October 27, 2008 TPTF Nodal Status Report: Program Update Ron Hinsley

2 2 Nodal Status Report - Program UpdateOctober 27, 2008 Agenda Health Indicators Highlights Critical Path through Feb Activities Behind Schedule Top Risks / Issues Cost Change Process Update

3 3 Nodal Status Report - Program UpdateOctober 27, 2008 Health Indicators IndicatorStatusExplanation OverallRed Overall status remains red, driven by schedule and budget indicators ScheduleRed Schedule remains red until the integrated schedule is approved BudgetRed Budget remains red until new budget is finalized and approved ScopeAmber Requirements review still underway ResourcesAmber Majority of projects reporting amber status RisksAmber Program addressing risks detailed on subsequent slide IssuesAmber Program addressing issues detailed on subsequent slide Quality ControlRed Status driven by number of Sev 1 and 2 defects and lengthy defect turn-around time ERCOT ReadinessAmber Status quo until the schedule is released Market Participant ReadinessAmber Status quo until the schedule is released Note: health indicator measures are located in the appendix

4 4 Nodal Status Report - Program UpdateOctober 27, 2008 Highlights No tasks on the program critical path are currently behind schedule Core project update –EMS CIM Importer Completed Pre-FAT and started FAT. All critical defects have been resolved FAT is scheduled to complete by Nov. 14 –NMMS Started NMMS5 FAT testing –MMS MMS4 patch 4 FAT testing >50% complete MMS4 patch 5 loaded into MMS DEV and smoke testing complete –COMS Two CSI releases completed and ready to move to ITEST End-to-end Day Ahead Market business scenarios defined When the schedule is finalized, the program does not anticipate contingency for unknown changes that impact cost and/or schedule. As changes arise, they will be addressed on a case-by-case basis Defect update –The number of severity 1, 2, and 3 active defects has remained relatively constant –We expect a significant increase in numbers as more components enter i-Test

5 5 Nodal Status Report - Program UpdateOctober 27, 2008 Highlights - 2 Staffing update –Added a requirements analyst to support ongoing requirements activities –QA practice manager is scheduled to start on Oct. 28 Nodal staffing changes –Shawna Jirasek is transitioning into the EDW PM role –Sankara Krishnaswamy (Krish) is moving into the Outage Scheduler PM role –Jeff Robinson will start taking on more day-to-day oversight of the MMS project –Murray Nixon will continue as the MMS PM as well as structuring a process team to address nodal business processes –ERT efforts have been redistributed to Murray Nixon (nodal business process work/ERCOT readiness) –Daryl Cote will be leaving the Nodal program on Oct. 31. Matt Mereness will replace him as EDS PM, with Richard Howard overseeing the technical aspects of EDS –Stephen Kerr will be leaving the Nodal program on Oct. 31. Brian Brandaw will replace him as EIP PM

6 6 Nodal Status Report - Program UpdateOctober 27, 2008 Critical Path through Feb NMMS activities to deliver a validated CIM XML file are the critical path activities from now through early 2009.

7 7 Nodal Status Report - Program UpdateOctober 27, 2008 Activities Behind Schedule Business Process review –Problem: Gaps have been identified in Nodal business processes which will impact readiness –Mitigation: Project schedule under development and resources assigned Data storage –Problem: Nodal and current systems driving high data storage needs Current processes do not adequately address archival and storage requirements for Nodal Existing Data Center constraints limit new storage growth –Mitigation: Develop an Information Life Cycle Management (ILM) strategy and implement the strategy Project funds have been identified Project to be managed by Business, IT and Nodal

8 8 Nodal Status Report - Program UpdateOctober 27, 2008 Top Risks / Issues DescriptionStatus (Risk: Oct. 17) ILM strategy for ERCOT is behind schedule. Without this in place and executed, the nodal program go-live date could be delayed because of insufficient storage. Need to assign a PM to manage this project, working closely with the business owners and IT. (Risk: Oct. 17) Nodal business process work is incomplete. Without the business process foundation in place, requirements traceability, functional testing, nodal procedures, and training work cannot be completed. Murray Nixon has been assigned as the PM to lead this effort. Staffing needs and an associated budget have been developed. Development of a project schedule is in progress. Traceability between protocols and requirements is largely manual; not all requirements documentation has been updated to reflect NPRR changes and re-approved by TPTF. Requirements review in process to review all project requirements documentation, approvals, and incorporation of NPRRs.

