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Nodal Delivery Success depends on 3 key dimensions…

Texas Nodal Market Implementation TAC Meeting Program Update March 08, 2007 Jerry Sullivan, Executive Director, Nodal Program jsullivan@ERCOT.com. Nodal Delivery Success depends on 3 key dimensions…. Scope / Quality. Nodal. Schedule. Cost.

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Nodal Delivery Success depends on 3 key dimensions…

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  1. Texas Nodal Market ImplementationTAC MeetingProgram UpdateMarch 08, 2007Jerry Sullivan, Executive Director, Nodal Programjsullivan@ERCOT.com http://nodal.ercot.com 1

  2. Nodal Delivery Success depends on 3 key dimensions… Scope / Quality Nodal Schedule Cost http://nodal.ercot.com 2

  3. Which are currently showing both success and areas to address… Cost Schedule Scope / Quality Amber Amber Amber Summary The program has completed the latest cost review cycle with current overall projected estimate at complete tracking within 1% of budget. A significant proportion of contingency has been earmarked specifically for EMS, MMS, NMMS and COMS. The program is in the process of defining the next iteration of its critical path baseline and is identifying issues that need resolution to help attain the published Go-Live date. Two critical systems, (Energy and Market Management Systems) are baselined on the May 2006 version of the protocols and not yet in sync with the latest approved NPRRs. Legend Estimate at Complete = >$263m Red Go-live = >30 days+ Program is not wholly aligned to protocols Estimate at Complete = $248 - $263m Amber Go-live = <30 days+ Program is aligned to previous version of protocols Green Estimate at Complete = <$248m Go-live = 12/1/08 Program is aligned with current protocols http://nodal.ercot.com 3

  4. In order to succeed, Nodal Program Delivery must be aligned with broader ERCOT Inc. and external readiness… The “Nodal Success Equation” Nodal Delivery ERCOT Readiness Market Participant Readiness Nodal Success x x = Measured by… Market Readiness Declaration Transition Plan Exe. Transition Plan Exe. TBD TBD ERCOT Readiness MP Readiness TBD TBD TBD Cost Nodal Go-Live Plan Registration & Qual. Amber TBD Schedule TBD Amber Scope / Quality Amber Status via Market Readiness Function (TBD) Without success of all 3 elements, Nodal success will be compromised… * New version of presentation http://nodal.ercot.com 4

  5. EMS staffing is approaching resolution ERCOT has taken the measures necessary to alleviate the most pressing staffing issue on Nodal: • The EMMS Development team provided 3 experienced staff to Nodal – 2 with immediate effect. • The EMMS Production Support team provided 5 experienced staff to Nodal – 4 with immediate effect • These staff will be 100% dedicated to Nodal for the balance of 2007 The transition needs to balance support of existing operations: • A period of transition for some of these staff is necessary to minimize disruption to existing workload, including Zonal enhancements required for Nodal • The impact on Zonal initiatives has been factored in (some initiatives will be delayed 30 – 60 days, backfills are being sought for some of these staff) • Response to critical production issues may require involvement of some staff Additional measures taken: • An advertisement campaign has been launched for EMMS resources – both contract and full time positions are being considered • Recruitment efforts in EMS markets outside of both ISO and Texas area http://nodal.ercot.com 5

  6. Progress Highlights • Market Operations Sandbox delivered 1/31/07 • 2 QSEs successfully connected • ERCOT learning Management System launched to Market Participants 2/15/07 • Requirements approved by TPTF • Approvals for MMS, Outage Scheduler requirements complete • CSDs approved by TPTF • Approvals for MMS, CRR, MIS and most COMS CSDs approved ahead of schedule • EDS 1 application (vanilla (basic) EMS) currently in I-Test • Nodal Deep-Dive Communications Meeting held with Steering Committee on 1/26/07 http://nodal.ercot.com 6

