1. October 24, 2007 Information Technology Nodal’s Impact on ERCOT IT CIM User Group Meeting Ron Hinsley ERCOT Chief Information Officer

2. 2 Enterprise ArchitectureAugust 21, 2007 Overview: ERCOT Primer The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to approximately 20 million Texas customers Represents 85 percent of the state’s electric load and 75 percent of the Texas land area As the independent system operator for the region, ERCOT schedules power on an electric grid that connects 38,000 miles of transmission lines and more than 500 generation units ERCOT also manages financial settlement for the competitive wholesale bulk- power market and administers customer switching for 6 million Texans in competitive choice areas

3. 3 Enterprise ArchitectureAugust 21, 2007 Overview: Nodal Primer Moving to a nodal design will satisfy the PUCT order to directly assign local congestion In the nodal market, the grid will consist of more than 4,000 nodes, replacing today’s 4 Zones (5 th NE zone consolidated to N effective 1/1/07 per PRR699) The Texas Nodal design is expected to deliver the following benefits: –Improved price signals –Improved dispatch efficiencies –Direct assignment of local congestion In today’s zonal market, the grid is divided into Congestion Management Zones, which are separated by the Commercially Significant Constraints Several limitations have been identified with the current zonal model: –Resources grouped by portfolio –Assignment of local congestion costs –Insufficient price transparency

4. 4 Enterprise ArchitectureAugust 21, 2007 Overview: Nodal Primer

5. 5 The problem is very complex: The system being controlled is complex and dynamic Market rules are detailed, interdependent and difficult to understand Detailed functionality and interactions of how systems support the process were not well understood. System boundaries were blurred. Moving from a 4 zone network to a nodal network with 1000s nodes Extending siloed technical and business processes to an integrated solution Increasing from a small number of “super” systems to best of breed applications that control the network and operate the market Product marketplace is dominated by a few companies Changing from screen scraped interfaces to web services Changing many point to point integrations to an Enterprise Service Bus Publishing market interfaces 18 months ahead of go-live to ensure market participation Integration of 14 COTS apps from 6 vendors The stakes are high: $263M over three years and $10M for every month late There is global interest in our success Enterprise ArchitectureAugust 21, 2007

6. 6 Overview: Nodal Primer Enterprise ArchitectureAugust 21, 2007 Building a complex system in a dynamic environment Without a guiding architecture and vision of the solution, prepare for the worst!! Previous attempts to describe the architecture had “failed” Many stakeholders with different needs Views of business process, data, information flow, systems, infrastructure, security, and organization were all incomplete We needed to know what had to be done We needed processes, standards, and architectural tools to be successful We needed to know ERCOT was ready

7. 7 Initial impact to ERCOT involved setting key strategies Key Nodal strategies:  ERCOT-led project – by comparison to the first market opening  Best-of-breed - products and vendors with proven delivery track records  Avoid “1.0”  Players in Nodal markets  ERCOT as integrator – supported by key consultants and contractors  Enterprise Architecture standards –  Rational Unified Processing (RUP)  System of Systems Architecture (SoSA)  Traceability  Industrial strength infrastructure, related disciplines – to handle multiple environments and hundreds of releases We looked back a while ago and wouldn’t change a thing in retrospect

8. 8 Bringing the IT Strategy to Life The IT Strategy Enterprise Architecture Approach Align IT infrastructure, data, applications and processes (people) to ERCOT's business strategy. Business Within a Business Change the focus of IT professionals to the level of external providers and to consider all they deal with as customers. The business fully understands what it receives for it’s IT dollars. Operational Excellence Raise the level of IT system delivery to meet or exceed customer expectations. Provide a level of service that makes everyone feel as if they are the most important customer of IT.

9. 9 Bringing Strategy to Life

10. 10 What the RUP?!? Enterprise ArchitectureAugust 21, 2007 The Rational Unified Process is a development framework created by Rational Software Corporation, now part of IBM RUP is an adaptable framework with several key principles: Adapt the process to the task at hand Balance stakeholder priorities, focusing on risk and high value first Demonstrate value early and often through iterations Elevate abstraction through modeling Focus continually on Quality

11. 11 Better Living with Standards With Nodal we’ve standardized on UML 2.0 as the modeling language for ERCOT UML is ideal for modeling application structure, data structure, business process, behavior, and architecture Enterprise ArchitectureAugust 21, 2007 … Ensure 60 Hz QSE Update Frequency QSE Nodal Adjust Generation Main Success Scenario 1.QSE and Frequency Monitor send Nodal frequency data to Nodal. 2.At 4 second intervals Time requests Nodal execute Load Frequency Control 3.… Use CaseUse Case Specification Sequence Diagram Operation Specification Deployment Diagram

