North American Energy Standards Board (NAESB) Retail Activities

1. North American Energy Standards Board (NAESB)Retail Activities May 5, 2010

2. Agenda • NAESB Background & Organization • Retail Accomplishments to Date • Future Retail Activities • NAESB Technical Subcommittees • Benefits of NAESB Membership

3. NAESB Background • NAESB has a long, established history • In 1992, the Natural Gas Council agreed that the wholesale gas market needed a standards organization and initiated the efforts to start one. • Over the next 2 years, the Department of Energy hosted monthly meetings where the gas industry in open meetings determined the best structure for the organization. • Gas Industry Standards Board (GISB) was incorporated in 1994 to develop business practice standards and communications and e-commerce protocols for the interstate natural gas industry. • Expanded in January 2002 to become NAESB to include wholesale and retail gas and electricity with GISB populating the Wholesale Gas Quadrant • NAESB Mission: • An independent and voluntary North American organization that develops and promotes the use of business practice and electronic communications standards for the wholesale and retail natural gas and electricity industries

4. NAESB Organization • NAESB is organized into 4 Quadrants: • Wholesale Gas Quadrant (WGQ - formerly GISB) • Wholesale Electric Quadrant (WEQ) • Retail Gas Quadrant (RGQ) • Retail Electric Quadrant (REQ) • The 2 Retail Quadrants (REQ and RGQ) have been and will continue to meet jointly in most cases • DSM and Smart Grid are currently exceptions (REQ only)

5. Retail Purpose, Scope & Activities • Purpose • The purpose of the REQ/RGQ of NAESB is to propose, develop and adopt voluntary model business practices or standards to promote more competitive, efficient and reliable service in the retail electric/gas industry. • Scope & Activities • The REQ/RGQ is concerned with and tasked to handle electric/gas related issues and practices that are within the scope of NAESB and typically addressed at the retail electric/gas distribution level. The REQ/RGQ shall work closely with other NAESB Quadrants to mitigate inconsistencies where proposed standards and model business practices affect those other Quadrants.

6. Segment Organization • Service Providers/Suppliers • Persons engaged in the competitive sale of electricity/gas and/or capacity to end users including marketers, aggregators and producers or that provide services to participants in the retail electric/gas industry, including equipment manufacturers, equipment and service vendors, software providers, energy consultants, and other companies or individuals not otherwise eligible for membership in another Segment. • Utilities • Persons engaged in the local distribution of electricity/gas. • End Users/Public Agencies • Persons that consume electricity/gas, represent consumers of electricity/gas or are employed by a public agency associated with the retail electric/gas industry.

7. Important to Remember • The final products of the Wholesale and Retail Quadrants are treated differently • Standards ratified by the Wholesale Electric and Wholesale Gas Quadrants are filed with the Federal Energy Regulatory Commission (FERC) which acts on them for mandatory compliance • Standards (or Model Business Practices) ratified by the Retail Electric and Retail Gas Quadrants aresubmitted to National Association of Regulatory Utility Commissioners (NARUC) for information • NAESB does not set policy • Policy is set by FERC and the State commissions • Where policies may differ, the Model Business Practices attempt to identify processes for the various policies that may be used. • Example: Dual Billing, Consolidated Billing, or Single Retail Supplier Billing

8. Retail Committees and Subcommittees

9. Business Practices Subcommittee (BPS) The Retail Electric/Gas Quadrant (REQ/RGQ) Business Practices Subcommittee (BPS) is primarily tasked with acting on those Requests for Action concerning the development, modification, and interpretation of Model Business Practices that address retail electricity/gas market practices and procedures. The BPS is a subcommittee of the NAESB REQ/RGQ whose mission is: 1. To receive, evaluate, and act upon Requests for Action regarding the development of business practices and other requests pertaining to a potential change to or adoption of a NAESB Model Business Practice as forwarded to it by the NAESB REQ/RGQ Executive Committee (EC). 2. To complement the work effort of the REQ/RGQ Information Requirements Subcommittee (IR) and the REQ/RGQ Technical Electronic Implementation Subcommittee (TEIS) in developing detailed procedures and transactions to implement the recommended business practices. 3. To work with other NAESB subcommittees to develop business practices and provide other recommendations with respect to the processing of such matters forwarded to it by the NAESB REQ/RGQ EC for review and determination. 4. To carry out the Annual Plan work assignments as directed by the NAESB REQ/RGQ EC. • Short version – BPS develops the process business rules

