1. PMO Update to PRS Troy Anderson Program Management Office December 13, 2007

2. 2 PMO Update Agenda –Unfunded Project List (Section 21 ) –2009 Project Prioritization Discussion

3. 3 PMO Update - Unfunded Project List Unfunded Project List (Protocol Section 21) –Issue Protocols require quarterly reporting to the Board of Directors on the projects on the “Unfunded Project List” (see Section 21.9) We have not been delivering this report Fact: No new market projects have been approved that are unfunded since the adoption of this rule early in 2007 –Options to Resolve Issue Begin reporting on unfunded projects to the Board Modify protocols to change the requirement –Suggested Solution After discussion with various parties, PMO suggests the following: –Create “Unfunded Project List” as a separate tab on the PPL –PMO reports status to PRS each quarter –PRS chair to report status to TAC quarterly –TAC chair to report status to the Board quarterly

4. 4 PMO Update - 2009 Project Prioritization 2009 will be a unique year for project planning due to Nodal –Quantity and type of SO/MO projects in 2009 is not yet known ERCOT expects to file a fee case in early 2008 –Up to 5 months earlier than the typical schedule This will limit our ability to produce the typical level of detail for project prioritization (Project Requests, CBAs, Time & Cost Estimates) ERCOT is proposing a two phase approach to 2009 planning –Phase 1 – Develop high level initiatives list in early 2008 –Phase 2 – Complete required documents in late 2008 for allocation of 2009 funds –Important No project will be allowed to proceed without all required documents Both phases will be completed with market subcommittee involvement

5. 5 PMO Update - 2009 Project Prioritization List of initiatives expected in 2009 Each CART provides as much information as it can Actual projects Groupings by project type Total budget request determined by summing initiatives list estimates CART Funding Allocation Funding per CART determined in late 2008 Funding provided for “Previously Approved” projects initiated in 2008 Funding provided for projects that have been defined (all documentation) Funds for efforts not yet defined to be held by SRT Funding will be allocated as projects become ready to initiate Sample of Initiatives List on the next two slides Proposed schedule of activities on the final slide SRT endorsed this approach on 11/5/2007

6. 6 PMO Update - 2009 Project Prioritization DRAFT - 2009 Initiatives by CART - DRAFT CARTProject Name / TypeEstimated Budget Candidate Projects / Additional Details CO Cyber Security $750,000 CO Document Management / Workflow / Reporting $500,000 CO Facilities - Taylor $500,000 CO Technology Upgrades $500,000 CO Physical Security $500,000 CO Post-Nodal Enhancements $250,000 Credit Monitoring CO Other Projects $500,000 TBD CO Subtotal $3,500,000 IO Additional SAN Storage Capacity $3,500,000 IO Blade Refresh and Other Hardware Replacement $2,500,000 IO Minor Capital $2,000,000 IO Infrastructure Monitoring Enhancements $1,000,000 IO Other Projects $1,000,000 TBD IO Subtotal $10,000,000

7. 7 PMO Update - 2009 Project Prioritization CARTProject Name / TypeEstimated Budget Candidate Projects / Additional Details MO PUCT / Market Projects $2,000,000 Advanced Metering, Distributed Generation MO Post-Nodal Enhancements $1,000,000 COMS MO Extracts, Reports, and Web Services $250,000 MO Other Projects $250,000 TBD MO Subtotal $3,500,000 RO PUCT / Market Projects $2,500,000 Distributed Generation RO Retail Application Upgrades $1,000,000 RO Extracts, Reports, and Web Services $500,000 RO Internal ERCOT Process Automation and System Design Enhancements $500,000 RO Other Projects $500,000 TBD RO Subtotal $5,000,000 SO Post-Nodal Enhancements $3,000,000 EMS, MMS, NMMS, CRR, OS, Credit Monitoring SO IMM Projects $500,000 SO Other Projects $500,000 TBD SO Subtotal $4,000,000 Grand Total$26,000,000

8. 8 PMO Update - 2009 Project Prioritization 2007 – 4 th quarter Seek approval of process change Develop list of high level initiatives by CART with budget range estimates 2008 – 1 st quarter Internal ERCOT approval of initiatives list & budget (SRT, EC) Market participant approval of initiatives list & budget (subcommittees, TAC) F&A and Board of Directors approval of initiatives list & budget 2008 – 4 th quarter Develop 2009 Divisional PPLs according to current standards Allocation of funds to CARTs for Previously Approved and known projects 2009 Operate with the funding approach outlined on slide 5