9 9 Nodal Status Report - Program UpdateOctober 27, 2008 Cost: Element Summary When the integrated schedule has been finalized and the financial impact determined we will incorporate this into an updated forecast. Variance (over)/under Cost ElementBudgetActualBudget Internal Labor $ 42.4 $ 42.8 $ (0.4) External Labor (10.0) Hardware / Software (1.1) Travel and Other Subtotal $ $ $ (7.5) Finance Charge (1.0) Total $ $ $ (8.5) Nodal Program Cost Element Summary ($ Millions) Through September 2008

10 Nodal Status Report - Program UpdateOctober 27, 2008 Change Process – Current Situation TPTF/ERCOT recognize: We are in the last phase of development Every change initiative must be expedited (urgent path) Our scope needs to remain relatively stable Any change requires a lot more scrutiny Impact assessments are costly (time-wise) and should be conducted judiciously Also, We can not assume that ‘reduction in scope’ means ‘reduction in effort’ “Approved Post Go-Live” or “Deferred” does not mean ‘never”; it means ‘not now’ Our approach is optimized by: TPTF/ERCOT focusing on requests “Needed for Go-Live” ERCOT separating and streamlining impact assessment activities: Impact Triage earlier (1-4) Full Impact Assessment

11 Nodal Status Report - Program UpdateOctober 27, 2008 If TPTF and ERCOT agree on “Needed for Go-Live” Follow current change process If TPTF and ERCOT disagree on “Needed for Go-Live” ERCOT files comments as to rationale and collaborates with TPTF to resolve ERCOT/TPTF determine alternate impact assessment schedule, if necessary Needed for Go-Live? If there is significant impact to Nodal schedule and budget, ERCOT provides input to PRS for consideration by the Board of Directors.

12 Nodal Status Report - Program UpdateOctober 27, 2008 Appendix

13 Nodal Status Report - Program UpdateOctober 27, 2008 Health Indicator Measures MetricGreenAmberRed OverallBoth core indicators are greenAt least one core indicator is amber, but none are red At least one core indicator is red ScheduleAll activities on the critical path are complete, or are expected to be complete, on or ahead of the planned dates No dates have been missed, but one or more critical path activities is forecasted to complete late At least one critical path deliverable has missed its due date. Project implementation date is in jeopardy Budget (hrs)Project forecasted to complete within the baselined hours Project forecasted to complete up to 5% over the baselined hours Project forecasted to complete more than 5% over the baselined hours ScopeAll Requirements approved; no unplanned scope changes Pending approvals for Requirements; no unplanned scope changes Unapproved Requirements and/or unplanned scope changes ResourcesAll key resource positions are filled and no schedule delays are expected. One or two key positions are not staffed and the schedule may be adversely impacted. More than two key positions are not staffed and the schedule will be impacted. RiskAll project risks have a Risk Score =< 4 At least one project risk has a Risk Score => 5 and =< 8 At least one project risk has an Risk Score => 9 IssuesAll issues are being resolved by the required due dates Some issues are remaining open past the required due dates but none are of “critical” priority (Impact = 3 or 4) At least one “critical” priority issue (Impact = 3 or 4) is open past the due date Quality ControlDefect metrics meet all of the following: # of Severity 1 = 0 # of Severity 2 = 0 Avg. #. Days to Close Sev 1 and Sev 2 Defects < 45 % Reopen Defects < 15 Defect metrics meet at least one of the following: # of Severity 1 = 1 to 5 # of Severity 2 = 1 to 5 Avg. # Days to Close Sev 1 and Sev 2 Defects => 45 and =< 90 % Reopen => 15 and =< 24 Defect metrics meet at least one of the following: # of Severity 1 > 5 # of Severity 2 > 5 Avg. # Days to Close Sev 1 and Sev 2 Defects >90 % Reopen >24

14 Nodal Status Report - Program UpdateOctober 27, 2008 Questions?