ERCOT IT Update

Ken ShoquistVP, CIO Information Technology

Board Meeting

October 2003

October 2003

page 2AgendaAgenda

Metrics Cost Savings Efficiency Effectiveness Portal Summary

October 2003

page 3MetricsMetrics

MetricsIdentified opportunities for improvementMaintain reporting of key metrics

IT Blue BookDeveloped and in useMeasuring key indicators

EMMS Acceptable levels Missed 3 intervals in September

Transaction Processing Market volume slightly down by

7% (seasonal) Average processing time

continues to decrease

Settlements All-time high of 7351 in September 75% volume increase in 8 months

Project Management 4 projects completed in September 23 in process Schedule slips from EMMS vendor

for ERCOT and PUC projects forecasted

October 2003

page 4Cost SavingsCost Savings

VendorsVendors Savings Savings %%

SavingsSavings$$

Market Market Flow ThruFlow Thru

Consultant and Contractor Rates

(Capital $)

A 20.0 1,800K

B 22.5 50K

C 17.5 364K

Communications (WAN)

A 46.0 265K 40%

B 54.0 645K 40%

Service/Support Agreements

A 54.0 1,000K 100%

Annual Savings $4,124,000

Three-Year Projected Savings

$ 10.57M

October 2003

page 5EfficiencyEfficiency

Requirements TrainingDrive down consulting costsPrepare us for future projects; i.e., Texas Nodal

Progress Tools purchased to support consistent development methodology Implementing tools for enterprise project management

OpportunitiesWeakness in transition of software from test to productionProduction processes continue to be a significant focus area

• Example: failure of portal implementationNew Key Management in Place

Tony Dulin, Manager System Engineering & AdministrationCarlos Gonzalez-Perez, Manager EMMS Production

Skillfulness in avoiding wasted time and effortand

The ratio of the output to the input of any system =

BusinessValue

BusinessValue

October 2003

page 6EffectivenessEffectiveness

Effective EMMS Systems Improving network modeling with more effective use of state estimator for

improved reliability Focusing on production processes

Effective Commercial Systems Focus on commercial systems architecture/Reliability – Requirements

underway CIG (Common Interest Group) Texas architecture group in process ISO architecture meeting held at ERCOT last week

Effective Server Consolidation & Automation Consolidation – effective staffing ratio, avoid expanding costs Automation – effectively build and manage servers Virtualization – effectively utilizes server assets

Effective Security Practices ERCOT CIP meetings progressing Secured infrastructure = high value

October 2003

page 7CIP Advisory GroupCIP Advisory Group

Critical Infrastructure Protection Advisory Group Meeting held October 13 Unanimous agreement on importance of group Base charter created, modifications being made Providing advice, assistance and best practices

Companies volunteering time and energy BP Energy Reliant TXU

Steering Committee & Group Proposed steering committee from Generators (6), Transmission (2), QSE

(4), ERCOT (1) Group membership – open to all ERCOT market entities Working task groups created from group membership

Working task groups (examples) Regulation compliance Texas market standards

CenterPoint LCRA ERCOT

Trending Analysis & Reporting Confidentiality

October 2003

page 8Texas Market Link – SummaryTexas Market Link – Summary Background

TML migration began Friday, 10/3 and completed Sunday, 10/5, as scheduled Stability issues reported on Monday morning 10/6 at 7:45 AM Efforts to research TML stability issues halted at 9:30 AM TML backed out and pre-migration portal restored Wholesale functionality (excluding Rpt Explorer) available by 10:30 AM Retail functionality (excluding Rpt Explorer) available by 6:00 PM Full functionality for Report Explorer not available until 10/9

Root Cause Migration produced issues in Production that did not exist in Test

Proposed Migration Solution Team will expand load tests to identify/correct potential issues For migration, MPs will be pointed to the new TML servers at cut-over Target re-launch and potential pilot date based on Market and User input

Separate incident with the Commercial Applications API Impacting MP ability to extract commercial reports programmatically Cause: Hardware failure twice Issue: Unable to regain full functionality restored without rebuilding modules Manual solution via portal in place Redeploy commercial API functionality within 2-3 weeks

October 2003

page 9SummarySummary

Good progress in renegotiation of major contracts, several key contracts remaining to rework/establish.

Major focus areas: EMMS vendor product delivery schedule issues Production process and procedures Server consolidation Commercial Systems Architecture Project Delivery of new Portal