Information Technology Update ERCOT Board of Director’s Meeting May 17, 2005

page 2 First Impressions  Personnel  Looking for a consistent direction  Highly engaged and competent  Good cross-section of skills  System support models vary  Systems Reliability  Generally IT systems are reliable  Some availability issues have participants concerned  Technical Environment  Highly integrated and open systems using current technologies  High demand for storage and server processing power  Data network reliability is critical

page 3 Strategy  Three pronged approach  Strategic – focus on business alignment, delivering to customer requirements —Infrastructure alignment —Proactively deliver service based on customer strategies  Commercial – focus on cost alignment and customer satisfaction —Listen to the customer —Open environment —Easy to do business with —Competitive IT delivery model —“What am I getting for my IT dollar?”  Tactical – focus on service delivery and meeting customer expectations —Consistent delivery model —Meets compliance standards —Tightly controlled —Reliable infrastructure and systems

page 4 Outcomes  Trusted organization  Efficient and professional IT organization  Stable and high-performing operating environment  Cost in-line with industry standards  Solid understanding of IT spend  Compliant and well controlled systems  Engaged workforce  Strong customer partnerships  Systems that meet or exceed customer expectations

page 5 Looking Forward  Projects  Projects currently underway  Future projects  IT methodologies  SAS 70  Change control  Systems reliability  Costs and cost control  Organizational alignment  Capabilities Maturity Model assessment  Participant concerns