  7. Progress this Month (Detail) • Enterprise Data Warehouse Package (EDW) • Achieved definitions of 80% of project areas and have begun process of high-level requirements gathering for those identified. • First deliverable “State Estimator Statistics” requirements being worked with EMS team. • Enterprise Integration Package (EIP) • Sandbox effort successfully demonstrated connectivity. • Prioritized list of Interfaces. • High Level Design of CIM. • Market Participant Engagement & Readiness Package (MER) • Executed new SOW for 2007 engagement for the Mosaic Company (training firm) for 2007. • Interviewed candidates for contract training delivery personnel. • Completed major review of the structure of 5 day QSE Basic Training Sessions (Course content, how to break 5 days into modules, scheduling, NERC CE hours issues etc…). • Market Information System (MIS): Proof of Concept with LDAP • MIS: Presentation of 3 Design Styles for the portal. • Integrated Readiness & Transition Package (IRT) • Training: Completed 30% of Curriculum Reviews, Started 70%. • Market Trials: Refine EDS Detailed Plan (ongoing through March 07). • Market Trials: Conducted reviews with business owners. • Sandbox: Met 1/31/2007 release date. Great team effort. • Sandbox: 2 QSEs have successfully connected. • Readiness Advisor: Metrics Map - Version 6 for Metric Subgroup review. • Readiness Advisor: Verification Plan - Version 3. • Infrastructure Package (INF) • EDS1/2 Environment: All systems delivered for testing. • EA Lab: VMWare license issue resolved. • Integrated Testing Package (INT) • COMS: Conducted Test Case training for business. • Received ROME-hosted access to the credit risk software for familiarizing ourselves with the application; Created draft CMM test plan. • EMS/MMS/CRR: Reviewed CRR Component Use Cases. • Submitted rough draft of assumptions and durations for FAT testing of CRR. • Data/E2E/Info: Data Transformation Presentation Preparation for other Teams in progress; Delivered First Phase of Mini Market. • NMMS: Team created 77 proposed lower level business flows; System test case candidate analysis; Started initial NMMS FAT Test Plan creation. • Tools: Create Daily Metric Reporting Data; Update Severity and Priority for Defect Tracking. • Program Management Office (PMO) • Completed Nodal deep-dive presentation to ERCOT Steering Committee. • Completed user interface for balanced scorecard. • Met with all projects to define program critical path in cooperation with IRT. • Integration Design Authority (IDA) Package • Assignment of IDA’s issues continued. • Preliminary review of EMS RPP CSD. • Review and response to TPTF comments for EMS requirements. • Commercial Systems Package (COMS) • Defined short term milestones and owners for outstanding architectural discussion points. • Continue integration planning - continued meetings with CRR, participated in CMM - registration POC with UISOL team. • Registration Requirements approved on 1/9/07 as scheduled. • Financial Transfer requirements approved. • Network Model Management System/Network Model Package (NMMS) • Developed training documentation. • Prepared training classes. • Clarified and documented modeling issues. • Obtained CSD approval from TPTF. • Continued work on Detailed design issues. • Network operations modeling issues: Now 77% complete with 4,153 Closed out of the 5,360 identified data issues. Now 25% complete with 243 completed out of the 973 identified Critical Measurements. • SIR 11147 and 11181 have been approved to be promoted into the iTEST / Production 2/22/2007 release. • Energy Management System Package (EMS) • Completed 1st Week of Change Impact Analysis for TPTF (Presentation Available). • Confirmed & Committed Phased Delivery Dates for EMS Phase 2. • Market Management System/SCED Package (MMS) • Completed Execution of MMS (ABB) Phase 2 SOW. • Congestion Revenue Rights Package (CRR) • BOD budget approval. • Zonal replacement for Stacy Barry on-boarded; transition complete. • Updated PCRR – generator list. • Completed Detailed Design Documents. • PSA executed with Nexant. • Continued work on SOW & associated agreements. http://nodal.ercot.com 7

