1

Update from ERCOT Market Services

to the Board of Directors

October 15, 2002

2

Retail Market Update

Topics– ERCOT’s Master Project Plan– Move-In/Move-Out Issues/Initiatives – GISB 1.4 Update – Data Transparency Project Update– Quick Recovery Team Update– New Power Transfer Update– Market Synchronization Activities– Consumption Data Loading Reports– Lodestar Data Loading Improvements– Resettlement Update

3

Master Project Plan Update

4

Master Project Plan

• 2003 Proposed Projects– Project worksheet established with list of all known requested projects

• Status/Updates

• Targeted outcomes

• Resources (Funding & Headcount) required identified where known

– Internal reviews of projects with ERCOT steering committee completed

– PRS completed prioritization of projects originated by Market Participants on August 28th

– TAC approved list of priorities on September 5th

– List delivered to ERCOT BOD targeted for approval at October meeting

– 3 New projects requested since September 5th

5

Master Project Plan

• 2002 Planned Projects– 51 Projects in progress– 22 Projects completed between August 1st and October 14th 2002– 5 Projects continuing on into 2003 for completion– 5 Projects removed from the 2002 plan (require reprioritization for

2003)

• 2002 Projects continuing into 2003 for completion include:– PR-20117 Internal Map Testing and Verification– PR-20079 Change Deployment Instructions_PRR281– PR-20067 Simultaneous Procurement of Ancillary Services– PR-20111 Hardening Initiatives– PR-2007801 IDR/NIDR Gap Corrections

6

Master Project Plan

• 2002 Projects removed from active status (requires reprioritization to proceed)– PR-20068 Interzonal Congestion Management:  Interim fix completed; any

further effort will go back through the prioritization process.

– PR-20071 Two Settlement System: Manual fix announced to market and Board.  If automated solution desired a new project request will be submitted through the prioritization process.

– PR-20080 Define OOME as Instructed Deviation:  PRR282 withdrawn and project canceled

– PIP106 Direct Load Control:  Deleted from 2002 Active list and has been prioritized for 2003 and included in Consolidated Prioritization List.

– PR-20083 Ratcheting of OOME:  Project withdrawn

7

Master Project Plan

• Next Steps…– Conduct Project Management Office Procedures Training from October 30th

through November 13th 2002

– Remaining ERCOT resources aligned and scheduled against Q1 2003 projects by December 6th 2002

– Monthly project prioritization adjustments and recommendations:

• ERCOT Executive Steering Committee

• Market committees and subcommittees

• ERCOT IT and Business Teams

– Finalize and distribute documentation on the projects request/prioritization process

8

Move-in and Move-out

Solutions Update

9

Market Participant Meeting

10

MP Visits

• Purpose– ‘Root out’ all sources of pain associated with Move-Ins

– Get each MPs opinion of worst problems

– Discuss possible solutions

– Find out if identified problems are common among all types of market participants

– Discuss concepts with consumer advocacy group

– Verify that all participants are dedicated to solving the problems and aware of the possible systemic impacts

– Discuss deployment of workarounds (Safety Net, Same CR Move-Ins, etc.)

11

MP Visits

• Audience– TDSPs (5 - CenterPoint, AEP, Oncor, Entergy, TNMP)

– AREPs (4 - Reliant Retail, AEP, TXU E, Entergy)

– CREPs (6 - Coral, GEXA, Republic, TCE, Constellation New Energy, Green Mountain)

– Vendors (2 - Exolink, EC Power)

– Consumer Protection (1 - Public Utility Council)

12

MP Visits

• Results– Identified several issues that were not previously identified

– Confirmed several common problems across many Market Participants

– Discussed concepts for solving identified issues

– Developed an average ‘pain’ level and frequency for major issues based on input from each MP

– Discussed several concepts with consumer advocacy group to verify compliance with Customer Protection

– Revealed inconsistencies and improper executions of workarounds

13

MIMO Workshop

14

MIMO Workshops

• Methods– Three type of issues; Existing Systems, Current Execution, & Market Gaps

– Two measurements for identifying order of discussion for issues• pain level• quantity of ESI Ids affected.

– The issues that are being pursued are as follows:1. Those that rank high on the pain level and quantity affected and are expected to be

relatively easy to repair2. Those that either are easy to fix but don’t rank high on the measurements or rank

high on the measurements and are difficult to fix.3. Those that are most likely to remain as workarounds for a longer period of time.

