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ERCOTERCOTFinancial SummaryFinancial Summary

For the Month Ended February 28, 2005For the Month Ended February 28, 2005

ERCOT Board of Directors

March 15, 2005

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February 2005 - Financial DashboardFebruary 2005 - Financial DashboardExpense category Budget Actual Var - # Var - % ERCOT Employee Count Budget Actual Var - # Var - %

Labor and benefits 9.10 8.96 0.14 2% Market Opeations 198 192 6 3%

Contractors 1.59 0.61 0.98 62% System Operations 234 226 8 3%

Hardware and software support 1.06 1.11 -0.05 -4% Corporate Operations 75 70 5 7%

Other expenses 10.45 9.35 1.10 10% Total 507 488 19 4%

Total 22.20 20.03 2.17 10% Total Actual Resource Employee Contractor Total

Expense category Budget Actual Var - # Var - % Market Opeations 192 19 211

Market Opeations 3.38 3.14 0.23 7% System Operations 226 12 238

System Operations 5.92 6.04 -0.12 -2% Corporate Operations 70 12 82

Corporate Operations 12.90 10.84 2.06 16% Total 488 43 531

Total 22.20 20.03 2.17 10% Bowman Giuliani Jones Pemberton Schrader

Contractor Resource by Executive 8 19 12 2 2

Project Expenditures Budget Actual Var - $ Var - %

Market Opeations 0.60 0.31 0.30 49% Goal Goal Description Hours Percent

System Operations 0.83 0.01 0.82 98% 1 Reliability and congestion managemernt na na

Retail Operations 1.00 0.22 0.78 78% 2 Retail transaction processing sussess na na

IT Operations 1.39 1.29 0.09 7% 3 Wholesale access, settlement and billing na na

Corporate Operations 0.72 0.26 0.46 64% 4 Management systems and business practices na na

Total 4.54 2.09 2.45 54% 5 Financial management and cost effectiveness na na

Total In-progress Planning Inactive Closed 6 External and stakeholder affairs na na

Number of projects by status 64 32 20 12 0 7 Organizational readiness na na

Budget Actual Var -$/ # Var - %

System Administration Fee 17.99 18.45 0.46 3%

Other Revenue 0.34 0.45 0.11 33%

Total 18.34 18.91 0.57 3% Current Mo. Prior Mo. % Change

MWH volume (millions) 42.84 43.93 1.09 3% QSE and TCR security deposits 20.84 22.18 -6%

QSE advance receipts and due to generators 26.59 38.76 -46%

TCR auction receipts 19.14 19.98 -4%

Current Month Prior Month Total market settlement liability 66.57 80.92 -22%

Debt Type Balance Rate Balance Rate Settlement short payments balance 16.12 16.03 1%

Senior Notes 136.40 6.17% 136.40 6.17%

Term Notes 35.00 3.10% 35.00 3.10%

Revolver - Borrowed 0.00 0.00% 0.00 0.00% Amount

Total / Average 171.40 5.54% 171.40 5.54% Beginning Cash (January 1, 2005) 33.49

Term Notes - Unused Capacity 15.00 15.00 Cash Provided by Operations 6.86

Revolver - Unused Capacity 50.00 50.00 Cash Used in Investing Activities (Projects) -2.32

Cash Provided by Financing Activities -6.98

Ending Cash (February 28, 2005) 31.04

Year-to-Date Cash Flow Summary

Market Settlement and Credit

Debt

Year-to-Date Operating Expenses Human Resources

Year-to-Date Capital Expenditures

Year-to-Date Revenue & Billing Determinants

Time Tracking - Hours Allocated to Seven Corporate Goals

ERCOT employees track and record time expended on approximately 140 operational activities. The activities will be mapped to seven corporate goals established by the ERCOT management team.

