1. System Operations Staffing Request Presented to the ERCOT Board Of Directors By Sam Jones, COO November 16, 2004

2. Overview Current And Proposed Hires 04 Appvd Contractor Work New Group New Positions Replacement Load Responsibility System Operations 7 14 3 8 10 Transmission Services 1 3 0 3 1 Technology Services 9 14 18 4 1 EMMS 4 2 4 1 1 Total 21 33 25 16 13

3. System Operations Contractor Replacement – 3 Work Load – 8 Outage Analysis – –Approximately 200 outage requests per day – double the original quantity –Seven day per week activity due to PRR changes System Modeling –Capture all transmission and substation reconfigurations –Enter and implement all element rating changes as soon as possible Operations Engineering Support – operating floor support –Wind limits – major activity increase in 2004 –Voltage, stability and thermal limit calculations – increased activity due to RMR, generation shut down and congestion cost pressures –Market participant question support for real time operations

4. System Operations Operations Planning – Longer range reliability and economics –Dynamic line ratings to increase transmission capacity –Remedial Action Plans, Special Protection Scheme evaluation, mitigation plans and unit commitment studies to reduce congestion costs –Real Time Contingency Analysis and State Estimator support – new function Control Room Operations –Congestion management demands have increased the staffing requirements for this function –Training requirements to meet NERC requirements has required an additional operator for each position –Wind limit and other postings have increased due to PRR’s

5. System Operations Market Operations Support –Increased support requests from the PUCT Market Oversight activity –Providing support to the Potomac Group monitoring activity –Increased market participant questions New Responsibility – 10 - 7 are 2005 requests Congestion Analysis Section – new function – “rear view mirror” Market Operations Support and Operations Planning - new project development design support to support new PRR’s and op’s projects designed to better automate operational functions Control Room Operations – Operator training simulator – to meet future NERC requirements and to provide better operator consistency

6. Transmission Services Work Load – 3 Resource Planning –Created in 2003 and strengthened in 2004 to better study the total cost impacts of building various transmission addition options –Tasked in 2004 to evaluate the cost impacts of alternatives to RMR New Responsibility – 1 – 2005 budget request Total System Planning Group –Engineering graphics capability needed to provide support to the increased use of system maps, study materials and reports now being generated by the System Planning Group

7. Technology Services Contractor Replacement – 18 Work Load – 4 Corporate Applications –Document management – audit item to support adequate documentation –HEAT and work order tracking –Node access management –Leave tracking Security –Audit item – will require more resources to comply with standards New Responsibilities – 1 – 2005 budget request Facilities –New and existing ERCOT facilities require security systems maintenance support

8. Energy Management And Market Systems Contractor Replacement – 4 Work Load – 1 – 2005 budget request Production Section –Dynamic limits –Power World operator displays –Support increased number of System Operators –Increased market applications features –Increased number of telemetry points New Responsibilities – 1 – 2005 budget request MOM’s support – Provide current version AREVA system to support Market Oversight Monitoring requirements

9. NERC Support North American Electric Reliability Council (NERC) activities have greatly increased following completion of the investigation of the Northeast blackout. These activities include: Version 0 Standards Version 1 Standard Authorization Requests and Standard Drafting Teams Implementation of the Functional Model Operating Committee –Numerous subcommittees – RCWG, ORS and PS especially Planning Committee –Numerous subcommittees – RAS, Transmission Adequacy Joint Interface Committee ERCOT System Operations currently has over 12 staff members actively supporting ERCOT’s interest in these efforts to be sure we are in compliance