  8. The short-term milestones, except Requirements, are on track http://nodal.ercot.com 8

  9. Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Time line update Blue diamonds right of Business requirements line denote schedule slippage CIM Model UI and EDS 3 components CRR, UI, Planning Network Model Management System (NMMS) DA Model Build DA Model NSA Generation Sub-system RPP, LF Study Apps Energy Management System (EMS) RT FAT Market Management System (MMS) DAM Build DA FAT FAT Congestion Revenue Rights (CRR) POC RT FAT Enterprise Integration (EIP) DA FAT RT FAT Commercial Systems (COMS) DA Build DA FAT FAT Market Information System (MIS) Acronym Key FAT – Factory Acceptance Testing CSD – Conceptual System Design SOW – Statement of Work EDS – Early Delivery System I test – Integration Testing POC – Proof of Concept RT FAT Enterprise Data Warehouse (EDW) DA FAT Build Dev Environments Build ITest 3 Build EDS 3 Infrastructure (INF) Build ITest & EDS1/2 Build ITest 4 Build EDS 4 MP Qual Begin Qual Freeze Training Complete Readiness Metrics Start MP Registration Registration Freeze ERCOT & MP Readiness DA Market 12/08 RT Market 12/01 168 Hour Trials Itest 4 ITest 1/2 ITest 3 Trials & Implementation EDS 1 /2 EDS 3 EDS 4 Business Requirements Target Single Entry Model 3/31/ Today http://nodal.ercot.com 9

  10. The overall schedule and critical path are the major concerns No major threats Known and contained threat – continue to progress and maintain a watching brief Major threat (or unknown) – “hair on fire” is the only acceptable response http://nodal.ercot.com 10

  11. Nodal build & release overview Transition Plan Milestones Project (FAT) Builds (ITEST) Releases (UAT) EDS (Trials) Requirements Use Cases Business Function 8 X 5 Build & Maintain 24 X 7 A1 A3 R1 RM RM * Data & Telemetry Standards Met RM A2 A… EDS 1 EDS 2 * SE 6 months RM B1 B3 R2 * Real Time Sequence RM RM B2 B… RM R3 C1 C3 RM RM * Reasonable LMPs (6 months) RM C2 C… RM EDS 3 * Bids & Offers Submitted R4 C1 C3 RM RM * RT Settlements RM C2 C… * CRR RM C1 C3 RM R5 RM * Day Ahead Market RM C2 C… * DA Bids & Offers Submitted RM EDS 4 * DA Settlements R6 C1 C3 RM RM * 168 hour test RM C2 C… RM Project Focus Market Timeline Focus * TXMACS 1.0 http://nodal.ercot.com 11

  12. Critical Path Update Objective: • Revise the existing Logical Program Schedule into a linked and verified program level Critical Path Gantt to drive integrated delivery milestones across projects. Approach: • Define all Builds (32), Releases (7), EDSs (4) • Build and Release Matrix • Build Sequence Diagram • Map business requirements and use cases to each build and release • Based on above definitions, identify build FAT completion dates with PMs and Vendors • Insert Release Management, ITest (INT) and Market Trial (EDS) activities • Utilize the program level Gantt as a tool to verify and manage the shortest viable program duration • Optimize critical path to honor transition plan & PUCT order (modified to 12/1/08) Guiding Principles: • Ensure Nodal Transition Plan elements are used to guide EDS • Minimize the number of Releases flowing into EDS Phases • Utilize a number of Builds to break Releases into logical and sequential groupings • Establish the optimal number of Builds to support the schedule • Consider vendor and project delivery capabilities in estimates • Account for all system functionality and requirements     http://nodal.ercot.com 12

