Texas Nodal Market Implementation ERCOT Board of Directors Meeting Budget Rationale October 17, 2006 Kathy Hager, Market Redesign Program Director

April 23 2007TPTF MeetingTexas Nodal Program UpdateJerry SullivanExecutive Director, Texas Nodal Program#12Texas Nodal Program Update23 April 2007AgendaItemPurposePageOverall Program Status For Information3Nodal Audit ResponseFor Information4Nodal Progress HighlightsFor Information5Nodal ScheduleFor Information8Scope change controlFor Information10#3Texas Nodal Program Update23 April 2007

Scope / QualityScheduleCostLegendSummaryAs reported on March 8, program is Amber but is being assessed continuallyAmberLatest monthly committed cost and forecasts are under by 10% of budget to date. Funding for Identity Management and change controls being defined.AmberAmberBacklog baseline established & impacts categorized. Projects conducting vendor negotiations to assess cost & schedule impact. QA plans and metrics in definition baseline target for end of April.RedAmberGreenEstimate at Complete = $263mGo-live = 12/1/08Go-live = 30 days+Program is aligned with current protocolsProgram is aligned to previous version of protocolsProgram is not wholly aligned to protocolsERCOT / MP web services specifications issued on time. Approach to EDS 2&3 trials completed and submitted to TPTF for approval. Confidence in schedule delivery needs to be improved, working on early releases of EDS 3 trials.#4Texas Nodal Program Update23 April 2007

All IBM recommended actions from December 2006 completed.

The high-level recommendations were: Modify the Role of the Nodal PMOUpdate Program Forecasts and Consider a Higher Cost ContingencyEngage Internal Stakeholders in the Nodal ProgramIncrease the Frequency of Integration DiscussionsModify the Tools & Techniques Used for Risk & Issue ManagementProvide Consistent Work Plan Structure with More Tracking InformationComplete Change Requests in a Timelier Manner

Already working on IBMs next reports recommendations.

Note: Higher cost contingency considered but not yet needed.The PMO has completed recommended actions by IBM from December 2006

We have fully discharged the actions recommended by the December 2006 review #5Texas Nodal Program Update23 April 2007March / April Major Program HighlightsEIP: Bell Ringer Nodal event: Published Web Service interfaces milestone met on 3/31/2007MPs data definition for automated (API) communication with ERCOT. Defining point for MPs since this is when they can start building systems to interface with ERCOT

EIP: Two way communications messaging and 3-part offer interface exposed to Market Participants on 3/22/2007

MER: Launch 1st web-based training module (ERCOT Nodal 101) 3/23/2007

MER: MIS Prototypes delivered ahead of schedule

NMMS: Phase 1a delivered to ERCOT development on schedule 4/12/2007

Program: Major vendor issues solved: Nexant (CRR) SOW and NDA agreements UISOL (EIP) SOW for integrationAreva (EMS) SOW for data importer and exporter

Program: Requirements approved by TPTFEMS requirements approved 3/1EDW Section 17 requirements submitted 3/22EDW Section 8 requirements to be submitted in May 2007

#6Texas Nodal Program Update23 April 2007Program Management Office (PMO)Launched 1st version of Nodal Balanced ScorecardPresented to PRS on Scope Change Control Process.Worked with Change Control to define Nodal scope baseline. Integration Design Authority (IDA) PackagePresented QA Nodal Leadership SummaryMIS and majority of COMS component use cases approvedCommercial Systems Package (COMS)181 use cases completed. 3056 test cases have been created.Network Model Management System/Network Model Package (NMMS)NMMSDelivered Phase 1a (first code drop) on schedule to ERCOT developmentTransitioned Network Model and Telemetry Project to operations and EDSImplemented Measurement weight changes into current zonal production environment

Energy Management System Package (EMS)Delivered Use Cases to IDA and Operations Completed Zonal Migration Code Merge ActivitiesCompleted EMP 2.3 Testing Activities Completed contract for CIM importer/exporter

