PMI Greater New Orleans Chapter May 2008

1. PMI Greater New Orleans Chapter May 2008 Managing a Large Project Entergy’s 800 MHz Radio Reconfiguration ProjectA Project Presentation for Mark Faust PMP John Mahoney PMP

2. About Entergy • Entergy Corporation is an integrated energy company engaged primarily in electric power production and retail distribution operations. • Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, and it is the second-largest nuclear generator in the United States. • Entergy delivers electricity to 2.7 million utility customers in Arkansas, Louisiana, Mississippi and Texas. • Regulated Utility with operating service territory of 133,000 square miles • Entergy has annual revenues of more than $10 billion and approximately 14,000 employees.

3. Project Scope – “The Beginning” 2001 • Entergy has major investment • Remains diligent to FCC planning 2003 • Entergy meetings in Washington DC with FCC to voice position on burden put on licensees for radio rebanding across U.S. 2004 • Government Order issued - FCC-mandates rebanding of the 800MHz band to eliminate interference to public safety radio systems – Phased in waves • FCC sets on Transition Authority • Locks in deal with Nextel Entergy does some initial scoping • Affects will be across entire service territory • Requires changes at tower sites, base stations and Mobile and portable radios • Also will affect mobile data system

4. Project Scope – Planning Begins January 2005 • Entergy program manager formalizes planning • Legal council engaged to support planning assessment • Conference call with FCC’s Transition Authority • SAIC engineering assessment gets underway Spring 2005 • Meetings with Nextel start to discuss scope and options • Meetings with TA and FCC to explain Entergy critical operations and complex radio system • Project manager assigned – Scope and WBS developed and field staff approach identified Summer 2005 • July – Project approach developed – meeting set with Nextel • August – Meets with TA to discuss channel exchange approach • August - Entergy and SAIC pitch scope definition and approach to Nextel in Little Rock face-to-face meeting

5. Katrina Outer bands hit Louisiana and Mississippi Project Scope –Risks Visible

6. Hurricane Rita Follows Katrina to Louisiana and Texas Project Scope –Risks Visible

7. From Planning to Field Work December 2005 • Entergy files advisory letter on impact of Katrina and requests schedule relief • More meetings with FCC to discuss channel exchange as part of project • Nextel and Entergy mutually agree on project approach and statement of work January 2006 • Washington DC - Legal Council sets meetings to expedite TA agreement of channel exchange and Frequency Reconfiguration Agreement (FRA) • Contractual agreement and scope approved April 2006 • Work will be reimbursed by Sprint-Nextel (project estimate: $3.5M) April 2006 • Field pilot starts at first site in Arkansas

8. High Level Requirements for Plan • Schedule work to minimize operational impact • 117 tower sites will be adjusted • 200 locations/service centers will be scheduled • Organize work by geography • Perform Nextel channel swap to tightly align ability to provide replacements • Complete field work: • Arkansas and Texas by November 2006 • Louisiana and Mississippi by March 2007

9. The Radio System • Normal Use • Emergency Use • Size • Geography

10. Normal Radio System Use Supports Entergy’s Core Business • Entergy-owned • 2-way radio system • Sophisticated • Powerful • Able to process • massive numbers • of real-time voice • transactions to • connect users Supports Entergy’s Mission as a Critical Industry Infrastructure Normal Use: • Used to coordinate electric line work and gas operations • Provides critical communications to support safety • Used for voice coverage and mobile data • Capable of wide-area trunking, dispatch and data transport • Users can freely roam within their region • Transparently relocate to other regions

11. Emergency Radio System Use • Entergy-owned • 2-way radio system • Sophisticated • Powerful Invaluable during • Hurricane Katrina • Hurricane Rita Protects the health and safety of employees and, in many cases, the public, e.g. over 10,000 annual fire department requests Emergency Use: Serves as “ground-up” communications for storm restoration – when most public systems are unavailable

12. Radio System Size • Covers Entire Entergy Service Territory • (133,000 Square Miles - 4 states) • 6 Major “Zones” Two Way • 64 Major Dispatch Positions • 182 Sites • 10,000 Devices

