September 25, 2007 TPTF Meeting Texas Nodal Program Update Jerry Sullivan

2 2 Texas Nodal Program UpdateSeptember 25, 2007 Agenda ItemPurposePage Program StatusFor Information3 Deliverables UpdateFor Information4 Follow up EDW questionsFor Information5 ERCOT Readiness – Organizational Design Update For Information6 Market Readiness UpdateFor Information7 EMS Deliveries - OverviewFor Information8 Integration Testing Leadership TransitionFor Information9

3 3 Texas Nodal Program UpdateSeptember 25, 2007 CostScheduleScope / Quality Legend Summary Overall program status remains amber Green Additional costs (Integration, Release Management, MMS, BL 1 & 2, and Internal Allocation) exceeding existing contingency Forecast is about $10 millions over 263 but plans being made to reduce costs. Amber Currently fully aligned with protocols. Red Amber Green Estimate at Complete = <$263m Estimate at Complete = < $263m + 10% Estimate at Complete = >$263m + 10% Go-live = 12/1/08 Go-live = <30 days+ Go-live = >30 days+ Program is aligned with current protocols Program is aligned to previous protocol version Program is not aligned to protocols Current EDS 1-3 milestones being achieved and are on track. On track to achieve near-term milestones. EDS 4 milestones still at risk due to MMS schedule. Scope/ Quality Schedule Cost Nodal Delivery Nodal Delivery Amber Current product quality is not sufficient for Nodal launch Most Nodal products currently achieve quality standards All Nodal products currently achieve quality standards Significant design issues still open with MMS solution. 100% Success Rate in EDS3 R5 “SCED Testing” QA plans for EMS, MMS, OS in for review

4 4 Texas Nodal Program UpdateSeptember 25, 2007 Tactical deliverables and actions #TopicSolution/Action 1MMS Working with vendor to improve confidence in MMS schedule deliveries; EDS 4 still at risk All design issues for the 30Nov07 release have been addressed with vendor; approximately 50 open design issues still being negotiated Commercial implications still pending for remaining MMS deliverables; 31Oct07 planned completion Third iteration of mutual detailed plan to be delivered this week for review and validation by ERCOT Working with other Nodal teams to ensure EDS 4 can start on schedule (early involvement from integration and testing) 2 EDS 1 Start: 6/4/07 End: Revised to Oct 15 th for 99% Revised to Nov 15 for 100% Confidence in achieving the milestone is High: 95% complete with P2P, with 4% error rate All QSEs will be completed and tested by 10/1, except for Austin Energy (currently upgrading their EMS) Expect to regression test quality code correction with MPs in early October Local ICCP Fail-over scheduled for this week and next 3 EDS 2 State Estimator and Telemetry Start: 9/4 End: 12/31/07 EDS 2 R 3, SE tuning activities started on 9/7 as planned TAP estimation to be reconfigured / software corrected by end of EDS 2 Release 3 We need help in the SE Tuning; drafting a SOW for AREVA resource to help 50% of QSEs ICCP feeds to Nodal are not active 4 EDS 3 EMS interfacing with SCED Start: 8/24/07 End: 7/15/08 Confidence in achieving the milestone (11/1) is Medium (EMS to MMS) Cross project team working to complete build and conduct end to end testing – progress being made via concentrated team Delivery of SCED reports, confidence is medium – MIS team working with EMS, MMS and EIP to ensure delivery of reports Developed consolidated list of data elements, assigning responsible parties for delivery (Network Model, Registration, EMS, MMS); will probably require ongoing effort to finalize data Investigating functionality to support ICCP handbook – ERCOT to QSEs (Hub and Zone LMPs) 5EDS2 R4 NMMS NOMCR Start: 11/1/07 End: 3/31/08 Confidence in achieving the milestone is Medium, with known challenges (data reconciliation and validation, AREVA load capabilities, MP availability) Phase 1c delivery at end of Sept 2007 being pushed to Mid-Oct; Defining testing approach to leverage system functionality in the order it’s delivered EDS Hardware for NMMS purchased, ready 10/1/07

5 5 Texas Nodal Program UpdateSeptember 25, 2007 Follow up on questions about EDW – Why do we have performance issues currently in Zonal EDW and how will Nodal resolve those issues? CategoryZonal ProblemsResolutions for Nodal Limitations with Design/ToolsSharePlex database replication tool being used in Zonal has experienced multiple technical issues Lack of support from vendor SharePlex tool is being replaced by GoldenGate solution/tool that will address limitations of the current toolset Poor Growth and Demand PlanningEDW is plagued by ERCOT’s lack of proper space & power planning Nodal EDW design is incorporating longer-range power and storage planning Lack of Processes for DeviationsDesign of the current EDW processes also focused heavily on “happy path” and not as much on deviations from that path EDW team working to account for all possible paths of data replication, transformation, and report generation Human ErrorMultiple human interventions are required in the current EIS process, leading to manual error in some instances Human interventions are being replaced by automation where possible Changes are being incorporated into the design of Nodal EDW solutions

6 6 Texas Nodal Program UpdateSeptember 25, 2007 ERCOT Readiness (Org Design) Over the next 15 months, ERCOT will undergo a series of activities in order to ensure proper organization size and organization alignment ERCOT will report progress via Readiness Advisor Metric (E8) which measures ERCOT’s readiness from an organization design (staffing) perspective Activities ERCOT has already completed several iterations of organization sizing analysis, specifically related to the 2009 budgeting process ERCOT is undertaking ongoing analysis to refine organization sizing requirements Future activities might include hiring plans, job descriptions, or organization charts

7 7 Texas Nodal Program UpdateSeptember 25, 2007 Market Readiness Update – Metric Map Metric measurement dates will not change to reflect schedule NODAL metric timeline showing detail TPTF and TAC review dates as well as availability in Dashboard tool posted on NODAL.ERCOT.com and will be reflected in Dashboard tool EDS Project managers aware of dates and provide input to metric review process

8 8 Texas Nodal Program UpdateSeptember 25, 2007 EMS Function & Documentation Delivery - Overview Original Nodal charter had EMS to be delivered at June 2007 EMS worked with Nodal projects to define phased deliveries –Each phased delivery (through EMS project FAT) included: Code – Functionality sufficient to meet Nodal & EMS requirements Detailed Design documentation Test Scripts Migration Control Document –Deliveries provide stepped (partial) functionality until total functionality is delivered –All deliveries are timed to meet Nodal critical path and integration demands, and still on track. Example: Resource Limit Calculator / RLC Initial RLC Function (Partial) Delivery – EMS 2C For EDS 2 R3 & EDS 3 R5 Final RLC Function (Complete) Delivery – EMS 3 For EDS 3 R6 EMS will be presented in October 9 th TPTF meeting

9 9 Texas Nodal Program UpdateSeptember 25, 2007 Integration Testing Leadership Transition

10 Texas Nodal Program UpdateSeptember 25, 2007 Integration Testing Leadership Transition - Resources