Exhibit 99.245
PROPOSAL TO CALIFORNIA
DEPARTMENT OF WATER
RESOURCES
February 11, 2001
PEROTSYSTEMS(TM)------------------------------------------------------PSC 016366
PEROTSYSTEMS(TM)
February 13, 2001
Mr. Pete Garris
California Department of Water Resources
Operations Control Office
3310 El Camino Ave
Sacramento, CA 95821
Tel: 916-947-4705
Dear Pete,
Perot Systems Corporation is executed to have the opportunity to present this
proposal for providing scheduling and settlements services to California
Department of Water Resources (CDWR).
We understand the enormous responsibility that has been assigned to CDWR to
lead California out of its current energy crisis. We also understand the
tremendous technical and business challenge that your organization is facing in
providing scheduling and settlements services to CDWR. We are uniquely
qualified to offer CDWR solutions that will mitigate its technical and business
risks. Prominent among our qualifications are:
- Perot Systems was a principal member of the teams that designed,
developed and implemented scheduling and settlements business and IT
solutions for both the California ISO and the California PX (CalPX).
- Perot Systems developed and integrated the scheduling and settlements
systems that are currently being used at CalPX - we believe that the
scheduling and settlements solutions that would meet CDWR's needs are
very similar to those currently being used by CalPX.
- Perot Systems staff that will be engaged in this "process" has been
operating all the IT infrastructure, applications and business processes
that CalPX currently uses for its scheduling and settlements functions.
The proposal that follows details our approach which is intended to enable CDWR
to optimize between its competing objectives of risk mitigation and cost
control. We welcome the opportunity to discuss our proposal with you in greater
detail, and look forward to working with you. Please contact me at (626)
537-3027 should you have any question regarding our proposal.
Sincerely,
/s/ Dariush Shirmohammadi
Dariush Shirmohammadi
Director, Energy Industry
cc: Ken Scott Jim Cribarl Marjan Mohtashan
Linda Curts Fulin Zhuang Chris Taylor
PSC 016367
1000 South Fremont, Suite 6200, Alhambra, CA 91803 Phone: 626.537.3000
Executive Summary
DISCLOSURE PROTECTION NOTICE
This proposal to the California Department of Water Resources (CDWR) is the
property of Perot Systems and contains confidential and/or proprietary
information of Perot Systems. It shall not be disclosed outside of CDWR and
shall not be duplicated, used, or disclosed--in whole or in part--for any
purpose other than to evaluate this proposal. CDWR's review of this material is
considered acceptance of this Disclosure Protection Notice. Should this be
unsatisfactory, please return this material to Perot Systems. If, however, a
contract is awarded to Perot Systems as a result of--or in connection
with--this submission, this proposal shall be subject to the confidentiality,
proprietary rights, and nondisclosure provisions of the resulting contract.
(C) Copyright 2001 Perot Systems Corporation. All Rights Reserved.
PSC 016368
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(C) Perot Systems Corporation, 2001 February 11, 2001 Page ii
Executive Summary
- --------------------------------------------------------------------------------
T A B L E O F C O N T E N T S
<Table>
EXECUTIVE SUMMARY ........................................................ iv
Solution 1: Scheduling and Settlements Operations Services ......... v
Solution 2: Scheduling and Settlements Application Hosting ......... vi
Solution 3: Software Solution ...................................... viii
Optional Services and Solutions ..................................... ix
Our Plan ............................................................ ix
Pricing ............................................................. x
Comparison with Another Service Provider ............................ xv
Summary ............................................................. xviii
ABOUT PEROT SYSTEMS ...................................................... xix
SOLUTION OFFERING ........................................................ 21
Stage One: Requirements Analysis and Design.......................... 22
Stage Two: Integration with CDWR Business Processes/Systems .......... 22
Stage Three: Service Offering ....................................... 23
TECHNOLOGY ............................................................... 38
Web-based Architecture .............................................. 38
Full Redundancy ..................................................... 39
Backup Site (available 6/30/01) ..................................... 39
Database Platforms .................................................. 40
Hardware and Software Platforms ..................................... 41
PRICING .................................................................. 42
Pricing for Solution 1 .............................................. 42
Pricing for Solution 2 .............................................. 43
Pricing for Solution 3 .............................................. 44
Pricing for Optional Services ....................................... 45
Example Pricing of our Services ..................................... 46
</Table>
PSC 016369
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(C) Perot Systems Corporation, 2001 February 11, 2001 Page iii
Executive Summary
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EXECUTIVE SUMMARY
Perot Systems Corporation(1) is very pleased to present this proposal for
providing scheduling and settlements services to California Department of Water
Resources (CDWR).