  13. Nodal spending to date EXPENDITURE CATEGORY JAN Program Total • O&M Expenses (,000): • Internal Labor 9 1,712 • Equipment, Tools, Materials & Supplies 0 50 • Outside Services/Consulting (68) 4,922 • Software license 54 123 • Hardware 50 149 • Facilities & Utilities 0 1 • Employee Expenses 0 34 • Interest and Fees 46 430 • Depreciation and Amortization 478 3,344 • Other 10 291 • Sub-Total 579 11,056 • Capital Expenditures (,000): • Sub-Total 5,126 49,584 • Total Expenditures (,000) 5,705 60,640 • Commitments $36,178 * ** • Notes: * Hardware spending to support Nodal represented $3.2 MM of the $5.1 MM January capital spending. ** Total spending through December was $54.9 MM with the additional year end accruals. http://nodal.ercot.com 13

  14. Texas NodalCritical Path UpdateTechnical Advisory CommitteeMarch 08, 2007 * New presentation http://nodal.ercot.com 14

  15. Critical path – overview of complexity NMMS X NMMS1 NMMS2 Multiple project software drops... EMS X EMS1 EMSX EMS2 >50 Drops MMS X MMS1 MMS2 …integrated into builds... Integration 1 Integration 2 Integration N Build 1 Build 2 Build N ~33 Builds I-Test 1 I-Test N …for testing and release... Release 1 9 Releases …into Early Delivery Systems for market trials prior to Go LIve EDS 1 EDS N 4 EDS http://nodal.ercot.com 15

  16. Legend – Confidence Level Low Increasing No Change Initial emphasis – individual project mobilization & requirements Independent Project Focus Protocols & NPRR Schedule Confidence Critical Path Confidence EMS Functionality Critical Path Status RED MMS Functionality Program Activities • Define Requirements • Conceptual Design • Functional Scope • Protocol Interpretation and Mapping • Vendor(s) Identification and Delivery Estimates • Internal Development Team(s) Delivery Estimates Project scope, requirements, development estimates (budget) S & B Functionality Add. COMS Functionality CRR Functionality Other Nodal Project Functionality Common Projects (IDA, IRT, INF, EIP) http://nodal.ercot.com 16

  17. Legend – Confidence Level Low Increasing No Change Last Few Months – Vendor Mobilization and Application Focus Project Delivery Focus Vendor Delivery Capabilities Schedule Confidence Critical Path Confidence EMS1 EMS2 EMSX Critical Path Status RED MMS1 MMS2 MMSX Program Activities • Req. Finalization & Conceptual Design • Define Common Terminology & Delivery Milestones • Define Common Goals Across Projects • Identify Project Interdependencies • Organize into Releases • Define Assumptions • Unconstrained End Date Project software drops, feasible delivery dates, vendor SOWs S&B1 S&B2 S&BX COMS1 COMS2 COMSX CRR 1 Build1 Build2 BuildX Common Projects (IDA, IRT, INF, EIP) http://nodal.ercot.com 17

  18. Legend – Confidence Level Low Increasing No Change Current State – Cross Project Design and Integration Alignment Program Delivery Focus Nodal Protocols Transition Plan Guidance Schedule Confidence Critical Path Confidence EDS 1 (Rel 1) EDS 1 (Rel 2) Proj 1 Proj 2 Proj 1 Proj 2 Critical Path Status Proj 3 Proj x Proj 3 Proj x AMBER Integration builds, EDS release scope, integrated schedules & trade-offs EDS 2 (Rel 3) EDS 2 (Rel 4) Program Activities • Conceptual & Detailed Design • Cross Project Alignment • EDS Deliveries Identified • Key Design Issues Identified • Key Program Risks • Identify Project Interdependencies • Identify Releases • Organize Pieces Proj 1 Proj 2 Proj 1 Proj 2 Proj 3 Proj x Proj 3 Proj x EDS 3 (Rel 5) EDS 3 (Rel 6) Proj 1 Proj 2 Proj 1 Proj 2 Proj 3 Proj x Proj 3 Proj x EDS 4 (Rel 7) Proj 1 Proj 2 Proj 3 Proj x Common Projects (IDA, IRT, INF, EIP) http://nodal.ercot.com 18