13. Geography Customer locations (distribution transformers) Service Area Zone Controller site Antenna site

14. The Project Plan • Organization • Schedule • Work Breakdown Structure • Strategy • Risk • Cost Tracking

15. Project Plan - Organization

16. Implementation Schedule Milestones & Work Drivers • Based upon mandatory completion dates • Start/Finish dates are aggressive to reduce operational impact / avoid storm risks • Implementation by region to break down program into defined project areas • Milestones will include tracking of invoicing dates to avoid negative cash flow

17. Areas & Work Packages 63 Specific Work Packages - 58 Radio, 5 Mobile Data

18. Entergy Strategy • Pitch one plan (scoping and implementation) - reduce cost and delays • Include channel exchange with Nextel and others • Develop payment structure for “self-funding” no out-of-pocket expense • Minimize third-party vendors – use existing contract with SAIC • Use outside legal council with expertise with FCC • Collect radio inventory information as a part of project • Lock down radio system afterwards - access to only registered units • Set up implementation by region and schedule by site • Develop communications plan the enables buy-in and work-arounds • Develop cost tracking using existing information systems

19. Risks & Mitigation Mitigation Strategy Risks • Detailed resource tracking; more than is typical on project work • Government change control requires re-submittal to Nextel and TA; may delay approval - adds additional PM burden • No experience with Nextel for payments; could cause out-of-pocket expense to Entergy • TA scrutinized and disallowed some cost for planning hours and legal rates • Radio inventory is old and may not be accurate • Hurricane/Storm season implementation • Hinder operations and emergency work during implementation • Use “Activity” codes for reporting time multiple project codes for location (Entergy and SAIC) • Payment schedule must be positive cash flow – 1st payment due at signing • Use Entergy financial systems (Time and expense reporting) along with supply chain inventory tracking for consumable and special order materials; Develop transportation cost tracking for fleet vehicles • Changes to scope, schedule, and technical requirements will be submitted upon discovery – Track radio units to update inventory • Start in Arkansas and Texas to reduce risk of storm season • Set up formal communications plan for operations groups

20. Work Breakdown Structure

21. Program Plans

22. Communications Plan

23. 2006 800MHZ - ESI EJO# F3PP800RAD 2005 Planning EJO# F3PP800RAD SAIC PODb Project # 11111 Entergy External Job Order # Program Chart of Accounts 800MHz Radio Program #04151 800MHz Antenna Work 800MHz Transactional EJO# F4PP801RAD Capital - Natchez Capital - Hebron Hill Capital - Central/Wilton Proj# 03773 Proj# 04129 Proj# 4128 Note: TA Tracking Capital Work 800MHz – ELI Louisiana EJO# F4PP806RAD 800MHz - EAI Arkansas EJO# F4PP802RAD 800MHz - EGSI Louisiana EJO# F4PP805RAD 800MHz –EGSI Texas EJO# F4PP804RAD Proj# 04134 Proj# 04130 Proj# 04131 Proj# 04133 800MHz – EMI Mississippi EJO# F4PP808RAD 800MHz – ENOI New Orleans EJO# F4PP807RAD Six Projects (by Region) Proj# 04136 Proj# 04135 Revised 10/8/06

24. Elements Of Cost Tracking Resource Codes from Entergy’s Cost Accounting System External Job Orders From Entergy’s Project accounting system SAIC Time Reports SAIC-generated activity codes to track work elements Entergy ESTER Time Reports

25. “Pre-Bill” & Invoicing The “Pre-Bill” package is the collection of system outputs and supporting documents as described in the FRA that are the basis for the invoice. 4.Pre-Bill Package is reviewed in detail and sent to Nextel 1. Time Reporting systems for Entergy, SAIC (including contractors for 800MHz Program By Program sorted by Activity Code 5. Project Manager requests Invoice 6. Invoice sent via PeopleSoft A/R Process at a summary Level The Invoice is the summary level document produced by Entergy using A/R process. 2. Cost accounting system reports for 800MHz Program sorted by detail Resource Code 3. Copies of Invoices for materials/ Services paid by Entergy

26. The Results • Implementation • Change Control & Management • Schedule • Cost Tracking & Invoicing • Risk Management

27. Results - Implementation No Variance! although changes to work package scheduling

28. Results – Change Control & Management July 7, 2006 First Amendment to FRA • change made to selected frequencies that were initially issued Multiple Extensions Issued for Closure • Mark, you may want to detail