We understand the enormous responsibility that has been assigned to CDWR to
lead California out of its current energy crisis. We also understand the
tremendous technical and business challenge that your organization is facing in
providing scheduling and settlements services to CDWR in order for it to
successfully meet its obligations.
Perot Systems is uniquely qualified to offer CDWR solutions that will mitigate
its technical and business risks. Prominent among our qualifications are:
- Perot Systems was a principal member of the teams that designed,
developed and implemented scheduling and settlements business and IT
solutions for both the California ISO (Cal ISO) and the California PX
(CalPX).
- Perot Systems developed and integrated the scheduling and settlements
systems that are currently being used at CalPX. We believe that the
scheduling and settlements solutions that would meet CDWR's needs are
very similar to those currently being used by CalPX. In fact, we know of
no other solution provider in the marketplace who has as complete a
solution as Perot Systems does to meet CDWR's immediate and long-term
needs - please see our comparison table at the end of this executive
summary for a better illustration of this point.
- Perot Systems staff that will be engaged in this "process" has been
operating all the IT infrastructure, applications and business processes
that CalPX currently uses for its scheduling and settlements functions.
In this proposal, Perot Systems presents CDWR with three solution options for
it to perform its scheduling and settlements functions. Each of these solutions
has its own specific characteristics and enables CDWR to optimize between its
competing objectives of risk mitigation and cost control. The three solution
options for CDWR are as follows:
SOLUTION 1: Provide CDWR with scheduling and settlements operations services.
PSC 016370
- ---------------
(1) For the purpose of this proposal, Perot Systems includes its subcontracting
partners such as PowerMeter, Inc.
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(C)Perot Systems Corporation, 2001 February 11, 2001 Page iv
Executive Summary
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SOLUTION 2: Provide CDWR with scheduling and settlements applications
hosting services. In this solution, CDWR would run scheduling and
settlements business processes using its own staff.
SOLUTION 3: Provide CDWR with a software solution for scheduling and
settlements and integrate the same into CDWR's current infrastructure. In
this solution, CDWR would run scheduling and settlements business and IT
processes using its own staff.
We describe these solution options in further detail below where Perot
Systems will attempt to highlight their main benefits from CDWR's point of
view.
We must emphasize that for all our solution options, CDWR will be the
official Scheduling Coordinator vis-a-vis Cal ISO and rest of the
marketplace. Perot System will solely act as an agent of CDWR in providing
the essential services that it needs.
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SOLUTION 1: SCHEDULING AND SETTLEMENTS
OPERATIONS SERVICES
--------------------------------------------------------------------------
In this solution option, Perot systems will provide scheduling and
settlements operations services to CDWR on 7x24 basis. In this solution,
Perot Systems will:
- Design interfaces between CDWR's business operation processes and
systems and Perot Systems scheduling and settlements operation
processes and systems;
- Implement a file based interface to CDWR's existing data sources and
its participants data sources;
- Register CDWR's resources with the ISO;
- Operate the scheduling and settlements processes;
- Interface with the ISO on scheduling and settlements processes,
questions or concerns;
- Track ISO processes and system changes and adapt its processes and
systems to meet such changes as necessary; and
- Track and facilitate settlements disputes with the ISO.
As we will describe later in this proposal, we price these services based
on a subscription fee and a volumetric charge.
