1. April 1, 2008 TPTF Texas Nodal Market Implementation Program Update Jerry Sullivan

2. 2 2 Texas Nodal Program UpdateApril 1, 2008 AGENDA Program Status Infrastructure Capacity and Disaster Recovery Schedule – CIM Health Check Cost

3. 3 3 Texas Nodal Program UpdateApril 1, 2008 Program Status: Nodal Delivery Nodal Delivery status remains amber; health checks starting Cost ScheduleScope / Quality Pending PUCT approval of Budget Fee request filed w/ PUC on 6 Mar 08 Aligned with protocols * TPTF is addressing issue where MPs not in complete agreement, e.g., self-committed resources in DAM. Checkpoints in place to ensure ongoing viability of 12/1/2008 CIM Health Check today EDS 3 and 4 still red (ACE testing and Alarm Processing, respectively) Achieving quality standards to date; upcoming months will be telling Applying increased efforts to identify and resolve defects in pre- FAT and FAT Green * Amber RedAmber Nodal Delivery Legend Red Amber Green Estimate at Complete = <$319.5m Estimate at Complete = < $319.5m + 10% Estimate at Complete = >$319.5m + 10% Go-live = 12/1/08 Go-live = <30 days+ Go-live = >30 days+ Program is aligned with current protocols Program is aligned to previous protocol version Program is not aligned to protocols Current product quality is not sufficient for Nodal launch Most Nodal products currently achieve quality standards All Nodal products currently achieve quality standards

4. 4 4 Texas Nodal Program UpdateApril 1, 2008 Program Status: ERCOT Readiness ERCOT Readiness status is amber; detailed update provided yesterday ERCOT Readiness Survey to move to monthly updates Transition plans recently developed (Feb. 29) and scheduled for updates in April and June Business Process model was completed and provides a top-down view and low-level operational detail Procedures developed for each department based on Business Process model Steady progress on training Staffing plans developed; recruiting ongoing; timeframes established Staffing metric definition is a codification of long-standing practice, not a new metric

5. 5 5 Texas Nodal Program UpdateApril 1, 2008 Program Status: ERCOT / Market Readiness Engagement [amber] – Still remains an area of concern – Market Participant survey (third round) closed March 31. Results available mid-April. Registration and Qualification [green] Connectivity and Telemetry [green] – Connectivity metrics complete for most MPs. Outliers are new to the program and need to go through EDS process Training [green] – Training metrics will be updated by survey results. Trials Participation [green] – Actively measuring EDS3 and EDS4 trial participation metrics Looking ahead –Readiness Metric for Resource Entity review of Resources to Resource Nodes and Resources to EPS Meters (MP10) is due by April 15, 2008. –Numerous metric milestones are upcoming in next two months –Hall of Fame Scorecard and Wall of Shame metrics will be prime motivators –See www.nodal.ercot.com for schedule of upcoming metricswww.nodal.ercot.com Market Participant Readiness status remains amber

6. 6 6 Texas Nodal Program UpdateApril 1, 2008 Infrastructure Capacity and Disaster Recovery Disaster Recovery (DR) - efforts progressing adequately –DR capability currently “intra” site –April 1 failover to demonstrate ability to move “inter” site – the first step of the failover plan –Post-April MMS/EMS releases will begin real-time synchronization between sites –Full failover capability to be completed prior to 168-hr test Infrastructure capacity – current assessment is that specified infrastructure capacity will be sufficient and contain adequate contingency –Expected nodal equipment for Taylor data center is installed and powered –Expected nodal equipment for Austin data center is about 85% complete with plans to complete decommissioning and finish installation in May –Test data center construction is fully complete with application installation prioritized behind April 1 Austin release

7. 7 7 Texas Nodal Program UpdateApril 1, 2008 Schedule: CIM Health Check The CIM health check was recently completed; Go-Live Plan under development JanFebMarAprMayJunJulAugSepOctNovDec EDS 1 EDS 2 EDS 3 EDS 4 Today MP Trials & NM Verification SCED & LMP Posting for 6 months ICCP / P2P SE Tuning E1 R2 E2 R3 E2 R4 E3 R5 E3 R6 LFC Testing E3 R7 CRR Testing E4 R9 CMM, DAM & RT Settlements, Verifiable Costs & Disputes DAM, SASM & RUC execution, DAM Stability Test, EECP, DST, Compliance E4 R8 Performance Health Checks – measure of schedule viability Dictated by PRR 727: Market Readiness Certification 168 Hr TestEDS 4Go Live Sequence CIM Integration Defect Go-Live (Go/No-Go) SeptOctNov TAC Meeting: 10/2 ERCOT BoD: 10/21 First Market Notice: 10/31Second Market Notice: 11/21168 Hr Test Start 32 Days to complete Test 3 2 1 Business Processes

8. 8 8 Texas Nodal Program UpdateApril 1, 2008 Schedule: CIM Health Check CIM Health check is currently on-going and will be reported to TPTF at end of April. Focus of health check will be on the NMMS, EMS, and MMS systems Further evaluation will be upon process to date, and data issues Largest known risk is the EMS importer delivery date, and ERCOT has escalated to AREVA mgmt.

9. 9 9 Texas Nodal Program UpdateApril 1, 2008 Schedule: Metric status for each of the Early Delivery Systems No change* in EDS status since last meeting (xx) – Number of metrics associated with a particular Release EDS1 – Complete EDS2 – Red resulting from ongoing issues with State Estimator EDS3 – Red resulting from ACE testing. Will return to Yellow if TPTF approves revised testing approach. EDS4 – Mostly unmeasured at this point, but inheriting Red status from recently moved Alarms Processing metric. Commercial Ops metrics being measured are Green Overall Readiness – Yellow due to open issues on telemetry, modeling, and CIM JanFebMarAprMayJunJulAugSepOctNovDec EDS 1 EDS 2 EDS 3 EDS 4 Today MP Trials & NM Verification SCED & LMP Posting for 6 months ICCP / P2P SE Tuning E1 R2 E2 R3 E2 R4 E3 R5 E3 R6 LFC Testing E3 R7 CRR Testing E4 R9 CMM, DAM & RT Settlements, Verifiable Costs & Disputes DAM, SASM & RUC execution, DAM Stability Test, EECP, DST, Compliance E4 R8 168 Hr TestGo Live Sequence (1 EDS, 2 MP) (3 EDS) (5 EDS, 1 MP) (2 EDS, 1 MP) (3 MP) (2 EDS, 2 MP) (12 EDS, 2 MP) (5 EDS, 3 MP) Overall Readiness (15 metrics): http://.scorecard.ercot.com Releases * As of 3.27.08

10. 10 Texas Nodal Program UpdateApril 1, 2008 Cost Element Summary EAC Revised Budget and Forecast remain constant Spending in January* was lower and reversed overrun through Dec. Add’l $1.2 M in contingency earmarked (Testing and MPIM vendor extension) *February actuals not available as of 3.27.08