1 RMS Task Force on Retail Market Customer Transition Status Report April 23, 2003

2 Purpose of Presentation Brief RMS on task force activities to date Provide sense of direction and approach Provide “heads up” notice of potential requests for support Highlight emerging issues or areas needing consensus Identify opportunity and channel for feedback to task force

3 Task Force Activity Task Force Commissioned at March 20 RMS meeting Kick-off Meeting –April 4 Subsequent working sessions –April 10 –April 16 Scheduled working sessions –May 1 –May 5 (rescheduled from May 9 due to PUCT Open Meeting)

4 Task Force Scope The Retail Market Customer Transition Task Force will: –Develop and document approaches, processes and procedures (including business processes, application/use of EDI transactions, data exchanges and market communications) –for the transition of customers between a REP and other REPs, AREPs, and/or POLR in the event that a REP exits the Texas electric market or otherwise has a need to transition customers to an alternate provider –Consider, as appropriate, a customer’s further transition from the POLR to a REP of their choice –Consider separately similar issues involved in the transition of customers from one TDSP to another

5 Task Force Situations Considered The task force will consider: Situations in which the transition is on an orderly timeline and the “losing” REP works in a cooperative manner with the “gaining” party/parties Situations in which the “losing” REP is unwilling or unable to provide sufficient information or in which the urgency of the situation (as determined by ERCOT and the PUCT) does not allow a more orderly transition These transitions could involve a) REP to REP b)REP to AREP (transitions applicable to PTB customers, not covered by item a above) c)REP to POLR to choice REP

6 Task Force Scenario Variables Variables that were determined to be important in developing recommendations for the business processes and transactions to use include: –Lead time –Date certain versus on cycle –Cooperation of “losing” REP –Volume of ESIs in population –Meter type IDR versus non-IDR

7 Task Force Deliverables The task force will, for each scenario considered: –provide documentation and flow charts for recommended business processes –identify Texas SET transactions to be used –provide a communication plan, including draft correspondence and information exchange templates –outline roles and responsibilities of parties –provide sequence of events or actions necessary –identify the need for changes in Texas SET transactions, market protocols or PUCT rules –Recommend interim alternatives or options for implementation if a transition event should occur before approved development work is completed This information will be captured in a task force report.

8 Launch Change REP of Record Obtain/Provide Effective Meter Read Change REP of Record (From POLR) Obtain/Provide Effective Meter Read On-Going Transaction Processing, Service, Maintenance High Level Generic Process Flow Transition Complete For use in change of REP of record, wires invoices, final and initial customer bills Actual, estimated, prorated Transactions to be submitted by “new” REP Communication from “new” REP to POLR for supply and scheduling purposes For use in change of REP of record, wires invoices, final and initial customer bills Actual, estimated, prorated Transactions to be submitted by “gaining” party Information Transactions Transactions to be submitted by “losing” party Transactions Information Back Office transition in market participant systems ERCOT TDSP CR Presumes decisions already made or endorsed with respect to the involved parties and the subject customer base Notification to involved market participants Notification to customers Notification of other market participants Includes as appropriate ESIs, effective date, process to be used, handling of transactions in flight, roles and responsibilities, timelines and milestones

9 Scenario Based Process Application For a scenario similar to the transition of TCE customers, what would the process flow look like? Transition to both AREP and POLR Short lead time Effective date certain within 2 or 3 days (out of cycle) Transition of partial customer base Low volume of ESIs Involves residential, small non-residential and large non-residential customers Event occurs in “near-term” (prior to any subsequent Texas SET releases) “Losing” CR still active in market, cooperative in the process