The main characteristics of this solution are:
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page v
Executive Summary
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- It practically eliminates all risks associated with setting up and
running CDWR's scheduling and settlements operations and allows CDWR
to concentrate on building and operating its other much needed
services
- This service can start practically immediately after Perot Systems and
CDWR have entered into an agreement for this solution.
[GRAPHIC]
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SOLUTION 2: SCHEDULING AND SETTLEMENTS
APPLICATION HOSTING
--------------------------------------------------------------------------
In this solution, CDWR would operate its scheduling and settlements
services using an application hosting service provided on 7x24 basis by
Perot Systems. For this purpose Perot Systems will:
PSC 016372
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page vi
EXECUTIVE SUMMARY
- --------------------------------------------------------------------------------
- Design the interface between CDWR's business systems and Perot
Systems' scheduling and settlements systems;
- Implements a file based interface to CDWR's existing data sources and
its participants data sources;
- Provide CDWR's operators with access to its scheduling and settlements
systems and applications;
- Present ISO settlements statements in the file format; and
- Track ISO system changes and adapt its systems to meet such changes as
necessary.
As we will describe later in this proposal, we price our applications hosting
services based on a subscription fee and a volumetric charge.
The main characteristics of this solution are as follows:
- It practically eliminates all risks associated with setting up and
running scheduling and settlements systems and applications, while
keeping all business operations under CDWR's control.
- This service can start almost immediately after Perot Systems and CDWR
have entered into an agreement for such services.
[GRAPHIC]
PSC 016373
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page vii
Executive Summary
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SOLUTION 3: SOFTWARE SOLUTION
In this solution, Perot Systems will install and integrate its scheduling and
settlements systems and applications into CDWR's current infrastructure. For
this purpose Perot Systems will:
- Specify CDWR's hardware and system software needs;
- Design the interface between CDWR's business systems and Perot Systems'
scheduling and settlements systems;
- Install Perot System' scheduling and settlements applications on CDWR's
hardware platform;
- Implement a file based interface between CDWR's business systems and the
installed scheduling and settlements systems; and
- Track ISO system changes and adapt its systems to meet such changes
based on projects.
Should you use this solution option, CDWR will pay a license fee for our
systems and software. Integration services will be provided on time and
material (T&M) basis. All major system and application changes will be made on
T&M basis.
[CDWR GRAPH]
PSC 01637
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(C) Perot Systems Corporation, 2001 February 11, 2001 Page viii
Executive Summary
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The main feature of this solution is that it keeps all business and IT
operations under CDWR's control. Installation and integration services will
start immediately after Perot Systems and CDWR have reached an agreement
for this solution.
----------------------------------------------------------------------
OPTIONAL SERVICES AND SOLUTIONS
----------------------------------------------------------------------
In addition to the previously described services, Perot Systems can provide
CDWR with the following services and solutions to improve the efficiency of
its operation. These are:
- Transparently integrating our scheduling and settlements
processes and systems with CDWR's existing processes and systems
(CDWR's processes and systems permitting);
- Integrating CDWR's "participants" into its settlements process
and system including allocating and invoicing CDWR's
participants' share of charges (based on CDWR's required
formulas);
- Developing interfaces between CDWR's scheduling and settlements
systems and those of additional Control Area Operators (CAOs)
with minimum possible changes to CDWR's processes and systems;
- Managing CDWR's real-time resource dispatch and tagging needs;
- Processing and validating CDWR's meter data;
- Providing energy trading services -- WITHOUT taking title in the
power or clearing such trades; and
- Consulting on RTO developments around the nation.
As we will describe below, depending on your selection of a solution
option, our pricing mechanism will vary. Regardless of the pricing option,
however, our approach allows you to only take on the services you need and
disregard the ones that have little or no value to you.
----------------------------------------------------------------------
OUR PLAN
----------------------------------------------------------------------
Once CDWR accepts one of these solutions, Perot Systems will engage at CDWR
through a three-stage process:
PSC 016375
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(c)Perot Systems Corporation, 2001 February 11, 2001 Page ix
Executive Summary
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STAGE 1 - REQUIREMENTS STUDY: Perot Systems will immediately enter into
contract negotiations with CDWR in parallel and based on a letter of
intent, Perot Systems will start providing requirements analysis and design
services to CDWR.
