1. Profiling Working Group July 17, 20031 PWG Update Report By Ernie Podraza of Reliant Energy ERCOT PWG Chair for RMS Meeting July 17, 2003

2. Profiling Working Group July 17, 20032 Next PWG Meetings 7/30, and 8/20. New Profile Cost Recovery Method per PUCT Project 25516. PRR399 - Requirements for Replacing an IDR with a Non- IDR Meter. Can a meter owner (non-TDSP) have an IDR meter installed but request that the billing/settlement be based on non-IDR data? Annual Profile Type and Weather Zone Validation. Opt-in Entity Issues for PWG. Oil and gas properties profile change request. Direct Load Control (DLC) Project Status. PRR 362, Section 18.4.4.2 – Load Profile ID Correction.

3. Profiling Working Group July 17, 20033 PUCT Project 25516, Load Profiling and Load Research Rule. 1.Approved at open meeting 3/05/03. Effective Date April 16, 2003 (Oct. 16, 2003 - end of 6 months). 2.Load Research is done by TDSP per the sample design of ERCOT and TDSP cost recovery would be through the TDSP rate making process. 3.ERCOT has 6 months to establish a procedure to provide a method of recovery of research costs associated with obtaining a new profile by a sponsoring Market Participant. a)Ballpark estimate of the research cost for a new profile. b)List two or three methods with pro and con. c)ERCOT may use the template from TXU Energy d)ERCOT presented a strawman at the 5/07/03 PWG meeting. e)Refined the strawman at the 5/28/03 PWG Meeting. f)PWG presented alternatives at the RMS meeting on 6/12, Pay As You Go was selected. g)Per PWG meetings 6/18, 6/19 and 7/09, the PWG has drafted a PRR and LPGRR.

4. Profiling Working Group July 17, 20034 New Profile Cost Recovery Method per PUCT Project 25516. PROJECT NO. 25516, LOAD PROFILING AND LOAD RESEARCH RULEMAKING, states in §25.131. (c) (3); A TDU may recover its reasonable and necessary costs incurred in performing load profile research as required by this section. §25.131. (e) (2); Any costs associated with developing the supporting data and documentation that is necessary for ERCOT's evaluation of the proposed profile change shall be the responsibility of the person initially requesting the profile change. §25.131. (e) (3); Within six months of the effective date of this section, ERCOT shall establish and implement a process to collect a fee from any REP who seeks to assign customers to a non-ERCOT sponsored profile. The process shall include a method for other REPs who use the profile to compensate the original requester of the new profile and for ERCOT to notify TDUs which REPs are authorized to use the new profile. A TDU shall not, without authorization, assign a customer to a profile for which a REP or another person has paid the costs of developing the new profile. See the file attached called 25516finrule.doc (note this is not to be considered the official copy of the rule).

5. Profiling Working Group July 17, 20035 New Profile Cost Recovery Method per PUCT Project 25516. Summary Highlights of the PRR: 1)New Protocols Section 9.7.7 Profile Development Cost Recovery Fee for a Non-ERCOT Sponsored Load Profile Segment. 2)Within 30 days after a profile segment has received final approval from ERCOT, costs incurred are to be submitted. 3)Costs must be during the 24 months preceding the original submission date of the profile segment change request. 4)Recoverable costs must be directly attributable to the creation of the profile segment change request including load research, third party or internal costs. 5)Within 60 days after a profile segment has received final approval from ERCOT, ERCOT will post the accepted costs, called the total reimbursable cost. 6)Market Participants may dispute the costs, however no disputes may be submitted after 45 days from posting of the total reimbursable cost to the ERCOT website.

6. Profiling Working Group July 17, 20036 New Profile Cost Recovery Method per PUCT Project 25516. Cost are limited to: 1. Costs for load research as paid to TDSPs and/or ERCOT, documented by a copy of all TDSP or ERCOT invoices or other evidence of payment, including but not limited to: a. Buying and installing IDR meters, b. Installing communication equipment such as phone lines or cell phones, c. Reading the meters and translating the data. 2. Reasonable costs paid to third parties, including a copy of all third-party invoices or other documentary evidence of payment, including but not limited to: a. Defining the request such as identifying population, profile, data, etc., b. Preparing the request such as collecting and analyzing data and presenting the case, c. Undertaking the review process such as meeting with ERCOT staff, PWG, RMS, TAC, ERCOT Board. 3. Requestor’s reasonable internal documented costs itemizing all persons, hours and other expenses associated with developing the request per items 1 and 2, above. Note: During the discussions at the PWG meetings:  Per the PUCT staff, reimbursement of costs refers to ‘Up-front initial’ costs.

