1. 1 Update from ERCOT Market Services to Board Of Directors November 19, 2002

2. 2 Retail Market Update Topics –ERCOT’s Master Project Plan –GISB 1.4 Update –Texas Set Version 1.5 –Data Transparency and ETS –Move-In/Move-Out Issues/Initiatives –Quick Recovery Team Update –Market Synchronization Activities –IDR Meter Usage Report –Non-IDR Meter Usage –Resettlement Update

3. 3 Master Project Plan Update

4. 4 Master Project Plan 2002 Planned Projects –46 Projects in progress –27 Projects completed between August 1 st and November 1 st –5 Projects continuing on into 2003 for completion –5 Projects removed from the 2002 plan (require reprioritization for 2003) 2002 Project Continuing into 2003 for completion include: –PR-20153 Amended POLR Process –PR-20117 Internal Map Testing and Verification –PR-20111 ERCOT Transaction Processing Hardening Initiative –PR-20079 Change Deployment Instructions_PRR281 –PR-20067 Simultaneous Procurement of Ancillary Services

5. 5 Master Project Plan (cont.) Next Steps… –Conduct Project Management Office Procedures Training in the month of November –Available ERCOT resources aligned and scheduled against Q1 2003 projects by December 6 th 2002 –Start High priority projects identified in master priority list resources as resources are available –Monthly project prioritization adjustments and recommendations: ERCOT Executive Steering Committee Market Committees and Subcommittees ERCOT IT and Business Support Teams –Finalize and distribute documentation on the project request/prioritization process

6. 6 Provide a GISB 1.4 implementation to replace FTP Provide a migration path toward NAESB 1.6, which is a secure data transport Deliverables - Support for HTTPS and GISB 1.4 - Roll-out to production - Migration of Market Participants to HTTPS or GISB 1.4 Provide a GISB 1.4 implementation to replace FTP Provide a migration path toward NAESB 1.6, which is a secure data transport Deliverables - Support for HTTPS and GISB 1.4 - Roll-out to production - Migration of Market Participants to HTTPS or GISB 1.4 Development of code is complete Server build out is complete Database configuration is complete Working on application configuration Working on network configuration Project Scope/Deliverables Timeline 10/15 Development Configuration Testing Sign off by ERCOT Upcoming Milestones/Market Impacts Budget YTD Forecast Var. Capital $0.70M $0.103M $0.140M [$0.070M] Expense $0.0M $0.00M $0M $0.0 Financial Milestones Executive Summary of Status Overall Financial Risk Staffing Risk Schedule Risk Technical Risk Bus.Align/ Scope Risk PR-20134 GISB 1.4 Sign off by ERCOT Migration of Market Participants All of these could be affected by any delays experienced in network configuration/setup. Completed In ProgressScheduled Outbound network configuration is not complete. Working with Network group to get the port opened to proxy server. End of Sept Labor Recorded 492hrs (Original SOW states 400hrs) Issues/Actions 10/2510/2811/12/153/174/1 Migration of Market Participants

7. 7 GISB 1.4 Update

8. 8 RMS agreed at August meeting to move forward with implementing GISB 1.4 at ERCOT Internal testing and implementation of a GISB 1.4 interface is underway at ERCOT, –Production Sign-off scheduled delayed to 11/18 All production components are in place as of 10/11 Testing uncovered errors in outbound transmission requiring a vendor software patch; will be testing the week of 11/4 –Acceptance Testing and Market Participant Testing – 10/15-11/8 TDTWG is surveyed market participants to finalize migration readiness dates –Preliminary migration schedule reviewed at 10-4-02 TDTWG –Market Participant migration will begin week of 11-25-02; ERCOT will work individually with participants in any change of date for testing and migration. –Goal is to complete migration by April 1, 2003

9. 9 Texas Set V.1.5

10. 10 V1.5 Coordination Team Accomplishments/Goals Established Timeline for V1.5 Project as a Market. Completed –Established Project Phases –Established the Solid date of 2/24/03 as Flight Test Begin Date –Established April as month of Production Implementation Established clear understanding of V1.5 Requirements. Completed –Reviewed all functional change controls approved by TX SET –Published, circulated, and reviewed ERCOT Conceptual System Designs –Published regularly updated FAQ document

11. 11 Established open and up-front communication. Completed –Created a dedicated web page for documentation, FAQ docs, and notes –Created email address for one central point of contact –Periodic Conference Calls and Face-To-Face meetings –Created several pieces of documentation to assist the market with research and analysis Continuing efforts for Project Success. In Progress –Continued improvements in communication –Project Status and tracking –Production Implementation Plan –Flight Test coordination with the TTPT V1.5 Coordination Team Accomplishments/Goals (Cont.)

