1 Update from ERCOT Retail Market Services to RMS January 15, 2003

2 Retail Market Update Topics –ERCOT’s Master Project Plan –GISB 1.4 Update –Texas Set Version 1.5 –Market Participant Testing - Texas Set Version 1.5 –ERCOT Data Transparency –ERCOT Registration Update –Market Synchronization Activities –Move-In/Move-Out Task Force

3 Master Project Plan Update

4 Master Project Plan 2003 Planned Projects –41 Projects in progress –4 Projects completed between December 15 th and January 15 th 2002 Project Continuing into 2003 for completion include: –PR ERCOT Transaction Processing Hardening Initiative –PR Amended POLR Process Part I –PR Internal Map Testing and Verification –PR Performance Enhancement –PR Amended POLR Process –PR Outage Scheduler Phase 2 –PR Tx Set V1.5 –PR Simultaneous Procurement of Ancillary Services –PR BULs and Block Deployment of LaaRs –PR Market Synchronization (sub 02 Remove Gap Validation) –PR QSE MOS Enhancements –PR Build Out Plan of Austin Facility

5 Master Project Plan (cont.) Next Steps… –PMO will develop a Project Portfolio Report for executive and market reporting on a monthly basis. –Streamline review/prioritization of new initiatives –Monthly project prioritization adjustments and recommendations: ERCOT Executive Steering Committee Market Committees and Subcommittees ERCOT IT and Business Support Teams –Finalize and distribute Project Portfolio Report

6 GISB 1.4 Update

7 GISB EDM 1.4 Migration Update Connectivity Testing with Market Participants has started –HTTPS/MPCS/FTP Replacement Testing with Sharyland, Occidental, and Tenaska has completed Awaiting a migration date from Release Management –GISB EDM 1.4 AEP, Green Mountain, Oncor, Exolink and TXU are currently in progress. ERCOT has corrected a network configuration issue, which delayed the completion of the connectivity testing.

8 GISB 1.4 Update Internal testing and implementation of a GISB 1.4 interface (PR-20134) at ERCOT is complete Project to migrate Market Participants is under way (PR ) TDTWG has surveyed market participants in order to finalize migration readiness dates –Preliminary migration schedule reviewed at TDTWG –Market Participant connectivity will begin week of ; ERCOT will work individually with participants in any change of date for testing and migration. –Goal is to complete migration by April 1, 2003

9 Texas Set V.1.5 Presented by: Dave Odle Wednesday, January 15 th, 2003

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11 Continuing efforts for Project Success. In Progress –Continued improvements in communication –Project Status and tracking –Working design/functional issues as they are discovered Most have been identified and resolved –Production Implementation Plan –Flight Test coordination with the TTPT and ERCOT Tasked associated to project success. Completed -Production Implementation Plan -Only the Conference Call times still need to be solidified -New Move In Move Out Cancellation Process -ERCOT has made the change and is in progress of System Test -Conceptual System Design Documents have been updated V1.5 Coordination Team Accomplishments/Goals Continued

12 Implementation Plan Objectives –Ensure all parties know the status of the implementation effort –Minimize down time –Work as a team Approach: Big Bang –All parties roll-out ALL 1.5 functionality over the weekend of April 11 th

13 Legend Implementation Shutdown Overview CRs ERCOT TDSPs Wednesday Midnight Thursday Noon Thursday Midnight Friday Noon Friday Midnight 6 hrs14 hrs6 hrs9 hrs1 am 9 pm6 hrs8 hrs6 hrs 814_01, 814_10, 814_16, 814_24 814_08, 814_12, 814_18, 814_20, 814_26 8 hrs2 pm hrs 5 pm hr 650 Initiating will cease on Friday at 5 pm, 650 Responses will cease on Friday at 6 pm 814_PC will cease on Friday at 5 pm, 814_PD will cease Friday at 6 pm

14 Next Steps Begin Monthly Face to Face Meetings (Dates Set) for project status/issues, testing, and Production Implementation fine tuning. –Jan 23 rd (Thursday) –Feb 20 th (Thursday) –Mar 20 th (Thursday) –April 14 th (Monday) – tentative depending on production implementation schedule MARKET Flight TESTING beginning February 24 th !

