ERCOT IT Update

Ken ShoquistVP, CIO Information Technology

Board Meeting

April 2004

Page 2

April 2004

Market Oversight and Monitoring System - Shoquist

Projects Update - Connell

CASUP Update - Galvin, Gruber, Judice,

AgendaAgenda

Market Oversight and Monitoring System

Project Update

Ken Shoquist

Page 4

April 2004Market Oversight and Monitoring SystemMarket Oversight and Monitoring System

Project began in mid-2003 to provide the PUCT with enhanced market monitoring capabilities. System went live in mid-February 2004.

Joint effort between multiple industry partners — PUCT, ERCOT, AREVA and Potomac Economics

Two Main Applications:

1. StudyMarket Application

Ability to simulate and analyze historical market clearing conditions in a standalone environment. Market information available to PUCT in near real-time after each interval.

2. Indices, Screens and Report (ISR) Application

Near real-time monitoring of market activity and behavior. Ability to generate reports on market indices and review of participant conduct.

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April 2004Market Oversight & Monitoring SystemMarket Oversight & Monitoring System

2. Indices, Screens and Report (ISR) Application (cont.)

Automated reports will detect bidding conduct or other events that warrant further investigation by MOD.

Screens and indices are designed to:

Identify generating units that have local market power.

Detect flaws in market rules or procedures that interfere with the efficient operation of the market or create gaming opportunities.

Detect bidding strategies or other conduct that may constitute economic or physical withholding.

Identify potential manipulation of transmission constraints.

Example Index: Residual Supply Index

Identifies when a supplier faces limited competition because its resources are needed (at any price).

Projects Update

Rob Connell – Director, Project Management

Page 7

April 2004Projects Completed First QuarterProjects Completed First Quarter

Projects Completed in January

Texas Set 1.6

Commercial Applications Development System (P-Test Prime)

Congestion Management Zones

Lawson Procurement System

Projects Completed in February

PUCT Market Monitoring System

Transmission Congestion Rights – Phase 1

Payment for Minimum Energy when OOMC Issued

SeeBeyond and PaperFree Upgrades

Projects Completed in March MS Project Server – Phase 1

Market Operations QSE Test Environment

Commercial Applications System Upgrade (CASUP) Project

Direct Load Control

Computer Room HVAC and PDU Upgrades

Facilities Expansion Construction at Taylor locations

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April 2004IT Project PerformanceIT Project Performance Project Process Improvements In 2004

6 completed 36 in progress 21 in planning Release 3 moved 11 projects to

in progress

Program Area Teams Launched CART (Continuous Analysis & Requirements

Teams) being implemented to plan releases and provide impact analysis

Project Activity Project Performance

0

5

10

15

20

25

30

35

40

4th Qtr Jan Feb Mar

Completed In Planning In Progress

0%

20%

40%

60%

80%

100%

4th Qtr Jan Feb Mar

On Time On Budget Deliverables

March 2004 Projects

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April 2004

Scope Provide a standalone, functional market operations test environment dedicated to

wholesale market participant testing that enables XML interface and business testing for qualified scheduling entity (QSE) market participants.

Budget = $735K. Actual Committed to Date = $494K Negotiations with EMP vendor saved ~$200K for separate license purchase.

5/19/03 10/21/03 2/16/04Today

Init/ Planning12 weeks

Design8 weeks

Build12 weeks

Prove-in4 wks

8/10/03

3/9/04 NGP 2

ERMSPDA 10.7.2.98

ITW2KT41 10.0.126.61

ERTWEBD 10.20.1.106

Market Operations Test Environment HW & SW

W2KPortal

(2 CPU) Jrun, Yahoo / Tibco, Server

Cert.

SoftwareLicenses

Policy / LDAP(1 CPU)

Metaframe, Server Cert. Netegrity

Siteminder, iPlanetLDAP

Solaris

Tru64

DMZ Firewall

MOS Web XML / API

(1 CPU) Apache Stronghold, Jrun,

Coldfusion, Server Cert.

MOS & EMS(4 CPU)

Habitat, EMP, Oracle

Active Directory(1 CPU)

Portal DB(2 CPU)

SQL Server

SPD(1 CPU)AIMMS

Database

Veritas & Measure Ware on All

ITSOLT01 10.0.126.106

ITW2KT40 10.20.2.42

ITW2KT39 10.0.126.60

ERMEMSA 10.7.2.100ERMMKTA 10.7.2.1013/9/04 NGP 2

ERMSPDA 10.7.2.98

ITW2KT41 10.0.126.61

ERTWEBD 10.20.1.106

Market Operations Test Environment HW & SW

W2KPortal

(2 CPU) Jrun, Yahoo / Tibco, Server

Cert.

SoftwareLicenses

Policy / LDAP(1 CPU)

Metaframe, Server Cert. Netegrity

Siteminder, iPlanetLDAP

Solaris

Tru64

DMZ Firewall

MOS Web XML / API

(1 CPU) Apache Stronghold, Jrun,

Coldfusion, Server Cert.

MOS & EMS(4 CPU)

Habitat, EMP, Oracle

Active Directory(1 CPU)

Portal DB(2 CPU)

SQL Server

SPD(1 CPU)AIMMS

Database

Veritas & Measure Ware on All

ITSOLT01 10.0.126.106

ITW2KT40 10.20.2.42

ITW2KT39 10.0.126.60

ERMEMSA 10.7.2.100ERMMKTA 10.7.2.101

Test4 weeks

1/15/04

Market Operation Test EnvironmentMarket Operation Test Environment

MOTE released on time using top tier portal! All 12 deliverables met. Major Deliverables:

Production-like HW (three platforms) Fully licensed environment

Ready for TML prerelease to QSE’s scheduled by Client Relations.

