Texas Nodal Program ERCOT Readiness & Transition (ERT) Business Process Update TPTF January 12, 2009 Kevin Frankeny

2 Agenda Review transition activities of the ERCOT Readiness & Transition (ERT) team as they relate to business process model and procedures  ERT business process objective and team  Business process approach and timeline  High level business processes review  Next steps  Questions

3 ERT BP Objective and Team  Revise / develop core nodal business processes and procedures  Existing work will be leveraged as much as possible to ensure that the future state is comprehensive and accurate  Business process efforts occurred in 2006 and  Will include market participant interfaces  Partnering with requirements management team to ensure alignment of process work with traceability efforts  Initial focus on ensuring accurate nodal business process definitions  Team formed to lead the reviews and revisions of previous work Team Members / Roles Murray Nixon – Project Manager Kevin Furlong – Process Manager Kevin Frankeny – Business Process Lead Chuck Hansen – Training Lead Brandon McElfresh – Metrics Lead Kenneth Ragsdale – ERCOT Enterprise SME Floyd Trefny (Reliant) – Nodal Protocol / MP SME

4 Business Process Approach and Timeline

5 ERT Business Process Approach  Conduct background research using previous business process work  Develop business processes using “top down activity” based approach  Draft “straw man” process streams and flows  Interview process owners or designated subject matter experts  Refine / complete process diagrams and narratives  Conduct cross-functional workshops  Focus on “human” activities  Examine “pass on” practices  Assist with development/revision of procedures, where necessary  Conduct quality control reviews  Ensure governing document compliance (Nodal Protocols, Operating Guides, etc)  Partner with requirements team in establishing traceability to requirements  Review with TPTF and ERCOT Business Owners (VPs / Directors)  Finalize process diagrams, narratives and procedures  Manage approvals of processes and procedures

6 ERT Business Process Timeline Business process effort will be prioritized targeting completion of definition and review prior to the start of related MP engagement activities

7 High Level Business Processes Review

8 Pragmatic process development requires balance of effort with value. Defined levels with increasing detail allow consistent approach to be applied. Level 3 Level 4 (Optional) Level 2 Level 1Conceptual Level Process Identification Level Process Maps Sub-Process Maps Core Business Processes Functional Breakout of Core Processes Depiction of Discrete Business Processes Detailed Maps (Where Needed) Level 5Procedure Level Procedures 14 ERT BP Terminology Today

9 Current BP Model Current BP model high level core processes are defined by the ERCOT Mission Statement, not the actual supporting business processes

10 Plan the Power System Operate the Power System and Markets Manage Commercial Operations Provide Market Services Support Operational and Market Monitoring Conceptual Level (1) Revised BP Model - Core High level processes have been re-defined to clearly identify the business processes that support ERCOT’s mission and regulatory statute obligations

11 Plan the Power System Plan the Transmission System Plan for Resource Adequacy Manage Power System Modeling Perform Operational Planning Operate the Power System and Markets Manage Congestion Revenue Rights Manage the Day-Ahead Market Perform Security Analysis & Reliability Unit Commitment Manage the Adjustment Period Operate the Real-Time Power System Manage Commercial Operations Meter and Aggregate Data Perform Settlements & Billing Perform Financial Transfers Provide Market Services Register and Qualify Market Participants Manage Market Information System Manage Disputes Facilitate Customer Choice Program Administer Renewable Energy Credit Program Manage Protocol Revisions Support Operational and Market Monitoring Monitor and Report Operational Performance Provide Market Monitoring Data Process Identification (2) Level Revised BP Model - Core Next level processes were re-defined to clearly align with nodal protocols and a logical time-sequence when possible

12 Next Steps  Responsible business owners (VP/Directors) have been identified  Work with business owners to identify process and procedure owners  Draft preliminary next level processes  Engage process and procedure owners to revise or complete processes and procedures  Ensure all Nodal requirements are enabled  Initiate quality control (review) process  Establish protocol requirement to process/procedure mapping to establish and ensure traceability  Review with business owners  Review with TPTF  Finalize process diagrams, narratives and procedures (Version 1.0)

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