monitor transaction flows within ERCOT • Provide current transaction status for Market Participants • Provide a mechanism to more easily identify Market Participant issues • Develop operational metrics reports • Develop Executive Summary reports • Improve speed and effectiveness of business operations • Incorporate advanced business logic to proactively identify and resolve issues

25. ERCOT Data Transparency ERCOT Interim Solution • ERCOT Interim Internal Solution • ESIID Tracking System (ETS) • Complete life-cycle view of transactional data • Near-real time updating of ETS database (every 10 minutes) • Transactions are monitored from FTP inbound to FTP outbound • Transactions are purged from database once business process is complete • Daily reporting of all ‘open’ transactions • Reports include all internal system component touch points and their respective timestamps • Reports will identify successful, failed, and out of protocol transactions • Reports are both ‘batch’ and ‘on-demand’

26. ERCOT Data Transparency ERCOT Interim Solution • ERCOT Interim Internal Solution • Daily reporting of all ‘open’ transactions • Transaction Flow Report • Identifies the last system component that the transactions hit and their corresponding timestamps by Global ID • Transaction Success Report • Identifies how successful ERCOT was in processing a response transaction • Protocol Report • Provides a view of ERCOT’s protocol compliance for each transaction type

27. ETS Phase I Progress Training was conducted for Registration and Data Management staff on access and use of the system Additional training for key ERCOT support staff will be scheduled over the next two weeks Began loading database transactions on 10/21 after TRLOG changes were implemented in Paperfree During User Acceptance Testing, ETS Reports discovered an 814_18 process that was never re-started after a scheduled outage All pertinent Transition, Deployment, and User documentation has been prepared and delivered to transition ETS into production ETS Phase 1 is planned for production November, 2002 ERCOT Retail Market Services will begin to utilize ETS functionality Ultimate value and impact on problem resolution processed will be evaluated ERCOT Data Transparency ERCOT Interim Solution

28. ERCOT Data Transparency Projected Deliverables (Example) In Place Nov 02 Q2 - 03 Next Q1 - 03 • Siebel Report • 997 Report • Portal • Trans Flow • Trans Success • Protocol • Capture Mkt • Metrics • Market Metrics • Data Archive • Dashboard • System Availability • Component Availability • Trans Flow Rates & Backlogs • Siebel Report • 997 Report • Portal • Trans Flow • Trans Success • Protocol • Capture Mkt • Metrics • Market Metrics • Data Archive Siebel Report 997 Report MP Report Siebel Report 997 Report MP Report Trans Flow Trans Success Protocol Siebel Report 997 Report Portal Trans Flow Trans Success Protocol Capture Mkt Metrics Market Reports ERCOT Visibility Market Visibility Market Metrics ERCOT Dashboard

29. ERCOT Data Transparency Project Benefits • How do Market Participants and ERCOT benefit? • PUC • Knowledge of overall Market performance • Transactions ‘in’ and ‘out’ of protocol • Identify transaction failure points within the Market • Ability to perform independent queries • Market Participants • Better able to manage customer expectations • Ability to research transactions for customers • Able to identify where each transaction is located • Reports identifying backlog, successful, failed, and out of protocol transactions • Ability to perform independent queries

30. ERCOT Data Transparency Project Benefits • How do Market Participants and ERCOT benefit? • ERCOT Retail Market Services • Able to identify and repair failed transactions • Research problem transactions • Reports identifying backlog, successful, failed, and out of protocol transactions • Summary reports on transaction volumes • Enhanced capabilities to perform root cause analysis on transaction failures • Ensure data synchronization between Siebel and Lodestar • ERCOT IT • Know when system and components are unavailable • Knowledge of current processing status of all components • Performance throughput and transaction volumes • Ability to trend anticipated volume levels for system reliability • Potential for real time volume-based performance tuning

31. Quick Recovery Team Update

32. Quick Recovery Effort • Pursuing responses from CRs and TDSPs • ~8,863 ESI Ids are awaiting more information or acknowledgment of closure from CR • ~39,514 have been sent to TDSPs for investigation and are awaiting response • QRE initiated a review of the Siebel extract report for all Business Processes still showing up as Scheduled on the current ERCOT reports • July, August and September have been completed • Period June 1- June 30 underway • January-May will be initiated as time permits.

