Emergency and Other Event Communications ERCOT Board of Directors Richard Gruber, Director of Market Services Paul Wattles, Manager, Governmental Relations & Communications May 16, 2006

2 Event Communications Improvement Efforts May 16, 2006 ERCOT Event Types NatureScope 1. Grid Disruption EECP or other Call to action regarding situation related to grid operations, grid integrity 2. ERCOT Inc. Disruption Event in progress that threatens ERCOT Inc. operating facilities, IT systems or staff, may impact ability of ERCOT to exchange data with MP’s May threaten grid reliability or other ability of ERCOT to consistently meet its service obligations or expectations 3. Market Disruption Event in progress that may threaten wholesale or retail market integrity Awareness that a market event is in progress which could result in a significant negative financial impact to several MP’s (subject to legal and confidentiality constraints) 4. ERCOT Issue Other issue or change in operating state that could negatively impact ERCOT reputation or confidence in ERCOT More slowly evolving issue, no immediate threat to real time operations or day-to-day service delivery ERCOT Event Communication Types (examples)

3 Event Communications Improvement Efforts May 16, 2006 Key Communications Constituencies Need for timely and accurate internal notification of management team, communications staff and client services staff Need for timely & appropriate communications with: Commissioners Key PUC Staff Legislative Leadership Governor’s Office SOC Market Participants: QSEs, TDSPs, LSEs Public: via ERCOT.com ERCOT Officers, Board, Staff News MediaAll Legislators

4 Event Communications Improvement Efforts May 16, 2006 Event ID Decision making Message development 1 Message Legislators/ Staff State Ops Center PUCT/Staff ERCOT Event Coordination Team News Media Members/ Staff ERCOT Board/ Staff Key Concept 1 message Many audiences Multiple channels Instantaneously Simultaneously

5 Event Communications Improvement Efforts May 16, 2006 ERCOT Communications in EECP Event ERCOT Event Stage ERCOT action/ communication Triggering event 1. First notice Conditions are being watched closely Alert for Forecast of Insufficient Capacity 2. Second notice Capacity Reserves are actually at minimum levels Deployment of non-spin reserves to maintain capacity sufficiency 3. EECP Step 1 All available Generation Resources dispatched Capacity Reserves below minimum levels 4. EECP Step 2 Interruptible Loads (LaaRs) deployed Difficulty maintaining frequency at 60 Hz 5. EECP Step 3 Media appeal for conservationContinued frequency decay 6. EECP Step 4 Rotating firm Load shed Continued frequency decay below 59.8 Hz 7. Cancellation of EECP Step 4 All firm Load restoredFrequency restoration 8. Cancellation of EECP Step 2 Interruptible Loads restoredFrequency restoration 9. Cancellation of EECPGrid conditions normal D R A F T 5/12/06

6 Event Communications Improvement Efforts May 16, 2006 Communications during EECP Stage 5 (EECP Step 3) & Updates PUC --Commissioners --Exec. Director --Media relations --Infrastructure/Reliability --Govt. Relations Legislative Leadership Governor’s Office SOC Hotline All of the above PLUS….. News media All legislators All Market Participants & other interested parties Activate ERCOT.com web page for public updates Market Participants -- QSE, LSE, TDSP Primary Contacts ALL STAGES ERCOT Officers & Board

7 Event Communications Improvement Efforts May 16, 2006 Other Areas Requiring Immediate Attention Event Identification Training in pre-event identification and escalation – “talk first, then fix” Establishment of “message coordinator” role Triage and Trigger “Message coordinator” point for triage and trigger Situational assessment related to communication needs Decision making process Establishing 7/24 communication capability Action Plan Execution Development of situational action plans/scripts Internal coordination/distribution pre release One author, one set of facts Distribution list development Mass distribution/multi channel technology deployment Inbound Q&A coordination Roles and responsibilities matrix