10. Other Subcommittees • Contracts Subcommittee (currently dormant) develops specific contract language when applicable. • The Subcommittee developed the Base Contract for Retail Sale and Purchase of Natural Gas or Electricity • The Subcommittee also worked jointly with the WGQ Contracts Subcommittee to modify the Trading Partner Agreement • NOTE: BPS has developed Outlines for several other Agreements. The Contracts Subcommittee would develop the specific contract language for those Agreements if needed. • Glossary Subcommittee develops definitions for specified terms. • BPS or another subcommittee submits a term and suggested definition. • Along with refining the definition, Glossary is tasked with avoiding conflicting definitions or duplicate definitions for the same term.

11. Joint Retail / WEQ DSM-EE SubcommitteeNOTE: Currently only Retail Electric is participating • Review and develop needed model business practices for a standardized method for quantifying benefits, savings, cost avoidance and/or the reduction in energy demand and usage derived from the implementation of demand side management and energy efficiency programs. (2010 Retail Annual Plan Item 3) • 4 Task Forces / Work Groups formed: • Wholesale Electric Demand Response • Retail Electric Demand Response • Wholesale Electric Energy Efficiency • Retail Electric Energy Efficiency • Close coordination between Wholesale and Retail Demand Response Work Groups to avoid conflicts

12. Other Subcommittees • The Retail Ad Hoc Texas Task Force works closely with BPS and develops draft MBPs and process flows supportive of the Registration Agent Model. Implementation guides and technical standards supportive of the Registration Agent Model are also developed. • The Smart Grid Task Force is a joint group of the Retail Electric and Wholesale Electric Quadrants with other standards development groups such as OASIS, CalConnect, FIX and UCAIug, and includes other groups. Direction may be given from NIST, DoE or FERC and the group reports to the NAESB Board Smart Grid Strategic Steering Committee.

13. Technical Standards Development Information Requirements Subcommittee (IR) The IR is a subcommittee of the NAESB REQ/RGQ whose mission is: 1. To receive, evaluate, and act upon Requests for Action regarding the development of informational requirements and other requests pertaining to potential change to or adoption of a NAESB Model Business Practice as forwarded to it by the NAESB REQ/RGQ Executive Committee (EC). 2. To further the development of model business practices created by the REQ/RGQ Business Practices Subcommittee (BPS) by enhancing the work product of BPS through the addition of informational requirements detail including, but not limited to, data dictionaries, code values dictionaries, sample paper transactions, and documentation of the implementation process. 3. To complement the work effort of the REQ/RGQ Technical Electronic Implementation Subcommittee (TEIS) by acting as the liaison between the BPS and TEIS. 4. To work with other NAESB subcommittees to develop informational requirements and provide other recommendations with respect to the processing of such matters forwarded to it by the NAESB REQ/RGQ EC for review and determination. 5. To carry out Annual Plan work assignments as directed by the NAESB REQ/RGQ EC.

14. Technical Standards Development Technical Electronic Implementation Subcommittee (TEIS) The mission of TEIS is to develop recommendations for transaction sets, data communication standards and implementation guidelines to support the standards and model business practices of the REQ/RGQ. This will require close cooperation/coordination with other NAESB efforts to ensure the development of interoperable communication standards and the consistent use and semantics of ANSI data elements, transaction sets and message exchange models, where applicable. The TEIS will be responsible for the creation of proposed standards and models as a result of items contained in the approved NAESB REQ/RGQ Annual Plan, Requests for Standards or other requests for action forwarded to it by the NAESB Executive Committee; to solicit input as to the source and nature of the circumstances giving rise to the Request for Standard or EC formulated request for action; and, working in conjunction with other subcommittees within the REQ/RGQ and the balance of NAESB to develop standards or other recommendations (with respect to the processing of such matters forwarded to it for processing) for review and determination by the NAESB Executive Committee. The TEIS is primarily tasked with assessing and addressing those Requests for Standards or portions thereof involving data communications, ANSI data element and transaction set definitions, with an initial focus on electronic delivery mechanisms and on the technical implementation standards associated with (1) billing and payments, (2) customer enrollment and switching, (3) metering, (4) load profiling and (5) customer information.

15. In Short -- • BPS develops business processes and rules, • IR develops what information is required to carry out those processes, and • TEIS develops how that information is communicated.

