1 TAC UPDATE from ERCOT Retail Market Services and RMS Report August 8, 2002

2 Retail Market Update Topics –ERCOT’s 30 Day Plan and Other Critical Projects –Move-In/Move-Out Issues/Initiatives –ESI ID Tracking System (ETS) –Version 1.5 Project –Market Synchronization Plan –Non-PTB Back Dated Switches –Lodestar Data Loading Improvements –IDR Meter Usage Reports (ERCOT and TDSPs) –Resettlement Update –Portal Performance –Quick Recovery Team Update –Proposed POLR PUCT Rule Changes

3 Master Plan Update

4 Master Project Plan All Known In-flight & New Projects identified –Related project worksheet established with list of all known projects Status/Updates Targeted outcomes Resources (Funding & Headcount) required identified where known –Internal reviews with ERCOT senior management underway to confirm completeness and accuracy. Next Steps… –Completing consolidation of all active and planned projects –Review with ERCOT IT and Executive Steering Committees to: Ensure completeness of project list Establish priorities and dependencies Review resource requirements –Present overview to ERCOT BOD at August Meeting –Begin aligning ERCOT resources with priorities established when approved –Tie approved project spending and people to 2003 budget/plan

5 Move-In / Move-Out Issues/Initiatives

6 Move-in/Move-out Short-term Recommendations and Ideas DescriptionStatus R-1Greater transaction visibilityIncorporated in ETS Phase 2 requirements – refer to ETS status report R-2Cancellation of pending switch ‘straw man’ complete – under review by Task Force R-3Holding MI/MO transactions‘straw man’ being written – Leanne Hayden R-4Splitting MI from switches‘straw man’ being written – Vernon Pierce R-5Safety net Move-insRecommended to be dropped R-6NFI Reject CodesCompleted by ERCOT R-7Expedite ESI ID creation a) At ERCOT; b) at TDSP a)Completed by ERCOT b)‘straw man’ being written – Darrell Hobbs Idea 1Eliminating initial meter readNot being addressed at this time Idea 2Relax NFI LogicERCOT is researching this idea

7 Same CR Move-in Objective –Reduce volume of Move-in transactions at ERCOT –Reduce Move-in error rate Market-wide Completed –Identified various proposals for Market Acceptance AEP, CPE (Option A), Entergy and Oncor –CR sends 650_01 to TDSP requesting off-cycle read –TDSP sends 650_02 to CR with read data –CR sends 814_PC to update Customer Info –TDSP sends 814_03 Monthly to ERCOT

8 Same CR Move-in In Progress –Development by CPE to implement Option B CPE (Option B) 6-8 Weeks –CR sends 814_03 to CPE with Special Flag –CPE sends 814_04 to CR –CPE sends 867_03 Final and 867_04 Initial to CR –CPE sends 867_03 Monthly to ERCOT –Development by TNMP to implement their option TNMP Days –CR submits “flat file” request for meter read –TNMP responds with “flat file” containing meter read Next Steps –TDSPs to communicate certification procedure with CRs –Immediate Implementation of options using 650 Transaction Entergy must have ROA in place – Negotiating with PUCT

9 Macro Plan for Move-in/Move-out Long-term Solution Objective –Determine best solution to effectively handle Move-in/Move-out transaction processing for Texas Market –Address the market events represented by the 29 scenarios previously identified Some may be fully automated and some may involve more manual processes Proposed Solution –Establish market participant core Task Force –Develop Detailed Requirements Document –Solicit input/responses from vendors through an RFP –Summarize vendor responses for Task Force review –Recommendation to RMS on vendor short list –Vendor presentations to Task Force –Present final recommendation to ERCOT Board –Negotiate and award contract

10 Macro Plan for Move-in/Move-out Long-term Solution Deliverables –Detailed Requirements Document –RFP –Vendor Proposals Resources and Costs –TBD by task force

11 Macro Plan for Move-in/Move-out Long-term Solution Timeline –RMS and Board approvals to proceed (8/20/02) –RMS establishes Task Force (8/29/02) –Develop Detailed Requirements Document for RFP (tbd) –Review with RMS detailed requirements (tbd) –Release RFP to vendors (tbd) –RFP responses due from vendors (tbd) –Summarize vendor responses for Task Force review (tbd) –Recommendation to RMS on vendor short list (December meeting) –Vendor presentations to Task Force (tbd) –Vendor recommendation to ERCOT Board (tbd) –Begin contract negotiations (tbd) –Award contract (by end of Q1/2003)

12 ESI ID Tracking System (ETS)

13 ETS Phase I Objective –Develop a system to track complete ESIID life-cycle –Maintain ESIID data until transaction life-cycle is complete Completed –Detailed Requirements for Phase 1 –Functional and Technical Design Documents for Phase 1 –First Draft Design of ERCOT-internal System Reports for Phase 1 In Progress –Mock-up of internal reports and user interface –Development and production hardware on order Next Steps –Build Phase to start August 12, 2002 –Completion scheduled for November 1, 2002