7. Profiling Working Group July 17, 20037 New Profile Cost Recovery Method per PUCT Project 25516. The fee is calculated as follows: If a REP is the requestor, then FEE = $C / n, where $C is the total reimbursable cost and n equals the number of REPs subscribing to the profile segment. If the requestor is not a REP, then FEE = $C / (n + 1). The fee shall be paid by each successive subscribing REP to the requestor and any previous subscribing REPs per instructions and validation by ERCOT. As additional REPs subscribe to the profile segment, the fee is recalculated and reallocated equally among all subscribing REPs, and the requestor if the requestor is not a REP. Beginning four years after the date on which the profile segment becomes available for settlement, any REP may request assignment of ESI IDs to the profile segment without being assessed the profile development cost recovery fee. Note: During the discussions at the PWG meetings:  The group unanimously agreed that the Flat Fee method would pose too much risk to the requestor.  The shorter the sunset period, the more lucrative it would be to wait until afterward which would preclude the requestor from getting reimbursed for his costs.

8. Profiling Working Group July 17, 20038 New Profile Cost Recovery Method per PUCT Project 25516. Pay As You Go (a CR as sponsor)

9. Profiling Working Group July 17, 20039 New Profile Cost Recovery Method per PUCT Project 25516. Section 18.2.9 Adjustments and Changes to Load Profile Development A Market Participant may submit a request to ERCOT for conditional approval of a new load profile segment following the approval process as specified in the Load Profiling Guides, Section 12, Request for Profile Segment Changes, Additions, or Removals. In conjunction with this request, ERCOT staff shall specify the requirements for additional load research sampling and shall define specific and objective criteria to be met by the analysis of this load research data to meet the requirements for final approval. Provided the request for conditional approval has received the appropriate ERCOT committee approval and if ERCOT staff determines the specified criteria are met, the request shall be granted final approval. If ERCOT staff determines the specified criteria are not met, the request shall be denied.

10. Profiling Working Group July 17, 200310 New Profile Cost Recovery Method per PUCT Project 25516. LPGRR2003-003 Highlights are: Profile “Segment” is noted as appropriate. Ties the LPG to the new Protocol Section 9.7.7. Further describes the “conditional approval” process.

11. Profiling Working Group July 17, 200311 New Profile Cost Recovery Method per PUCT Project 25516. (Voting Issues) Motions: 1)Motion to accept the draft PRR written by the PWG entitled, “Profile Development Cost Recovery Fee for a Non-ERCOT Sponsored Load Profile and Provisional Approval of a Profile Segment Change Request”, in file named, PRR_reimburse_PWG_approved_030709.doc. 2)Motion to accept the draft LPGRR2003-003 written by the PWG entitled, “ New Profile Segment Development Cost Recovery Fee for a Non-ERCOT Sponsored Load Profile Segment and Conditional Approval of a New Profile Segment Request ”, in file named, LPGRR2003-003 Cost Recovery Sponsored Profiles craish emeredline 070503.doc

12. Profiling Working Group July 17, 200312 1.The Peak Demand is equal to or less than 200 kW (or 200 kVa) for a period of twelve (12) consecutive months. 2.Previous PWG discussions centered around loads <= 10 kW where a watt hour meter would normally be installed. 3.Discussed at the 5/7/03 PWG Meeting. 4.Had non-consensus discussions at the 5/28/03 PWG Meeting and 6/4/03 PWG Conference Call. 5.Presentation of PWG comments for RMS meeting 6/12/03. 6.Per RMS, the PWG forwarded the PWG PRR 399 Comments to WMS. 7.PRS on 7/3/03 stated, The submitter has withdrawn PRR399. PRR399 - Requirements for Replacing an IDR with a Non- IDR Meter.

13. Profiling Working Group July 17, 200313 Can a meter owner (non-TDSP) have an IDR meter installed but request that the billing/settlement be based on non-IDR data? 1)Shall be discussed further at the PWG. 2)WMS has been requested to review the issue. 3)At WMS meeting on 6/18/03, the PWG presented the same presentation given at RMS. WMS crafted a broader motion, “Can a premise have an IDR settlement meter installed but request that the billing/settlement be based on non-IDR data” and voted NO. 4)TAC on 7/2/03 voted no as well. 5)Issue is closed.