15 Market Participant Testing Flight Test V1.5 Overview Karen Bergman ERCOT, Manager of Retail Testing & QC

16 Flight V1.5 Overview Planning for this market test began March 2002 TTPT team worked closely with TX SET team and V1.5 Coordination team. Goal of testing: To ensure Market Processes are successfully tested according to testing criteria, procedures established by TTPT, ERCOT and market protocols Scripts were developed by the TTPT to accomplish this goal.

17 Flight V1.5 Overview 3 TDSP requiring end-to-end testing of scripts –AEP (CPL, SWEPCO, WTU) –Centerpoint –ONCOR 3 TDSP requiring ETOD testing of scripts –Entergy –Sharyland –TNMP 1 MC/TDSP will be required to end-to-end test (new MP) –Nueces / San Patricio 2 territories, sharing 1 system

18 Flight V1.5 Trading Partner Facts 14 New Competitive Retailers entering the Texas Market 51 Current Competitive Retailers –31 Systems to be tested (some CRs have multiple names they do business under) 7 TDSP Testing Approx. 150 trading partner relationships to be tested and tracked.

19 Track Testing Flight V Tracks identified for testing –Existing CR –New CR –MC/TDSP –CSA –POLR/AREP –ERCOT (testing concurrent processing)

20 Flight Test Responsibilities Market Test Coordinator –Karen Bergman Functional and technical architect –V1.5 implementation team –Dave Odle –Quentin Wendt – ESP Transaction analysis –Dave Odle –Quentin Wendt – ESP Communicator and facilitator –Karen Bergman Record keeper and data tracker –Karen Bergman – primary –TTPT Chair – secondary

21 Dispute resolution –Following the steps outlined in the Texas Market Test Plan document. Parties should work through disputes and issues first with trading partners. If dispute can’t be resolved in these forums, parties then required to submit a Marketplace Dispute form to Karen Bergman to frame the issue for further clarification and mediation. Qualification authority –Karen Bergman Reporting –Karen Bergman –TTPT chair Flight Test Responsibilities

22 Activities and responsible Parties Pre-Testing Activities and Parties responsible - ERCOT, PUCT, TTPT Daily Flight Activities and Parties responsible - ERCOT, MPs, TTPT Scheduled Activities and Test Schedule Pre-Testing Activities – 10/25/02 – 2/24/03 Daily Flight Activities – 2/24/03 – 4/17/03 Certification Activities - begin upon completion of the v1.5 Flight Flight Test Responsibilities

23 Flight V1.5 Pre-flight Tasks Nov. 21 – TTPT finalize scripts for V1.5 - complete Dec. 5 – New MP orientation - complete Dec. 12 – Current MP orientation - complete Dec. 13 – Deadline for MP to sign up for flight testing (both new and current) - complete Dec. 13 – ERCOT to migrate to V1.5 in ETOD - complete Dec. 18 – MP able to send V1.5 files for ETOD validation – MP and vendors assisting with debugging efforts Jan. 6 – Connectivity Kick off call – complete Jan. 6 – Feb. 14 – Connectivity between TP to complete Feb. 3 – Test Bed loading Feb. 21 – Flight V1.5 Kick off call Feb. 24 – Transactions flow according to scripts

24 Flight V1.5 – Test Timeline Existing Market Participants - 6 week process defined New Market Participants - 8 week process as defined Muni-Coop Participants – 8 week process as defined CRs testing in Additional TDSP territories – 8 week process as defined CRs testing in MCTDSP service territories – 8 week process as defined

25 Questions?

26 ERCOT Data Transparency (ETS)

27 ERCOT Data Transparency ETS Phase I database is beginning to show complete transaction life- cycles as data continues to be successfully loaded. –All lost Paperfree transactions were reloaded as of 12/18 A Project to capture GISB transactions and to report transaction timestamps per Protocol regardless of transport is underway. –Project kickoff Monday January 13, 2003 –Scheduled completion date February 28, 2003 An Impact analysis on TX Set 1.5 changes has been approved. Currently identifying requirements for the Scorecard concept for statistical summary reporting and for making ETS available to Market Participants as part of ETS Phase 2 (projected Q3 2003).