12. 12 Project Status Summary Exolink provides EDI services for: Calpine, Entergy Disco, Entergy Retail, GEXA, Republic, STEC retail, TCE, Tara Energy, Systrends provides EDI services for: Occidental, Sharyland, Tenaska ESG provides EDI services for: ACN Energy, Cirro Group, Coral Energy Markets, Dynegy, Sempra Energy Solutions, Tractebel Energy Markets, UBS Warburg

13. 13 PROPOSED TIMELINE AND SCHEDULE STILL BEING DEVELOPED BY THE MARKET COORDINATION TEAM Friday, April ? at 5 p.m. ERCOT stops accepting all Transactions ERCOT processes queued 1.4 transactions Friday Midnight 1.4 transactions processed and ready for pickup by MPs ERCOT Upgrades Software Internal Testing Sunday, April ? at 5 p.m. ERCOT begins accepting 1.5 Inbound Normal 1.4 operations Normal 1.5 operations Wednesday, April ? at 5 p.m. ERCOT stops accepting Initiating Transactions = Conference Call

14. 14 ERCOT Data Transparency

15. 15 ERCOT Data Transparency ERCOT/Market Requirements  What do Market Participants and ERCOT need to know? –PUC How is the market performing over time? –Protocol compliance –Transaction volumes –Transaction Success (Business Process) –Market Participants What is the status of my transactions? –Protocol compliance –Transaction volumes and status –View/Research transactions

16. 16 ERCOT Data Transparency ERCOT/Market Requirements –ERCOT Retail Market Services How is ERCOT and the Market performing now and over time? –Transaction Success –Protocol compliance –Backlog Transactions –State of current processing environment –Performance throughput and availability –ERCOT IT How are ERCOT systems performing now and over time? –State of current processing environment –Backlog Transactions –Performance throughput and availability

17. 17  What do Market Participants and ERCOT need to see? –Daily update on all CR transactions All initiating transactions received All ERCOT responses –List of all other associated transactions All requests sent to TDSP All transactions returned by TDSP –Timeliness of responses Transactions both ‘in’ and ‘out’ of protocols –Failed Transactions Transactions without a response –Cancelled Transactions ERCOT Data Transparency ERCOT/Market Requirements

18. 18 ERCOT Data Transparency Existing ERCOT/Market Reports  Existing ERCOT Reports –Market Participant Transaction Report (“Dark Side”) Daily EDI activity “in” and “out” of ERCOT (FTP) –Siebel Report Daily ESIID transaction status by Market Participant –997 Report Daily EDI file receipt with 997 transactions

19. 19 ERCOT Data Transparency Stakeholders and Needs ERCOT IT ERCOT Retail CRs TDSPs PUC Performance and Throughput Backlogs State of Current Environment View and Research Transaction StatusTransaction Success Protocol Compliance

20. 20 ERCOT Data Transparency Business and Operational Concerns  Business Environment –Market changes – Regulatory mandates – Transaction Management  Operational Infrastructure –System availability – Component integrity – System capability Business ActivityBusiness Intelligence Monitor system performance at or near real-time Provide system and component availability summaries Monitor processes that have dependencies on other parties Provide transaction timing analysis for all Market Participants based on protocols Identify failure points within the transaction life-cycle Proactively target failed transactions for reprocessing Provides Visibility into the Business Environment and Operations Infrastructure

21. 21 ERCOT Data Transparency Model Transaction Database Provide VISIBILITY into transactions within ERCOT Systems…. See near “real-time” transaction data Monitor transaction flows within ERCOT Provide transaction status for Market Participants Provide a mechanism to more easily identify Market Participant issues Develop operational metrics reports Develop Executive Summary reports Improve speed and effectiveness of business operations Incorporate advanced business logic to proactively identify and resolve issues

22. 22 Data Logs FTP TCHPaperfree Seebeyond LodestarSiebel Lodestar App Server Lodestar DB Server Siebel App Server Siebel DB Server EAITCHPaperfreeFTP Internet ERCOT Frame ERCOT EDI PIPELINE (PRODUCTION) Portal Transaction Transparency Warehouse Data EventsLogging Reports Archive

23. 23 Queue Depths & E-ways FTP TCHPaperfree Seebeyond LodestarSiebel Lodestar App Server Lodestar DB Server Siebel App Server Siebel DB Server EAITCHPaperfreeFTP Internet ERCOT Frame ERCOT EDI PIPELINE (PRODUCTION) Portal Component Availability Transactions RelatedLogging Reports Summary