STAGE 2 - INTEGRATION DESIGN AND IMPLEMENTATION: Upon completion of Stage 1
and execution of a services agreement, Perot Systems will start its
integration design and implementation (the nature of which will depend on
the selected solution).
STAGE 3 - SERVICE OFFERING: Finally, depending on the selected solution,
Perot Systems will either enter into an operation service, an application
hosting service or a software installation effort.
The timeline for Stage 2 and 3 activities can only be determined after the
Stage 1 requirements study is completed.
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PRICING
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As indicated above, our pricing will vary depending on the selected
solution. In the following we present our pricing options.
PRICING FOR SOLUTION 1
---------------------------------------------------------------------
In this solution Perot Systems will charge a monthly subscription fee and a
monthly volumetric fee for its scheduling and ISO settlements operations
services.(2) The minimum term for this service is two years. There will
also be separate T&M charges for our services in Stage 1 and 2 of the
proposal. However, these charges will be fully refunded over the two-year
term. Under this solution Perot Systems will track ISO business process and
systems changes to ensure compatibility with such changes.
<Table>
<Caption>
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STAGE PRICING RATE COMMENTS
MECHANISM
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1. T&M 200/hr Will not exceed $100K. Fees
Req study with a cap will be fully refunded during
the 2-year operation term.
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</Table>
- ----------
(2) 20% discount will apply to subscription and volumetric fees if 7x24
operations is not required.
PSC 016376
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page x
Executive Summary
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<Table>
<Caption>
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PRICING
STAGE MECHANISM RATE COMMENTS
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2. T&M $200/hr Will determine a cap based on
File based with a cap Stage 1. Fees will be fully
Integration refunded during the 2-year
operation term.
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3. Subscription Subscription: - Subscription fee covers 2.5
Business plus $550,000/month TWh per month of energy and
Operation Volumetric 250 GWh per month of capacity
Volumetric: scheduling and ISO settlements
2.5-5 (cents)/MWh
Per side - Volumetric fee is 5 (cents)/
MWh per side for the second
25TWh of energy or the
second 250 GWh per month
of capacity scheduling and
settlements per month.
- Volumetric fee is 2.5 (cents)/
MWh per side for energy or
capacity scheduling and
settlements exceeding 5 TWh
per month for energy and
500 GWh for capacity.
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</Table>
PRICING FOR SOLUTION 2
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In this solution, Perot Systems will charge a monthly subscription fee and a
monthly volumetric fee for its scheduling and settlements application hosting
services.(3) The minimum term for this service is two years. There will also be
separate T&M charges for our services in Stages 1 and 2 of the proposal.
However, these charges will be fully refunded over the two-year term. Under this
solution Perot Systems will track ISO systems changes to ensure compatibility
with such changes.
- ---------------
(3) 20% discount will apply to subscription and volumetric fees if 7x24
operation is not required.
PSC 016377
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(C)Perot Systems Corporation, 2001 February 11, 2001 Page xi
Executive Summary
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<Table>
<Caption>
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STAGE PRICING RATE COMMENTS
MECHANISM
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1. T&M $200/hr Will not exceed $100K. Fees will
Req Study with a cap be fully refunded during the 2-year
service term.
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2. T&M $200/hr Will determine a cap based on
File based with a cap Stage 1. Fees will be full refunded
Integration during the 2-year service term.
- -----------------------------------------------------------------------------
3. Subscription Subscription - Subscription fee covers 2.5 TWh
Application plus $300,000/month per month of energy and 250
Hosting Volumetric GWh per month of capacity
Volumetric: scheduling and settlements
1.5-3(cents)/MWh
Per side - Volumetric fee is 3(cents)/MWh per
side for the second 2.5TWh of
energy or the second 250 GWh
per month of capacity scheduling
and settlements per month
- Volumetric fee is 1.5(cents)/MWh per
side for energy or capacity
scheduling and settlements
exceeding 5 TWh per month for
energy and 500 GWh for
capacity.
