1. June 22 and 23, 2010

2.  The information and/or flow processes contained in this Power Point presentation: ◦ Were created to allow interested parties to have a starting point for the discussions and brainstorming session for Project 8 Long Term Settlement meetings. ◦ Does not represent a specific company position ◦ Was not intended to depict that Market Participants and ERCOT have already agreed upon a long term process or system design for the Long Term Settlement Solution (Project 8). 2

3. 3 Agenda Agenda  Review “Study “and “TDSP and ERCOT Meeting” held prior to today’s Kick-off:  “ERCOT AMS Study Recommended Solution“ by EDS  Single System of Record meeting between TDSPs and ERCOT on April 26, 2010  Brainstorm “Scope of Work” for the following:  Shortening Timelines for TDSP’s Data Loads to Smart Meter Texas Portal (SMTxP)  Single System of Record for Interval Data  Single Point of Record for the Truth on the Premise  Shortening Timelines for ERCOT’s Settlements  AMS impacts to Congestion  Demand Response opportunities using AMS

4. “ERCOT AMS Study Recommended Solution” Dated November 19, 2008 by EDS 4

5. Key Assumptions ERCOT AMS Study Approach TDSPs will provide VEE’d 15 minute interval meter usage data to ERCOT Currently, all meter reads are held for a 24-hour period prior to ERCOT load Load testing of data transfer processes must occur before implementation All records added to the central repository will be inserts only – no updates to existing records Since repository only accepts VEE’d data push down stack storage insignificant ERCOT is responsible party for aggregation of ESIID data for settlement The solutions recommended in Study will not bound by existing processes or systems Only metered service points will be considered for the study. A NODAL system is in effect as the market system. All 15 minute interval meter usage data transfers pulled from Central Repository into ERCOT systems. 5

6. Out of Scope Items ERCOT AMS Study Approach Retail Switching Processes  All switching and other retail transactions and workflows to continue as is 867 Transaction Processing  867 transaction processing will continue as is  867s received by ERCOT will be forwarded to CR  867_03/F will still be utilized to complete a switch  Only difference – 867_03 for AMS meters will not be translated and loaded into Lodestar 6

7.  ERCOT AMS Study Recommended Solution Usage Data Flow: TDSP  Central Repository  Lodestar 1.Database transfers to repository. TDSPs are responsible for Data transfer into the repository. Repository would have a table that mimics the staging table. ERCOT would connect to the repository by WAN or other similar method. 7

8.  ERCOT AMS Study Recommended Solution 2.ERCOT would replicate to a staging table Staging table would be partitioned by hour (or smaller interval if needed) Validation would be done in the staging table using PLSQL or Rules Language depending on table location. Failed records would be added to a validation report. oThis report must capture Error and Load statistics. oError report by TDSP containing invalid meter usage data would be provided to each TDSP. Loading would occur by partition. Once all records in a partition have been loaded, the partition would be truncated. 8

9. ERCOT AMS Study Recommended Solution 3. Data received into the repository and ERCOT on a 24/7 basis. 4. Validation of data in ERCOT systems occurs on a 24/7 basis. 5. Loading of Data into ERCOT’s settlement system occurs on a continual basis except during data aggregation batch window. 6. SLA for data availability within the repository would need to be established 9

10. ERCOT AMS Study Recommended Solution Solution Advantages 1.Data Transfer 2.Repository Configurability 3.Data Aggregation and Settlement system database can be partitioned and truncated 4.Data Availability Solution Disadvantages 1.Data Security 2.Lack of ESIID Registration data 3.Data Issues 1.Redundancy 2.Data transfer volumes 3.Database needed for Settlements outside ERCOT control 10

11.  ERCOT AMS Study Recommended Solution Repository Architecture 11

12.  ERCOT AMS Study Recommended Solution Division of Responsibilities Central Repository would be created and hosted by a TDSP or their third party designee Data Transfer methods form TDSPs to Repository would also be created and support by a TDSP or their third party designee Data transfer methods from Repository to ERCOT would be created and maintained by ERCOT Changes to ERCOT settlement system would be created and supported by ERCOT Data Transfer Methods Data transfer method that is recommended is database replication technology Currently there are COTS replication products that can connect to many different databases, are low network overhead, provide encryption, compression, and configurability so that only targeted data is replicated It is recommended that the repository TDSP and ERCOT database all utilize staging tables for replication ERCOT will devise an interface spec for the staging table feeding the settlement system Benefits:  ensure that all parties know what is expected  underlying database structures of all participants to be secured  Allows flexibility for architectural changes 12

13. Single System of Record for Interval Data TDSPs and ERCOT Meeting April 26, 2010 13

14. Advantages for ERCOT 1.Less numerous files 2.Less data received by ERCOT 3.Single source for inbound files. (Host has higher required availability than TDSPs have) 4.Closed loop to ensure all parties have same data 5.Same reconciliation process for ERCOT back to TDSP TDSP SMT ERCOT Exception Report For Missing Data 14