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Change in Consultant CountChange in Consultant Count

• Track consultants performing work that might otherwise be performed by an ERCOT staff person• Begin excluding:

• Security guards• Outside legal counsel• External audit staff

• Continue excluding:• Consultants working off-site such as resources

supporting EMMS systems and projects

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Staff and Contractor SummaryStaff and Contractor Summary

Jan-05 Feb-05ERCOT Staff 484 488 Contractors 44 43 Total Human Resource 528 531

Actual

-

100

200

300

400

500

600

Jan-05 Feb-05

Month Ended

Hu

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Contractors

ERCOT Staff

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Annual Cost Savings - Realized

• $290,000 cost savings identified in January

• $110,000 cost savings identified in February• Electrical and cabling services - $62,000

• Hired ERCOT staff to perform cabling services rather than have contractor do this long-term, on-going electrical and cabling work

• Audiovisual equipment services - $50,000• Cycle use of control room projectors to extend light bulb

life and save approximately 25% of the annual 2005 budget

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Annual Cost Savings - Targeted

• $400,000 cost savings targeted• Timing of New Hires

• Evaluation of timing and need for budgeted positions

• Cell phone and telecommuting expenses• Aim to reduce usage and rates

• Computer purchases• Consolidation of configurations• Negotiation of better pricing• Reevaluation of assumed need

• New banking relationship and/or terms• Coffee and vending services

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Annual Cost Savings - Targeted

• Additional cost savings targets• Employee expenses

• New employee expense reimbursement policy

• Conference call and Web-Ex• Evaluate usage, contracts, and alternatives

• Office supplies• Competitively bid office supply contract

• Additional targets resulting from employee suggestions and other effort to improve company efficiency

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Draft Internal Control Management Plan Work Plan

To be developed with Deloitte & Touche(GANTT chart with milestones that will be reported against)

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Review of Internal Controls

• Deloitte & Touche review continues• Final report expected to be issued on March

15, 2005

• Address the final report at next month’s status report to the Commission

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Completion Status By Audit

Priority Number Complete On:

Audit Total Items H M L 8-Feb 21-Feb 14-Mar

CAN Audit 72 22 20 30 60 66 66

D&T 111 97 14 0 15 18 28

E&Y 35 34 1 0 6 10 *8

Internal Audit 37 32 3 2 26 28 28

PWC 10 7 2 1 5 6 6

265 192 40 33 112 128 136

* 2 items determined to be Non-Actionable

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Completion Status By Business Unit

Priority Number Complete On:

Bus Unit Total Items H M L 8-Feb 21-Feb 14-Mar

Corp. Comm. 2 2 0 0 2 2 2

Cyber Scty 26 26 0 0 0 4 0

Fin. & Acct. 98 87 10 1 24 23 32

HR 26 18 6 2 10 16 16

Legal 5 5 0 0 0 1 1

Mkt Ops 12 5 5 2 6 12 12

Officers 21 19 2 0 4 3 4

Tech. Services 75 30 17 28 66 67 69

265 192 40 33 112 128 136

* 4 items moved to other Business Units

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In Process Status By Audit

Audit Items Remaining Planning Execution

    2/8/2005 2/21/2005 3/14/2005 2/8/2005 2/21/2005 3/14/2005

CAN Audit 6 of 72 0 6 6 12 0 0

D&T 91 of 111 63 63 35 28 29 48

E&Y 27 of 35 36 26 26 5 3 1

Internal Audit 9 of 37 0 0 0 11 9 9

PWC 4 of 10 4 3 2 1 1 2

Totals 137 of 265 103 98 69 57 42 60

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In Process Status By Business Unit

Bus Unit Items Remaining Planning Execution

    2/8/2005 2/21/2005 3/14/2005 2/8/2005 2/21/2005 3/14/2005

Corp. Comm. 0 of 2 0 0 0 0 0 0

Cyber Scty 26 of 26 35 26 26 0 0 0

Fin. & Acct. 73 of 98 44 45 28 29 29 40

HR 10 of 26 3 4 1 10 6 9

Legal 4 of 5 5 2 2 5 2 2

Mkt Ops 0 of 12 0 0 0 6 0 0

Officers 18 of 21 15 3 8 4 3 9

Tech. Services 6 of 75 1 2 6 2 2 0

Totals 137 of 265 103 82 71 56 42 60