16. Retail Accomplishments to date

17. Published Standards • Organized in Books • A total of 13 Books have been published • Book 14 has been voted out of BPS to be included in publication version 1.3 in first quarter 2011. • Several hundred (or possibly thousands) of Model Business Practices have been developed • Each Book contains all or most of the following: • Table of Contents • Executive Summary • Introduction • Principles • Definitions • Model Business Practices • Models • Technical Implementation Guides

18. Published Standards (2) • Book 0 – Master List of Defined Terms – Definitions of all Terms used in all Books • Book 1 – Market Participant Interactions – Describes the procedures and processes for establishing the operational and business relationships between Market Participants in the competitive retail energy marketplace • Book 2 – Creditworthiness – Describes the procedures and processes for establishing the credit relationship between the Distribution Company and Suppliers in the competitive retail energy marketplace • Book 3 – Billing & Payment – A summary of the business practices for billing and payment processing in competitive retail energy markets. Includes processes for Dual Billing, Consolidated Billing, and Single Retail Supplier Billing

19. Published Standards (3) • Book 4 – Distribution Company – Supplier Disputes – The procedures and processes for resolving disputes between Suppliers and Distribution Companies that may arise in the context of serving Customers participating in competitive energy markets • Book 5 – Quadrant-Specific Electronic Delivery Mechanism– High level technical business practices that apply to all electronic delivery business practices • Book 6 – Contracts – See next Slide • Book 7 – Internet Electronic Transport – High level guide to implementing various technologies necessary to communicate transactions and other electronic data over the internet using standard protocols. (Note: This Book is common to both Retail Quadrants and the Wholesale Gas Quadrant)

20. Published Standards (4) • Book 6 – Contracts – Various Contracts and Agreements complied in this Book: • RXQ.6.1 – Electronic Data Interchange Trading Partner Agreement (TPA - Note: Common to both Retail Quadrants and the Wholesale Gas Quadrant) • Exhibit • Trading Partner Worksheet (TPW) • Transaction Set Information • Users Guide for Use in Retail Applications • RXQ.6.2 - Outline of a Non-Disclosure Agreement • RXQ.6.3 – Distribution Company – Supplier Service Agreement Outline • RXQ.6.4 – Billing Services Agreement Outline for Consolidated Billing • RXQ.6.5 – Base Contract for Retail Sales and Purchase of Natural Gas or Electricity • Exhibit A • User Guide to Base Contract

21. Published Standards (5) • Book 8 – Customer Information– The processes for exchanging Customer Information between Market Participants in competitive energy markets. Includes Customer-specific Information Requests, Mass Customer Lists, and Synchronization Lists. • Book 9 – Customer Billing and Payment Notification via Uniform Electronic Transactions– Not tied to the competitive energy markets (i.e. not related to Book 3). The processes for any billing and payment notification using Uniform Electronic Transactions

22. Published Standards (6) • Book 10 – Customer Enrollment, Drop, and Account Information Change – In a competitive energy market, the processes for enrolling, dropping (or changing Suppliers), and notifying other parties of changes in Customer Account Information • Book 11 – Customer Enrollment, Drop, and Account Information Change Using a Registration Agent– Similar to Book 10, except where a Registration Agent is used – Example: Texas where ERCOT is the Registration Agent • Book 12 – Customer Inquiries– In a competitive energy market, the processes for handling inquiries from Customers

23. Published Standards (5) • Book 13 – Measurement & Verification (M&V) of Demand Response Programs– Provides a common framework of the Model Business Practices for M&V of Demand Response programs. Again, unrelated to the competitive market. Currently, only applied to Retail Electric, and closely coordinated with the Wholesale Electric M&V Standards for Demand Response recently approved by FERC. Voted out of BPS, but not yet Ratified or Published -- • Book 14 – Service Request, Disconnection and Reconnection in the Registration Agent Model– Model Business Practices for specialized procedures and processes when a Registration Agent is used. (Note: Formal comment period ends May 7. Then the Executive Committee will vote)

24. Future Retail Activities

25. Future Retail Activities BPS • BPS is currently developing Process Flows and additional MBPs for Billing and Payment (Book 3)needed to fill gaps found as the Process Flows were developed (2010 AP Item 4) • Add a new section to Book 0 to describe what Books have been developed and how to use them (2010 AP Item 5) • Develop any additional MBPs for Registration Agent process (2010 AP Item 6) • Develop practices for Distribution Companies to register/certify new Suppliers (2010 AP Item 7) • Develop a “Consumer Disclosure Statement” describing the Supplier’s service offerings and related contract provisions (2010 AP Item 8) IR / TEIS – Develop technical implementation standards and Data Dictionaries for: • Additional MBPs developed by BPS for Book 3 – Billing & Payment • Book 14 - Service Request, Disconnection and Reconnection Using a Registration Agent (2010 AP Item 6) • Book 10 – Customer Enrollment, Drop and Account Information Change

