1. 1 Purpose  To gain executive-level commitment from key market participants to take a leadership role in quickly improving retail transaction processing within ERCOT

2. 2 Background Startup glitches have been identified in ALL market participant processing systems Individual systems were tested separately and, at a functional level, in the ITPTA process Actual volumes have significantly exceeded expectations –More than 5 Million ESI ID maintenance transactions (814_20s) have been submitted – more than ten times anticipated volumes –Duplicate transactions have doubled system load due to reprocessing attempts –Queries needed to investigate failures have further taxed the systems No single vision exists for integrating all transactional components into a seamless, end-to-end processing system

3. 3 Quick Fix Examples EDI files should contain a single type of transaction (e.g. consumption data or ESI ID updates, not both), and generally must be smaller in size (less than 10 Megabits for CRs) Time sensitive files should be separated for prompt identification (e.g. 814_20 Adds and Move Ins) Confirmation notifications (997s) should be promptly reconciled to facilitate the issues tracking and resolution process Translators should be used to validate all outbound transactions for compliance with TX SET requirements Unsolicited transactions should stop (e.g. TDSPs submitting 814_04s before receiving an 814_03 in the “safety net” project)

4. 4 Quick Fix Examples (Cont’d) Recurring problems with critical components should be addressed in a consistent manner among participants that are using the same service provider (e.g. SeeBeyond) System resources (e.g. Accenture specialists with unique system knowledge) should be optimally utilized to ensure that lessons learned by one participant are shared with others across ERCOT Automatic sending of duplicate files should be turned off until processing is better “tuned”

5. 5 Conclusions Direct top-level management involvement is needed to resolve issues already identified by the “Tiger Team” and market participant staffs, but which are more “global” in nature Following the “80/20 Rule” will provide the best results in the shortest period of time (i.e. focus first on those with the issues that affect the greatest number of participants) Independent analysis by a third party is essential to eliminate “finger pointing” among participants, and to encourage acceptance of final recommendations Time is of the essence; market confidence is highly perishable Executive level leadership provides high visibility to issues and ensures levels of motivation that are otherwise unattainable

6. 6 Next Steps Continue to utilize existing market participant resources and tools (e.g. FasTrack and Market Metrics) to identify, track, and fix market issues Commit to executive-level participation in resolving retail transactional issues via a “steering committee” that will monitor progress toward achieving common goals Select a contractor to conduct an independent analysis of the transactional processing system over the next ninety days Set a scope of work that will produce desired results Communicate effectively with all market participants, the PUC, the Legislative Oversight Committee, and the Governor