</Table>
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PRICING FOR SOLUTION 3
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In this solution Perot Systems will charge a license fee and an annual
maintenance fee for its scheduling and settlements applications. There will
also be separate T&M charges for our services in Stages 1 and 2 of the
proposal. Under this solution, Perot Systems will track ISO systems changes to
ensure compatibility with such changes. CDWR will pay for installation and
integration of such changes.
PSC 016378
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(C)Perot Systems Corporation, 2001 February 11, 2001 Page xii
Executive Summary
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<Table>
<Caption>
Pricing Rate Comments
Stage Mechanism
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1. T&M $200/hr Will not exceed $100K. Will
Req study with a cap provide up to 100 hours of
study at no charge to CDWR
once license fee is paid.
- --------------------------------------------------------------------------------
2. T&M $200/hr Cap will be determined at the
File based with a cap end of Stage 1. Will provide up
Integration to 400 hours of integration
services at no charge to CDWR
once license fee is paid.
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3. Upfront and License: All major system/application
License fee annual license $2,000,000 changes due to ISO will be
priced on T&M basis.
Maintenance:
$400,000/year
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</Table>
PRICING FOR OPTIONAL SERVICES
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The following present the price menu of our optional services. All three options
of operations services, application hosting and software solutions are available
for these optional services. CDWR may choose one or more of these services and
the method of delivery in conjunction with one of the base solutions offered
earlier. It is necessary for the delivery option for optional services to be
consistent with that of the selected solution option.
<Table>
<Caption>
Optional Service Operations Applications Software
Service(4) Hosting(5) Solution
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Integration with Subscription: Subscription: License:
CDWR "participants" $60,000/month $40,000/month $500,000
and allocation of all (3 participants) (3 participants)
charges among these Maintenance:
participants $8,000/month $5,000/month $100,000/Year
per additional per additional
participant participant Integration:
$200/hr
(For more than
100 hours of
services)
- --------------------------------------------------------------------------------
</Table>
- --------------
(4) Integration services are included.
(5) Integration services are included.
PSC 016379
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page xiii
Executive Summary
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OPTIONAL SERVICE OPERATIONS APPLICATIONS SOFTWARE
SERVICE(4) HOSTING(5) SOLUTION
Real-time Dispatch $25,000/month Subscription: License:
and Tagging Services per staff $25,000/month $250,000
Maintenance:
$50,000/Year
Integration:
$200/hr
(For more than
50 hours of
services)
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Trading: 2 cents/MWh per side 1.2 cents/MWh per License:
Clearing Auction (No clearing) side $500,000
Bilateral Matching
Pay as bid Maintenance:
$100,000/Year
Integration:
$200/hr
(For more than
100 hours of
services)
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Transparent N/A N/A $200/hr
integration with
existing & new
systems
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Meter data processing Subscription: Subscription: N/A
and validation $45,000/month $25,000/month
(including MDAS and (3 participants) (3 participants)
metering interface & &
software) $5,000/month $3,000/month
per additional per additional
participant participant
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PSC 016380
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(c)Perot Systems Corporation, 2001 February 11, 2001 Page xiv
Executive Summary
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----------------------------------------------------------------------
COMPARISON WITH ANOTHER SERVICE PROVIDER
----------------------------------------------------------------------
The following table compares Perot Systems services with those of another
scheduling and settlements services provider in California. This table,
which has been developed based on information openly available on the
services of this provider, clearly indicates the completeness of our
solution offering.
<Table>
<Caption>
--------------------------------------------------------------------------------
SERVICES, SYSTEMS PEROT SYSTEMS OTHER MAJOR SERVICE
AND QUALIFICATIONS VENDOR
--------------------------------------------------------------------------------
Scheduling DA, HA, Ancillary Services, DA, HA, Ancillary Services,
Supplemental Energy, Supplemental Energy,
ETC/FTR, Bilateral Bilateral Scheduling
Scheduling, Inter-SC
Adjustment Bids
--------------------------------------------------------------------------------
Real-time dispatch Optional service Not mentioned
and tagging
--------------------------------------------------------------------------------
HUB locations 25 Zones 8 hubs
--------------------------------------------------------------------------------
Metering Process and Validate meter None
data from and provide
Settlement Quality Meter
Data to ISO (optional
service).