33. Quick Recovery Effort • QRE is transitioning processes and procedures to ERCOT Data Management and Registration teams. • QRE is hosting “brown bag” as well as individual training sessions with Data Management and Registration teams • QRE is providing documentation for all QRE business processes to ERCOT • QRE has completed CBT training modules to ERCOT for new hires. Modules have been reviewed and modified based on feedback from ERCOT users

34. Point of Failure Entity Current Status Quantity Quantity Quantity New TDSP Cause Not Reported 39514 121 17472 In Analysis QRE Team delete 3954 3548 1 CR In Progress CR 51925 8863 38410 Total ERCOT EAI Resolved 51925 101243 4979 Total ERCOT FTP 157243 694 ERCOT Manual Process (814_08) 3444 ERCOT Out of Protocol 20 ERCOT PaperFree 8474 ERCOT Siebel 2430 ERCOT TCH 6510 TDSP 18809 Total 101243 ESI Ids Reported to QRE (as of November 4, 2002)

35. Market Synchronization Efforts 1) Retailer Synchronization2) “TDSP as LSE” Clean-up 3) Non Price to Beat

36. Market Synchronization Retailer Synchronization Project • Objective • Address market issues resulting in an out of sync “Rep of Record” between ERCOT, TDSP, and CR systems for all ESI IDs resulting from market startup/processing issues as well as subsequent workarounds • Completed • ERCOT identified “Perfect Sync” and “1 Day Perfect” – sent lists to MPs • ERCOT identified out-of-synch categories at Sept 10th design meeting • Task Force identified additional ESI IDs considered “In Sync” – sent lists to MPs • Task Force prioritized 8 categories based upon potential customer impact • ERCOT has sent priority 1 through 6 out-of-sync files to TDSPs and CRs • Weekly conference calls to set file analysis response timelines for TDSPs and CRs, discussion of progress and open issues • Task Force charged with defining “how to fix” at 10/16/02 RMS meeting • October 25th face-to-face meeting to resolve “how to fix” accomplished little. A second meeting is planned. • In Progress • ERCOT compiling and analyzing priority 1 responses out-of-sync files • TDSPs and CRs completing analysis and response to priority 2-6 files .

37. Market Synchronization Retailer Synchronization (cont.) Next Steps • November 5th , 12th, 19th • Follow-up conference calls • November 11th at ERCOT Austin Met Center • Second face-to-face meeting with Market Sync Task Force to resolve “how to fix” out-of-sync conditions • November 13th at ERCOT Austin Met Center • RMS pre meeting scheduled to make decision on “how to fix” for any contentious scenarios remaining from the Nov 11th meeting • December 5th • Escalate issues to TAC (if required)

38. Market Synchronization“TDSP as LSE” Clean-up • Objective • Ensure that all ESI ID are converted from the “TDSP as LSE” by the time True-Up Settlement of February 2002 begins; which is currently scheduled for 12-07-02. • Completed • ERCOT sent TDSPs list of ESI ID affiliated with “TDSP as LSE” any time after Feb 01, 2002 • Weekly conference calls with TDSPs (already takes place with ONCOR and CenterPoint) • In Progress • TDSPs to provide correct effective date concurrent with usage record prior to February 01, 2002 or …. identify de-energized/inactive ESI IDs by November 01, 2002

39. Market Synchronization Non Price to Beat • Objective • Make necessary corrections to ensure that >1MW Customers were switched on the correct date in January 2002 • Completed Items • Per RMS direction, ERCOT sent lists to each MP for reconciliation: • Full list of ESI ID in the >1MW project was confirmed • Still to be fixed list (subset of the full list) was also confirmed • 1,134 ESI Ids (>1 MW) identified by CRs (meeting the April 30 deadline) • Number increase attributed to reconciliation of lists with Market Participants • 1016 (89%) ESI IDs are corrected • 74 ( 7%) ESI IDs were agreed not to fix by TDSP and CR • In Progress • 44 (4%) ESI IDs remaining to be fixed • 39 (was 91) where CR and TDSP agree to fix • 5 (was 17) where CR and TDSP are not in agreement – CR and TDSP researching

40. Market Synchronization Non Price to Beat • Next Steps • ERCOT to continue to confirm changes in Siebel and Lodestar • ERCOT is monitoring, suggesting next steps and scheduling calls with TDSPs for remaining 44 ESI IDs • If any “non agreements” still exist, CR will have to escalate