Role of Account Management at ERCOT

DRAFT ONLY Role of Account Management at ERCOT PRR 672 Collaborative Analysis October 2, 2006

Background of PRR672 • PRR written as a result of changes from Terms and Conditions. • PRR requested timing changes for ERCOT processing of transactions • Comments filed with PRR 672 - A group needs to review CR and TDSP transaction timing requirements related to Terms and Conditions project in a separate PRR. • Group shared that ERCOT timing was first priority. TDSPs and CRs are in progress on reviewing timing changes. • Comments filed with PRR 672 - Due to the mandatory nature of the rulemaking, TCTF would also ask that ERCOT consider and present other options that may be less expensive to implement in the event that the changes proposed in this PRR would be cost prohibitive or would not allow implementation by the dates required by the rulemaking.

Background of PRR672 • PRR puts ERCOT transaction timings into four categories based on their priority in the marketplace: • Level 1 Transactions: Including transaction pairs (inbound and outbound) relating to 814_16 priority move-ins and 814_20 creates (adds), which should be processed within 1 Retail Business Hour (any hour within a Retail Business Day as defined in Section 2 of Protocols). • Level 2 Transactions: Including transaction pairs relating to standard move-ins, move-outs, Off cycle Drops to AREP and Off cycle switches, which should be processed within 2 Retail Business Hours. • Level 3 Transactions: Including transaction pairs relating to historical usage transactions, and 814_20 changes, which should be processed within 4 Retail Business Hours. • Level 4 Transactions: Including pairs relating to On-cycle Switches, On-cycle Drops, 814_26 Ad Hoc Usage Request, Establishing/Deleting CSA within 1 Retail Business Day.

PRS recommendation 7/20/06 • On 07/20/06, PRS voted to recommend approval of PRR672 as submitted by the Retail Market Subcommittee (RMS). Revised language will be grey-boxed until system implementation. ERCOT will be directed to implement priority move-ins within two (2) Retail Business Hours with the TX SET 3.0 implementation. Remaining grey-boxed language will be implemented with future system functionality. ERCOT and Market Participants will have a collaborative analysis of Retail Business Processes (RBP) associated with PRR672 transaction timing changes. Results of the analysis will be presented to RMS no later than the November 2006 RMS meeting. • Rank and priority: • Two (2) Retail Business Hours processing and sorting of priority move-in to be included with TX SET 3.0. • All other changes for PRR672 will be included in Project 60008_01 (priority 1.1; rank 10) • The motion passed with one (1) abstention from the Municipal segment. All Market Segments were present for the vote.

TAC recommendation to BOD 8/3/06 • On 08/03/06, TAC voted to recommend approval of PRR672 with Phase 2 and Phase 3 language to be grey-boxed and assigned a high priority to Phase 1. • Priorities for Phase 2 and Phase 3 will be considered after system and impact analyses have been completed and issues have been further vetted. • TAC will present Phase 1 and its associated costs to the ERCOT Board for approval at this time. • Phase 2 and Phase 3 costs will be further defined upon completion of analysis. • The motion passed with two oppositions from the Consumer segment. All Market Segments were present for the vote.

BOD action 8/15/06 • The Board voted unanimously to approve PRR672 as recommended by TAC.

Approach / Findings from Analysis • ERCOT brought an approach to the MP attending the meeting at 8/3 – asked for any other suggestions on how to work through this. • Looked CR sends requests to ERCOT (3) when ERCOT sends requests to TDSPs (4) when TDSP executes request • Drafted business questions to ask each MP and ERCOT to bring back stats for two, 1-week periods (to keep data manageable). • Started with Move Ins – the questions were date requested vs. scheduled, date requested vs. actual, volumes of safety net and batch schedules. • Second round of analysis on additional business processes, the team added questions on receipt/time of day, average time to process and what time of day did transactions go out.