10 Launch Change REP of Record Obtain/Provide Effective Meter Read Change REP of Record (From POLR) Obtain/Provide Effective Meter Read On-Going Transaction Processing, Service, Maintenance Scenario Based Process Application Transition Complete For use in change of REP of record, wires invoices, final and initial customer bills Actual, estimated, prorated Communication from “new” REP to POLR for supply and scheduling purposes Transactions to be submitted by “new” REP Modified switch, switch on cycle, switch off cycle, future move in, backdated move in For use in change of REP of record, wires invoices, final and initial customer bills Actual, estimated, prorated For non-PTB ESIs, POLR to submit transactions Information Modified switch, switch off cycle, future move in, backdated move in For PTB ESIs, preference for “losing” party to submit transactions Drop to AREP Information (Otherwise) For PTB ESIs gaining REP to submit transaction Information Transaction preference similar to POLR Notification to involved market participants Notification to customers Notification of other market participants Includes as appropriate ESIs, effective date, process to be used, handling of transactions in flight, roles and responsibilities, timelines and milestones

11 Potential Support Requests No specific requests for support outside the task force have yet been identified or approved, but could include requests to: –TX SET Modified Switch Process “New” transactions Modified Transaction Flow of 814_PC –Texas Test Plan Team –Protocol Revision Subcommittee –PUCT Staff –ERCOT Staff

12 Emerging Issues or Areas Needing Consensus None yet specifically identified or defined Still under discussion –Responsibility for service after effective date Prior to transition to the designated party For pending transactions away from the “losing” REP that are scheduled to complete after the transition effective date Not yet considered –“losing” REP not involved in transition

13 Next Steps Next steps –Refine and prioritize additional scenarios –Develop and adjust recommended process(es) –Complete task force’s outstanding Action Items –Generate documentation as described in deliverables Timeline/path to closure –Status update at May RMS meeting –Draft deliverable presented/issued and open comment period begins at June RMS Meeting Two weeks for comment One weeks for incorporation of comments –Task Force final draft deliverable Task Force convenes to consider comments –Issuance for RMS Approval July Meeting

14 Appendix (contains additional task force interim work product)

15 Task Force Scope The Retail Market Customer Transition Task Force will develop and document approaches, processes and procedures (including business processes, application/use of EDI transactions, data exchanges and market communications) for the transition of customers between an REP and other REPs, AREPs, and/or POLR in the event that an REP exits the Texas electric market or otherwise has a need to transition customers to an alternate provider. The task force will consider a customer’s further transition from the POLR to a REP of their choice as part of the assigned scope. Additionally, the Task Force will consider similar issues involved in the transition of customers from one TDSP to another.

16 Task Force Situations Considered The scenarios to be addressed by the task force include: Situations in which the transition is on a planned timeline and the “losing” REP works in a cooperative manner with the “gaining” REP/AREP/POLR. a)REP to REP (negotiated business transition) b)REP to AREP (transitions applicable to PTB customers, not covered by item a. above) c)REP to POLR to choice REP (transitions applicable to both PTB and non-PTB customers, not covered by items a or b above. This scenario includes the customer transition away from the POLR to a REP of their choice) Situations similar to a, b and c above but in which the “losing” REP is unwilling or unable to provide sufficient information or in which the urgency of the situation (as determined by ERCOT and the PUCT) does not allow a more orderly and planned transition contemplated by scenario A. above. Situations in which customer ESIs are transitioned from one TDSP to another

17 Task Force Approach Understand/agree on scope of work Understand/agree on situations or scenarios Understand/agree on deliverables Explore options and gain consensus on –Business and transactional processes (flowcharts and timelines) –Communication Implementation of plan Correspondence with Customers On-going monitoring and resolution of emerging issues

18 Task Force Approach (cont.) Explore options and gain consensus on (continued) –Data Customer data (for contact and mailing purposes) Transaction data (to allow necessary transactions to be submitted and successfully processed) Premise data (load profile, meter, usage history, etc.) –Transactions Switch, move in, drop, other? –Process Completion Criteria

19 Task Force Deliverables The task force will produce documentation and flow charts for the transition of retail customers for the assigned scenarios. Communication aspects of the transition, from the perspective of a variety of market participants, will be included (customers, ERCOT, PUCT, REP, AREP, POLR and TDSP). Draft correspondence as well as data/information templates to allow the exchange of necessary information between parties will be developed. The process will outline the roles and responsibilities of various parties and the sequence of events or actions needed to accomplish the transition of customers. The need for any changes in Texas SET transactions or revisions to market protocols or clarifications to current PUCT rules, if any, will be presented to RMS for further consideration or action. Should the task force recommendations require additional development work by market participants, the task force will include alternatives or options should processes need to be implemented prior to the completion of the development effort.