– They rank low on pain and quantity, but appear difficult to fix

– Three time frames for solutions are being applied;• Short-Term (solutions that can be implemented immediately or prior to next April)• Mid-Term (solutions that can be implemented next year after April)• Long-Term (solutions that can be implemented after 1/1/2004)

15

MIMO WorkshopL

evel

of

Pain

Number of ESI ID’s affected

Issue 1

Issue 6

Issue 3

Issue 4

Issue 5

Issue 6

Issue 2

Issue 7

Issue 8

Issue 9

Low

High

High

16

MIMO WorkshopL

evel

of

Pain

Number of ESI ID’s affected

Issue 1

Issue 6

Issue 3

Issue 4

Issue 5

Issue 6

Issue 2

Issue 7

Issue 8

Issue 9

Low

High

High

Low -

Net

Effect

of Is

sue

- H

igh

17

MIMO WorkshopC

ost

of A

ddre

ssin

g

Net Effect of Issue on Market

Issue 1

Issue 6

Issue 3

Issue 4

Issue 5

Issue 6

Issue 2

Issue 7Issue 8

Issue 9

Low

High

High

18

MIMO WorkshopC

ost

of A

ddre

ssin

g

Net Effect of Issue on Market

Issue 1

Issue 6

Issue 3

Issue 4

Issue 5

Issue 6

Issue 2

Issue 7Issue 8

Issue 9

Low

High

High

Higher Impact

& Lower Cost

19

MIMO Workshop

• Results– 32 Concepts were discussed

• 7 Concepts were dismissed for various reasons• 1 Concept was determined as solved in Version 1.5• 23 Concepts were discussed

– 4 Concepts were tabled until additional information can be obtained

– 19 Concepts were discussed at length and are being considered for recommendation to RMS

» 10 Short-Term» 9 Mid-Term

• 1 Concept was not discussed (lack of time)

20

Next Steps

• MIMO Taskforce meetings– October 23, & 24 in Austin

– October 29, & 30 in Dallas (tentative)

• Recommendations to RMS at November RMS meeting– Potentially 15-24 Concepts

• Release of implementation timelines

• Development of Texas Set Change Controls, Protocol Revision Requests, and RFP(s) as needed

• Deployment of Solutions

• Re-Evaluation of Move-In/Move-Out processes

21

Timeline 08-29-02 RMS establishes Task Force09-05-02 Kickoff Meeting – assignments given for MP transaction

root cause analysis10-15-02 Complete root cause analysis and comprehensive list

of business scenarios TBD Develop detailed requirements document for RFP - RMS Approves MIMO requirements document(s)

- Release RFP(s) to vendors - RFP Responses due from vendors - Summarize vendor responses for Task Force review - Recommendations to EOTF on vendor “Short List” - Vendor presentations to Task Forces - EOTF recommendation to ERCOT Board - Begin contract negotiationsEnd 1Q03 Award contract

Move-in/Move-outLong-term Solution Status

22

GISB 1.4 Update

23

GISB 1.4 Update

• RMS agreed at August meeting to move forward with implementing GISB 1.4 at ERCOT

• Internal testing and implementation of a GISB 1.4 interface is underway at ERCOT, – Production Sign-off scheduled for 10/25

• All production components are in place as of 10/11– Acceptance Testing and Market Participant Testing – 10/15-24

• TDTWG is surveying market participants to finalize migration readiness dates– Preliminary migration schedule reviewed at 10-4-02 TDTWG – Market Participant migration will begin week of 10-29-02– Goal is to complete migration by April 1, 2003

24

ERCOT Data Transparency(ETS)

25

Data Transparency Project

• ETS Phase I Progress– Development and Production Database Servers and Application Servers

are configured and installed on the network

– Report Development 99% complete

– Production testing is underway

– Database transaction loading to start 10/21

– User Documentation is being finalized

– Backup and restart procedures coordinated

– Implementation Schedule is being revised to ensure adequate testing• Estimated to move three weeks to last week in November

26

Quick Recovery Team Update

27

ESI Ids Reported to QRE (as of October 15, 2002)

Current Status Quantity

New 461

In Analysis 6766

In Progress 50140

Resolved 79638

Total 137005

Entity Quantity

TDSP 34271

QRE Team 7049

CR 8820

Total 50140

Point of Failure Quantity

Cause Not Reported 6990

CR 37000

ERCOT EAI 3979

ERCOT FTP 694

ERCOT Manual Process (814_08)