--------------------------------------------------------------------------------
Dispute Processing Developed a fully functional Not mentioned
dispute processing and
tracking system. The model
is expandable to provide
predictive disputes.
--------------------------------------------------------------------------------
ISO System Fully automated data Not mentioned
Interface communication of all ISO
schedule and settlement data.
--------------------------------------------------------------------------------
Settlements and All ISO charge types for Few participants
Billing over 70 participants in CA
alone.
--------------------------------------------------------------------------------
10 minute Provided Not mentioned
Settlements
--------------------------------------------------------------------------------
Settlement and Web based Web based
Billing data access
--------------------------------------------------------------------------------
</Table>
PSC 016381
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(C)Perot Systems Corporation, 2001 February 11, 2001 Page xv
Executive Summary
- -------------------------------------------------------------------------------
<Table>
<Caption>
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SERVICES, SYSTEMS PEROT SYSTEMS OTHER MAJOR SERVICE
AND QUALIFICATIONS VENDOR
- ------------------------------------------------------------------------------------------------------
ISO Public Market Provided Not Mentioned
Information
- ------------------------------------------------------------------------------------------------------
Handling of ISO Provided. Sharing among Uplift spread over
charges participants as an optional participants
service.
- ------------------------------------------------------------------------------------------------------
Service Schedule 7 by 24 operation Capable of 7 by 24 operation
- ------------------------------------------------------------------------------------------------------
IT Team Provided IT support to Handling less than 5% of
Experience CalPX that handled 80% of California market?
California electric energy
market. Developed a
majority of improvement
applications in PX trading,
settlement, metering and
finance systems. Made all
PX system changes to
accommodate ISO market
and system changes.
Conduced numerous Market
Simulation including ISO
and IOUs to provide End to
End integration test before
introducing change. Provide
complete help desk and
computer operation services
using Perot's pool of
resources. Runs a Program
Office applying proven
project management
technologies. IT project
success (on schedule, under
budget) rate close to 95%.
- ------------------------------------------------------------------------------------------------------
Business Team Involved in the design Not mentioned
Experience implementation and
operation of ISO and PX
from day one. Intimately
familiar with energy market
and utility financing and
operation. Team experts
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</Table>
PSC 016382
(c)Perot Systems Corporation, 2001 February 11, 2001 Page xvi
EXECUTIVE SUMMARY
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<Table>
<Caption>
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SERVICES, SYSTEMS PEROT SYSTEMS OTHER MAJOR SERVICE
AND QUALIFICATIONS VENDOR
- -----------------------------------------------------------------------------------------------
published widely on major
market issues. Handled 80%
of California energy market.
- -----------------------------------------------------------------------------------------------
Operation Team Handled 80% of California Not mentioned
Experience spot market and long term
contract market (yearly,
quarterly and month).
Conducted Web based real-
time energy auction for the
Alberta Balancing Power
Pool.
- -----------------------------------------------------------------------------------------------
Company Financial See Annual Report. See Annual Report
Strength
- -----------------------------------------------------------------------------------------------
Interface with Web based, initially file Web based, limited GUI
Participant Systems based
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System Platforms NT, MS SQL NT, MS SQL
- -----------------------------------------------------------------------------------------------
Participant System PC compatible workstations PC compatible workstations
Requirements running Windows 85, 98, running Windows 85, 98 and
2000 and NT NT
- -----------------------------------------------------------------------------------------------
Data Transmission SSL, 128 bit encryption SSL, 128 bid encryption
security
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Clearing and Credit Not offered in California so Offered to certain extent.
Management as to insulate participants Can lead to similar failures as
from the current credit crisis. the PX has experienced with
large participants default.
Large California utilities will
have difficulty to trade with
credit self-management
participants due to the
utilities current credit
standings.
