ERCOT IT Update Ken Shoquist VP, CIO Information Technology Board Meeting August 2003

July 2003 page 2 Agenda  Metrics  Project Updates  Security  Texas Electric Market (TEM) Forum Update

July 2003 page 3 IT Highlights  Production – 27 missed intervals in EMMS environment (approx 1%) due to flawed code and internal processes. Vendors working code issues. ERCOT and Vendors working process issues.  Development – Continue to analyze architecture evolution. Issues of data access and quality, performance, and vendor support continue to remain as high priority. Architecture evolution will need to strike appropriate balance between focus on Market Redesign and IT Operations.  Security - Role of ERCOT Security continues to evolve in supporting Market.  Texas Electric Market IT Forum – Superior speakers and content; 118 Market Participants registered.

July 2003 page 4 EMMS 2003 Mission Critical Unplanned EMMS Outages Ceiling Target EMS and MUI 45 minutes (99.9%) Outage Minutes Intervals Missed Ceiling Target 3 RTB Intervals System Reliability  4 distinct software issues caused 27 intervals to be missed in July:  2 resolved by Alstom (EMMS vendor)  1 resolved by HP  1 issue remains under investigation

July 2003 page 5 Transaction Processing  Infrastructure changes for performance continue with good results. Next major step will be investment in support of Data Warehouse effort scheduled for end of year.  Lack of high availability continues to be a challenge. This will need to take a higher priority in project list.  All major Commercial System Components are either on outdated application releases and/or are operating on unsupported versions of the Oracle Database. The operational impact with respect to data quality, performance, reliability, and support cost will continue an issue until resolution. Business and IT have joint plan in place for driving resolution. Includes all 32 transaction types Retail Transaction Volumes (In Millions) January - July 2003

July 2003 page 6 Reporting Performance 2003 Report Posting Settlements  Volume increase represents BOD mandated resettlements of 2002 that began in mid-May and will continue through year-end.  Settlements success rate has decreased June to July due to increased volume issues, batch timing, and hardware and software implementations.  Performance improvements made in August are expected to reduce resource contention and batch processing time. Next level of tuning due by end of Q3.

July 2003 page 7 Change Request by Area January – July 2003 Change Requests by Area Total Monthly Change Requests January – July 2003 EMMS 36% Commercial 34% Data Warehouse 8% Corporate Apps. 19% Web Portal 3%  Commercial Paperfree server upgrade SeeBeyond outage  EMMS SPD Code Errors Alstom user interface code error Hardware upgrade Real-time balancing error Digital certificate renewal July Outage Summary

July 2003 page 8 IT Project Performance IT Project Updates Projects Deployed in July 2003  Year-to-date Priority 1 and 2 Projects: 32 complete, 17 in progress, and 19 in planning  Combined Cycle Settlements – PRR 369 for settling combined cycle plants  Outage Scheduler Phase 2 – Enhancement to Outage scheduler for operations  Internal Map Testing – EDI map testing and verification automation  SCADA Transmission Alarms – Enhance alarms for operations. Monthly ActivityProject Performance

July 2003 page 9 Upcoming Deployments  PUCT Market Monitoring Plan (Aug 2003)  QSE Market Testing (TBD) Increase availability Increase functionality  Portal Replacement (Oct 2003)  Portfolio Mgmt Software (Nov 2003)  Document Management (TBD)  Lawson G/L Upgrade (Dec 2003)  Enterprise Data Warehouse (TBD)  BUL / LAAR (Sept 2003)  Load Research Sampling (TBD)  Mismatched QSE Schedules (Aug 2003)  Commercial Dev/Test Systems (Nov 2003)  MIMO Long Term Market (Aug 2004) Market Coordination Team formed Requirements being finalized  Texas Set 1.6 (Dec 2003) Energy Management Systems Enterprise Operations Settlement & Billing Transaction Processing

July 2003 page 10  Project Objective: Support the PUCT requirements to effectively monitor the ERCOT market Joint effort between PUCT, ERCOT, Alstom and Potomac Economics  Business: Planning phase completed. Detailed work plan defined. High- level architecture has been defined. General project requirements have been collected. Initial data requirements have been compiled. First draft on design documents completed (per schedule).  Technical: ERCOT Infrastructure, Network and Security teams preparing for project implementation. ERCOT to host systems and provide data. Alstom and Potomac Economics locations will be linked by a secure direct connection to ERCOT’s site. Install & test 4 weeks Today Ship PUCT Market Monitoring System

July 2003 page 11 ERCOT’s Security Team Manager, Physical Security (Former FBI Agent) Manager, Cyber Security (Former State of Georgia CISO) Director, Corporate Security (Former Naval Cryptologist)

July 2003 page 12 Department of Energy NERC/ CIPAG ISO CIO Security Committee ERCOT Members State Agency Educate on Best Practices / Standards Provide Forum for Information Sharing Coordinate Security Incidents Distributing Information from Federal and State Agencies Solicit Federal and State Funding Where Appropriate Represent ERCOT Market’s Interest to Federal and State Agencies Growing Interest in ERCOT Security Role in Texas Market Department of Homeland Security Federal Bureau of Investigation U.S. Secret Service

July 2003 page participants registered 43 unique companies 79% ESIIDs represented 83% of load Dynamic Guest Speakers Security Focused Dept of Homeland Security FBI Secret Service California ISO New England ISO Public Utility Commission of Texas IT TEM Forum

July 2003 page 14 Austin Energy Brazos Electric Bryan Texas Utilities CenterPoint Energy Cirro Energy City of Bastrop City of Georgetown Coral Power El Paso Electric Energy America Entergy Solutions Ltd Fire Fly Electricity FPL Gexa Energy Green Mountain Energy Company HILCO Electric cooperative Inc. LCRA New Mexico Natural Gas LP d/b/a StarLight Electric Occidental Petroleum Oncor Pedernales Electric Cooperative Public Utility Commission of Texas Reliant Resources Inc. Republic Power Sempra Shell Trading G&P North America South Texas Electric Coop Strategic Energy Taylor Electric Cooperative Tenaska Inc. TESI Texas Commercial Energy TNMP TNP Enterprises Tractebel North America Inc. TXU Energy Utility Choice Electric TEM Forum Market Participants

July 2003 page 15 Summary  Production Management: Resettlements will continue to focus development on tuning and capacity planning. EMMS Stability remains high priority for improvement.  Commercial Systems Architecture: Working with business to define requirements and select evolution path. Data Warehouse will complete first phase late ’03.  TEM Forum: Shaping into significant information sharing event. 118 Market Participants registered.