  19. Legend – Confidence Level Low Increasing No Change Future State – Program and Business Delivery Alignment Business Capability Focus Nodal Protocols Transition Plan Guidance Schedule Confidence Critical Path Confidence EDS 1 (Rel 1) EDS 1 (Rel 2) Critical Path Status GREEN Integrated Build Integrated Build Committed control milestones, finalized vendor SOWs, Business Transition Training Transition Training Transition Program Activities • NPRR Backlog Cleanup • Rigorous Scope Change Control • Design Issues Resolved • Confirm EDS strategy with TPTF, including potential exceptions to Transition Plan • Build delivery confidence (early drops) • Rigorous critical path and dependency management • Go-Live risk review EDS 2 (Rel 3) EDS 2 (Rel 4) Integrated Build Integrated Build Training Transition Training Transition EDS 3 (Rel 5) EDS 3 (Rel 6) Integrated Build Integrated Build Training Transition Training Transition EDS 4 (Rel 7) Integrated Build Training Transition Common Projects (IDA, IRT, INF, EIP) http://nodal.ercot.com 19

  20. Meeting the 12/1/2008 target, needs thrust on multiple areas Nodal Program • Technical Design Leadership and Alignment • Vendor Delivery Management • Application Integration External Support • Clearing NPRR Backlog • TPTF Review / Approval Turn Around • Transition Plan Clarification http://nodal.ercot.com 20

  21. Texas Nodal Market Implementation TAC MeetingUpdate on NMT Model ActivitiesMarch 08, 2007Raj Chudgar, ERCOT http://nodal.ercot.com 21

  22. NMT – Network Operations Modeling & Telemetry - Project Topics to Cover • Network Model Data Issues • Critical Measurements Telemetry Analysis • Measurement Weights Modeling • NMT Transition Plan http://nodal.ercot.com 22

  23. NMT – Network Operations Modeling & Telemetry - Project Model Data Issues – as of 2/27/2007 • Began with 200+ manually entered issues in August 2006 • Developed the Automated Query Process to scan for additional issues • Ran First Case from September 2006 thru October 2006 • Generated 4000 new issues • NMT Closed 78% before running next case • Ran Second Case from November 2006 thru December 2006 • Generated 1100 new issues • Total baseline is 5400 issues • NMT has Closed 4600+ or 86% of the new baseline • Remaining issues = 764 • Will run Third Case from January 2007 thru February 2007 • Next Steps • Documenting NMT processes to hand over to ERCOT Operations • Begin wrap of NMT project to end on 3/31/2007 http://nodal.ercot.com 23

  24. NMT – Network Operations Modeling & Telemetry - Project Network Model Data Issues Status – by MP http://nodal.ercot.com 24

  25. NMT – Network Operations Modeling & Telemetry - Project Critical Measurements Telemetry Analysis • Spreadsheet Feedback • Continuing to work with each of the Market Participants to: • collect and document comments and feedback • clarify questions • perform additional analysis • Completed 2nd on-site visit to larger TSPs to expedite resolutions • Next steps: • Continue to implement modeling changes as a result of analysis • Complete documentation of feedback • Publish results and schedules by end-of-March 2007 http://nodal.ercot.com 25

  26. NMT – Network Operations Modeling & Telemetry - Project Critical Measurements Telemetry Analysis – by MP http://nodal.ercot.com 26

  27. NMT – Network Operations Modeling & Telemetry - Project Measurement Weights Modeling - Update Analysis and Progress Update • Setup Tuning Environment with near real-time feeds from Production • Measurement weights were re-defined • Requires software change to add plausibility checks on negative load telemetries • Changed the limits for a set of unit capability curves • Tuning Environment Results • Reduced Bus mismatches (Mw/Mvar) after SE convergence • Reduced difference in Mw/Mvar flows between SE and Power Flow • Reduced number of voltage violations on the RTCA base case • Improved performance index • Implementation Plan • Software fix successfully implemented into Production • Data changes are being monitored in Study Environment • To complete implementation early March http://nodal.ercot.com 27

