1. 1 Update from ERCOT Retail Market Services to RMS November 13, 2003

2. 2 Retail Market Update Topics Commercial Application Systems Review Texas Market Link (PRP Phase 1) Update Retail API Update MIMO Stacking Solution V2.0 Update Data Variance / SCR 727 Extract Update FasTrak Day-to-Day Issues Progress Report Pre-Texas SET 1.5 Data Clean-Up Progress Report On-Going Data Clean-Up Update ERCOT Proactive Clean-Up Measures (Vote) Test Flight 1003 Update

3. 3 Commercial Application Systems Review PR-30082 Project Update Project Sponsors Jim Galvin Kevin Judice Richard Gruber

4. 4 Project History At the end of 2002 approval was received for 4 projects –PR-30058 Siebel 7.0 Upgrade/Replacement* –PR-30082 Commercial Application Systems Upgrade* Upgrades began on PaperFree and all SeeBeyond components as a result of their clear upgrade paths (PR-30082) –PR-30083 LodeStar Upgrade/Replacement* A functional review between LodeStar version 2.25 and 3.5 was conducted –PR-30110 Replace TCH* These same projects were approved for carry over to 2004

5. 5 Project Drivers Our recent history indicates our commercial systems: –Meet current business needs but not as efficiently as possible –Have been able to meet market design changes but are difficult to implement –Require significant IT support to consistently meet market needs in the area of processing times –Most upgrade options are ‘re-implementation’ with new versions and upgrade path may not be straight forward –Significant data manipulation and calculation functionality written outside of major systems Without action, our outlook for our existing applications: –May continue to incur a high total cost of ownership and risk of failure –Continued challenges to accommodate market driven changes

6. 6 ERCOT’s Architecture Review Approach The core systems that comprise and integrate commercial applications are all under evaluation ERCOT is developing a holistic set of functional and technical requirements –The requirements process includes representatives from both business and IT to promote the discovery of similar cross functionalities and dependencies During this process ERCOT will be evaluating if there are existing applications that better meet ERCOT’s functional and cost of ownership requirements. The possible outcome might be: Modify existing Replace Upgrade Build Most likely a combination of these

7. 7 Project Timeline A vital element of this project is determining what other options are available and the cost of those options –Current focus is on requirements –By year end, ERCOT will send a Request for Information to software vendors –Organize database of potential vendors and service providers –ERCOT expects to have a course of action defined early to mid 2004

8. 8 Summary of Project Vision Remain obligated to support the ERCOT market with the right solution and best cost option to meet near-term needs and longer-term considerations

9. 9 Texas Market Link ( PRP Phase 1)

10. 10 IT Update – Texas Market Link (Portal Replacement Project Phase 1) Initial Release : Weekend of October 4-5 Backed-out : Monday, October 6 Next Planned Release: December 3 Cause of Failure was a Technical Migration Issue: –Inconsistent Software Migration (installation issue) that surfaced under loaded conditions Monday morning Implementation changes for next Launch –Different Migration procedures (hardware migration, not software) –Contingency/Back-out Communication Plan Providing Weekly Updates on Retail Conference Call Reminder that the website URL will change: –https://tml.ercot.com

11. 11 Retail API Update

12. 12 IT Update ( API Issue and Redevelopment Efforts) API became corrupt/unrecoverable on October 3 ERCOT Development team is developing new API program to replace old functionality Planned Release Steps: –Download of Report Functions- released November 11 (this week) Delivery was on schedule and currently has no reported issues. –Find ESI Id and Find Transactions- target first week of December –Find Market Participant Data- target second week of December Providing Weekly Updates on Retail Conference Call Reminder that the website URL for the API changed: –https://pi.ercot.com/servlet/piController –(old address was pi.ercot.com)

13. 13 Move-In/Move-Out Market Solution to Stacking (Texas Set V.2.0) Presented by: Glen Wingerd

