August 11, 2008 Texas Nodal - Integrated Schedule Update Integrated Schedule Update for TPTF Janet Ply

2 2 Texas Nodal - Integrated Schedule UpdateAugust 11, 2008 Agenda Why an integrated schedule is needed Integrated schedule progress Assumptions Risks Remaining work on the integrated schedule Questions

3 3 Texas Nodal - Integrated Schedule UpdateAugust 11, 2008 Why an Integrated Schedule is Needed Nodal program is highly complex ─CIM is new concept for nodal market ─AREVA and ABB are delivering core functionality that is new software ─Lodestar version 4.7 is latest version available from Lodestar ─Significant increase in TIBCO integration footprint for ERCOT ─Complete rewrite of portal application ─Current Day Reporting and MIS Dashboards are new technical deliverables ─Large, business transformational program that requires formal oversight and management Integrated schedule provides the ability to: –Manage nodal as a program –Understand how project-level schedule impacts affect other projects –Define program critical path, allowing schedule optimization –Analyze schedule impacts at the program level and recognize trends early –Analyze resource needs across the program –Present realistic view of progress at the program level

4 4 Texas Nodal - Integrated Schedule UpdateAugust 11, 2008 TPTF Requests for the Integrated Schedule A clear, achievable delivery date ERCOT wait until the EMS CIM Importer is thoroughly tested before committing to a new "go-live" date Implementation will include both the Real-Time Market and the Day-Ahead Market, as originally planned ERCOT review incorporating deferred items for the Dec. 1 date Sufficient testing time for TSPs and QSEs is needed in the new "go-live" date Sufficient time to validate the network operating model for TSPs ERCOT provide a draft of the new integrated schedule to TPTF for review and comments

5 5 Texas Nodal - Integrated Schedule UpdateAugust 11, 2008 Nodal Integrated Schedule Progress “Finalized” scope and technical approach for each project –Significant “discovery” exercise for all projects –Major refinements to existing project schedules Defined inter-project dependencies –Dependency density is very high, adding to the complexity –Approximately 1,000 inter-project dependencies out of 7,000 activities –Hundreds of staff hours expended to get to common understanding Documented schedule assumptions and risks (ongoing) Integrated all project schedules with the exception of ITEST (in progress) – the integrated schedule framework is in place Critical path is identified; continue to refine and look for optimization opportunities Reviewing dependencies for correctness and outlier dates to find ways to optimize the schedule Early stages of defining project views

6 6 Texas Nodal - Integrated Schedule UpdateAugust 11, 2008 Scheduling Assumptions – First Pass – 1 Most difficult part is building the master schedule framework with a comprehensive list of activities – this was our initial focus Scope –NPRRs that were Board-approved post-Baseline 2 or were well defined are included in the schedule EMS: 92, 119 MMS: 91,102,113,124,128,131 and 134 NMMS: 80, 81, 87, 89, 124, 128, 132, 133 CRR: No system changes after baseline 2 COMS: 86, 98,112,120,122,134 NPRR102 – several disclosure area extracts will be delivered after go-live Deferred Items implemented and currently being tested at ERCOT –Shams changes to DAM : Handling Offers (Energy and AS) for Self Committed Resources –MMS provided API available to QSE to update Resource parameters. –CRR option pricing information (Day ahead, Real Time) –Re-implementation of Energy Inc/Dec offers for DSR Resources on Output Schedule Deferred Items to be implemented post go live: MMS support for two network models –Manual workarounds are minimal and will not require additional resources –No new scope (functionality or services) will be incorporated (i.e., schedule is based on current scope)

7 7 Texas Nodal - Integrated Schedule UpdateAugust 11, 2008 Scheduling Assumptions – First Pass – 2 Schedule –Critical schedule/dependency dates will be met (vendor and internal) –Systems will perform as planned –No new software vendor releases will be required past what is already planned Resources –No resource constraints –Contracts are extended with prime vendors with no delays –No resource funding constraints or delays for key resources –Staff turnover is minimal Environments –ITEST environment available and functions as expected –System access is available as needed for integration development and testing –Deployment processes remain stable and no changes to environments for development and testing –Proper release and design information is provided by core systems Market Participants –6 months allocated for testing settlements and billing –Minimum of 5 months for TSPs to validate network model data

8 8 Texas Nodal - Integrated Schedule UpdateAugust 11, 2008 Integrated Scheduling Risks – First Pass – 1 Scope and Estimation –Complexity of nodal systems and functionality add inherent risks –Business users are requesting changes to requirements as more information becomes available, causing increases in scope and rework –NPRRs/white papers will likely increase scope, impacting schedule –Vendor deliveries have been slipped Siemens has added an additional release, to be delivered in December CIM Importer is months late –Core systems may not be in synch with requirements (conflicts found during integration) –Estimates based on prior history may be overly optimistic since development and testing were focused on “happy path” with stubbed data in many cases –No contingency has been built into the schedule for additional work that occurs due to requirements clarifications or unknown unknowns

9 9 Texas Nodal - Integrated Schedule UpdateAugust 11, 2008 Integrated Scheduling Risks – First Pass – 2 Resources –SME and key technical resource availability is limited, likely affecting the critical path, which would delay the schedule –Turnover of key staff may cause schedule delays Performance –Data availability and quality may impact schedule (e.g., CIM, common data set for NMMS, EMS, and MMS) –Additional rework may surface as systems are integrated –Vendor delivery delays may impact schedule Environments –Some environments may not be sufficient to meet performance requirements, requiring additional work and time for tuning and/or upgrading –Some environments are not yet built out due to data center constraints; may impact performance and schedule

10 Texas Nodal - Integrated Schedule UpdateAugust 11, 2008 We Know… That there will be additional NPRRs – several are already in the pipeline, approved by TPTF and essential for Go-Live, to include in the schedule That we will have additional work to complete related to integration, infrastructure and vendor delivery Testing time may take longer than estimated once we start testing more than the “happy path” That there will be resource constraints at times for SMEs and technical experts That there will be more unknown unknowns Schedule and budget contingency at the program level will included to allow for associated impacts

11 Texas Nodal - Integrated Schedule UpdateAugust 11, 2008 Remaining Work on the Integrated Schedule Continue refining the schedule –Incorporate ITEST project schedule –Assess program risks and allot time for mitigation activities –Look for optimization opportunities –Analyze resource loading to identify potential resource contention areas –Fix linking issues and incorporate additional work as uncovered –Set up appropriate views (PM, PMO, MP, Executive) –Finalize dates for CIM Importer delivery and Siemens functionality required for SEM go-live Review with approvers –Internal reviewers (executives, business, TPTF, TAC, PUCT) –Baseline the schedule Develop the nodal budget (1 st draft due Aug. 28) Develop and implement update processes/procedures –Program-level status reports –Schedule analysis and trends –Dashboards

12 Texas Nodal - Integrated Schedule UpdateAugust 11, 2008 Questions?