1. ERCOT IT Update Ken Shoquist VP, CIO Information Technology Board Meeting May 2004

2. Page 2  EMMS Release 3 and Release 4  Disaster Recovery  TML Portal  Project Update Agenda Agenda

3. May 2004 Page 3  Planned Migration Schedule MOS/EMP2.1.1 on 6/2 Market Oversight Monitoring System (MOMS) on 7/2 SMP/EMP2.2 in July Resource plan improvement and XML in July  Site Acceptance Test (SAT) ends for MOS/EMP 2.1.1 this week SAT for SMP/EMP2.2 scheduled to start next week  Market User Acceptance Test (UAT) in progress  QSE training completed and operator training is in progress EMMS Release 3

4. May 2004 Page 4  Completed Provided display for gen output, limits, monitored Pts Displayed PF and SCADA on single one line System map (Power World)  June 2004 Stop oscillation of constraint managementPR30044 Elimination of Resource Specific Deployment Used for Energy Balance Purpose (CAT4)PRR424 UBES-DBES ramp ratesPRR 349 OOM as instructed deviationPRR373 Unit resource testingPRR332 Archival of shift factorsPR30167 Handling of equipment name changesPR30169  Critical addition for summer operations Unconstrained ancillary servicesJune 2004 CA/RAP enhancements (RTCA flag addition)June 2004 EMMS Release 3 (cont.) EMMS Release 3 Addressed a Total of 23 Projects

5. May 2004 Page 5  July 2004 EMP 2.2 upgradePR30144 EMS front-end replacementPR30050 Load rollover during line outagePR20159 Enhance STNET to run multiple selected time rangesPR30074 VSAT/TSAT interface upgrade ESCA to PTI downloadPR30096 Implement selected contingency in PFPR40170 Improve resource plan 50% completePRR359 Resource plan change indicatorPR30059 Display print resource planPR30068 Display expected schedule changesPR30097 EMMS Release 3 (cont.)

6. May 2004 Page 6  22 items under consideration at “Pens Down” 2/29 Two projects Eight PRRs One PIP One SCR  Business requirements completed on 3/31  Final detail scope definition in progress RMR automation and dynamic ratings deferred to R5 Firm scope on 10 projects Negotiations continue on scope of three projects Scope of four projects spread between R4 and R5 EMMS Release 4

7. May 2004 Page 7  Firm scope Improve real time local congestion managementPR40001 Load forecast metrics (in-house)PR40001 Improvements to VSA/DSA (scope in R4 & R5)PR40001 OOME participation in providing ancillary services PR40051 EMS archive comparison tool (scope in R4 & R5) PR40059 AS simultaneous selection (carryover from R3)PRR342 RPRS procurement processPRR413/PIP137/PRR211 Out of Merit Zonal Dispatch Instructions and electronic recording of VDI and VDI as Instructed Deviation PRR422/PRR423 Resource plan improvement (Carryover from R3) (Scope in R4 & R5) PRR359/SCR723 PUCT market oversight division projects PR40048/40049/40062 Unit-specific bid limits based on generic costPRR485 EMMS Release 4 (cont.)

8. May 2004 Page 8  Under Negotiation CSC thermal limits (Scope in R4 & R5)PR30084 Special protection schemes PR30085  Deferred to R5 RMR automationPRR428 Dynamic ratings (extend pilot program functionality)PR30016 EMMS Release 4 Candidates

9. May 2004 Page 9 Commercial Systems DR Test  Successfully completed March 2004!  Major functionalities Included Retail transactions Registration Load profiling Data aggregation Settlements  Targeted recovery time of 48 hours – test recovery time of 18.5 hours well within the targeted window  Test requires both IT and business resources  Current policies under review in consideration of possible revision  EMMS (Energy Management and Market Systems) have been tested on a monthly basis since the market opened

10. May 2004 Page 10  Released to market with three known issues – scheduled for correction 5/11/04  No significant issues reported from market  As of 5/5/04 TML receiving 10-15% of web traffic used by 20 market participants TML Update

11. May 2004 Page 11 IT Project Performance Project Process Improvements In 2004  Four completed  48 in progress  61 in planning  Market Operations CART (Continuous Analysis & Requirements Teams) stood up in April Project Activity Project Performance April 2004 Projects