14. 14 Testing Recommendations –Delivered 242 recommendations to TTPT for testing –Identified party/parties that need to test each recommendation ERCOT Only:122 TDSP Only:14 REP Only:3 ERCOT and TDSP Only:64 ERCOT and REP Only:25 TDSP and REP Only:0 ERCOT, TDSP, and REP:14 –Ranked by Impact, Risk, and Volume –Developed a priority using a formula –Divided priority into 3 groups of High, Medium and Low Market Coordination Team for the Solution to Stacking

15. 15 Exception Processing –Conditions for exception processing 814_09 Rejects on Demand Cancels 814_09s Not Matching Open Cancel New ‘Cancelled with Exception’ Process Non Response to New ‘Cancelled with Exception’ Process Conflicting Response to New ‘Cancelled with Exception’ Process Leapfrogging TDSP Rejects for ‘008’ and ‘SBD’ Market Coordination Team for the Solution to Stacking

16. 16 Exception Processing –Overview Appropriate processing verified at ERCOT FasTrak issue logged Resolving party given specific number of days to resolve Some Service orders are then cancelled Escalation procedure used as appropriate Metrics on exceptions and dispositions including MP names, volumes, and time it took to resolve reported to RMS Market Coordination Team for the Solution to Stacking

17. 17 Project Overview Summary of Changes: Manage customer expectations by accepting and processing all valid requests. Impact Level Efficiency Communication Competition Business Problem Existing NFI logic forces an unreasonable amount of dependency on labor intensive workarounds. Execution of workarounds are causing synchronization issues between market participants. Lack of synchronization leads to improper billing and mismanagement of customer expectations Solution All valid transactions will be accepted and processed based on a set of market rules. Drop notifications will be sent at a point in time where the proper recipient can be positively identified. Rule based cancellations are sent on a pre- determined timeline with enough time for the recipient to react.

18. 18 Solution to Stacking Production Implementation Timeline 1/1 2004 Oct. RMS Production Implementation Date: 8/1/2004 7/7 2003 MIMO Task Force delivery of PRR to PRS 7/31 2003 Texas SET Version 2.0 Final Baseline 10/1 2003 Market Coordination team review of Production Processing Schedules 8/31 2003 TDSPs and ERCOT Production Processing Schedules due 11/14 2003 38 weeks Details on ERCOT exception processing due Draft Implementation schedule and plan due 5/3 2004 7/23 2004 5/17 2004 10 weeks Market Test Testing checkpoints at weeks 5 & 8 Final Implementation schedule and plan due

19. 19 Details on ERCOT Exception Processing Due 11/14/03 Track Market Participant Progress Develop Flight Test Plan –Procedural Requirements – TTPT –Conceptual Requirements – Market Coordination Team *Done –Functional Requirements – TTPT Script Sub-Team –Monitoring Requirements – Stacking Testing Advisory Team Develop Production Implementation Plan Develop Post-Implementation Success Criteria Next Steps

20. 20 Thank-you

21. 21 Data Variance / SCR 727 Extract Update

22. 22 ERCOT provided historical SCR 727 extract files (7/31/01 – 9/28/03) on October 6, 2003 ERCOT refining the extract logic to ensure completeness of the data provided Complete SCR 727 extract files to be provided by December 19, 2003 Several days needed for Market Participants to load complete data into their systems 120 Day countdown to the start of 2003 True-Up Settlements to begin on 1/1/04 2003 True-Up Settlements to begin on April 30, 2004 Market Participants are already analyzing historical data provided to identify variances Market Participants have begun filing variances against the data received to date SCR 727 Extract Status

23. 23 FasTrak Issue Status Day-to-Day Data Extract Variances (DEV)

24. 24 FasTrak 2003 “Day to Day” Issue Stats (as of 11-11-03) Of the 250 In Progress with ERCOT, 181 are resolved and awaiting other party resolution check off Total ESI IDs worked to date since January 1, 2003 = 256,048 Of the 3,049 New and In Progress with Non- ERCOT, 13 are for the year 2002 Number of ESI IDs not tracked

