Retail Market Update June 5, 2003

1.New meter is requested for a specific customer’s location. 2.Application is filed by customer and/or the customer’s meter representative to ERCOT Settlement Metering Group. Document submittals shall include: –Certification of compliance with applicable ANSI standards. –Letter from manufacturer indicating that they will supply free programming software & adequate training to TDSP within 30 days of receipt of meters. 3.ERCOT reviews the application for completeness, and to determine if information to demonstrate ANSI compliance has been submitted. –If accepted, ERCOT forwards application to TDSP 4.ERCOT notifies the market of submittal. 5.TDSPs will test meter using applicable standards and share data with other TDSP’s and ERCOT. Information will be made available to other Market Participants upon request. 6.ERCOT approves application based on positive recommendation by a minimum of 80% of TDSP’s, otherwise application is rejected. –If approved, meter is added to list. –If rejected, ERCOT will provide TDSP documentation to the applicant of the specific reason(s) for rejection.. Note: Appeal to PUCT is available for all parties. TDSP’s refers to TDSP’s where competitive metering is available Meter Approval Process

1.TDSP notifies the manufacturer of product issue. 2.If the product issue involves non-compliance with ERCOT approved competitive meter standards, TDSP shall notify ERCOT of the issue and the manufacturer’s response to the issue. 3.ERCOT reviews issue. 4.ERCOT confirms non-compliant product issue. 5.ERCOT sends a notification to all TDSP's, and to the meter manufacturer, if issue is confirmed. 6.Manufacturer must resolve issue with TDSP's and ERCOT, during which time further meter installations may be placed on hold. If resolved, remove meter from hold status, and Meter Issue Resolution Process is complete. 7.If not resolved, ERCOT creates de-certification form based on unanimous recommendation from TDSP’s. 8.ERCOT removes meter from ERCOT approved competitive meter list. Note: Appeal to PUCT is available for all parties. TDSP’s refers to TDSP’s where competitive metering is available Meter Issue Resolution Process

Meter functionality shall meet the latest revision of ANSI standards as approved by ERCOT. All meters shall meet C12.10 and either C12.1 or C12.20, without exceptions. Meters shall have a minimum of three password levels: a) Programming, b) Read only, demand reset, and time syncing, c) Read only Meets firmware functionality as defined by ERCOT and as documented by manufacturer. Meets TDSP billing determinate requirements Conforms to TDSP meter reading/operating/billing systems Note: TDSP’s refers to TDSP’s where competitive metering is available Competitive Meter Standards

COMET Resolution RMS requests TAC approval of the Meter Approval Process, Meter Issue Resolution Process and Competitive Meter Standards as previously approved by COMET and RMS.

Revised Testing Timelines

Resolution for Test Flights RMS requests TAC approval of the revised Market Testing timelines for Flights 0703 and Flight 1003 as adopted by the TTPT and the scope of Flight 1003 which will include TX SET Version 1.6 and COMET changes. RMS further directs that any material changes to these timelines or changes in scope of the test flights must be approved first by RMS and then approved by TAC.

Load Profile Guide Modify language in Load Profiling Guides to better represent how Direct Load Control will be implemented in the retail market place. A summary of the requested procedural changes to implement Direct Load Control are: Adding and clarifying detailed Direct Load Control implementation information, Modifying language to be consistent with the revisions made with respect to profiling ESI IDs in Direct Load Control, Minor wording changes coinciding with revisions in Protocols Section

Load Profiling Guides RMS requests TAC approval of proposed changes to Section 16.2 of Load Profiling Guides dealing with Direct Load Control.

Heads Up #1 During Texas SET 1.5 market testing, an existing market participant failed to complete the necessary testing to obtain their 1.5 certification. After much discussion at RMS, PUCT Staff agreed to investigate what actions the Commissioners might take if an existing CR, new CR or an existing TDSP failed to certify.

Heads Up #2 TDSPs and ERCOT have filed and distributed to their trading partners first quarter 2003 Market Metrics. Included were meter readings, enrollments, billing, invoices, customers served by Non-AREPs and REPs in a TDSP territory. Market participants are already fine tuning the measurement formulas, definitions, etc. for the second quarter 2003 filing.

Heads Up #3 RMS formed three new task forces. 810/820: Addressing operational problems with TDSP invoice and CR payments. 810/867: Addressing operational problems with TDSP invoice and the associated usage transactions Transaction Performance Improvement Initiative: Identify processing gaps within Protocols, Tariffs and Substantive Rules; Develop escalation process to ensure timely management of transactions and Develop market mechanism for transaction processing accountability.