24. 24 Future ERCOT Data Transparency Project Deliverables Q2 - 03 Siebel Report 997 Report MP Report Siebel Report 997 Report MP Report Trans Flow Trans Success Protocol Siebel Report 997 Report Portal Trans Flow Trans Success Protocol New Reports PUC Reports Data Archive Summary Rpt - Transactions % Cancelled % Failed % Reprocessed -System Avail -Component Avail -Trans Flow Rates -Volume Trending Competitive Metering Reports? Billing Summaries? CR/TDSP Summaries By Area? MTD/QTD ESIID Usage Summaries? Auto Reprocess Q1 - 03 Nov 02In Place Siebel Report 997 Report MP Report Trans Flow Trans Success Protocol Capture MM PUC Reports Data Archive Market Reports ERCOT Visibility Market Metrics / Visibility Scorecard / Dashboard

25. 25 ERCOT Data Transparency ERCOT Phase 1 Solution  ERCOT Visibility – ESIID Tracking System (ETS) Complete life-cycle view of transactional data …Near-real time updating of ETS database (every 10 minutes) …Transactions are monitored from FTP inbound to FTP outbound …Transactions are purged from database once business process is complete Daily reporting of all ‘open’ transactions …Reports include all internal system component touch points and their respective timestamps …Reports will identify successful, failed, and out of protocol transactions …Reports are both ‘batch’ and ‘on-demand’

26. 26 ERCOT Data Transparency ERCOT Phase 1 Solution  ERCOT Visibility – Daily reporting of all ‘open’ transactions Transaction Flow Report …Identifies the last system component that the transactions hit and their corresponding timestamps by Global ID Transaction Success Report …Identifies how successful ERCOT was in processing a response transaction

27. 27 ERCOT Data Transparency Project Benefits  How do Market Participants and ERCOT benefit? –PUC Knowledge of overall Market performance –Transactions ‘in’ and ‘out’ of protocol –Identify points within the Market that have transaction processing problems –Ability to perform more independent queries –Market Participants Better able to manage customer expectations –Ability to research transactions for customers –Able to identify where each transaction is located –Reports identifying backlog, successful, failed, and out of protocol transactions –Ability to perform more independent queries

28. 28 ERCOT Data Transparency Project Benefits  How do Market Participants and ERCOT benefit? –ERCOT Retail Market Services Able to identify and repair failed transactions –Research problem transactions –Reports identifying backlog, successful, failed, and out of protocol transactions –Summary reports on transaction volumes –Enhanced capabilities to perform root cause analysis on transaction failures –Ensure data synchronization between Siebel and Lodestar –ERCOT IT Know when system and components are not operating –Knowledge of current processing status of all components –Performance throughput and transaction volumes –Ability to trend anticipated volume levels for system reliability –Potential for real time volume-based performance tuning

29. 29 ERCOT Data Transparency ERCOT/Market Requirements  Next Steps Confirm design and value of ETS Phase 1 Complete vision of data transparency project and confirm with PUCT and Market Participants Build an overall project plan with timeline and sequencing Estimate resources required ($ & People) Gain approval and proceed

30. 30 Update from Move-In/Move-Out Task Force

31. 31 MIMO Workshop Progress –32 Concepts for improved processing have been discussed 7 Concepts were dismissed for various reasons 1 Concept was determined as addressed in Version 1.5 3 Concepts were combined into other concepts 21 Concepts in Task Force –6 Concepts approved by RMS on 10/16 –3 Concepts approved by RMS on 11/14 –12 Concepts are currently pending until additional information can be obtained

32. 32 Approved Concepts Questions from RMS 1.Does this concept require a coordinated implementation? 2.What parties are affected by the implementation of this concept? 3.What is the follow-up plan to ensure the concept is implemented? 4.What enforcement or accountability will we use to ensure the concept is implemented?

33. 33 Concepts for RMS vote Short-Term (6 Concepts approved by RMS October 16 th ) Mid-Term –Pending 814_06s (Approved by RMS November 14 th ) –Retired ESI Ids (Approved by RMS November 14 th ) Short-Term –Processing Efficiency (MIMO will take to RMS December 18th) –Customer Canceling Move-Ins with Move-Outs. (MIMO will take to RMS December 18th) –Handling Switch after 650 Disconnect (MIMO will take to RMS December 18th)

34. 34 Next Steps MIMO Taskforce meetings as needed –Discussions on concepts for resolving existing issues –Discussions around concepts for handling stacking Recommendations to RMS at future RMS meetings –Additional Concepts Follow-through on execution of approved concepts Release of implementation timelines Coordinating test flights with TTPT as appropriate Development of Texas Set Change Controls, Protocol Revision Requests, and RFP (If necessary) Deployment of Solutions Re-Evaluation of Move-In/Move-Out processes

35. 35 Quick Response Effort Update

36. 36 EntityQuantity TDSP37077 QRE Team2932 CR10682 Total50691 Current StatusQuantity New32 In Analysis3303 In Progress50691 Resolved108100 Total162126 ESI Ids Reported to QRE (as of November 12, 2002) Point of FailureQuantity Cause Not Reported19581 Not executable20 CR38962 ERCOT EAI4966 ERCOT FTP694 ERCOT Manual Process (814_08) 3442 ERCOT Out of Protocol20 ERCOT PaperFree8215 ERCOT Siebel1513 ERCOT TCH6933 TDSP23754 Total108100

