1. Prepared by Opinion Dynamics Corporation May 2004

2. Introduction • Opinion Dynamics was contracted to conduct a primary research effort to measure Market Participant perceptions of ERCOT’s performance with respect to meeting its responsibilities. • Results allow for comparisons between market perceptions and operational realities.

3. Methodology Three Phases: Phase 1: 9 in-depth interviews and 2 focus groups with ERCOT staff Phase 3: Survey of ERCOT’s Market Participants Phase 2: In-depth interviews with 17 Market Participants

4. Survey Sample ODC developed a sample of 1,157 unique Market Participants using the following lists provided by ERCOT staff: • Appropriate points of contact at market participant firms provided by MP’s via CSR’s • ERCOT Board members from 2003 and 2004 • Current Committee members from 2003-04 • Attendees of the 2003 IT forum

5. Response Rate429 completed surveys from a sample of 1,157 Market Participants (37%)

6. By Market Participant Firm Type Response Rate

7. Survey Approach: 10 point scale • Many questions based on a 10 point scale: 1-3 = negative response, 8-10 = positive response. • Mean responses will trend toward the middle of a 10 point scale – only those with passionate opinion are likely to provide a rating in top or bottom 3. • In general, mean responses of 6.6 or above are favorable ratings, 7.5 and above are extremely positive responses.

8. Background and ContextMarket Participant Opinions RegardingERCOT Staff’s Role In Developing Market Rules Findings

9. Background and ContextMarket Participants’ Understanding of ERCOT’s Committee Structure Findings

10. Background and ContextMarket Participants’ Understanding of ERCOT’s Committee Structure (cont.) Findings

11. Background and ContextMarket Participant Interactions with ERCOT Staff Findings

12. Background and Context Interest in Future Training Response Rate

13. Overview of Perceived Strengths • Performance of ERCOT staff, officers and directors • Personalized contact with Market Participants-- particularly CSR contact • Timeliness and accuracy of data provided • Providing effective training Findings

14. Color Key

15. ERCOT Staff Performance: Corporate Objectives (10 point scale, means shown) Nondiscriminatory access to transmission/ distribution Ensuring Reliability/Adequacy of Grid Accurate accounting of electric production & delivery Timely information about customer’s choice of REP Findings

16. Corporate objectives: Non-discriminatory access/Market Participant Registration (10 point scale, means shown) Findings

17. ERCOT Staff Performance (10 point scale, means shown) Attitude Industry expertise Overall Performance Responsiveness to Market Participants Management of ERCOT organization(Officers & Directors only) Consistency Findings

18. ERCOT Staff Performance: CSRs (10 point scale, means shown) Attitude/Willingness to resolve problem Direction of inquiries Accessibility Overall expectations Response accuracy Timely response Knowledge/ Industry Expertise Findings

19. ERCOT Staff Performance: Functional Areas(10 point scale, means shown) Market Participant Registration Systems Testing Retail Transaction Processing Scheduling Grid Operations Settlements and Billing Settlements Dispute Resolution Findings

20. Communications (10 point scale, means shown) Written Communication Amount of information Verbal Communication Clarity of ERCOT Staff’s Messages Timeliness Findings

21. Communications: Functional Areas(10 point scale, means shown) Asset Registration Systems Changes Progress on Market Projects Bidding Systems Planning Findings

22. Communications: Room for Improvement(10 point scale, means shown) Communicating… Impacts of PRRs When behind schedule for systems changes Grid ops decisions When systems are down Findings

23. Timeliness & Accuracy of Data(10 point scale, means shown) Metered Data Settlements Bill Transmission Congestion Rights Renewable Energy Credits Data Extracts Findings

24. Effectiveness of Training(10 point scale, means shown)

25. Overview of Areas for Improvement • Portal reliability • Spending priorities • Systems and tools for communicating with the market • Website navigation • EMMS • IT Technical Helpdesk • Functional Performance • congestion management • data extracts • settlement dispute resolution Findings

26. ERCOT PortalLevel of Agreement with Statements About ERCOT IT Systems/Staff The Portal is effective The Portal is reliable Findings

27. ERCOT Spending Practices (10 point scale, means shown) Spending Funds Equitably Spending Funds on Things that are Important to Your Company Spending Funds Cost Effectively Findings

28. Communications with the Market (10 point scale, means shown) Navigation of the Web Site Usefulness of IT Help Desk Understanding EMMS Findings

29. ERCOT Functional Performance (10 point scale, means shown) Providing Data Extracts with Necessary Content Addressing Congestion Management issues Timely and Effective Implementation of Systems Changes Timely Resolution of Settlements Disputes Findings

30. Conclusions Market perceived areas of strength: • Grid reliability • Systems are providing timely and accurate data • ERCOT staff performance including personal interactions

31. Conclusions Market perceived need for system improvements with: • Web site navigation • Data extracts (content) • Web portal • EMMS

32. Conclusions (cont.) Market perceived communication gaps in: • Impacts of PRRs • Systems changes • Spending priorities • Grid operations decisions

33. Conclusions (cont.) Specific areas for strategic consideration by ERCOT Board: • Role of committees in setting spending priorities and introducing market changes • Defining and communicating ERCOT staff’s market function Market is interested in more training--More research on potential types of training seminars is necessary