12. 12 Common Services Transaction Monitor Mail Interactive Prg. Env. Collaboration Interactive Prg/Txt Ed Telephony Event ServicesDig Lib/Cont Mgt Publish and Subscr.Enterprise Service Bus ComponentsEDI/EIE Intelligent Agent Mgt.Web Content Mgmt InternationalizationWeb Application Server Virtual Machine Web Facilities Workflow Web Services BP Choreography Svcs Better Living with Standards Data and Data Access Services Data Data Area 1 Data Area 2 Data Area 3 Data Area 4 Data Area 5 Data Area 6 Data Area 7 Relational Database Hierarchical Database Object-Oriented Database Multidimensional Database Persistence Services File Storage Management Systems Management and Autonomics Services -Change - Configuration -Software Distribution - Workload Services -Problem - Performance -Backup/Recovery - Svc Level Automation/Orchestration -Asset - Operations -Contact Management Communication Services Conversational Remote Procedure Call Messaging and Queuing HTTP Common Transport Semantics Physical Equipment Subnetworking: LAN WAN Distributed Services Directory Security Transaction Manager Time Object Management Services Object Request Broker Life Cycle Externalization Collections Transport Services iSCSI Wireless TCP/IP NetBIOS ICCP ASC Local Operating Systems Services Applications Business Admin for ERCOT Product Mgmt Cust Portfolio Mgmt Cust Svc & Sales for issuers Product Mgmt & Ops Cust Accounting for MPs Financial Mgmt for ERCOT AD Tools 3GL Tool Suites 4GL Tool Suites OO Tool Suites Cross-Suite Tools Tagging & Scripting Productivity Tools Personal Productivity Tools Distributed Systems Services User Access and Presentation Services User Access Services Adaptation Interaction Enabling Services Connectivity User Presentation Services Human Computer Interaction Print View Multimedia Web Browser Network Services Resource Virtualization Services Physical Network Equipment Physical Computing Equipment Dynamic MM Comm. Control Local Operating Systems Other Utility Business Services Metering Rating Billing Peering and Settlement EA Building Blocks

13. 13 Majority of ERCOT wholesale market systems are being replaced/upgraded for Nodal MP Registration Market Operations OSCRRNMMS EDWMISEMS DAM Commercial Applications CM&M LF SCEDRUC Business and Engineering Model SettlementMid TermDay AheadReal Time User Interface Power Operations IMM Integration (information bus)  B&SBilling & Settlements  CRRCongestion Revenue Rights  CM&MCredit Monitoring & Management  DAMDay-Ahead Market  EDWEnterprise Data Warehouse  FT Financial Transfer  IMMIndependent Market Monitor  LFLoad Forecast  MISMarket Information System  MP RegMarket Participant Registration  NMMSNetwork Model Management System  OSOutage Scheduler  RUCReliability Unit Commitment  SCEDSecurity Constrained Economic Dispatch Degree of change 100% New/replacement >50% Upgrade/enhancement <10% Enhancement QSE Systems RPPF Our vendor landscape is much more complex

14. 14 Tracing the Requirements Binding Documents Requirements Use Cases Design SW Components Deployed Infrastructure Change & Configuration Management

15. 15 Measuring Success Enterprise ArchitectureAugust 21, 2007 YesterdayToday Tomorrow No SLAs Limited Definitions of Services Best Effort Capabilities Limited Visibility Performance Based SLAs for Nodal and Retail Elaborate Service Catalog Better Instrumentation Granular Business Process Enterprise SLAs Service Catalog Mapped to SoSA Full Visibility with Thorough Instrumentation and Event Correlation

16. 16 Sys Ops Admin Sys Ops DPO Mkt Ops Suport Operating Stds Ops Support Outage Coord Network Modlng Ops Planning Adv NW Apps Ops Engrg Sys Ops Training SO-Control Cente Treasury & Credit Admin Contract Admin & Procurement ICMP Accounting & Budget Corp DPO PMO Planning, QA, Reporting Program Admin PMO Heaviest business impact is on core operations and IT Market Rules Setlnt Metering Energy Anal Settlmnts/Blng Op Retl Cust Choice Comml Ops Data Integrity & Admin Mkt Ops DPO Rtl Mkt Analysis Mkt Ops Testing Retail Client Svcs Whlsl Client Svcs Information Systems Security Physical Security Congestion & Revenue Rights Regulatory Support & Reporting Planning Admin Planning Services Regional Planning System Assessment Cust & IT Services Sys Engrg Storage Rescs Network EMMS Dev Ent Int, IS & Arch Comml Svcs Corp & Cnsl Apps DB Admin Release Mgmt IT Coml Ops EMMS Prod Spt IT DPO

17. 17 Better Living with Standards Some Current Technology Standards Operating Systems: Windows Server 2003 RedHat Linux 3 IBM AIX 5.3L Server Platforms: IBM pSeries (Power) IBM xSeries (Intel) VMWare ESX (Intel) Relational Databases: Oracle 10g Microsoft SQL 2000/2005 Web Servers: Apache 2.0.46 Microsoft IIS 6.0 Application Servers: JBoss 4.0.5 Tomcat 5.5.20 Message Bus: TIBCO BusinessWorks Web Portal: TIBCO PortalBuilder Web Search: Google Appliance Languages: Ruby (on Rails) TIBCO Java Build Tools: Apache Ant HP PPM

18. 18 Questions and Answers Enterprise ArchitectureAugust 21, 2007 Handy Links: http://nodal.ercot.comhttp://nodal.ercot.comAll about Nodal http://uml.orghttp://uml.orgOMG’s Official UML Site