  28. NMT – Network Operations Modeling & Telemetry - Project NMT Transition Plan • Documented Procedures: • Data Issues Management Process • SE Fallback Procedure • Nexant (3rd party) review and recommendations: • SE and Network Model • Nodal standards • Zonal procedure changes needed for Nodal • Review and summary of: • Critical Measurements • Tap Estimation • Measurement Weights Tuning • Load Modeling • Parameter Estimation http://nodal.ercot.com 28

  29. NMT – Network Operations Modeling & Telemetry - Project Summary • Major Model clean-up underway • Target to complete by 3/31/2007 • Major effort to reduce critical measurements and improve observability underway • Target to have all justifications and schedules for new implementations by 3/31/2007 • Implementation schedule will be published end of 1Q2007 • Measurement Weights tuning recommendations are being implemented into Production in early March 2007 • NMT creating a Transition Plan of activities and processes to ERCOT operations http://nodal.ercot.com 29

  30. Texas NodalMarket Readiness FunctionTechnical Advisory CommitteeMarch 08, 2007 * New version of presentation http://nodal.ercot.com 30

  31. Readiness Metrics become important as we approach Go-Live Nodal Control Milestones Readiness Metrics Importance to Nodal Success Today Time 12/1/08 Progress Indicators Performance Indicators • Readiness Metric Development Phase – Current • Facilitate the development of metrics with the TPTF Metric Sub Group and ERCOT Business Managers (metric owners) • Meet with the TPTF Metric Sub Group (MSG) as necessary to address metric issues • Baseline readiness metrics with TPTF and TAC • Metric Verification Phase – Begins in April 2007 • Begin collecting metric status • Incorporate readiness status into program level reports • Report readiness activities to the TPTF & TAC via nodal program updates • Report to the main TPTF as necessary to obtain approval for new metrics and changes to existing metrics • Produce Market Readiness Declaration – November 2008 * New version of presentation http://nodal.ercot.com 31

  32. Texas NodalStatus of Identification of MP ExecutivesTechnical Advisory CommitteeMarch 08, 2007Trip Doggett, ERCOT http://nodal.ercot.com 32

  33. ACCOUNTABLE EXECUTIVE DESIGNATION QSE AE Designation AE Designations with Qualified Scheduling Entities (Sub-QSEs not considered). • Level 4 (A/S provider)………………… – 22 of 29 • Level 2 (Load only)…………………… – 15 of 38 • Level 1 (Bilateral Trades only)………. – 17 of 29 http://nodal.ercot.com 33

  34. ACCOUNTABLE EXECUTIVE DESIGNATION QSE AE Designation by Sector AE Designations with Qualified Scheduling Entities (Sub-QSEs not included). *Sector assignment figures are estimates. • Investor Owned Utilities – 2 of 3 • Cooperatives – 3 of 3 • Municipal – 4 of 4 • Independent Generator – 13 of 17 • Independent Power Marketer – 17 of 29 • Independent REP – 15 of 38 • Industrial Consumers – 0 of 2 http://nodal.ercot.com 34

  35. ACCOUNTABLE EXECUTIVE DESIGNATION TSP AE Designation Number of AE Designations for Transmission Service Providers. *Sector assignment figures are estimates. • Investor Owned Utilities – 4 of 4 • Cooperatives – 3 of 5 • Municipal – 9 of 9 http://nodal.ercot.com 35

  36. For more information . . . • To designate your Accountable Executive, please contact your ERCOT Account Manager • Texas Nodal Website: http://nodal.ercot.com • Subscription-based newsletter published every other Friday: http://lists.ercot.com/cgi-bin/majordomo. Select TexasNodalNews • E-mail questions, comments or feedback to: TexasNodal@ercot.com http://nodal.ercot.com 36

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