1. Oncor Electric Delivery Oncor Electric Delivery Restructure An Engineering & Construction Perspective SWEDE Conference May 11, 2007 San Antonio Mark Burt

2. Oncor Electric Delivery The Overall Business Strategy The overall strategy and Business Model looks at the business in three major segments: Asset Ownership Asset Management Asset Services/Operations

3. Oncor Electric Delivery Asset Owner Function Key Driver is Business Excellence Focuses on overall business performance Values business strategies that create opportunity & manage risk Core competencies in forecasting & managing revenue & costs Asset Owner expectations: Return on assets Earnings Growth Management of revenue/costs Responsiveness to stakeholders

4. Oncor Electric Delivery Asset Manager Function Key Driver is Asset Excellence Strong focus on the performance of all Assets (financial, physical, human, etc.) Core competencies in performance measurement, analysis, economic lifecycle & managing risk Leverages information technology to manage accurate & timely information The Asset Manager Drives: Strategic asset planning Balancing the financial, technical, & sociopolitical components Holistic consideration of spending (Capital, O&M) Performance accountability

5. Oncor Electric Delivery Asset Services Function Key Driver is Service Excellence Best-in-Class Implementation of Asset Plan(s) Focuses on efficient & responsive service delivery Values customer service & the quality of the work Core competencies in work management & operating acumen Asset Services drives: Best in class processes Most effective use of resources Consumer/Customer Satisfaction

6. Oncor Electric Delivery The Business Model Asset Owner sets & directs Asset Manager to meet asset performance goals Asset Manager develops asset plans for implementation by Asset Services Asset Services implements Asset Plans, Policies, and Guidelines

7. Oncor Electric Delivery 7 Key Accountabilities Asset Owner  Develops overall business plans  Determines appropriate level of investment & spending for assets (capital & O&M)  Defines owner’s risk tolerance  Defines expected level of performance of assets: - Financial - Technical (Reliability ) Asset Manager  Develops strategies, policies, & standards  Monitors implementation of Asset Plans and key performance indicators  Asset Plans include: - Asset expansion, augmentation and replacement projects & programs. - Materials, design, and construction standards - Maintenance & operations guidelines Asset Services  Implements Asset Plans according to predetermined performance metrics  Designs & builds asset expansions and replacements per standard  Maintains and operates assets in accordance with guidelines  Provides key feedback on asset condition & performance

8. Oncor Electric Delivery Keys for Success Focus on accountabilities and key drivers for each business segment Continue process improvement and innovation in all aspects of business Performance excellence in each area of the enterprise Performance metrics to drive accountability & performance

9. Oncor Electric Delivery 9 Organizational Alignment Asset Manager Regulatory Rates REP Relations Community/Customer Relations ERCOT Interface Metering and Measurement Services Communications Investment Strategy and Planning Environmental Standards and Policy Electric Delivery HR Asset Management & Engineering Asset Services T&D Operations T&D Field Engineering Storm/Trouble Response Construction Maintenance Transformer Shop Supply Chain and Sourcing Fleet Management Safety & Training Work Management Distribution Services Environmental Lab and Waste Management Asset Owner Governmental Affairs Business Operations Economic Development Business & Developer Management Finance & Accounting

10. Oncor Electric Delivery 10 Engineering (T & D) – Engineering & Material Standards, Conceptual Designs, Policies & Procedures, Construction Standards, Performance Management System Operations – T&D Operating Centers System Planning – T&D Planning, System Expansion, System Protection & Coordination Asset Investment Strategy – Budgeting, Program/Project Funding, Plan Management Performance Management – T&D System Performance, Metric Analysis, Benchmarking Information Management – IT Systems Planning, Systems Applications Maintenance Strategy – Maintenance Program Strategy & Development Oncor Electric Delivery Asset Management & Engineering

