1. November 2, 2006 LESSONS FROM 2003-04 CIPAG 1 Lessons from 2003-04 Critical Infrastructure Group Bill Bojorquez November 2, 2006

2. LESSONS FROM 2003-04 CIPAG 2 2003-04 CIP Advisory Group Purpose Purpose: A collaborative effort to bring together owners and operators of critical physical and cyber assets for securing the Texas electric sector.  Channel security information from Local authorities Regional authorities Federal authorities  Discuss security solutions  Share information  Communicate and clarify NERC security standards  Assist in security standards implementation

3. November 2, 2006 LESSONS FROM 2003-04 CIPAG 3 2004 CIPAG Proposed Structure “ERCOT CIPAG will be sanctioned by the ERCOT board of directors for the purpose of monitoring compliance with defined NERC standards. In addition, the group may offer security advisory services, assist market participants in developing stakeholder standards and will assist in communicating and clarifying critical information from federal and state agencies.”

4. November 2, 2006 LESSONS FROM 2003-04 CIPAG 4 2004 CIPAG Proposed Structure (cont.) CIPAG:  Will serve as an expert advisory panel to the ERCOT Board of Directors and subcommittees  Will establish security standards for interfacing with ERCOT systems.  Will not set stakeholder security standards but can assist in developing standards. These security standards may be more stringent or specific than NERC’s and must be approved through the reliability subcommittee (ROS)  Will establish and maintain an information reporting procedure for critical infrastructure protection among industry segments and with federal and state government agencies.  Will conduct forums and workshops related to the scope of CIPAG.  ERCOT staff will lead the CIPAG and manage an open stakeholder forum.

5. November 2, 2006 LESSONS FROM 2003-04 CIPAG 5 Department of Energy NERC/ CIPAG ISO CIO Security Committee ERCOT Members State Agency Educate on best practices / standards Coordinate security Incidents Distributing information from federal and state agencies Solicit federal and state funding where appropriate Represent ERCOT market’s interest to federal and state agencies Issue 1: Reach is too Broad Department of Homeland Security Federal Bureau of Investigation U.S. Secret Service

6. November 2, 2006 LESSONS FROM 2003-04 CIPAG 6 Issue 2: Significant Resource Burden CIPAG Physical Cyber Operations Subcommittees TAC Reliability RMS, WMS Subcommittees TAC Reliability RMS, WMS ERCOT Board of Directors ERCOT Board of Directors Federal State NERC Agencies Federal State NERC Agencies Market Participants Market Participants PUCT  Will establish and maintain an information reporting procedure for critical infrastructure protection among industry segments and with federal and state government agencies.  ERCOT staff will lead the CIPAG and manage an open stakeholder forum.

7. November 2, 2006 LESSONS FROM 2003-04 CIPAG 7 What Could be Helpful from the 2004 CIPAG?  Draft charter  Proposed Governance Model

8. November 2, 2006 LESSONS FROM 2003-04 CIPAG 8 2004 CIPAG Governance Steering Committee  Drafts charter and proposes the governance structure for review and approval by the ERCOT Board of Directors  Companies who volunteer resources to the Steering Group: TXU Reliant BP Governance Committee  Elected by Market Segments  Proposed Members: Generators (6), Transmission (2), QSE (4), ERCOT (1)  Reports to the Board of Directors  Chaired by ERCOT Director of Security  Vice Chair and Secretary elected by Committee Members  Working task groups created from group membership CenterPoint LCRA ERCOT

9. November 2, 2006 LESSONS FROM 2003-04 CIPAG 9 2004 CIPAG Governance (cont.) Communications and Initial Distribution:  All QSEs (65)  All Transmission Service Providers (17)  PGCs with total generation over 800MW (30) Others can participate by subscribing to open exploder list.