Management System/SCED Package (MMS)Outage Scheduler CSD in review with TPTF

Enterprise Data Warehouse Package (EDW)Protocol 17 requirements doc submitted to TPTFEDW Project CSD doc submitted to TPTFDraft requirement specification for State Estimator and SCADA completed.Progress this Month to dateEnterprise Integration Package (EIP) The External Interfaces Specification deliverable was completed ahead of schedule and submitted to TPTF and MPsEIP QA Plan was approved by the QA Review BoardCompleted EIP build vendor selection. Contract negotiations underwayMarket Participant Engagement & Readiness Package (MER)Google appliance installed, tested, evaluation results being documented.Dashboard Portlet End to End POC completed using a mocked up web service.The MIS Production Test environment finalized and stood up.Integrated Readiness & Transition Package (IRT)LMS Training Registration process rolled out to ERCOT employeesAssessed PUC staff sizing analysis drafted approach for engagement.Sandbox: QSEs Connected to Who Am I: 14; QSEs Connected to Boomerang: 1Readiness AdvisorTPTF Approved: 10 additional metricsReady for TPTF Approval: 14 additional mtricsInfrastructure Package (INF)Environments completed: EIP Development environment; EIP Product Test Environment; NMMS Development environmentIntegrated Testing Package (INT)Verified VPN Access has Passed the Security SignoffReceived final approval for external testing configuration via guest networkWorked with Sandbox Testing Team to streamline testing processDraft of Test Data GUI interface completedCongestion Revenue Rights (CRR)Held Phase II Kickoff Nexant completed all deliverables associated with first Phase II milestone, MS-0.

#7Texas Nodal Program Update23 April 2007The short-term milestones are mostly on trackControl MilestoneBaselineActual/FcastCommentRequirements approval10/31/20063/31/2007EDW IMM requirements submitted to TPTF on 3/22. Currently incorporating feedback, vote to take place on 4/23. EDW Compliance requirements to be submitted on 5/7.EDS 1 Start5/15/20074/01/2007EDS1 started early as part of a phased approach to testingEnterprise Integration Build Vendor Selected3/31/20074/12/2007Vendor orals completed and selections made. Negotiations have begun.Sandbox Release Plan4/30/20074/30/2007IRT and EIP teams working to identify key features to be exposed to MPsEMS CSD Submitted to TPTF4/30/20074/30/2007On scheduleCOMS Dispute CSD submitted to TPTF5/31/20075/31/2007On Schedule#8Texas Nodal Program Update23 April 2007

We are working to start early EDS to encourage earlier MP involvement quality and support expectations must be managed appropriatelySoftware versions used for early EDS testing will not have completed our full quality cycle

EDS Software versions will have known defects that will be corrected under rigorous release management schedules

Emergency issues (e.g. servers down) will also have reduced service level agreements during early EDS timeframe

MPs that are early adopters will be encouraged to review the current ERCOT defect list to reduce submission duplication

This applies particularly to EDS 3 and especially software deliveries in MMS, EMS, CRR, and integration

System availability, quality of LMPs and other data, and support responses will improve over time

#89Texas Nodal Program Update23 April 2007We are working to confirm the implications of the revised schedule on environments, support

#910Texas Nodal Program Update23 April 2007We are working through impact assessment leading to change requests for Baseline 1 synchronization of all projects

40 of the 65 (65%) items have at least 1 project with a high or a medium impact (category 1 or 2)25 of the 65 (35%) items have all projects with aminimal or no impact (category 3 or 4)Impact categorization continues for new items to get ahead for the next synchronization work in progressBacklog list of65 itemsincluding Approved NPRRsDraft NPRRsWhite PapersBaseline 0(May, 2006)Ongoing NPRRs& white papersThe Impact Categorization Matrix helps triage the impacts for all the items across all the projects

Baseline 1(March 1, 2007)#11Texas Nodal Program Update23 April 2007

The process is designed to meet both NPRR/PRS and Nodal Change Control needs and focus on material changesDraft NPRRs not seekingadditional funds and essentialfor Go-live will be accepted within existing budgetDraft NPRRsbeing tabled iffound not essentialfor Go-LiveAfter evaluating the change request(detailed cost, schedule and systemimpact) the Nodal steering board may defer (boxed if approved by the board or tabled otherwise) it until post go-live.The Impact assessment team will report the status of NPRRs to TPTF, PRS, and the Nodal Steering Board on a periodic basis123The internal forward looking process of assessing change#Draft NPRR

Develop change request

Is it essential for Go-Live?

Does it seek additional funds

Detailed Impact assessment process

Nodal steering board approves the change request

End

Yes

Yes

Start

Conduct Initial Impact Categorization