- -----------------------------------------------------------------------------------------------
Trading services Clearing auction Pay as bid trading limited to
Bilateral matching zonal level only
Pay as bid
Block forward (optional)
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</Table>
PSC 016383
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page xvii
Executive Summary
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<Table>
<Caption>
- -------------------------------------------------------------------------------
SERVICES, SYSTEMS PEROT SYSTEMS OTHER MAJOR SERVICE
AND QUALIFICATIONS VENDOR
- --------------------------------------------------------------------------------
Credit Evaluation Part of trading service Not mentioned
- --------------------------------------------------------------------------------
Pricing Volumetric and subscription Volumetric
- --------------------------------------------------------------------------------
Scheduling/Settlements 5.83(cents)/MWh per side 6.25(cents)/MWh per
Fee (based on 7.5 TWH/ side
months
- --------------------------------------------------------------------------------
Trading Fee 2(cents)/MWh per side 3(cents)/MWh per side
- --------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
SUMMARY
- --------------------------------------------------------------------------------
We are confident that one of our proposed solutions will meet CDWR's immediate
and long-term technical and business objectives of providing scheduling and
settlements services in California. In fact, we believe that only our solutions
can meet CDWR's very aggressive timeline while at same time remaining cost
effective. Finally, our operations or applications hosting solution option will
mitigate CDWR's ongoing risk of keeping up with Cal ISO's and market's ongoing
business processes or systems changes.(6)
- ---------------------------
(6) Last year alone CalPX spent $3.5M in software development to keep pace with
Cal ISO business process and system changes
PSC 016384
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(C) Perot Systems Corporation, 2001 February 11, 2001 Page xviii
About Perot Systems
- -------------------------------------------------------------------------------
ABOUT PEROT SYSTEMS
Perot Systems has been providing business solutions and information
technology services worldwide. Our success lies with out continued ability
to serve our clients by helping them to better serve their customers. Perot
Systems look to these end-customers for direction and insight, rather than
pursuing past successes or competitors.
OUR CLIENTS UNDERSTAND that finding or creating customer value is the only
way to survive. They think strategically about technology, and they are
focused on achieving both market leadership and operational excellence. Our
clients understand the significance of the Internet economy dynamics and
have a passion to seize the opportunities they provide.
PEROT SYSTEMS INTEGRATE THREE CORE DISCIPLINES - business integration;
systems integration, including applications development; and information
technology infrastructure services - to help clients serve their customers
better and more creatively. Business integration includes working with
clients to develop and implement information technology strategies, process
redesign, and change management. Systems integration and applications
development includes the design and implementation of new and existing
information technology systems for clients, including both custom-developed
and packaged software. Information technology infrastructure services
include information technology outsourcing, staffing, and infrastructure
management.
PEROT SYSTEMS COMBINE THESE THREE DISCIPLINES to assist clients in both
improving the way they do business and creating new business offerings. Our
multi-disciplined teams combine industry expertise with leading-edge
technical and professional skills. As a flat, highly collaborative
organization, Perot Systems have built a smooth engagement model composed
of joint teams working together to deliver high-value business benefits.
Additionally, Perot Systems bring in and coordinate third parties when
appropriate, to ensure optimal, best-of-breed solutions.
PEROT SYSTEMS ENSURE OUR ABILITY TO CONSISTENTLY DELIVER RAPID, RELIABLE
SOLUTIONS by applying tested methods and processes, employing experienced
Account Managers, and implementing intense management review. Perot Systems
have defined and refined our methodologies through our extensive
experience, and Perot Systems assign to each client an Account Manager
experienced in those methodologies, as well as in the industry and
information technology. Additionally,
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page xix
About Perot Systems
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our leadership team reviews accounts each month, using a "dashboard" tool
that reflects key performance metrics.
PEROT SYSTEMS BUILD LONG-TERM RELATIONSHIPS with our clients, investing
ourselves in their business strategies and their success in realizing their
business goals. Perot Systems view ourselves as business "partners," so
instead of simply providing vendor services, Perot Systems work with
clients to understand their business, their customers, how they can best
achieve their business goals, and how IT can facilitate that achievement.