3428

ERCOT PaperFree 7359

ERCOT Siebel 2129

ERCOT TCH 6427

TDSP 11632

Total 79638

28

New Power Transition Status

29

New Power Transition

Status as of 10/11/2002

• Two ESI Ids remain to be completed

• “Scheduled” at ERCOT

• Waiting for 867-04

• Scheduled meter read date 9/24/2002 (backdated)

30

Final New Power Transition Numbers

42,690 ESI IDs TXU Energy Services

37,175 ESI IDs Reliant Retail Services

2,022 ESI IDs 3rd Party Competitive Retailers

260 ESI IDs New Power Submitted Move-Outs

82,147 ESI Ids Total Transitioned

31

Market Synchronization Activities

32

• Objective – Address market issues resulting in an out of sync “Rep of Record” between

ERCOT, TDSP, and CR systems for all ESI IDs resulting from market startup/processing issues as well as subsequent workarounds

• Completed– ERCOT identified “Perfect Sync” and “1 Day Perfect” – sent lists to MPs– ERCOT identified out-of-sync categories at Sept 10th design meeting– Task Force identified additional ESI IDs considered “In Sync” – sent lists to MPs– Task Force prioritized 8 categories based upon potential customer impact – sent

lists to MPs

• In Progress– TDSPs and CRs to complete analysis of priority 1-4 files and respond to ERCOT

by October 18th (priority 5-6 response date TBD)– Weekly conference calls scheduled on Tuesdays through October– “How to” make repairs face-to-face meeting scheduled for October 25th

.

Market Synchronization Retailer Synchronization Project

330

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

Market Synchronization Retailer Synchronization Project

Considered In Sync5,399,860

Under Analysis739,039

Non-ERCOT area Removed from Analysis

945,000

ESI IDs

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

Considered In Sync5,279,063

Under Analysis859,836

Non-ERCOT area Removed from Analysis

945,000

ESI IDs

September 26, 2002 Report October 16, 2002 Report

34

• Next Steps

– October 15th, 22nd, 29th Follow-up Conference Calls Define items for immediate “fix” and report on progress Define issues to raise to RMS

– October 25th Face-to-face meeting to finalize decision on “backdating” fixes

– November 13th Present any disputed scenarios to RMS

– December 5th

Escalate issues to TAC (if required)

Market Synchronization Retailer Synchronization (continued)

35

Market Synchronization“TDSP as LSE” Clean-up

October 10, 2002 RelationshipStatus exists after Active as of

Feb 01,2002 10/10/2002CenterPoint 8,350 505ONCOR 18,328 433TNMP 515 71CPL 2,246 793WTU 3,164 314

Market 32,603 2,116

• Objective– Ensure that all ESI ID are converted from the “TDSP as LSE” by the time True-

Up Settlement of February 2002 begins (December 7, 2002)

• Clean-up Plan – ERCOT to send TDSPs list of ESI ID affiliated

with “TDSP as LSE” any time after Feb 01, 2002 – TDSPs to provide correct effective date concurrent

with usage record prior to February 01, 2002 or identify de-energized/inactive ESI IDs

– ERCOT to make correction based upon TDSP response (complete pending orders, establish relationship, etc…)

– Weekly conference calls with TDSPs (already takes place with ONCOR and CenterPoint)

• In Progress– ERCOT to send revised lists to TDSPs by 10-21-2002– TDSPs to respond with new effective dates or status data by November 01, 2002

36

Market Synchronization – Non Price to Beat

• Objective– Make necessary corrections to ensure that >1MW Customers were switched

on the correct date in January 2002• Completed Items

– Per RMS direction, ERCOT sent lists to each MP for reconciliation:• Full list of ESI ID in the >1MW project was confirmed• Still to be fixed list (subset of the full list) was also confirmed

– 1,133 ESI Ids (>1 MW) identified by CRs (meeting the April 30 deadline)• Number increase attributed to reconciliation of lists with Market

Participants– 1001 (88%) ESI IDs are corrected– 74 ( 7%) ESI IDs were agreed not to fix by TDSP and CR

• In Progress– 58 (5%) ESI IDs remaining to be fixed

• 11 – CR of RECORD needs to be fixed• 42 – Date of when CR became CR of Record needs to be fixed• 5 – where CR and TDSP are not in agreement – CR will have to escalate

