ERCOT Program Management Update RMS Meeting – May 15, 2003 Steve Wallace

Project Updates Monthly Activity Project Performance The 18 Projects completed in 1 st Quarter includes projects started in the last Quarter of 2002 For the 50 Priority 1 Projects: 18 are Complete 20 are In Progress and 12 are In Planning New Projects Are Being Prioritized by the Market and ERCOT

Project Updates Highlights of Completions TX Set V1.5 Market coordination was key success factor (Thank You!) Commercial Systems Disaster Recovery Tested well below the 48 hour requirement Trending Information: Project Management staff added in 1 st Qtr Number of projects closed Planning and Active projects will relate going forward Major initiatives around market design, retail transaction performance, etc. are on the horizon ERCOT 2004 Budget Planning starts in late June, completes in September Project Activity

Technical Operations Releases Technical Operations Market Operations Enterprise Operations Energy Management SystemsClearing, Settlement and BillingPortal / PUCT Market Interface Market Management SystemsMarket Relationship Management Transaction Management Transaction ProcessingCyber Security Facilities Architecture and Maintenance Serve, Ensure, Protect and Operate Release 2.1 & 2.2 EMS front end replacement System map Customized generation monitoring Customized one line displays EMP 2.2 upgrade User interface enhancements related to resource plan and schedule changes Ability to print resource plan Market Monitoring Additional development work with BOD approval Simulation Engine Pilot - Plexos Release 3.0 Release 3.0 & 3.1 Mitigate constraint oscillation Security constrained optimal power flow Dynamic ratings Load rollover during line outage Multi-hour, multi-day outage evaluation studies Special protection schemes in contingency analysis VSAT/TSAT Interface upgrades Enhance PTI export Simultaneous A/S procurement (PRR342) Balancing energy – ramp rates (PRR349) Enhancements to BES and RPRS markets RPRS market re-design (SCUC) Association of BE bids with RPRS awards (PIP137PRR211) Resource ramp rate constraints Allow resource plan updates after adjustment period (PRR359) Automate calculation and posting of CSC Limits Handling of resources in Test Mode (PRR332) Enhanced Market Monitoring Day Ahead/Forward Market/Matching/Scheduling Engine POS/MOS Design for new market model, Pilot? Draft Release 4.0 Release 4.0+ Texas Nodal, replace MOS POS rollback or POS Replace to support Texas Nodal Automate A/S qualification testing Changes to A/S performance monitoring and frequency control algorithms Remove BE and energy schedule dependencies on resource plan Regulation service from loads (PRR307) Fleet deployment of OOME? Automated Market Power Mitigation Pilot Real Time Market Indicies and Monitoring 2 nd Qtr 2 nd Qtr ‘04 4 th Qtr ‘04 4th Qtr3rd Qtr Release 2.0  Direct weather data path to EMMS  Integrate OSI PI systems  Commission alarm system  Smoothing algorithm (PRR350)  Outage sensitivity factor  Outage scheduler customization  BULs and Blocked deployment (PIP112/PIP210)  Oracle 9i upgrade  QSEMOS web enhancements  Balancing energy deployment timing improvement  Market operator interface – printing requirements Release 3.1

Market Operations Releases Technical Operations Market Operations Enterprise Operations Energy Management SystemsClearing, Settlement and BillingPortal & PUCT Market Interface Market Management SystemsMarket Relationship Management Transaction Management Transaction ProcessingRisk, Cyber Security, Facilities Architecture and Maintenance Serve, Ensure, Protect and Operate Release 2.0 -BUL and Blocked Deployment of LAR -SCR 727 Extracts -Combined Cycle Units -Balancing Energy Mismatch Schedule -GISB 1.4 Transport -Texas Set Version 1.5 -TX Set 1.5 ETS Changes -EDI Pipeline Improvements -Move In / Move Out Short Term Changes -Retail Market Performance Measures -Commercial Applications Disaster Recovery -Upgrade Tape Backup System -Austin Computer Room Expansion Release 2.1 & 2.2 -Competitive Metering for Large Non Res. Customers Pilot -Proxy Day Determination Extensions -EPS Meter Data Transmittal Via Extract -Meter Data Loading Improvements -Increased Number of Sub QSE’s -Commercial Applications Development Environment -RMC Redundancy -TCR Redundancy -OVWTA Combined Network Improvements -Lawson & HR Upgrades -Market Monitoring Pilot -Increased Zones Study Request Release 3.0 -Load Profiling Enhancements -Build Load Research Sampling Capability -TCR Settlements Synchronization -MIMO/Stacking, TCH, Registration Replacement and Competitive Metering Design -Supplemental Load Profiling Improvements -Enhance ESI ID Lookup Capabilities Pilot -Invoice Generation Performance Enhancements -Hardening EDI TX Pipeline -EDI Pipeline Performance -DA/DW Redundancy -Rental/Build Facility Systems -Texas Nodal Design & Studies - Server Consolidation Release 3.1 -MIMO/Stacking, TCH, Registration engines replacement/upgrade and Competitive Metering tied to major release timing -Texas Set Version 1.6 -Commercial Systems Performance Enhancements -Forward Markets and Forward Market Clearing Engine? -Standardize Retail XML Transactions -Texas Nodal Protocols, CBA and Rollout Plan -Initial Enterprise and Risk Dashboard Capabilities -PUCT & Market EDW Release Texas Nodal Market System (clearing, scheduling, trading, balancing, billing and settlement tied to retail systems, slated for Mar 06) -Texas Set Version 1.7 -Full PUCT/MOD/RISK Market Analysis Portal and Reporting Release 3.0 Draft Release nd Qtr 2 nd Qtr ‘04 4 th Qtr ‘04 4th Qtr3rd Qtr Release 2.0 Release 2.1 & 2.2 Draft 3.1

Ability to Assess our Project Portfolio