14 ETS Phase II Objective –Develop a system to allow Market access into ESIID transaction life-cycle data –Maintain ESIID data until transaction life-cycle is complete Completed –Received information from 13 Market Participants on display data elements In Progress –Summary of Market display data elements to be distributed for review –Requirements Document for Phase II In Progress –Mock-up of Market Reports and User Interface In Progress Next Steps –Seek project funding and priority approval from ERCOT Board of Directors for ERCOT 2003 Budget

15 TX SET Version 1.5

16 TX Set Version 1.5 Existing system performance benchmark (to ensure processing speed is maintained). Conceptual System Designs (CSD) – Will distribute the CSD’s to Market Coordination team members upon TX SET. clarification. In Progress - Detail Design Phase Technical System Design (TSD) Training Documentation and Methods Testing scripts, files, and methodology Completed

17 Next Steps Week of September 2 nd meeting at ERCOT finalize design and production implementation plans. TX Set Version 1.5 6/17/029/17/0212/17/02 2/24/03 Detail Design Construction Internal System Test Market Test 4/4/03 Timeline 1.5 Implementation

18 Market Synchronization Activities

19 Objective –Address market issues resulting in an out of sync “Rep of Record” between ERCOT, TDSP, and CR systems for all ESI IDs Completed Items –Programs to compare and report discrepancies are complete –MP agreed upon approach resolution for 22 scenarios at July 26 th design meeting –Technical review has been completed on two rounds of test files In Progress –Letter to TDSPs and CR requested: Technical and business project contact person from each company, Estimated time and date the MP will submit synchronization files –Internal data synchronization. Market Synchronization Retailer Synchronization Project

20 Next Steps –By August 1 st …….Test run with encrypted files –August ……..All TDSPs & CRs MUST compile files –August 12 th ………..All files received by ERCOT –August 13 th ………..Status report conference call (go forward decision) –September 5 th ……ERCOT to identify out-of-synch results ERCOT will host 2 nd design meeting to prioritize and define correction criteria –September 10 th ….. RMS go forward/process decision ( vote) –October 3 rd …… Escalate issues to TAC (if required) Market Synchronization Retailer Synchronization (continued)

21 Market Synchronization – Non Price to Beat Objective –Make necessary corrections to ensure that >1MW Customers were switched on the correct date in January 2002 Completed Items –Number ESI Ids (>1 MW) Identified by CR’s 1,040 –Number of ESI IDs that are corrected 836 (80%) In Progress (as of July 31 st – to be updated) –Number of ESI IDs where CR matches but date does not 128 (13%) (TDSP and Retailers to agree to date) –Number of ESI IDs where CR is not CR of record 76 ( 7%) (TDSP and Retailers to agree to switch & date) Next Steps –Escalate ESI IDs not agreed upon

22 IDR Meter Data

23 TDSPs and ERCOT working to improve IDR data completeness ERCOT developed an enhanced “IDR Data Status Report” which was delivered to TDSPs starting on –Identifies any IDR ESI ID that has ever been active and associated load data –Includes all ESI ID Service History row to facilitate 867_03 date matching In special circumstances, ERCOT has deployed alternative data loading mechanisms to fill gaps and bring IDR data current in Lodestar. IDR Data Loading Notes

24 IDR Data Loaded into Lodestar – JULY 1 REPORT * NOTE: ERCOT (and REPs) may have received additional non-sequential data (i.e, February data before January data). ERCOT rejects all meter reads that introduce gaps in the database. 95% or better expected 66% % of IDR Data Loaded as of July 1, 2002

25 IDR Data Loaded into Lodestar August 7th Report 95% or better expected 69%

26 IDR Meter Usage Report (date through which 99% of data received)

27 Lodestar IDR Data Loading Improvement Recommendations by TDSPs

28 Objective –Implement process improvements which alleviate problems loading IDR data into ERCOT’s Lodestar system Activities –TDSPs provided a list of 8 issues and recommendations –ERCOT to analyze TDSP document and provide response in group forum –Define implementation possibilities and set timelines Completed Items –ERCOT received TDSP documentation on July 17 th –Initial review and analysis has been completed and is being shared with TDSPs Next Steps –ERCOT and TDSPs to agree on scope of effort to implement agreed-to recommendations at meeting on August 15 th –Seek project funding and priority approval from ERCOT Board of Directors. IDR Data Loading Recommendations by TDSPs