15. 15  For Competitive Retailers: ◦ Closed loop to ensure all parties have same data, where currently multiple locations creates increased potential for out of synch information for the same ESI ID.  For TDSPs : ◦ Single location to send AMS files ◦ Reconciliation of NAESB file receipt easier Benefits Benefits

16. Brainstorming Session June 22-23, 2010 16

17. 17  Shortening Timelines for TDSP’s Data Loads to SMTxP ◦ Does this mean: ◦ Continue to provide VEE Data to SMTxP? ◦ More frequent where each frequency may provide partial of the 96 intervals? ◦ If yes, what is the frequency? ◦ Market Consideration --If this is the same data used by ERCOT for Settlement then currently TDSP’s must provide all 96 intervals to be accepted by ERCOT ◦ More frequent with intervals without data for that calendar day period where data not available yet would show what? NULLs? ◦ To provide “actual reads" and if applicable estimated data quicker that is VEE’d? ◦ If yes, what is the acceptable timeframe (i.e. XX hours) ◦ Something different? ◦ What are the Pro’s and Con’s for each in the event that your solution is the model to build upon for future functionality and enhancements?  Note: Design needs to also take into consideration what is the Single Point of Record for the Truth on the Premise and Single System of Record for AMS Data used for Settlements  ◦ Brainstorming Discussion Brainstorming Discussion

18. 18  Single System of Record for Interval Data ◦ Is it where TDSPs continue to provide ERCOT with LSE data and ERCOT updates the Central Repository or Database? ◦ Is it where TDSPs would send data only to SMTxP and not to ERCOT? ◦ Is it where ERCOT receives the Data from a Central Repository or Database? ◦ Is it where ERCOT Pulls the Data from a Central Repository or Database? ◦ Is there another path that should be considered to communicate data and still provide a single system of record? ◦ What are the Pro’s and Con’s for each in the event that your solution is the model to build upon for future functionality and enhancements?  Note: Design needs to also take into consideration what is the Single Point of Record for the Truth on the Premise ◦ Brainstorming Discussion Brainstorming Discussion

19. 19  Single Point of Record for the Truth on the Premise ◦ What does this mean? ◦ Is it Aggregation? ◦ Is it TX SET Transactions? ◦ Is it SCR727 and SCR740 activities and Data Extracts? ◦ Is it ERCOT’s Settlement Invoices and Settlement activities? ◦ Is it the MarkeTrak Tool and its functionality? ◦ Is it ERCOT’s reports and others? ◦ Is it all data and information currently available in several platforms at ERCOT to be accessible and/or visible in one single point of record for a premise? ◦ Who would have access to single point of record for the truth on the premise?  Competitive Retailers  TDSPs  PUCT  Third Party Vendors or Contractors  Retail Customers ◦ If SMTxP considered to be a viable alternative, need to consider:  All meter types not currently in SMTxP, therefore multiple platforms would still need to be maintained for some period of time  What are the implications both Pro and Con?  Note: Design needs to also take into consideration what is the Single Point of Record for AMS data and long term system design.  ◦ Brainstorming Discussion Brainstorming Discussion

20. 20  Shortening Timelines for ERCOT Settlements ◦ Does this mean? ◦ All premise and meter/non-meter types in the ERCOT market would be included into the shortening of Settlement Timelines, not just AMS meter types? ◦ If yes, this would include all Market Participants in the ERCOT Market ◦ Shortening the timeline for: ◦ Initial Settlements? ◦ Final Settlements? ◦ True-Up? ◦ Working with the Market Credit Working Group along with other Market Participants, does ERCOT have a suggestion on the timeline reduction? ◦ Some Benefits: ◦ Reduce Credit Risk ◦ Reduce Market Exposure, especially where a Mass Transition event is involved. ◦ What are the Pro’s and Con’s since shortening the settlement timeline may need to take into consideration where ALL the settlement data is located, frequency in which data is obtained or available and how the information is communicated to ERCOT in the timeframe needed to meet any new timelines.  Note: Design needs to also take into consideration what is the Single Point of Record for the Truth on the Premise and the method and architectural design used for the Settlements of AMS Data used for Settlements.  ◦ Brainstorming Discussion Brainstorming Discussion

21. 21  Impacts to Congestion with AMS meters: ◦ How does AMS affect Congestion? ◦ What are the benefits, if any? ◦ How can this affect long term settlements or if settlement timelines are shorten?  Demand Response Opportunities using AMS meters: ◦ What does this mean to Competitive Retailers, TDSPs, and ERCOT, is it:  Load Control?  Emergency Backup Plans for ISO emergency load shedding?  Where a Settlement outcome or adjustment is expected and will need to be developed?  Where programs, procedures, guides and protocols need to be developed based upon ERCOT and Market agreement for AMS meter types only? ◦ Brainstorming Discussion Brainstorming Discussion

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