14. Profiling Working Group July 17, 200314 Annual Profile Type and Weather Zone Validation. 1.Oncor, AEP North, AEP Central, TNMP and CNP are complete with validation of algorithms using new usage month per the Profile Decision Tree. 2.ERCOT’s version of SAS Code for the Residential and Business profile id assignment have been sent to the profiling@ercot.com exploder.profiling@ercot.com 3.LPGRR2003-002 for procedures and timeline approved by TAC 5/8/03 have been added to the Load Profiling Guide, LPG update is available through the ERCOT web. 4.As of 7/9/03, the list of profile id assignment changes due from each TDSPs to ERCOT by June 30 th are complete for Oncor, AEP, TNMP. a.CNP has sent in the Business changes only as of 7/14/2003. 5.Next milestone is 7/15/03, for ERCOT staff to make available to CRs of record their lists of ESIIDs that may be changing profile id assignment. Note the CRs must request the list from the ERCOT staff.

15. Profiling Working Group July 17, 200315 Based on 12 months ending April 2002 and using the usage month algorithm in current Profile Decision Tree. Percentages are for a residential and a business sample of 20,000 ESIIDs each per TDU and not over the whole population that was pulled in November 2002.

16. Profiling Working Group July 17, 200316 Opt-in Entity Issues for PWG. 1.Nueces and San Patricio. 2.Texas SET Version 1.5 Mid July, 2003. 3.Invite the Muni and Coop Segment participation. 4.ACTION ITEMS: a)Initial Validation of Profile Id Assignments. b)Updates to the LPG, Load Profiling Guides. c)Updates to Protocols. d)Shall be using the Profile Decision Tree Version 1.08. e)Both entities working with ERCOT staff to get data loaded.

17. Profiling Working Group July 17, 200317 Oil and gas properties profile change request. 1.Submitted to ERCOT 3/6/03 by Pioneer Natural Resources, Priority Power Management, and Energy Data Source. 2.ERCOT to post to WEB. 3.Argument is that the aggregate profile is a very high load factor profile, close to flat. 4.ERCOT is to evaluate and submit recommendation to PWG. 5.May test the new PUCT Rule 25516 for reimbursement. 6.ERCOT shall post the methodology request to the Market Information System (MIS) and respond to the request within sixty (60) days of the posted date of the request. This period does not include the time to analyze and render the complete assessment of the request. 7.“ERCOT withholds a decision on making a recommendation on whether to adopt or to deny adoption of the suggested profile change; instead ERCOT finds the request, as submitted, is incomplete and deficient. The requestors are invited to address the incompleteness and deficiencies listed below and re-submit the request for further review.” 8.Per 6/19 PWG meeting, a straw-man in development for changes to the profile change request process.

18. Profiling Working Group July 17, 200318 Direct Load Control (DLC) Project Status. 1.PRR 385 Section 18 is complete with Board Approval. 2.LPGRR2003-001 is attached to PRR385 (approved by TAC 7/02, to be reviewed by Board, with Board approval the LPG shall be updated). 3.ERCOT Schedule is pending, Project Manager assigned. 4.ERCOT and some Market Participants question priority going forward. 5.PRR Section 6 (submitted by DSWG 3/17/03, PRR388 BUL Capacity Payments, TAC approved 3/6, Board 3/18). Language for DLC still needs to be written for a PRR. 6.Memo, on Project 26359 on Competitive Metering, May 8, 2003, by Commissioner Perlman suggests that wires companies need to develop a rate structure that provides strong incentives for demand responsiveness by charging different rates during high load periods. 7.PRR400 does not completely cover DLC issues.

19. Profiling Working Group July 17, 200319 PRR 362, Section 18.4.4.2 – Load Profile ID Correction 1.Deferred by PRS 11/26/02. 2.Annual Load Profile Type and Weather Zone Validation procedures and timelines. 3.RMS Vote of approval. a)Cleaned up language in Protocols 18.4 as comment to PRR362. b)LPGRR2003-002 Sections 11.4 and 11.5. 4.Approved by PRS. 5.Approved by TAC on 5/8/03. 6.PRR 362 approved by Board 5/20/03 and no comments were made to the LPGRR. LPGRR COMPLETE. Load Profiling Guide update in process. 7.LPG is updated and available at the ERCOT web per LPGRR2003-002.