11. Oncor Electric Delivery 11 Engineering (T & D) – Specific Project Design & Project Management, Easement & ROW Acquisition, Construction Coordination System Operations – Storm & Trouble Response, T&D Field Operations Construction (T&D) – Project & Maintenance Construction, Contractor Management, Work Management & Project Scheduling Customer Operations – Customer Outage & Informational Response Safety & Training – Safety Program Development & Training Fleet Management – Fleet Management Operations Materials Management – Supply Chain Operations & Materials Acquisition, Strategic Sourcing Oncor Electric Delivery Asset Services

12. Oncor Electric Delivery 12 What’s Different And What’s Not What's different:  Asset Management will be more focused on planning, strategy, policy  Asset Services will be more focused on superior Plan execution What's not different:  Asset Services input and feedback on system planning, standards, plan development and other issues is just as critical as it ever has been  Clear, continuous, straightforward communication between groups is the key to shared success

13. Oncor Electric Delivery 13 New concept initiated for the performance of distribution field engineering and customer service activities “out of office” Concept based on the criteria to provide plan of service, design specific details, calculation of customer charges, and other project specifics (easement & vegetation management requirements, etc.) while “on location” with customer and potentially during first site visit Includes integration of new tools including non-graphic estimating tool and design programs into mobile computer system Future enhancements include mobile connectivity to System program to update databases and issue work requests & service orders Engineering & Construction – What Changes? Field Engineering

14. Oncor Electric Delivery 14 Construction pricing developed to utilize “unit pricing” for performance of construction specific activities Goal is to “unitize” as much work as can effectively be captured with this type of pricing Expected that approximately 90% of all construction to be based on unit work Construction units are integrated into estimating systems such that system output includes quantity and type of construction units for that specific project (based on estimate by designer) Engineering & Construction – What Changes? Construction Unit Pricing

15. Oncor Electric Delivery 15 Engineering & Construction – What Changes? Construction Unit Pricing Example of construction unit is as follows: Unit #Unit Description CB2000 PRIMARY CABLE, SINGLE PHASE. INCLUDES: SET UP/BREAKDOWN, PULL ROPE, PULL CABLE IN CONDUIT, MAINTAIN MOISTURE SEAL AT CABLE ENDS AND CLEANUP. UNIT OF MEASURE = PER PULL (245' AVG PULL).

16. Oncor Electric Delivery 16 Audits of design & construction activities have been initiated to provide an “external” look at the quality of work Items include full range of design & construction activities Actions plans from audits to provide training and educate field personnel on design & construction standards Additional activity includes review of Standards of construction and material requirements for “real work” application Also includes review & revisions to design estimating units and associated material requirements driven by estimating system Engineering & Construction – What Changes? Design & Construction Audits

17. Oncor Electric Delivery 17

18. Oncor Electric Delivery 18

19. Oncor Electric Delivery 19

20. Oncor Electric Delivery 20 Centralized development of maintenance programs to provide efficiencies on performance of work and also consistent approach to maintenance practices Maintenance programs developed and targeted to address specific items (facilities) or issues to derive maximum benefit from maintenance dollars Maintenance programs developed by Asset Manager organization with review of latest technology and practices available Field organizations charged with timely and cost-effective completion of specific maintenance work Both organizations judged by improvement in operating performance of distribution system Engineering & Construction – What Changes? Program Development

21. Oncor Electric Delivery 21 Engineering & Construction – What Changes? Program Development A summary of the various types of maintenance programs are as follows: Visual & infrared inspection of feeders Ground line pole inspection, treatment, reinforcement and replacement Underground cable testing & diagnostics Cable rehabilitation (silicon injection) Capital replacement programs (poles, crossarms, cable, etc.) Open-wire secondary replacement Vegetation management activities

22. Oncor Electric Delivery 22 Performance Metrics developed to focus each organization on its specific activities and areas of control Metrics developed around design, construction, and operational items at a more “operational” level than before Metric owners and also data sources identified to provide ownership responsibility and consistency of data measurement & application Electronic “performance dashboard” developed to provide up-to- date picture of performance Timely reporting allows timely adjustment to developing trends as well as overall focus on organizational goals Engineering & Construction – What Changes? Performance Metrics

23. Oncor Electric Delivery 23 QUESTIONS?