Texas Nodal Program ERCOT Readiness Update TPTF June 23, 2008

Agenda 2  Staffing  Executive Readiness Survey  Business Process Model and Procedures  Training

Staffing – Nodal Staffing Status 3  Interns (excluded from numbers) have been hired and are already working  Actively Recruiting Open Positions Division2008 Authorized 2008 Open 2008 % Filled IT – Nodal Departments IT – Other Total % Market Ops – Nodal Departments Market Ops – Other Total % System Ops – Nodal Departments System Ops – Other Total % System Planning – Nodal Departments System Planning – Other Total % Nodal Departments Others (including Corporate) TOTAL % *As of June 14, 2008

Staffing Metric 4  ERCOT is at 93% of plan for  June 1 Metric: ERCOT is AMBER.  Current Staffing Metric: REDAMBER GREEN June 1 95% July 1 98%  Aggressive staffing metric was targeted at 168 Hour Test for September 1st.  Do we want to revise/extend the “July 1” standard?  2 Months Prior to 168 Hour Test?

ERCOT Executive Readiness Survey 5  Conducted monthly for ERCOT.  The ERCOT Executive Readiness Survey as of June indicates GREEN  Next iteration will be published on July 1 st.

ERCOT Business Process Model Overview 6 27 processes identified as highly impacted by Nodal –PMO confirmed modeling effort is high priority Key SME time being accounted for in re-planning effort Status Update –2 complete; 23 in-progress –Target completion date to be determined based on re-planning effort Next steps –Align Market Operations and Systems Operations divisions –Concentrate efforts on: Day Ahead Market (DAM) process Supplementary Ancillary Services Market (SASM) process Security Constrained Economic Dispatch (SCED) process Reliability Unit Commitment Market (RUC) process Competitive Constraints Test (CCT) process

ERCOT Business Process Model Overview (continued) 7 Key Nodal Processes

ERCOT Procedures Overview 8 Developing desktop procedures for all ERCOT departments Status Update –470 procedures identified; 74% complete as of 6/19/08 Recommendation from Audit Team –Focus on highly-impacted departments ERT team has set up weekly meetings with departments impacted by Nodal 54% of procedures completed for highly-impacted departments 85% of procedures completed for other departments System Operations Control Center is 66% complete and on track to meet its mid-July deadline Effort underway to cross-reference procedures to protocol references Central repository created to house all procedure documents Completed procedures are a key dependency for training and testing

ERCOT Training Overview 9 Two types of courses: Market and System Level Market Courses are created by Ted Hailu’s Group –Courses are based off of protocols –ERCOT and Market requirements for completion are the same System Level Courses are created by project team and vendors –Course based off of operational use, support and maintenance needs, and delivered systems –Three types of courses where appropriate: General User Courses for occasional users and support staff Core and Daily User Courses Core Users, IT Support and Development Staff Courses needed to support and maintain system

ERCOT Training Approach 10 Basic Knowledge –ERCOT Nodal 101 All Departments in ERCOT are required to attend –Procedures Training All Departments must be trained on their business processes and procedures Tailored Training Needs –Training Plans developed for each department, individual Training Plans were developed with input from Market Training Group, ERCOT Directors and Department Heads, TPTF Members, Nodal Project Leaders, and ERT Team –Market Courses tailored according to: Involvement in functional area Need to interface will market participants in functional area Systems impacted by functional area –System Courses tailored according to: Use of system Support of system Data used by system

ERCOT Training Progress 11 Departments Following and Completing Training Plans –All departments are aware of training needs and requirements –Heavily impacted departments will be able to meet requirements despite any system delays Most System Courses are still in Development –Focus is on completing system development –Course Development is in process or planning stages –Progress is being made on timeline and will address needs Some System Courses have been Delivered –Attendance at courses has been good –Developed courses are being scheduled for future instruction Market Level Courses –ERCOT staff has diligently attended market level courses –Most departments are ahead of schedule for their market courses

IBM Audit Suggestions – General Questions 12 Current Training completion was targeted towards the September 1st 168 Hour Test –With new integrated schedule this target will shift –Is this the correct milestone? Audit Question - Should the training metric focus only on heavily impacted departments? –Status is tracked for all departments –Should we limit the metric to only the heavily impacted departments (14)? –Should there be 2 separate training metrics – 1 for System, 1 for Market Audit Question - Should training be required of all departments? –All departments have training requirements –Should we limit training to only the heavily impacted Nodal departments? Audit Question – Status Reporting –If a department planned to complete a course and they have not taken the course because the course is not available, their status will not change (i.e. The department would remain Green) –Do you want to alter the metric? For the above situation, do you want the training metric to also indicate a delivery delay? Should the department turn Amber until course is available and completed? Should the department turn Red if the course is still unavailable after 30 days?