25. 25 FasTrak Data Extract Variance Issue Stats (as of 11-11-03) Of the 45 In Progress, 29 are resolved and awaiting other party resolution check off As a reminder: On 10-11-03, 1,452 existing ERCOT and Non-ERCOT issues for 2002 Trade Months were rejected with comment of “RMS directed close out of 2002 variances filed under the original extract process”

26. 26 Pre TX Set 1.5 Data Clean Up Directive from RMS 07-17-03 Meeting Pre TX SET 1.5 Status Report Ongoing Transaction Clean-up Process

27. 27 Pre-TX Set 1.5 Data Cleanup Background: ERCOT identified “In Review”, “Scheduled” and “Canceled with Exception with Meter Reads” that were not completed from early 2002 to April 11, 2003. RMS Vote, July 17 th, 2003: Recommend RMS direct ERCOT to completely clean-up by August 13 th, 2003 the Pre-Tx Set 1.5 In Review, Scheduled and Cancel With Exception that have been identified and sent to the market participants which should include cancels with CR approvals. ERCOT will provide at August RMS full statistics involving market participants broken down per issue type. ERCOT is directed that if the TDSP provides file names, ERCOT will locate and re-process if it is a valid transaction. RMS directs the TDSPs and CRs to provide transactions or information necessary to achieve the completion of the data clean-up.

28. 28 Pre-TX Set 1.5 Data Cleanup

29. 29 Ongoing Transaction Data Clean Up Clean-up Process Steps Completed Items – Next Steps Status Report

30. 30 Ongoing Transaction Data Clean-up Clean-up Process Steps: 1.ERCOT runs the query and defines the Action Items needed a)In-Review with Meter Read: Notify TDSP and request 814_04/25 then transaction will complete. (Date Range equals or greater than 07/01/01.) b)Scheduled No Meter Read: Notify TDSP and request 867 completing transaction. (Date Range equals or greater then 07/01/01.) c)Cancel With Exception (CWE) with Meter Read: Notify CR and TDSP and find out if they thought the transaction had completed. If so – take corrective action. (Date Range is 04/12/03 to 08/31/03.) d)Cancelled Permit Not Received with Meter Read: Notify CR and TDSP and find out if they thought the transaction had completed. If so – take corrective action. (Date Range is 04/12/03 to 08/31/03.) 2.ERCOT distributes the lists to MP who owe the follow-up action. 3.MP Responds and ERCOT coordinates the clean-up activities. 4.ERCOT to report Monthly to RMS.

31. 31 Ongoing Transaction Data Clean-up Completed Items : October 20, 2003: ERCOT sends out new lists to CRs and TDSPs October 29, 2003: TDSPs send analysis to CR November 4, 2003: CRs respond to TDSPs and coordinate final response to ERCOT ERCOT received responses from all TDSPs except Sharyland by November 7 th Next Steps: ERCOT to coordinate corrective actions to TDSP ERCOT to Request RMS establish a completion deadline of 12-12-2003 ERCOT will continue to report progress at each RMS meting

32. 32 Ongoing Transaction Data Cleanup

33. 33 Customer Protection and 814_08 Issue Background and Completed Items Matrix and Progress Report Other Status Items and Next Steps

34. 34 Background ERCOT has determined that there was an issue with the 814_08 manual- processing tool related to the cancel by customer objection process. While ERCOT systems were updated appropriately, 972 ESI IDs (spanning the August 2002 through July 2003 time frame) were identified where ERCOT has been unable to confirm that the TDSP was sent the 814_08 cancel. Completed Items All Scenario 1 instances that could be worked have been worked. ERCOT has approximately 25 that need further clarification from TDSPs, and there are 45 new ones stemming from ACN response (ACN response was received 10/21) 41 FasTrak issues (including 7 new issues based on ACN’s response): ─13 Resolved (spanning 16 switches) ─20 In Progress (some dialog has occurred) ─10 Not Started (no feedback) – 7 are “new” (ACN) Customer Protection Period and 814.08

