1 Update from ERCOT Market Services for TAC October 3, 2002

2 Retail Market Update Topics –ERCOT’s Master Project Plan –Move-In/Move-Out Issues/Initiatives –GISB 1.4 Update –Transaction Transparency (ETS Update) –Quick Recovery Team Update –New Power Transfer Update –Market Synchronization Activities –Consumption Data Loading Reports –Lodestar Data Loading Improvements –Resettlement Update

3 Master Project Plan Update

4 Master Project Plan All Known In-flight & New Projects identified –Related project worksheet established with list of all known projects Status/Updates Targeted outcomes Resources (Funding & Headcount) required identified where known –Internal reviews of projects with ERCOT steering committee completed –Consolidated list of all active and planned projects distributed to TAC, subcommittees, and PUCT on August 20 th –PRS completed prioritization of projects originated by Market Participants on August 28 th –TAC approved list of priorities on September 5 th –List delivered to ERCOT BOD targeted for approval at October meeting Next Steps… –ERCOT resources are being aligned with recommended priorities –Initial hiring underway –Synchronize with the 2003 budget/plan when approved

5 Move-in and Move-out Short Term Solutions Update

6 Safety Net Move-In: First part was remanded to QRE. Second part is not being acted upon because it requires ERCOT to process all the MIMO Safety Net Spreadsheets rather than TDSPs Move-in/Move-out Short-term Solution Status RMS has agreed to consider the following items Closed with the analysis remanded over to the Long-term MVI/MVO Working Group… Provide Visibility into ERCOT’s Systems Splitting Move-In from Switch NFI Rejection Codes Expedite ESI ID Creation (7A-ERCOT's portion) RMS is being asked to Move the following items to the Long-term MVI/MVO Working Group Cancellation of Pending Switch CR Holding Move-In Transaction “X” Number of Days Expedite ESI ID Creation (7B-Oncor’s portion)

7 Move-in / Move-out Long-term Recommendations

8 Move-in/Move-out Long-term Solution Status Completed Established task force of market participants on September 5 th Reviewed additional root cause analysis by MPs 3 working sessions over the next several weeks with MPs. 1 st is September 24 th -25 th. –AEP TDSP, CenterPoint, Reliant Retail, Coral Power, GEXA Energy, and Republic Power Next Steps Develop comprehensive list of business scenarios not addressed by short-term solutions Develop detailed requirements for long-term resolution in preparation for RFP and subsequent implementation Scheduled working sessions with –Week of 9/30 - Oncor,TXU Energy, Exolink, Texas Commercial Energy, AEP Retail, Entergy Solutions, –Week of 10/7 - Entergy Gulf States, EC Power, Constellation New Energy, Green Mountain, TNMP. Possibly others.

9 Why Root Cause Analysis? Ensure problem resolution investments are consistent with what greatest value to market Confirm that current market design/implementation is viable –Confirm detailed understanding of causes Errors in current systems implementation Protocol/procedural gaps Execution issues at ERCOT and Market Participants –How are ERCOT’s systems built? –Confirm TDSPs have consistent design Confirm current system’s performance and transaction sequencing Move-in/Move-out Long-term Solution Status

10 Timeline RMS establishes Task Force Kickoff Meeting – assignments given for MP transaction root cause analysis Complete root cause analysis and comprehensive list of business scenarios Develop detailed requirements document for RFP -RMS Approves MIMO requirements document -Release RFP to vendors -RFP Responses due from vendors -Summarize vendor responses for Task Force review -Recommendations to EOTF on vendor “Short List” -Vendor presentations to Task Forces -EOTF recommendation to ERCOT Board -Begin contract negotiations End 1Q03Award contract Move-in/Move-out Long-term Solution Status

11 GISB 1.4 Update

12 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, –targeting 1 st full week in October for preliminary market participant tests TDTWG is surveying market participants to finalize migration readiness dates –ERCOT will publish preliminary migration schedule and plan by the end of October. –Expecting first market participant migration in late November. –ERCOT will plan to migrate 2-3 participants per week per the schedule and based on market participants readiness –Goal is to complete migration off of FTP by April 1, 2003

13 Transaction Transparency ESIID Tracking System (ETS)

14 ERCOT Visibility Phase I & II Phase I Progress –Production Database Server and Application Server has been ordered –Development Database Server and Application Server are configured and installed on the network –Report Development 95% complete –String Testing is complete –Testing in ITEST underway –On schedule for November 1, 2002 Phase II Progress –Began work on Requirements Document –Modifying initial cost estimates for PUCT Data Requirements (Scorecard) –Summarized Market requirements for data content –Internal Project Kick-off meeting scheduled for October 3, 2002 –Seeking funding and approval from ERCOT Board for 2003

15 Quick Recovery Team Update

16 Quick Recovery Effort Period for Investigation Expanded January 1, 2002 – July 31, 2002 QRE is proactively working the Siebel extract report for all Business Processes from the period July 1- July 31 that are still showing up as Scheduled on the ERCOT report. QRE will be working with Data Management to assist in clearing FasTrak issues prior to July 31, QRE will take direction from Data Management – it is not necessary for MPs to do anything. QRE is working to set up weekly status conference calls with each MP to review QRE progress.