Findings from Analysis – Level 1 transactions • Population we looked at for Move Ins

Findings from Analysis – Level 1 transactions • Priority Move-Ins • CRs not using priority codes consistently • Move-in transactions fairly evenly distributed throughout the day

Findings from Analysis – Level 1 transactions

Findings from Analysis – Level 1 transactions • Priority Move-Ins • Times are ERCOT received times • TDSP needs to receive by 5pm or the order is considered received the next business day. • CRs may need to review their batch times • CRs may need to review their call center scripts to ensure that customer expectations are set appropriately

Collaborative Analysis – Level 1 Recap • Level 1 Transactions: Including transaction pairs (inbound and outbound) relating to 814_16 priority move-ins and 814_20 creates (adds), which should be processed within 1 Retail Business Hour (any hour within a Retail Business Day as defined in Section 2 of Protocols). • Findings by ERCOT and MPs brought back to 8/31/06 and 10/2/06 working meetings: • Findings support the PRR changes for timing for the following: • Priority Move-Ins • Approach - Two (2) Retail Business Hours processing and sorting of priority move-in to be included with TX SET 3.0. • Approach – additional system changes (going from 2hr to 1hr) to be managed in PR60008 – Market decision to re-rank • MP raised concerns on transaction timing for 814_20s – want the 4 hr turn for timing as approved by the BOD. • Findings support alternative to changing transaction timing for the following: • 814_20 Adds • Approach – changing transaction flow process for 814_20s see subsequent slides

Findings from Analysis – Level 2 transactions • Population we looked at for Standard Move Ins & Off-Cycle Switches

Findings from Analysis – Level 2 transactions • Population we looked at for Move Outs

Findings from Analysis – Level 2 transactions • Standard Move-Ins • Times are ERCOT received times • Standard move ins need to be received 2 business days prior to the requested date. TDSP needs to receive by 5pm or the order is considered received the next business day. • CRs may need to review their batch times • CRs may need to review their call center scripts to ensure that customer expectations are set appropriately

Findings from Analysis – Level 2 transactions • With protocol FASD rules and the market behavior of sending off-cycle Switches on average 15 days prior to requested date – ERCOT does not support changing the Transaction Timing for off-cycle switches. • For the sample, ERCOT average turn around time is 1 hour 33 min

Findings from Analysis – Level 2 transactions • Findings on Move-outsnearly 80% are completed on date requested • These are Move Outs, Move Out to CSA – does not include force off • Move Outs need to be received 2 business days prior to the requested date. TDSP needs to receive by 5pm or the order is considered received the next business day.

Findings from Analysis – Level 2 transactions • Move Outs need to be received 2 business days prior to the requested date. TDSP needs to receive by 5pm or the order is considered received the next business day.

Collaborative Analysis – Level 2 recap • Level 2 Transactions: Including transaction pairs relating to standard move-ins, move-outs, Off cycle Drops to AREP and Off cycle switches, which should be processed within 2 Retail Business Hours • ERCOT continued analysis on the standard move-ins, move-outs, off-cycle drops, off-cycle switches after working meetings on 8/31/06 & 10/2/06. • Findings brought back to 10/2 working meetings: • Findings support the PRR changes for timing for the following: • Standard Move-ins • Move outs • Approach – related to 814_20 approach – see subsequent slides • Approach – additional system changes (going to 2 hr) to be managed in PR60008 – Market decision to re-rank • ERCOT does not believe that the analysis for Off-cycle Switches or Off-cycle Drop to AREP support the timing changes in PRR672 and will file another PRR to move to Level 4 • Market participants at the meeting did not agree with the need for another PRR

Collaborative Analysis • Level 3 Transactions: Including transaction pairs relating to historical usage transactions and 814_20 changes (i.e. maintains), which should be processed within 4 Retail Business Hours • ERCOT continued analysis on 814_20 changes after the working meeting on 8/31/06. • Findings brought back to 10/02 working meetings: • Findings support alternative to changing transaction timing for the following: • 814_20s • Approach – changing transaction flow process for 814_20s see subsequent slides • MP raised concerns on transaction timing for 814_20s – want the 4 hr turn for timing as approved by the BOD. • ERCOT will continue analysis on historical usage transactions after the working meeting on 10/02/06.

Collaborative Analysis • Level 4 Transactions: Including pairs relating to On-cycle Switches, On-cycle Drops, 814_26 Ad Hoc Usage Request, Establishing/Deleting CSA within 1 Retail Business Day. • Does not change current protocol timing. • No analysis requested by Market. • ERCOT will recommend adding additional transactions to this category based upon the analysis shared with the market.