35. 35 Customer Protection Period and 814.08

36. 36 Other Status Items Matrix of FasTrak issues not yet resolved provided to RMS Chair/Vice Chair on Nov 6 th – included CR names ERCOT has “processed” all email exchanges related to FT issues as of 11/10/03 Concern that ERCOT is not being informed of “resolution” in some cases. Next Steps 7 new ACN FasTrak issues – spanning 11 switches ERCOT to continue to escalate missing responses ERCOT to complete manual corrections by related to Scenario 1 (25 remaining instances + 45 new from ACN’s response) CRs and TDSPs make decisions on outstanding FasTrak issues and provide response to ERCOT Customer Protection Period and 814.08

37. 37 Pro-Active Transaction Resolution Measures 867s Received on Canceled Service Orders

38. 38 Situation ERCOT periodically receives 867_03 Finals and 867_04s for service orders that are Canceled in ERCOT systems. The Service Order Statuses that are considered Canceled are: Canceled (manually or concurrent processing), Canceled by Customer Request, Canceled by Customer Objection, Canceled Permit Not Received, Canceled with Exception, Unexecutable and Rejected by TDSP. This can indicate an out-of-sync condition between the TDSP and ERCOT. Volume: For the month of October there were 439 meter reads received against canceled service orders. –Of those, 363 were for distinct global IDs. –76 were duplicates – meaning ERCOT received both an 867_03F and 867_04 for the same cancelled global. –In at least 1 case ERCOT received 3 867s for the same global ID. Market Participants Affected: TDSPs, Competitive Retailers and ERCOT 867s received on Canceled Service Orders

39. 39 Timing and Implementation: ERCOT initiated this process on November 7, 2003 and the first list detailed to the TDSPs via FasTrak contained data for 867s received against Canceled Service Orders from November 1, 2003 through November 6, 2003. Each Friday thereafter, the list will contain items from the previous Friday forward. 867s received on Canceled Service Orders

40. 40 Proactive Measure: ERCOT will compile transaction data related to the situation described above and on a weekly basis submit an ERCOT initiated FasTrak issue with the TDSP identified as the Resolving Party. The short description of the issue will read: 867s Received on Canceled Service Orders (867_RCSO). The long description of the issue will contain a request for the TDSP to review the Service Order and Transactions to determine if the service order was actually Canceled in the TDSP system. The TDSP is to provide a response for each FasTrak line item within the issue spreadsheet: 1.The service orders are Canceled in the TDSPs system - the TDSP should update the FasTrak issue spreadsheet accordingly. No further action is necessary. 2.The service orders are Complete in the TDSPs system - identifying an out-of- sync condition with ERCOT. The TDSP would then initiate an effort to clear the out-of-sync condition. (see ERCOT proposal for resolving out-of-sync conditions) 867s received on Canceled Service Orders

41. 41 Considerations for clean-up of Out-of-Sync Situations : CRs receive both completing and cancellation information on service orders and should initiate an inquiry to the TDSP any time they see both on the same service order (they should not wait for this process) Additionally, CRs who submit an enrollment transaction receive a Service Order extract identifying the ERCOT Siebel status of the transaction Use of a “modified” Inadvertent issue process has not been a great success in the missing 08 clean-up effort Precise rules allow for definitive understanding of how each Market Player will respond but does not circumvent the ability for ad-hoc corrections 867s received on Canceled Service Orders

42. 42 ERCOT Proposal for Handling Out-of-Sync Conditions : For: ▪ Canceled  Canceled by Customer Request  Canceled by Customer Objection  Unexecutable  Rejected by the TDSP Process: The TDSP will cancel the service order in their system. For:▪ Canceled Permit Not Received  Canceled with Exception Process: When TDSP indicates service order should be completed, ERCOT will locate and reprocess transactions identified as sent by the TDSP to complete a service order. (May require TDSP to re-send transaction) NOTE: FasTrak is the mechanism to handle exceptions to the above policy 867s received on Canceled Service Orders

43. 43 Pro-Active Transaction Resolution Measures Cancel with Exception (CWE) Report Transaction Mapping Status Reject Report Missing 867 Report