28 ERCOT Registration /QRE Team Transition Update

29 Summary of Quick Recovery Effort 6/10/02 to 12/20/ ,825 ESI IDs submitted. 129,456 ESI IDs resolved. 33,259 ESI IDs are currently “In Progress” 110 ESI IDs are “In Analysis” 0 ESI IDs are in “New Status” Breakdown on the point of failure for resolved ESI IDs: 22,007 cause not reported. 41,713 cause at CR. 31,113 cause at TDSP. 34,623 cause at ERCOT. Quick Recovery Effort

30 QRE Transition Breakdown of “In Progress” ESI IDs: 12/16/02 28,651 awaiting information from (TDSP) 2,695 awaiting information from (CR) 1,913 ESI ID issues transitioned to ERCOT Registration. Effective 12/20/2002 the ERCOT Registration Team assumed responsibility for the resolution of the remaining unresolved ESI ID issues and has began using the QRE Tracking system for all new ESI ID issues submitted to the Registration Team.

31 Registration Update Since transitioning QRE to the Registration Team: 12/20 - 1/9 671 new FasTrak issues were received. 664 FasTrak issues were resolved. New/In progress issues have increased by 7 13,028 new ESI IDs have been loaded from FasTrak to the QRE tracking system. 19,250 ESI IDs have been resolved. New/In Analysis/In Progress issues decreased by 6,222

32 Market Synchronization Activities

33 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 has sent priority 1 through 6 out-of-sync files to TDSPs and CRs –November 11 th face-to-face meeting to resolve “how to fix” set principles to correct out-of-sync conditions –ERCOT has made relationship corrections to ~104K ESI IDs (priority 1 &2) In Progress –ERCOT compiling and analyzing MP responses to out-of-sync files –ERCOT, TDSPs and CRs making corrections per decisions –ERCOT has still not received responses from some Market Participants –Reporting mechanism has been defined. Market Synchronization Retailer Synchronization Project

34 Reporting Mechanism Market Synchronization Retailer Synchronization Project Fix What’s Left in Market Sync “Proper” “TDSP as LSE” Reconciliation Establish DART/QRE Process Documentation

35 Market Synchronization Priority 1 – 1 MP submitted relationship record 13K where ERCOT had a record – Analysis is complete – Recommendations sent to MPs with response of required or action will be taken –Some fixes require additional information from MP 20K TDSP and 16K CR – ERCOT completing analysis for response to MPs by COB Priority 1 – 2 MPs submitted relationship record Originally ~110K, but now at ~6K – Sending fix recommendations to MPs by COB Priority 2 – 2 MPs submitted active row 5,515 where TDSP and CR reported active but ERCOT did not – Analysis in progress with ETC of (depending on response turn-around) Priority 4 – 1 and only 1 relationship record submitted by TDSP, CR and ERCOT (Same CR) Cat 1 – 25K where CR is Stopped, Cat 2 – 21K where CR & TDSP are stopped, Cat 3 – 10K with different start and stop times – All MPs to analyze all data sent and determine action per decisions. ERCOT analysis and fixes ETC is Priority 5 – 1 MP submitted an Active Row 6K ERCOT only, 7K CR Only and 760 TDSP only – ERCOT analysis has not begun – awaiting original response from some MPs

36 Market Synchronization Data Analysis and Resolution Team (DART) Process for Market Sync –CR or TDSP to submit data to ERCOT via FasTrak mechanism utilizing the QRE spreadsheet submission process –File naming convention to reference to Market Sync for tracking purposes – MP to open a new FasTrak issue and preface the “Short Description” with “MARKET SYNC” –Files to be submitted by COB Wednesday January 29, 2003 (Any files submitted after that time will not be included or reported as part of this effort) –ERCOT will quantify, establish workflow process, and reporting/progress tracking starting January 30, 2003 (MPs can contact with questions) –Potential volumes: 20,167 Priority 3 – Multiple Active CR Relationships 22,761 Priority 4 – 1 and only 1 relationship record submitted by TDSP, CR and ERCOT (Different CRs) 10,242 Priority 6 – TDSP, CR and ERCOT submitted active rows but one MP has a different CR of record Additionally, any other Market Sync ESI IDs where the Market Decision can no longer be applied or there or other mitigating circumstance

37 Market Synchronization TDSP as LSE Reconciliation Objective –Ensure that all ESI ID are converted from the “TDSP as LSE” by the time True-Up Settlement of February 2002 begins; which started Completed –ERCOT sent TDSPs list of ESI ID affiliated with “TDSP as LSE” any time after Feb 01, 2002 –All TDSPs have responded to ERCOT original list with suggested corrective action (several iterations of file swapping have taken place) –Approximately 145K ESI IDs had been corrected since August 8, 2002 –1,169 ESI IDs confirmed by TDSPs as active with “TDSP as LSE” past Jan ’02 –TDSPs provided relationship data for final reconciliation by Jan 09, 2003 In Progress –ERCOT will review data and data format submitted by TDSPs –ERCOT will perform reconciliation of ERCOT system data by January 24, 2003