DRAFT ONLY Role of Account Management at ERCOT TX SET 814_20 volumes Options - Discussion October 4-5, 2006

TX SET meeting / cross over into alternatives • At TX SET meetings on 9/12/06 • ERCOT and MPs identified known and potential large volumes of 814_20 and other types transactions. • Recap of Known Types of Large Transaction Volumes 814_20s - Bulk Retires, Meter Changes, Annual Validation, Cycle changes, Address Clean-ups • Recap of Potential Types of Large Transaction Volumes 814_20s - Profile changes, Rate Changes, Advance Metering Rulemaking, Potential of Nodal, Weather Related Other Transactions - Opt Ins to the market, TDSP territory changes, Potential Mergers. • TX SET determined that we needed to look at near-term options and they would continue to investigate long-term options for future TX SET releases (may include elimination of response transactions not needed in market) • ERCOT and MPs identified options for improvements to 814_20 processing • ERCOT and MPs were to identify High, Medium and Low from an effort perspective. Costs will not be provided by ERCOT at this time. • ERCOT’s replacement of SeeBeyond with TIBCO (RBP project) may increase processing capabilities - ** Load/performance testing has not started (est. start early Nov 06)

Transaction volumes

Transaction volumes Clarify this slide Inbounds only

High volume options

What’s next for TX SET? • TX SET meeting • Need input from MPs on the options and their estimated effort. Done during meeting  • Need input from TX SET on the options/recommendations to get a priority of which to investigate first. Done during meeting. • ERCOT to get additional information from development teams to the clarifying questions. Will bring back to 10/25 meeting. • ERCOT to come to next TX SET meeting with more details around the recommendations selected. Will bring back to 10/25 meeting.

What’s next for TX SET? 814_20 processing - Until near-term recommendations are implemented – ERCOT encourages TDSPs to continue to communicate to ERCOT any large volumes of 814_20s to be managed through current market processes (bundles and manual intervention by ERCOT and TDSPs). • Long Term analysis continues at TX SET • 814_04s – is there a flag for distinguishing priority vs. standard move-ins? Not currently.

Collaborative Analysis Recommendations Recommendations: • TX SET 3.0 – priority Move ins w/in 2 hours – in progress • Ask ERCOT to move forward with near-term recommendations for 814_20 processing changes to be implemented prior to PR60008. Need to indicate which option/recommendation we are moving forward with – will have this after feedback at 10/25 TX SET meeting. • Re-rank and initiate project PR60008 (remainder of grey box) • Intent of PR60008 is to implement remainder of grey box changes to address timing of transactions • Intent of PR60008 also to include changes from a PRR that ERCOT will draft for prioritization of all transactions (as set by analysis from this group) and recommend moving off-cycle switches and drops to AREP to level 4 transactions (not everyone participating agreed with the moving to level 4)

What’s next for PRR672 analysis? • TX SET meeting • Need input from MPs on the options and their effort (10/4-10/5 TX SET meeting) • PRR 672 • Phase 1 – already underway for TX SET 3.0 • Phase 2 & 3 – Collaborative Analysis / Future system release (PR60008 – Terms & Conditions) • This report back to RMS at Nov 06 Meeting • RMS to report to TAC in Dec 06 • TAC to report to BOD in Jan 07 • Near term – ERCOT to begin work on near term recommendations if approved by RMS/TAC/BOD – will report to RMS by Jan/Feb 07 the implementation dates • Near term – list these out from the 814_20 recommendations • Long term – Market make decision to reprioritize PR60008 for 2007 Project list • 814_20 processing - Until near-term recommendations are implemented – ERCOT encourages TDSPs to continue to communicate to ERCOT any large volumes of 814_20s to be managed through current market processes (bundles and manual intervention by ERCOT and TDSPs). • Market may file PRR on CR / TDSP timing changes that are needed • ERCOT may file PRR on adding off-cycle switch/drop to Level 4 transactions • Long Term analysis continues at TX SET • 814_04s – is there a flag for distinguishing priority vs. standard move-ins? Not currently. • ERCOT to look sorting 814_04 based upon move-ins and switches under PR60008 • This concludes the Collaboration effort for PRR672. Thank you for your support.

Role of Account Management at ERCOT