17 Created FasTrak issue for all TDSPs to provide a consolidated spreadsheet for all QRE requests for information or data TDSP responses to request for transactions are uploaded and tracked in QRE database Pursuing responses from CRs and TDSPs ~8,761 ESI Ids are awaiting more information or acknowledgment of closure from CR ~21,258 have been sent to TDSPs for investigation Documentation is being created to outline processes used by QRE team to ensure consistency and allow for team knowledge transfer to ERCOT Training materials are being created and assembled to pilot on ERCOT new hires Quick Recovery Effort

18 ESI Ids Reported to QRE (as of October 1, 2002) Current StatusQuantity New 6176 In Analysis 6703 In Progress37724 Resolved69156 Total EntityQuantity TDSP21258 QRE Team 7705 CR 8761 Total37724 Point of FailureQuantity Cause Not Reported 3667 CR32733 CR Failure 284 ERCOT 1083 ERCOT EAI 267 ERCOT FTP 696 ERCOT Manual Process (814_08) 3349 ERCOT Out of Protocol 26 ERCOT PaperFree 7686 ERCOT Siebel 963 ERCOT TCH 6626 TCH to Siebel Failure 1 TDSP TDSP Failure 788 Total69156

19 New Power Transition Status

20 New Power Transition Status 4-“In Review” 25-“Scheduled” 2-CR to Resubmit 31-TOTAL Remaining ESI ID’s as of October 2 nd

21 Market Synchronization Activities

22 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 10 th 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 sent priority 1 and 2 out-of-sync files to TDSPs and CRs –Sept 17 th and 24 th conference calls to set file analysis response timelines for TDSPs and CRs, discussion of progress and open issues In Progress –ERCOT sending priority 3-6 out-of-sync files to TDSPs and CRs by October 4 th –TDSPs and CRs to send analysis of priority 1 files by Sept 26 th and priority 2 files by Sept 30 th –TDSPs and CRs analyzing files received from ERCOT –Weekly conference calls scheduled. Market Synchronization Retailer Synchronization Project

23 Market Synchronization Retailer Synchronization Project Considered In Sync 5,279,063 Under Analysis 859,836 Non-ERCOT area Removed from Analysis 945,000 ESI IDs

24 Next Steps –October 1 st, 8 th, 15 th  Follow-up Conference Calls  Define items for immediate “fix” and report on progress  Define issues to raise to RMS –October 16 th  Present any disputed scenarios to RMS –November 7 th  Escalate issues to TAC (if required) Market Synchronization Retailer Synchronization (continued)

25 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 –1,133 ESI Ids (>1 MW) identified by CRs (meeting the April 30 deadline) Number increase attributed to reconciliation of lists with Market Participants – 951 (84%) ESI IDs are corrected – 74 ( 7%) ESI IDs were agreed not to fix by TDSP and CR In Progress –108 (9%) ESI IDs remaining to be fixed 91 where CR and TDSP agree to fix 17 where CR and TDSP are not in agreement – CR will have to escalate

26 Market Synchronization – Non Price to Beat Next Steps –ERCOT to continue to confirm changes in Siebel and Lodestar –Round 2 of analysis in progress at ERCOT –ERCOT will provide suggested next steps to the submitting CR and TDSP –Scheduling conference calls with TDSP to determine next steps for those ESI IDs that still need to be fixed (ERCOT metering team included on calls) –CR to escalate ESI IDs where no agreement exists

27 Consumption Data Loading Reports

28 IDR Data Loaded into Lodestar August 27th Report 95% or better expected 75%

29 IDR Data Loaded into Lodestar September 24 th Report 95% or better expected 91%

30 IDR Data Status Report September 24, 2002

31 Non-IDR Data Status Report September 23, 2002

32 Lodestar IDR Data Loading Improvement Recommendations by TDSPs

33 Objective –Implement process improvements which alleviate problems loading IDR data into ERCOT’s Lodestar system Completed Items –ERCOT and MPs met August 15 th to define scope of 9 items –Conference call held on August 26 th to refine scope and follow-up –6 items are complete (see matrix on next page) –TX SET reviewed 2 EDI related recommendations on Sept 16 th (see matrix) In Progress –2 items defined for immediate action (both are currently in test) –4 items defined as long term fixes (project request being drafted) Next Steps –Seek project funding and priority approval. IDR Data Loading Recommendations by TDSPs

34. IDR Data Loading Recommendations by TDSPs

35 Resettlement Update

36 Objective Identify and track the key critical market issues needing resolution prior to the resettlement calculations of true-up statements for trade days beginning with July 31, –Re-settlements started the night of September 4 th. –50 re-settlements have been posted. Six Issues/Status: 1.IDR Data Loading – 100% for market through Sept 09, NOIE IDR Data Correction – Completed and verified by TDSP 3.Profile ID Corrections – All TDSPs now pass the acceptable criteria 4.Lodestar and Siebel Status Mismatches – Complete for 2001 dates 5.TNMP and AEP have completed negative consumption fixes 6.Outstanding OOMC Disputes – QSEs have submitted corrections (reduced payments apply otherwise). Resettlement of True-up Status Update Statistics will continue to be monitored for compliance