37. 37 Quick Response Effort QRE is transitioning processes and procedures to ERCOT Data Management and Registration teams by 12/20/2002. QRE is providing documentation for all QRE business processes to ERCOT QRE is hosting brown bag and individual training sessions with Data Management and Registration teams QRE has provided CBT training modules to ERCOT for new hires. Modules have been reviewed and modified per ERCOT comments. QRE will provide a week of “shadowing” ERCOT employees taking over responsibilities

38. 38 Quick Response Effort Transition Transition tasks have been identified and checklist created. Market notification of transition and survey was sent to Market on 11/12/02. –Survey feedback will be used to assist ERCOT in identifying the proper owner –Survey comments will be used to determine what processes worked and what needs to be improved –Market Participant Surveys need to be returned by 11/18 in order for comments to be considered Additionally, QRE will provide two documents to ERCOT by 12/20 –“Lessons Learned” –“Recommendations”

39. 39 Retail TDSP as LSE Non-PTB Market Synchronization Activities

40. 40 Objective –Address market issues resulting in an out of sync “Rep of Record” between ERCOT, TDSP, and CR systems for all ESI IDs resulting from market startup/processing issues as well as subsequent workarounds Completed –ERCOT identified “Perfect Sync” and “1 Day Perfect” – sent lists to MPs –ERCOT identified out-of-synch categories at Sept 10 th design meeting –Task Force identified additional ESI IDs considered “In Sync” – sent lists to MPs –Task Force prioritized 8 categories based upon potential customer impact –ERCOT has sent priority 1 through 6 out-of-sync files to TDSPs and CRs –November 11 th face-to-face meeting to resolve “how to fix” set principles to correct out-of-sync conditions In Progress –ERCOT compiling and analyzing MP responses to out-of-sync files –TDSPs and CRs completing analysis and response to priority 2-6 files –MPs making corrections per 11-11-02 decisions –Final schedule for completion being developed. Market Synchronization Retailer Synchronization Project

41. 41 Next Steps –November 19 th, December 3 rd, 10 th, 17 th  Follow-up conference calls –December 5 th  Escalate issues to TAC if needed –Next Steps:  Finalize process to complete and close out this project  Confirm timeline  Define progress reporting format mechanism for use until close of project Market Synchronization Retailer Synchronization (cont.)

42. 42 Market Synchronization “TDSP as LSE” Clean-up Objective –Ensure that all ESI ID are converted from the “TDSP as LSE” by the time True-Up Settlement of February 2002 begins; which is currently scheduled for 12-07-02 Completed –ERCOT sent TDSPs list of ESI ID affiliated with “TDSP as LSE” any time after Feb 01, 2002 –All TDSPs have responded to ERCOT’s original list with suggested corrective action In Progress –ERCOT is reconciling response lists from TDSPs and confirming suggested corrective action can be taken –TDSPs should expect there to be a subset of these ESI IDs which will require multiple discussions prior to ERCOT performing corrective actions

43. 43 Objective –Make necessary corrections to ensure that >1MW Customers were switched on the correct date in January 2002 Completed Items –Per RMS direction, ERCOT sent lists to each MP for reconciliation: 1,134 ESI Ids (>1 MW) identified by CRs (meeting the April 30 deadline) –CR and TDSP have reached agreement of Service Instance Date for all ESI IDs –1,035 (91%) ESI IDs are corrected – 82 (7%) ESI IDs were agreed not to fix by TDSP and CR In Progress –17 (2%) ESI IDs with action required to complete agreement 13 – CR agreed to TDSP date (after TDSP submits usage, ERCOT will correct) 4 – ESI ID retired (TDSP needs to submit 814_20 retire transaction) Market Synchronization Non Price to Beat

44. 44 Consumption Data Loading Reports

45. 45 IDR Data Loaded into Lodestar November 12 th Report 95% or better expected for 60 days ago 94%

46. 46 IDR Data Status Report 99% Data Available per MRE

47. 47 Non-IDR Data Status Report November 12, 2002

48. 48 Resettlement Update

49. 49 Resettlement of True-up Status Update Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2003 2004 December 7, 2002 True-Up Settlement of February 01, 2002 The date all ESI IDs should no longer be with the “TDSP as LSE”. November 1, 2002 True-Up Settlement of November 20, 2001 The date we move from the ERCOT Board resolution to the Protocols IDR Data Threshold April 1, 2003 Date we expect to be back to six month after the trade day True-Up Settlements November 14, 2002 True-Up Settlement of December 17, 2001 Drop dead date for correction of Non-PTB ESID Backdating November 12 132 re-settlements performed to date (Operating Day 12/11/01)