37

Market Synchronization – Non Price to Beat

• Next Steps– ERCOT to continue to confirm changes in Siebel and Lodestar

– Final analysis in progress at ERCOT

– ERCOT will provide suggested next steps to the submitting CR and TDSP

– Conference calls being held with TDSP to determine next steps for those ESI IDs that still need to be fixed (ERCOT metering team included on calls)

– Affected CR to determine next steps for ESI IDs where no agreement is reached

CR1 CR2 CR3 CR4 CR5 CR6 Total

TDSP 1 3 0 2 5 0 7 17

TDSP 2 0 1 0 0 0 2 3

TDSP 3 0 0 0 1 5 5 11

TDSP 4 0 1 10 1 2 13 27

Total 3 2 12 7 7 27 58

38

Consumption Data Loading Reports

39

% of IDR Data Loaded by MRE (as of 09-24-2002)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

7/31 8/14 8/28 9/11 9/25 10/9 10/23 11/6 11/20 12/4 12/18 1/1 1/15 1/29 2/12 2/26 3/12 3/26 4/9 4/23 5/7 5/21 6/4 6/18 7/2 7/16 7/30 8/13 8/27 9/10

CPL

WTU

ONCOR

CenterPt

TNMP

Brazos

LCRA

Rayburn

STEC

System

IDR Data Loaded into LodestarSeptember 24th Report

95% or better expected

91%

40

% of IDR Data Loaded by MRE (as of 10-11-2002)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

10/1 10/15 10/29 11/12 11/26 12/10 12/24 1/7 1/21 2/4 2/18 3/4 3/18 4/1 4/15 4/29 5/13 5/27 6/10 6/24 7/8 7/22 8/5 8/19 9/2 9/16 9/30

CPL

WTU

ONCOR

CenterPt

TNMP

Brazos

LCRA

Rayburn

STEC

System

IDR Data Loaded into LodestarOctober 11th Report

95% or better expected

93%

41

IDR Data Status Report 99% Data Available per MRE

As of As ofSeptember 24, 2002 October 11, 2002

CPL 12/03/01 01/14/02CenterPoint 12/31/01 12/18/01ONCOR 12/03/01 12/28/01TNMP 06/25/02 01/14/02WTU 01/22/02 01/25/02

Brazos 09/15/02 09/30/02LCRA 09/12/02 10/02/02Rayburn 08/31/02 09/30/02STEC 09/03/02 09/30/02

Market 12/20/01 01/17/02

Meter Reading Entity(MRE)

42

Non-IDR Data Status Report October 14, 2002

Percent of Actual Non-IDR Datafrom October 11, 2002 Batch Process

32%

37%

20%

32% 34%

0%

34%

95% 96%

80%

92% 93% 95%

100% 99% 99% 99%95%

99%

0% NA0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CenterPoint ONCOR TNMP CPL WTU Sharyland Market

Initial (9-25-02) -16 Days After

Final (8-14-02) - 59 Days After

Re-Settle (10-8-01) - 369 Days After

43

Lodestar IDR Data Loading Improvement Recommendations by TDSPs

44

• Objective – Implement process improvements which alleviate problems loading IDR

data into ERCOT’s Lodestar system

• Completed Items– ERCOT and MPs met August 15th to define scope of 9 items– Conference call held on August 26th to refine scope and follow-up– 6 items are complete (see matrix on next page)– TX SET reviewed 2 EDI related recommendations on Sept 16th (see

matrix)

• In Progress– 2 items defined for immediate action (both are currently in test)– 4 items defined as long term fixes (project request being drafted)

• Next Steps– ERCOT to define scope of “additional Lodestar Data Loading

Improvements” project

IDR Data Loading Recommendations by TDSPs

45

Resettlement Update

46

Resettlement of True-up Status Update

SeptOct

NovDec

JanFeb

MarApr

MayJun

JulAug

SepOct

NovDec

20032004

December 7, 2002

True-Up Settlement of February 01, 2002

The date all ESI IDs should no longer be with

the “TDSP as LSE”.

November 1, 2002

True-Up Settlement of November 20, 2001

The date we move from the ERCOT Board resolution to the Protocols IDR Data Threshold

April 1, 2003

Date we expect to be back to six month after the trade day True-Up

Settlements

November 14, 2002

True-Up Settlement of December 17, 2001

Drop dead date for correction of Non-PTB ESID Backdating

October 16, 2002

80 re-settlements performed to date(Through Oct 18, 2001)