38 Market Synchronization Market Sync “Proper” (Priorities 1,2,4 (1) and 5) –ERCOT maintains the Master Reporting Mechanism –TDSPs and CRs to submit updated response files to ERCOT mailbox 5 business days prior each RMS meeting –ERCOT receives response files and compiles report for each RMS meeting »Response files will be summarized with ESI IDs identified as a “1” considered “In-Sync” or resolved –Completion threshold will be based upon each Market Participant group type reaching a 95% status »ERCOT group »CR group »TDSP group Market Sync – DART/QRE (Priorities 3, 4 (2,3,4) & 6) –To be defined in early February 2003

39 RMS Update on Move-In / Move-Out Task Force January 15, 2002

40 Timelines for approved concepts ERCOT Monitoring –Cancelled with Exception 1/29/2003 ERCOT system impact analysis –Rejects In Analysis Date Reasonableness –12/19/2002 implementation Pending 814_06s –1/31/2003 – ERCOT will implement temporary fix, 1/29/2002 ERCOT system impact analysis Retired ESI Ids –Version 1.6 Invalid ESI ID retry –1/29/2003 ERCOT system impact analysis De-Energize flag (ignore CSA) on Move-Outs –In analysis ESI ID Start/Eligibility Date –In analysis

41 Invalid ESI ID Rejects Approved by RMS on October 16 th –Expediting ESI ID Creates - A report by TDSP by percent of Invalid ESI ID reject to total 814_16 transactions will be made available to RMS prior to each RMS meeting for an undetermined period of time. The report will encompass a two-week time frame as close as possible to the RMS meeting (not too far in the past). This report will be provided by ERCOT –December 20th through January 3rd Total 814_16sPercent Invalid ESI ID –AEP % –Centerpoint % –Oncor % –Sharyland % –TNMP % –4 out of 5 TDSPs showing improvement over last report

42 MIMO Workshop Progress –33 Concepts have been discussed 13 Concepts were dismissed for various reasons 1 Concept was determined as solved in Version Concepts were combined into other concepts 16 Concepts in Task Force –6 Concepts approved by RMS on 10/16 –3 Concepts approved by RMS on 11/14 –2 Concepts approved by RMS on 12/18 –5 Concepts are currently tabled until additional information can be obtained

43 Next Steps MIMO Taskforce meetings as needed –Discussions on concepts for resolving existing issues –Discussions around concepts for handling stacking Recommendations at future RMS meetings –Additional Concepts Follow-through on execution of approved concepts Release of implementation timelines Coordinating test flights with TTPT as appropriate Development of Texas Set Change Controls, Protocol Revision Requests, and RFP (If necessary) Deployment of Solutions Re-Evaluation of Move-In/Move-Out processes

44 Stacking Definition: a method that allows ERCOT to accept (and process) multiple and valid Move-Ins, Move-Outs, Switches, Drop to AREPs, Cancels, Date Changes, and Continuous Service Agreements in date sequence as defined by TDSP response. The assumption is that all parties will be able to manage multiple non-sequential Business processes concurrently on a single ESI ID. Benefits –90+% reduction in NFI rejects –Reduces volume of Safety Net Move-Ins –TDSPs can accept Same CR Move-Ins Point-to-Point –Manages customer expectations (Dates, billing, etc.) –Fewer back-dated clean up efforts –Fewer Cancel/Re-bills –Helps keep systems in sync –Reduces transaction volume –Shortens Business Process Lifecycle timeline –Improves transaction reliability

45 Reversing the effects of Move-Ins and Switches Concept remanded to Move-In Move-Out task force by RMS on December 18 th Re-evaluation of Customer Protection rules requiring additional analysis by the task force – (n) (3)…the REP that initiated the unauthorized change shall: …pay all charges associated with returning the customer to the original REP …pay the original REP the amount it would have received from the customer …refund any amounts paid by the customer …cancel all unpaid charges. – (n) (4)…The original REP shall …maintain a record of customers that experienced an unauthorized change in REP [including] …the name of the REP that initiated the unauthorized change …not bill the customer for any charges the customer incurred during the first 30 days after the unauthorized change …but may bill the customer for charges that were incurred after the first 30 days…

46 Thank-you