29. Results - Schedule All Goes as Planned … • 2005 System Assessment/ Initial Scoping Completes on time • May 2006 Planning Completes on time; Pilot Starts • July 26, 2006 Arkansas Sites Substantially Complete • Oct. 5, 2006 Texas Sites Substantially Complete • Oct. 9, 2006 Louisiana Substantially Complete • Feb. 28, 2007 Mississippi Complete • Field Clean-up and System-wide Lockdown • Ahead of Schedule! • Closeout is Another Story …. • Sprint-Nextel (Merger, Lost Reporting Data, Financial Review) • Undefined Closure Process • TA Review

30. Results - Schedule 800 MHz Subscriber Radio Performance by Week • 8,100 radios • Funding approved for 10,000 radios • Fewer difficult (higher cost) radios were encountered than expected • Missed radios identified after the locked down FRA Approved: 10,000 Radios YTD: 4,459 Radios Schedule Performance Index • Index of radios reprogrammed to radios planned to be reprogrammed • 1 is better (100% cumulative performance) • On average, we are finding less radios than planned

31. Results – Cost & Invoicing • Cost • Tracked Monthly – Reported Internally • Cost Reports - Sent to Sprint-Nextel Quarterly • Labor by Activity (Entergy and Contractors) • Costs by Type – Labor, Expenses, Material, Transportation • Invoicing • Received Payment in Less Than 30 Days • Cash Flow Remained Positive Through Project

32. Worked Well … Able to Track With Existing Time Reporting Systems • Worked Well …Payment < 30 Days! • Extra Work Tracking Consumables and Transportation • Weekly status meetings enabled this detailed work • Katrina and Rita; Delay Caused Summer Work • Enabled teaming at Service centers Results – Risk Management • Use “Activity” codes for reporting time multiple project codes for location (Entergy and SAIC) • Payment schedule must be positive cash flow – 1st payment due at signing • Use Entergy financial systems (Time and expense reporting) along with supply chain inventory tracking for consumable and special order materials; Develop transportation cost tracking for fleet vehicles • Changes to scope, schedule, and technical requirements will be submitted upon discovery – Track radio units to update inventory • Start in Arkansas and Texas to reduce risk of storm season • Set up formal communications plan for operations groups

33. Rebanding Status – Cost Performance • Planned approach was for Entergy to be prepaid by Nextel to cover rebanding costs. • A payment schedule was negotiate that included “true-ups” after the 2nd invoice. Mark ... need final Project Baseline: $3,575,313 Current EAC: $3,331,594 Difference $ 243,719 Expense Credit 4th Invoice 5% $178,766 No payment expected w/True-up . Entergy is ahead at end of 3Q06 more than invoice amount Final 10% $357,531 $345,039 w/True-up (Planned) 1st Invoice 40% $1,430,125 2nd Invoice 30% $1,072,594 3rd Invoice 15% $536,297 $407,761 w/True-up (Planned)

34. The Lessons

35. Lessons Learned – Radio System • Radio inventory caused major variance from plan (8,000 vs. 10,000) • Customer interfaces – presence of technicians and engineering staff gave users a chance to ask questions and learn more about the system, e.g. interference problems • Gas Operations safety – discovered that intrinsically safe batteries were not matched properly to radios • Many broken radios were identified and repaired prior to reprogramming • Benefits of this Program to Entergy: • Even more “universal” radio than we have today • Talk-Around • System Roaming – more seamless roaming • Additional frequency resources at sites that we are constrained at today

36. Lessons Learned – The Project Get it in writing • Scope • Schedule • Measurements • Payment Terms/Cash Flow Track Diligently … Report Regularly • Resources tracked monthly by activity; status reported internally and externally • Cost tracked monthly and reported monthly Communicate Effectively • Keep impact to the business in the forefront of planning • Communicate to those affected as low in the organization as possible • Make this a part of your WBS • Keep Sponsor Informed

37. Managing a Large Project Entergy’s 800 MHz Radio Reconfiguration Project Questions ???? Mark Faust mfaust@entergy.com John Mahoney jmahone@entergy.com