29 Resettlement Update

30 Objective Identify and track the key critical market issues needing resolution prior to the resettlement calculations of true-up statements for trade days beginning with July 31, 2001 Six Issues/Status: 1.IDR Data Loading % for market through mid Sept (100% required) 2.NOIE IDR Data Correction – Completed and verified by TDSP 3.Profile ID Corrections –ONCOR & AEP now pass the PWG approved acceptable criteria –TNMP & Reliant working toward meeting acceptable criteria (No ETC) 4.Lodestar and Siebel Status Mismatches –94% complete and remainder will be corrected before August 14 th 5.Negative Consumption Fixes –92% complete with TNMP commitment to provide corrections by August 7 th 6.Outstanding OOMC Disputes –QSEs have submitted corrections (reduced payments apply otherwise). Resettlement of True-up Status Update Once resettlements resume, statistics will be monitored and reported

31 Retail Portal Performance

32 Portal Performance Items Moved Portal E Ways to New Hardware week of 4/13 –Saw a temporary 10 % improvement Added components (threads) on 4/25 –Showed some very promising improvements Additional Architecture change was made 5/21 –Removed TCH component competing with batch transactions –Seeing a 30% decrease in timeout errors –Also added “heartbeat” functionality to verify EAI every minute Implemented additional redundancy improvements 6/8 –Improvements in redundancy (6) for find transactions –Limited the result set to 500 transactions Change made to Find ESI ID 7/28 –Moving Siebel queries directly to Oracle –Only 2 errors in the last 3 days (99.8% success!) Future options being evaluated –For Find Transaction – move directly to Oracle (ETA is August 19 th ) –Additional redundant paths for Portal transactions (if needed)

33 Quick Recovery Team Update

34 Quick Recovery Effort Focus: Problematic transactions that are required by the CR to generate end-use customer bills. Period: December 17, 2001 – May 31, 2002 For transactions/issues outside of this date range, MPs must create a FasTrak issue and contact their Registration Analyst for resolution.

35 Quick Recovery Effort Progress Created market website to track QRE progress by MP, root cause, etc. Database supporting website also acts as an audit trail for all QRE activities. Interviewed all TDSPs to determine procedures for handling back dated move ins and move outs during the recovery effort. Provided TDSPs access to a report to close the information loop and let them know when ESI Id issues have been resolved. Consolidated all requests for information and/or data from QRE to TDSPs into one spreadsheet with common format.

36 ESI Ids Reported to QRE (as of August 7, 2002) Current StatusQuantity New27653 In Analysis 3963 In Progress24201 Resolved34613 Total90436 Entity (In Progress IDs) Quantity TDSP 7340 QRE Team13141 CR 3720 Total24201 Point of Failure (Resolved IDs) Quantity Cause Not Reported 1691 CR16814 ERCOT EAI69 ERCOT FTP40 ERCOT Manual Process (814_08) 1869 ERCOT PaperFree 7081 ERCOT See Beyond 1 ERCOT Siebel35 ERCOT TCH3966 TDSP3046 Un-executable1 Total34613

37 Revised POLR rule from PUC

38 POLR Rule Background A PUC rulemaking is in advanced stages to revise the POLR rule for implementation by January 2003 Major changes in the draft rule: –AREPs assume role of POLR for non-paying customers at PTB with disconnection rights –Existing POLR non-pay customers to be transitioned to the AREP –Default POLR service for reasons other than non-pay to be bid competitively –PUC Staff’s recommended final rule and an implementation timeline will be considered at open meeting August 23, 2002

39 REP, POLR AREP, TDSP, ERCOT TRANSACTION Flow Current & Proposed for Non-pay Customers Current Drops ERCOT TDSP POLRTDSP 814_10 814_11 814_14 814_15 Proposed Drops for Non-Pay CREP ERCOT TDSP 814_10 814_11 814_14 814_15 650_ REP (any) 814_04814_03 814_04814_03 Disconnect 650_ Disconnect AREP POLR Customer list 814_01 814_02, 814_05 ERCOT TDSP 814_03 814_04

40 REP, POLR AREP, TDSP, ERCOT TRANSACTION Flow Proposed for Other Than Non-Pay Proposed REP (any) ERCOT TDSP Default POLR Manually done by ERCOT ERCOT Voluntary Customer Default POLR 814_01, 814_16 etc. REP Default ERCOT-driven if not orderly transition Requesting Customer Manually done by ERCOT REP Drop for Contract Expiration REP (any) Notify POLR POLR obligated to switch customer to its service

41 Retail Market Subcommittee Report Don Bender

42 RMS Leadership Changes RMS Vice Chair : Reed Comstock Strategic Energy TDTWG Vice Chair : Susan Tote Reliant Retail

43 PWG Operating Guides RMS Requests TAC approval of Profiling Work Group Operating Guides Version 1.0

44 Other RMS Actions Approved TDTWG recommendation for MP’s to adopt ERCOT Proposal on a Short Term Data Communications Plan Approved PRR on Extension of Proxy Day Determination Remanded a RMS Issue on Mass Customer to CR Segment