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TAC Program and Projects Update

March 6, 2003

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Shared Services to Six Sigma

Three Year Program Management PlanThree Year Program Management Plan

Become Proactive

Introduce

Innovation Lead the

Industry 200

3

200

4

200

5

Beyond

Resu

l t

• Lower priority tasks addressed and delivered

• Enhanced cost control and funding leverage

• More functionality• More nimble organization • Improved market

participant satisfaction• Naturally address

architecture issues

• Lower total cost in market• Parallel support of multiple

product releases• Availability of reduced-cost

infrastructure

• Minimized market participant total cost of operation

• Minimized ERCOT total cost of operation

• Adaptable, reliable and scalable services for the market

Task to

Product

Product to Shared

Services

200

3

200

4

200

5

Beyond Task

to Product

Product to Shared

Services

Shared Services to Six Sigma

Act

ion

• Group tasks into product groups

• Build product release cycle• Introduce better

collaboration and management tools

• Collaborate with market, compliance, and vendors

• Perfect and expand product line

• Group products and features into shared services

• Build potential/total outsourcing management capabilities

• Shift focus from Program Management to Process Management

• Institute Six Sigma continuous process improvement

• Process Management oversight and improvement program for market

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Today’s Task Oriented ProcessToday’s Task Oriented ProcessMarket Participant Requests

MR1 High

MR2 High

MR3 High

MR4 Medium

MR5 Medium

MR6 Medium

MR7 Medium

MR8 Medium

MR9 Low

MR10 Low

MR11 Low

MR12 Low

ERCOT RequestsER1 High

ER2 High

ER3 Medium

ER4 Medium

ER5 Medium

ER6 Medium

ER7 Medium

ER8 Medium

ER9 Low

ER10 Low

Project PrioritiesMR1 In-progress

MR2 In-progress

MR3 In-progress

ER1 In-progress

ER2 In-progress

MR4 In-progress

MR5 Pending

MR6 Pending

MR7 Pending

MR8 Pending

ER3 Pending

ER4 Pending

ER5 Pending

ER6 Pending

ER7 Pending

ER8 Deferred

MR9 Deferred

MR10 Deferred

MR11 Deferred

MR12 Deferred

ER9 Deferred

ER10 Deferred

Budget Cutoff

NEW High MR2.a

New Project PrioritiesMR1 In-progress

MR2 In-progress

MR2.a In-progress

MR3 In-progress

ER1 In-progress

ER2 Paused

MR4 Paused

MR5 Pending

MR6 Pending

MR7 Pending

MR8 Pending

ER3 Pending

ER4 Pending

ER5 Deferred

ER6 Deferred

ER7 Deferred

ER8 Deferred

MR9 Deferred

MR10 Deferred

MR11 Deferred

MR12 Deferred

ER9 Deferred

ER10 Deferred

Budget Cutoff

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Product Delivery ProcessProduct Delivery ProcessMarket Participant Requests

MR1 High Prod1

MR2 High Prod2

MR3 High Prod1

MR4 Medium Prod1

MR5 Medium Prod1

MR6 Medium Prod1

MR7 Medium Prod2

MR8 Medium Prod2

MR9 Low Prod1

MR10 Low Prod3

MR11 Low Prod1

MR12 Low Prod1

ERCOT NeedsER1 High Prod3

ER2 High Prod2

ER3 Medium Prod1

ER4 Medium Prod3

ER5 Medium Prod1

ER6 Medium Prod2

ER7 Medium Prod2

ER8 Medium Prod1

ER9 Low Prod3

ER10 Low Prod1

Budget Cutoff MR9 Deferred

MR11 Deferred

MR12 Deferred

ER10 Deferred

NEW High MR2.aNEW High MR2.a

Budget Cutoff MR9 Deferred

MR11 Deferred

MR12 Deferred

ER10 Deferred

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Product Groupings (Sample is for Technical Operations)Product Groupings (Sample is for Technical Operations)

Technical Operations Market Operations Enterprise Operations

Energy Management Systems Clearing, Settlement and Billing Portal / PUCT Market Interface

Market Management Systems Market Relationship Management Transaction Management Transaction Processing Cyber Security

Facilities

Architecture and Maintenance

Serve, Ensure, Protect and Operate

Release 2.1 & 2.2

Release 2.1 & 2.2•EMS front end replacement •System map•Customized generation monitoring•Customized one line displays•EMP 2.2 upgrade•User interface enhancements related to resource plan and schedule changes•Ability to print resource plan•Additional development work with BOD approval

Release 3.0

Release 3.0•Mitigate constraint oscillation•Security constrained optimal power flow•Dynamic ratings•Load rollover during line outage•Multi-hour, multi-day outage evaluation studies•Special protection schemes in contingency analysis•VSAT/TSAT Interface upgrades•Enhance PTI export•Simultaneous A/S procurement (PRR342)•Balancing energy – ramp rates (PRR349)•Enhancements to BES and RPRS markets•RPRS market re-design (SCUC)•Association of BE bids with RPRS awards (PIP137PRR211)•Resource ramp rate constraints•Allow resource plan updates after adjustment period (PRR359)•Automate calculation and posting of CSC Limits•Handling of resources in Test Mode (PRR332)

Release 4.0Release 4.0•Locational Marginal Pricing?•FERC Standard Market Design?•Automate A/S qualification testing•Changes to A/S performance monitoring and frequency control algorithms•Remove BE and energy schedule dependencies on resource plan•Regulation service from loads (PRR307)•Fleet deployment of OOME

6/03 06/04 12/0412/039/03

Release 2.0

Release 2.0Direct weather data path to EMMSIntegrate OSI PI systemsCommission alarm systemSmoothing algorithm (PRR350)Outage sensitivity factorOutage scheduler customizationBULs and Blocked deployment (PIP112/PIP210)Oracle 9i upgradeQSEMOS web enhancementsBalancing energy deployment timing improvementMarket operator interface – printing requirements

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Current Picture of ERCOT ProjectsCurrent Picture of ERCOT Projects

Individual Projects have been Initiated Based on Market and ERCOT Prioritization Process

• 32 Projects Currently Active

• 8 Scheduled to complete in March

Active Projects being bundled as Releases to Support Market and Systems Stability

• EMMS Releases have been defined

• Texas Set 1.5 with Related changes to be Released in April

Remaining Prioritized Projects being Grouped as Logical Releases to Support a Predictable and Stable Market

• Releases will Reflect Market Priorities

Releases will Include System, Architecture and Infrastructure Improvements to Support the Texas Market Going Forward

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Ability to Assess our Project PortfolioAbility to Assess our Project Portfolio

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Gain Insight Into Our ProjectsGain Insight Into Our Projects

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Ability to Model What If ScenariosAbility to Model What If Scenarios