26. Future Retail Activities (2) DSM – EE • Demand Response – Phase 2 – Review Comments submitted on existing Model Business Practices and recommend actions. Currently underway – about ½ way through comments. • Note: the Wholesale Electric Quadrant Demand Response Work Group is currently reviewing definitions of Terms. Upon completion, the Retail Demand Response Work Group and Glossary Subcommittee will meet jointly with them to develop, where practical, common definitions. • Energy Efficiency – Work Group in early stages with some work papers being developed • NOTE: Definition of Terms are also being developed. Joint meetings with Demand Response Work Groups and the Retail Glossary Subcommittee will also be needed to resolve any conflicts in definitions Smart Grid • Phase 2 is currently underway in developing requirements and Use Cases for the following Priority Action Plans: • PAP 03 – Pricing Model • PAP 04 – Scheduling Model • PAP 09 – Demand Response / Distributed Energy Resources • PAP 10 – Standard Energy Usage Information

27. Future Retail Activities (3) Glossary • Review the definitions of all Defined Terms in Book 0 – Master List of Defined Terms, including other Ratified Terms not yet published, and revise the definitions of all Terms not specifically related to the competitive market to broaden their applicability to conform to NAESB’s expanded scope (2010 AP Item 11) • Participate in the development of definitions for both Demand Response and Energy Efficiency terms (see above)

28. NAESB Technical Subcommittees 28

29. NAESB Technical Committees Technical Electronic Implementation Subcommittee (TEIS) Information Requirements Subcommittee (IR) NAESB is looking for energy industry personnel to staff these subcommittees. In addition to completing technical work associated with Model Business Practices development, NAESB envisions these subcommittees acting as a technical resource to market participants in retail choice states. 29

30. NAESB Technical Committees Some NAESB Standards/Model Business Practices are already in prominent use throughout the retail market: • NAESB Electronic Delivery Mechanism, a.k.a. GISB EDM • NAESB EDI Trading Partner Agreement • NAESB Base Contract for Purchase & Sale of Natural Gas 30

31. NAESB Technical Committees Unlike NAESB Standards developed for the wholesale markets, retail Model Business Practices (MBPs) effectively serve as templates, often based upon the ‘best practices’ used in various jurisdictions. • For retail access, there is no common regulator like FERC. • MBPs are written to be general to that they can be molded by the processes used in each jurisdiction to develop business rules. • MBPs are written to be deferential to the ‘Applicable Regulatory Authority’ as well as to the processes used to identify business rules used in each jurisdiction. 31

32. NAESB Technical Committees Suppliers, EDI Service providers and utilities often work in multiple jurisdictions. • Technical solutions from one jurisdiction may be ‘borrowed’ from another and customized for yet another. • The degree of standardization for technical solutions can be flexible in response to the regulatory and business needs of individual markets. State level working groups can focus on business and regulatory issues. • While different approaches naturally result in different jurisdictions, technical implementations are often similar. • Why re-invent the wheel? 32

33. NAESB Technical Committees State Commissions still make the regulatory decisions but NAESB Technical Subcommittees could develop the implementations, as appropriate. • Once ‘what’ and ‘why’ are determined, NAESB could provide the ‘how’. • NAESB provides a venue for discussion including conference calls and web casting. • NAESB also provides a means to publish and maintain implementation details. • NAESB could act as a repository for retail market technical implementations. 33

34. Benefits of NAESB Membership 34

35. Benefits of NAESB Membership • All published Model Business Practices (MBPs) and Standards are available on the NAESB web site via a user ID and password • Members may use these MBPs and Standards to develop internal processes within their organizations and add credibility to state working group recommendations and regulatory filings

36. Benefits of Membership (cont’d) • Networking opportunities with others in the gas and electric industries help to resolve issues within your own marketplace through information sharing • Members grow in their knowledge of the gas and electric industries, making them a valuable resource to their organizations back home

37. Benefits of Membership (cont’d) • And finally, it’s fun! We work hard and play hard! You get to know and become good friends with the members of your subcommittee. Join us. There is lots to be done, and we need your help!!

38. Questions ?