20 Objectives/Preferred Outcomes Customer: oMinimize negative customer impact. oCustomer is appropriately informed oCustomer gets notification. oWhat their rights and alternatives are oSeamless to customer oCustomer gets billed on a timely and accurate basis. oCustomer rights protected, compliance with current rules. oCustomer’s right to choose

21 Objectives/Preferred Outcomes (cont.) TDSP: oLeverage what is existing market design/processes oExisting TX SET transactions oExisting Protocols oExisting PUCT rules oUse the Task Force Process oMinimize labor impact oPreference for on cycle reads oPreferred that transfers made on forward cycle read date oTDSPs allowed to recover costs

22 Objectives/Preferred Outcomes (cont.) ERCOT: oSpecific well defined process oMinimize manual aspect oSupported by all the MPs oLeverage what is existing market design/processes oExisting TX SET transactions oExisting Protocols oExisting PUCT rules oAppropriate project cost allocation oLow impact to current day to day processing

23 Objectives/Preferred Outcomes (cont.) Losing CR oMinimize labor impact oClear definition of responsibilities oCommunication oTimely transfer of: oCustomers (REP of Record) oInformation oTransaction flow oFacilitate final bill oMinimize wholesale settlement impact

24 Objectives/Preferred Outcomes (cont.) Gaining CR (REP/AREP/POLR): oLeverage what is existing market design/processes oMinimize manual processes –EX: Spreadsheets oPreferred that on cycle switches be used oMinimize labor impact oClear definition of responsibilities oClosure of population oAbility to schedule and procure supply oLoad information oTimely transfer of: oComplete, consistent, and accurate customer information

25 Summary of Prior Events NEW POWER Transition of customers to TXU and Reliant. Approximately 80,000 predominantly residential ESI IDs. The switches took place on an on cycle basis. The customer’s right to rescission was waived. Took approximately two to four weeks to scrub through the data provided by NEW POWER. Switches (814_01) were cued up so as to not congest ERCOT’s system (batch of 500, then slow ramp up). CRs sent the customers who matched up to the meter read cycle that was closest to on schedule at the time. There was advanced notification to the CRs. Lump sum of data in a flat file that allowed for a systematic data program to be created. The customer was a provided a letter in advance, this allowed for customers to have opportunity to choose. Took approximately four months to complete this process. NEW POWER began the process for this transfer of customers prior to the process being initiated by the CRs (No Surprise to the market). NEW POWER kept the call center open and helped manage the customers (this made transition easier).

26 Summary of Prior Events TCE In accordance with bankruptcy court order it was decided that the assignment of 80% of TCE’s load would transfer to either the AREP or the POLR (predominantly commercial 5,000 ESI Ids), this was intended to be date certain (date certain was close to market notification). This was a Move In (814_16) sent by CRs, to facilitate that it had to be done immediately, date certain, and to alleviate the customer rescission period. Approximately 90% of the Move Ins were submitted in the first week, with 60% completed. At close to a month later a handful of ESI Ids remain unresolved transfer from TCE. Protocols were bypassed for this process. Normal transaction processing did not facilitate a customer’s quick exit from the POLR service. PUCT defined mechanism to transfer customers away from POLR. Interim transactions were cancelled/policed by ERCOT. TCE remained a participating entity in the market throughout and after the process.

27 Observations/Lessons Learned Lead time –Prefer sufficient lead time to allow use of existing transactions on cycle –Current market design does not support short/no notice transition Communication –Daily conference calls work well Data –Standardization is needed for timely transition –Data integrity/quality directly proportional to transaction prep and successful processing timeline –Historical usage information was extremely helpful to REPS –A clear definition or implementation of non-PTB customers is missing –Need to get the correct date and correct REP on the transactions –Lack of synchronized starting point causes delays Transactions –Canceling transactions in flight is a complication and hurts end use customer –Use of move ins creates a reset in some TDSP systems (e.g., historical demand, permits, usage history, critical care flag, etc,)