Information Technology Update ERCOT Board of Directors Meeting January 17th, 2005

page 2 System Outage Time line Outage Time line 12/25 9:29 pm First drive fails Replacement scheduled by 10:37pm 12/26 5:34 am Second drive fails 12/26 1 pm NAESB Recovery begins Assessment, recovery planning 12/26 10:30 pm 1 st market notice sent 12/27 11:00 pm TCH Recovery begins 12/28 2:00 am NAESB transactions started 12/30 12:00 am TCH Online 1/1/06 11:15 pm Retail Systems online 1/4/06 Siebel Daily Extracts Posted Replicated Lodestar Current 1/5/06 Siebel Full extracts posted Recovery completed (extracts) 1/15/06

page 3 System Outage What Happened? RAID – Redundant Array of Independent disk RAID 5 - Block Interleaved Distributed Parity: Provides data striping at the byte level and also stripe error correction information. This results in excellent performance and good fault tolerance. Level 5 is one of the most popular implementations of RAID (Webophedia 2006) Data Parity Spindle (ERCOT runs more than 2000 spindles in SAN environment) RAID 5 Array Track Each spindle contains usable data and parity data for other drives in the array. If one drive fails, the parity data on the other drives rebuilds the missing drive from the parity tracks of the working drives. First drive failed 12/25 at 9:29 Second drive failed 12/26 at 5:34 Note: 1 additional drive for parity indexing not depicted

page 4 System Outage Review Steps Data Storage Management  Processes —EMC (Data Storage Vendor) engagement Staff augmentation and consulting Administer storage environment Review ERCOT storage processes and procedures Recommend changes per “Best Practices” if appropriate  Technology —“Hot Swap” implementation —Third layer of protection  People —Review of skills in Storage area —Provide additional training if needed —Review of Management structure

© Property of ERCOT Market Redesign Time line and Critical Path For effort estimation assumed 1/1/2009 for Go Live With 3 months for Pilot and 6 months for Mock Market, 27 months remain to complete all Nodal projects A number of Nodal projects are now on the critical path (require ~27 months to deliver) NMMS, NSA Enhancements, Settlements and Billing, EDW framework, and Nodal training

© Property of ERCOT Market Redesign Project Cost Estimate  Ground Up Approach ~735,000 estimated hours 86 projects/initiatives anticipated ~50 ERCOT employees require backfill ~40 external contractors  Project cost $95 - $130 million Previous CBA $59.4 – 76.2 million Key differences Hardware estimated around $40 million Several minor differences in labor and assumptions CA-ISO publicly disclosed estimate $139.2 million

© Property of ERCOT IT Update Accomplishments  Improved Change and Release Management  Capacity Plan development  Key upgrades/implementations Release 3 and Release 4 LodeStar 3.7 Siebel 7.7 Texas Set 2.1  Service Oriented Architecture  Market Redesign efforts Protocol reviews Readiness planning  Outstanding group of people across all of ERCOT!!!