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ERCOT 2001 Marketing & Business Plan Review Meeting

ERCOT 2001 Marketing & Business Plan Review Meeting. January 23, 2001. ERCOT Marketing & Business Plan Table of Contents. I. ERCOT Fundamentals and Viewpoint A. Market Overview B. Market Overview (cont.) II. Strategy A. ERCOT Business Plan Outline B. 2001 Business Objectives

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ERCOT 2001 Marketing & Business Plan Review Meeting

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  1. ERCOT 2001 Marketing & Business PlanReview Meeting January 23, 2001

  2. ERCOT Marketing & Business PlanTable of Contents I. ERCOT Fundamentals and Viewpoint A. Market Overview B. Market Overview (cont.) II. Strategy A. ERCOT Business Plan Outline B. 2001 Business Objectives C. Regulatory Strategy III. Marketing Strategy A. Marketing Overview B. Marketing Segments C. ERCOT Product Slate D. Marketing Metrics E. Marketing Metrics (cont.) IV. Organization and Responsibilities A. Org Chart B. Segment Responsibilities Appendix I: Customer List

  3. I. ERCOT Fundamental & ViewpointA. Market Overview • ERCOT supply exceeds demand for the next four years • Average Annual Planned Capacity Growth 2.8% • Average Annual Peak Demand Growth 2.7% Based on ERCOT Web site data

  4. I. ERCOT Fundamental & ViewpointB. Market Overview (cont.) • ERCOT studies range from overbuilt to a “normal” reserve margin. • ERCOT is deregulating and typically price uncertainty and upward bias in pricing happens during the initial start-up of a market. • Strategy is to build a balance book. Our bias will be balanced long term (as opposed to long/short viewpoint). • ERCOT is requiring schedulers be qualified (QSE), this has led to a formation of a services business.

  5. II. StrategyA. ERCOT Business Plan Outline • The goal is to create a “Virtual Utility”. Creating a “balanced book” of load, generation, ancillary services and strong customer base. • Marketing loosely aligned along customer’s preferred method of interacting with ENA. Each customer will have an Account Manager. • Goals and measurable objectives • Total P&L (2001 Goal is $25MM)

  6. Load Serving TNMP 1200MW Other REP 100 MW Industrial 200 MW Generation Sources Enron Wind 135MW AES 380 MW TIE 250 MW Avista 630 MW Other Remainder QSE Service TNMP 1200 MW EES 150 MW New Power 100MW Other Remainder Ancilary Services Transmission TexMex 300 MW Tie Into New Mex 300 MW Other 300 MW 2001 Goals 1500 MW 1500 MW 2000MW 1000 MW 900 MW II. StrategyB. 2001 Business ObjectivesThe “Virtual Utility”

  7. II. StrategyC. Regulatory Strategy • Representation on key boards and organizations • Robin Kittell-ERCOT Board • Ron McNamara-TAC • Active involvement in any regulatory or rule making issues • Offer new services related to “opening” of ERCOT market • QSE Scheduling • Ancillary Services • Commercial point person: Michelle Parks

  8. II. StrategyD. Under Construction • Competitor Analysis • Identify all significant competitors • Identify competitor products and offerings • Customer Profiles • In-depth information regarding customers • Site Bank & Development Options • Formulate plan • Identify how to approach development • in house, AES, Mossbacher or combination • Request a budget

  9. III. Marketing StrategyA. Marketing Overview • Each customer will have an account manager. • Deals/Customers will be segmented by customer interaction and product needs. The segments are: • Transactional • Services • Development • Each segment will have a team lead or “coordinator” responsible for product development and uniformity and achieving 2001 segment goals.

  10. III. Marketing StrategyB. Marketing Segments Customer/Deal Type • Deal Flow • Daily coverage • Speed • Efficiency • Cost Effectiveness Transactional • QSE • Power Marketing Services • Credit Services • Fuel Management Services • Portfolio builders • Tolling, supply • Full requirements • Unique transactions Development

  11. III. Marketing StrategyC. ERCOT Product State

  12. III. Marketing StrategyD. Marketing Metrics for 2001 • Transactional Goals • Deal Flow • 50 transactions  1 Month • Coverage • IOU and Large Aggregators & Distributors • Daily contact • Municipalities • Establish relationship with every municipality in Texas • Industrials • Contact all industrials with loads greater than 10MW • Close 2 deals with excess industrial generation • Derivatives • Establish derivative marketplace in ERCOT • Enron Online • Establish EOL as preeminent market for ERCOT • Sign 25 new customers for trading

  13. III. Marketing StrategyE. Marketing Metrics for 2001 (Cont.) • Services Goals (Services and Business Development) • QSE Services • Sign 5 QSE contracts • Total MW 2000 Peak • Asset Management • “Touch” or contract 1500 MW of generation • Development Goals • Renewable Energy Credit • Monetize 75% of all available credits • Full/Partial Requirements • Manage 1500 MW (Peak load requirements) • Government Affairs/Regulatory • Assist and help guide our regulatory efforts

  14. IV. Organization and ResponsibilitiesA. TEAM ERCOT

  15. IV. Organization and ResponsibilitiesB. Segment Responsibilities Strategic Information Commercial Functions

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