44. 44 Cancel With Exception (CWE) Report If a TDSP does not send an 814_04/25/28 transaction within a timely manner, the business process is Canceled automatically by ERCOT systems. The cancellations are known as Cancel With Exceptions. Report has been produced manually by ERCOT since February 10, 2003 Daily report provided to the TDSPs displaying those transactions that will go CWE within the next 5 business days. Report being automated for delivery to TDSPs via the ERCOT portal in late December or early 2004 (Market Notice will precede roll-out) Volume: For October ‘03, ERCOT notified TDSPs of 166 “Pending CWEs” Actionable Items: TDSP to retrieve the report and provide missing response transaction before CWE occurs If TDSP identifies a discrepancy with the report, they should open a FasTrak issue Cancel with Exception (CWE) Report

45. 45 Transaction Mapping Status Reject Report This report will provide a list to the TDSPs and CRs containing information for inbound Transaction Mapping Status rejects (TX SET) Report has been produced manually by ERCOT since mid 2002 Daily report provided to the TDSP or CR who submitted the transaction Report being automated for delivery to MPs via the ERCOT portal in late December or early 2004 (Market Notice will precede roll-out) Volume: For October ‘03, ERCOT notified MPs of 3,682 Mapping Status Rejects Actionable Items: CRs and TDSPs to retrieve the report, correct their transaction and resubmit If MP identifies a discrepancy with the report, they should open a FasTrak issue Transaction Mapping Status Reject Report

46. 46 Missing 867 Report The Missing 867 Report will provide TDSPs information about Service Orders in a scheduled state for which ERCOT has not received an 867 completing transaction at least seven days after the scheduled meter read This item is a part of the Pre-TX Set 1.5 clean-up and the Ongoing Transaction Clean-up efforts Weekly report provided to the TDSP Report being automated for delivery to TDSPs via the ERCOT portal in late December or early 2004 (Market Notice will precede roll-out) Volume: On 11/6/03, ERCOT identified 7,946 instances where the current date was more than 7 days after the scheduled meter read date (Approx 60% are scheduled for September/October 2003) Actionable Items: TDSPs to retrieve the report and provide 867 completing transactions If TDSP identifies a discrepancy with the report, they should open a FasTrak issue Missing 867 Report

47. 47 Flight Testing Status Report

48. 48 Flight 1003 Status Report Progress: Frame 1 – complete Frame 2 – on schedule A total of 3 frames for testing Flight scheduled to conclude – 12/05/03 Issues that will be brought back to TTPT for next flight CM101 script –Expected results need to be refined –Some MP used different forms (TMA vs. TMI) –Two TDSP had some difficulties with the 814_20s. Scheduled meter read dates on a couple of scripts need to be pushed into the correct frame of testing.

49. 49 Flight 0104 Announcement Flight 0104 will test for TX SET Version1.6 Testing is required for New Market Participants entering the Texas Retail Market. Current Market Participants entering new service territories, testing additional business functionality, or adding another entity to their business umbrella will need to test in Flight 0104. Market Participants participating in Flight 0104 will test with GISB EDM v1.4, but will also be required to support NAESB EDM v1.6 in another environment for concurrent test processing. The NAESB EDM v1.6 transition is scheduled for implementation April 3, 2004.. The deadline to register for participating in Flight 0104 Retail Market Testing is December 10, 2003.

50. 50 Flight 0104 Announcement ERCOT will host an orientation meeting in preparation for Flight 0104 TX SET Version 1.6 Retail Market Testing. This meeting will be held on Wednesday, December 3, 2003, from 10:00 AM – 3:00 PM CST at the Hilton Austin Airport. The orientation meeting will include an overview of the market, as well as additional examples of test scripts, to better prepare New Market Participants for testing within a test flight. The orientation meeting is mandatory for New Retail Market Participants. New Market Participants include New Competitive Retailers (CRs) entering the Market, and/or New Municipal or Cooperative TDSPs opening their territory/entering the Market. Current Market Participants entering new service territories, testing additional business functionality, or adding another entity to their business umbrella are welcome to attend the orientation meeting.

51. 51 Questions ?