ERCOT is the ONLY ISO to provide such an environment!

Commercial Applications Systems Upgrade Project -

Project Update

Jim Galvin – Director, Market Operations

Richard Gruber – Director, Market Services

Kevin Judice – Director, IT Development

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April 2004CASUP Project

The CASUP project began in October 2003 to:

Evaluate the core systems that comprise the commercial systems platform –

Lodestar, PaperFree, SeeBeyond (TCH) and Siebel

Evaluate existing commercial software applications and other options that may

better meet ERCOT’s functional and cost-of-ownership requirements

Develop a set of business and technical requirements using a process that

includes representatives from both business and IT

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April 2004

Business Requirements for Commercial Systems

Used an agile approach, including the Rational Unified Process (RUP) and Joint

Requirements Planning (JRP) sessions, to capture and articulate requirements

Completed Enterprise Business Model (EBM)

Completed Business Use Cases

Requirements Gathering

Technical Specifications for Commercial Systems

Completed Supplementary Specification

Completed Technical Architecture Design

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April 2004Product Evaluation

Commercial Systems Software Product Evaluation

Request for Qualification (RFQ) process completed:

• 19 responses received • Responses evaluated by Project Leadership Team and rated using weighted scoring• List categorized and shortened to:

Full Solution: Excelergy, Lodestar, SAP Aggregation & Settlements: Alstom/AREVA(Eterra), ICF, OM Retail: Siebel

Product demonstration process completed:

• Demos focused on functional, technical and rough cost criteria• Products evaluated by ERCOT managers and SMEs - rated using weighted scoring• Solution Option alternatives developed by CASUP Team

Enterprise Application Integration (EAI) product evaluation process constructed

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April 2004Solution

Mid-term actions to improve vendor support level

Upgrade Lodestar wholesale to v3.7 to get current with vendor and gain advertised performance improvements

Upgrade Siebel to v7.0 and evaluate work flow capabilities

Develop enterprise-wide application integration strategy (EAI)

Long-term to improve reliability, scalability, and extensibility

Implement EAI application and architecture plan

Conduct a Proof-of-Concept (POC) to investigate using Lodestar to support retail business functions

Conduct a POC in support of future TNT initiatives, evaluate billing and settlements capability of AREVA’s Eterra and Lodestar’s 4.x products

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April 2004

AttachmentsAttachments

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April 2004Production MetricsProduction Metrics

Released six projects and 90 SIRs into production SIR procedure being updated and improved Currently in testing for TML portal launch three SAS 70 audit preparation and documentation continues for

May 1 start

EMMS Four intervals missed Focused on Release 3

Transaction Processing Vendor patch installed to correct

post update problems Processing times continue to

improve

Settlements 5,638 in Mar 99% on-time settlement posting

Project Management 6 completed 36 in process 21 in planning

Summary for MarchSummary for March

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April 2004

2 1 2

11

6

2

27

0

6

12

13

0

43

020406080

100120140160180200

0

5

10

15

20

25

30

EMS (Frequency Control) 8 4 - 10 57 152 2 26 - 43 - - - - -

Market User Interface - - - - - 60 746 - - - - - 2 2

RTB Intervals Missed 2 1 2 11 6 2 27 0 3 6 12 1 3 0 4

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

2003 Mission Critical Unplanned EMMSEMMS Outages

Ceiling TargetEMS and MUI

45 minutes (99.9%)

OutageMinutes

IntervalsMissed

Ceiling Target3 RTB Intervals

System ReliabilitySystem Reliability

Results and Challenges Action Items

746

Currently preparing for Release 3Opportunities for improved monitoring of hardware and network

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April 2004Transaction ProcessingTransaction Processing

ProcessingTime (hrs)

TransactionVolume (MM) 2003 Retail Transaction Processing

10.9

8.9

3.7 3.42.2

4.8

3.34.5

3.4 3.24.2

1.8 1.4 1.7 2.31.2

2.0 1.91.0

1.42.0

1.4 2.0 1.6 1.0 0.91.6 1.2 0.8 1.0 1.2 1.1 0.7 0.6 0.6 0.50.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Total Txn (m illions) 31.7 37.3 29.5 28.8 31.5 30.5 32.1 34.6 35.1 34.0 38.8 35.9 33.4 28.4 31.6 37.1 33.1 29.7 34.4

Avg process ing tim e 814 10.9 8.9 3.7 3.4 2.2 4.8 3.3 4.5 3.4 3.2 4.2 1.8 1.4 1.7 2.3 1.2 2.0 1.9 1.0

Avg process ing tim e 867 1.4 2.0 1.4 2.0 1.6 1.0 0.9 1.6 1.2 0.8 1.0 1.2 1.1 0.7 0.6 0.6 0.5

Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Average 814 transaction processing times exclude maintenance (type 20).

Results and Challenges Action Items Major vendor release end of Feb with post migration

issues that impeded transaction throughput in the first week of March

Vendor patch applied to address transaction issues

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April 2004Reporting PerformanceReporting Performance

Action Items

0

1000

2000

3000

4000

5000

6000

7000

8000

0%

20%

40%

60%

80%

100%

Total Settlements 2,015 1,931 2,668 2,655 3,251 5,564 6,193 6,434 7,351 7,093 5,289 7,009 5,584 4,767 5,638

Missed Settlements 707 358 248 - 801 349 2,109 1,006 1,122 1,456 41 840 371 - 59

Settlement PCT 65% 81% 91% 100% 75% 94% 66% 84% 85% 79% 99% 88% 93% 100% 99%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

2003 Report Posting Settlements# Settlements Settlement %

Continuous system improvements in processing

Strengthening staff to improve production support