Credit Monitoring and Management Status TPTF December 17, 2007

Slide 2 TPTF Meeting December 17, 2007 Agenda Project Status –Release Approach CreditRisk Architecture Planned Release Phases –Current Status –Vendor Relations Where CMM Fits in Nodal & EDS Project Interactions with TPTF

Slide 3 TPTF Meeting December 17, 2007 Project Status – Release Approach Credit Risk/CMM Architecture Common Configurable Functionality for all ROME Customers Custom Exposure / Management Functionality Specific to ERCOT CreditRisk DB Integration DB Counter-Party Maintenance Financial Statement Reviews Credit Rating Credit Score Credit Limits Collateral Management Workflows Calculate Current & Future Credit Exposure Calc Calculate Average Daily Prices Integration to Nodal Systems Credit Reporting ERCOT Specific ACL and Collateral Management Default Analysis Credit Analytics Backcasting Base Product Functionality Integration Layer Functionality

Slide 4 TPTF Meeting December 17, 2007 Project Team Raj Chudgar Program Director Cheryl Yager ERCOT Treasurer Executive Sponsor Vanessa Spells Credit Manager Rizaldy Zapanta Credit Analyst Srini Sundhararajan Senior Financial Analyst Sylvia Shiroyama CMM PM Tom Keney Business Systems Analyst Bill Kaspar IT Application Support M. Poythress UI Designer / Test Engineer David Swartz DBA Vera Weber Test Manager S Pabbisetty M Gaddam R Somavarapu J Motheral D Komandla G Hegedus 2 INT Test Automation Engineers Dickey Triche ROME PM 5 ROME Developers Vendor employeeERCOT ContractorERCOT employee Direct Report Matrix Report

Slide 5 TPTF Meeting December 17, 2007 Project Status – Release Approach Release Phases 1.Base Product Functionality (see prior architecture chart) 2.Custom Calculations 3.Nodal Integration – EDS 4 Requirements 4.Custom Management Functionality 5.Back-casting

Slide 6 TPTF Meeting December 17, 2007 Current Status – Part I Base Product Release – completed FAT 8/31/07 Custom Calculation Release – in FAT (as of 12/12/07) – 441 test scripts – 399 executed – 353 passed – 8 open: 2 sev 2, 4 sev 3, 2 sev 4 – 15 ready for retest: 4 sev 1, 5 sev 2, 5 sev 3 – 15 closed – 8 deferred: 1 sev 3, 5 sev 4, 2 sev 5 – Expected completion w/ regression testing – 12/21/07 Originally scheduled to complete 10/26/07 –Complexity of calculations –Complexity of ensuring coverage in test scripts –Complexity of data preparation

Slide 7 TPTF Meeting December 17, 2007 FAT Statistics – Custom Calc Release

Slide 8 TPTF Meeting December 17, 2007 FAT Statistics – Base Product Release * Remaining open defects were deferred to future releases * * *

Slide 9 TPTF Meeting December 17, 2007 Current Status – Part II Nodal Integration –Requirements Complete for CRR, S&B, Registration In process for CSI/MMS, in concert with S&B –Detail Design – in process for integration layer –FAT – target entry 1 st quarter 2008 to match EDS drops Custom Management Functionality –Currently defining detailed specifications –Functionality deliveries through 2 nd quarter 2008 Back-Casting – 3 rd quarter 2008

Slide 10 TPTF Meeting December 17, 2007 Vendor Relations Vendor – Excellent delivery record Responsive Within authorized budget

Slide 11 TPTF Meeting December 17, 2007 Interactions with Market Participants During EDS 4 Where MPs Will See CMM during Market Trials –Direct Visibility: ACL Postings via MIS -.pdf ACL reports CRR Auction Credit Limit allocations CRR Bilateral Trade Approval DAM Bid Credit Limits –Indirect Impact via inputs to Credit Calculations CRR Inventory S&B Settlements Statements, Invoices and Payments DAM and RT Transactions

Slide 12 TPTF Meeting December 17, 2007 Where CMM Fits in Nodal & EDS4 2 4 Registration EDW CMM Interfaces 1 : Creditworthiness 2: ACL 3: CRR ACL 4: Residual ACL 5: MP ACL Reports (MIS) 6: DAM activity & prices 7: RT activity & prices 8&9: Settlement Statements, Invoices, Payments 10: Replication 10 MIS 5

Slide 13 TPTF Meeting December 17, 2007 CMM Project Interactions with TPTF Status of Document Reviews –Requirements and CSD have been approved thru Baseline 1 –No updates required for Baseline 2 –Detail Designs for Base Product implementation and Calculations available now No others currently scheduled What else do you want to hear about?

Slide 14 TPTF Meeting December 17, 2007 Summary Good team working well together Good vendor product and support Going slower than expected due to: –Complexity of calculations –Capturing currently manual business processes –Complexity of defining data integration –Constrained resources –but … On target to meet EDS dependencies

Slide 15 TPTF Meeting December 17, 2007 Questions?