1. PRR Impact Analysis Update Steve Wallace Program Management Office October Board Meeting

2. PRR Requests and Impact Analysis Plan Why this topic now? ERCOT going through its annual budget and fee setting exercise F&A Committee and Board have requested that ERCOT staff provide additional details as it relates to PRR’s and SCR’s so that the long term costs of the PRR/SCR are part of the Board approval process Current rate of PRR requests/adoption more than double 2002 rate and increasing This rate of PRR’s has significant impact ERCOT staff to create impact analysis and implement and maintain the approved PRR’s (short and long term, $’s/FTE’s not in plan) We are still in an additive phase for the PRR’s & SCR’s vs. replacing functions/protocols

3. Sample Unplanned PRR/SCR Impacts PRR/SCR DescriptionIA Done ERCOT Impact Staff ST/LT Project Costs If Any Year 1 $’s / 3 Year $’s in 000’s PRR327* Confidentiality NManual.75/.75NA75/225 PRR408* HVDC Tie Schedule Data PManual1.5/.5NA150/300 PRR420* MCPE When All UBES is Deployed PManual.5/.5NA150 PRR422* Out of Merit Zonal Dispatch Instructions FManual to Automated 1.5/.5400550/650 PRR441 Enhanced Impact Analysis FManual4.5/4.5NA450/1,350 PRR444* MIMO/Stacking FAutomated & Manual 9/1148005,700/7,900 Market Sync/SCR 727*NManual & Automated 8/920002,800/4,600 *= Long term staffing support in business and IT requested as part of 2004 budget/fee request

4. PRR Requests and Impact Analysis Plan Current process for impact analysis set to improve with PRR 441 (Protocol Revision Impact Analysis and Implementation Information Enhancement) Recommendation: Using PRR441 as a base (Enhanced Impact Analysis), each PRR brought to TAC with completed impact analysis and initial 3 year estimated project and staff costs. Deliver updated information to Board as available as part of TAC packet. Work to deliver high level impact analysis and estimates prior to PRS meeting (target is 80-90% of PRR’s prior to PRS, Urgent Timeline Issue, late postings, etc.) Direct ERCOT staff to fully support PRR 441 with the additional financial details, effective with January PRS, TAC, F&A and Board meetings Deliver with the following confidence levels, impact analysis to: PRS – 60%, initial high level estimate TAC – 70%, high level estimate, including PRS changes to PRR/SCR BOD – 80%, planning estimate, including TAC changes to PRR/SCR Follow the enhanced template and program process flow shown on next slide Enhanced process will give PRS, TAC, F&A and the Board the financial and staffing impacts of proposed PRR’s and SCR’s.

5. ERCOT’s Enhanced Program Management Process