And then Perot Systems work with them to implement their business strategy,
information technology strategy, process redesign, and change management.
Perot Systems treat every client problem as our own.
PEROT SYSTEMS LOCATIONS & GEOGRAPHIC INFORMATION
Perot Systems has a substantial global presence including sales centers,
systems integration centers, and operational support centers. Perot Systems
have established these centers based on our desire to penetrate specific
markets and the operational and support requirements of our global clients.
Over 7500 associates are dedicated to providing world-class service to
these clients.
In Europe, Perot Systems has key data centers and help desk operations in
Dublin, Ireland and London, England. In addition, Perot Systems provide
operational and systems integration services in a number of European
locations including France, Germany, Switzerland, The Netherlands, and
England.
In Asia, Perot Systems continues to build an operational presence in the
Pacific Rim with data center and operational support centers in Hong Kong,
Japan, and Singapore including substantial systems integration capabilities
in these locations as well as India.
In the United States, Perot Systems has worked to consolidate data center
operations creating economies of scale for our clients. Perot Systems
operates help desk and data centers in Sacramento, San Diego, San
Francisco, Auburn Hills, Chicago, Dallas, and Stamford. Additionally, Perot
Systems have systems integration centers in Denver, Dallas, Los Angeles and
Reston, Virginia.
Perot Systems has a significant established base of business in Europe,
Asia, and North America. Perot Systems plan to aggressively build this base
with existing clients an new clients while expanding our presence in
countries within these regions. Additionally, our relationship with global
clients will result in expansion to new regions and countries as our client
base continues to grow, and as Perot Systems obtain new global client
relationships. Perot Systems intend to pursue this geographic growth on a
proactive basis.
PSC 016386
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page xx
Solution Offering
SOLUTION OFFERING
CDWR Challenge: CDWR must operate a seamless scheduling and settlements process
with Cal ISO and its participants for ensuring the operational and business
viability of solution to the California energy crisis. In achieving this
objective, CDWR must handle schedules and preserve the transparency and
audit-ability of all actions.
Our solution: Using proven technologies, Perot Systems will quickly and
efficiently fit its solution to match CDWR's needs. Our solutions, designed to
interface with Cal ISO, have been completely field tested and proven.
To help CDWR meet its challenges, we offer three solution options:
SOLUTION 1: Provide CDWR with scheduling and settlements operations services.
SOLUTION 2: Provide CDWR with scheduling and settlements applications hosting
services. In this solution, CDWR would run scheduling and settlements business
processes using its own staff.
SOLUTION 3: Provide CDWR with a software solution for scheduling and
settlements and integrate the same into CDWR's current infrastructure. In this
solution, CDWR would run scheduling and settlements business and IT processes
using its own staff.
Each of three solution options will be offered using a three step process
consisting of:
STAGE 1 - REQUIREMENTS STUDY: Perot Systems will immediately enter into
contract negotiations with CDWR in parallel and based on a letter of intent,
Perot Systems will start providing requirements analysis and design services to
CDWR.
STAGE 2 - INTEGRATION DESIGN AND IMPLEMENTATION: Upon completion of Stage 1 and
execution of a services agreement, Perot systems will start its integration
design and implementation (the nature of which will depend on the selected
solution).
STAGE 3 - SERVICE OFFERING: Finally, depending on the selected solution, Perot
Systems will either enter into an operation service, an application hosting
service of a software installation effort.
PSC 016387
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(C) Perot Systems Corporation, 2001 February 11, 2001 Page 21
Solution Offering
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In the following, we describe the stages of this three-stage process and the
essential components of services or software solutions that Perot Systems would
provide to CDWR regardless of the selected solution option.
- --------------------------------------------------------------------------------
STAGE ONE: REQUIREMENTS ANALYSIS AND DESIGN
- --------------------------------------------------------------------------------
A team of Perot Systems business consultants, system analysts, information
system architects and project managers will join with CDWR at the CDWR site for
a three-day workshop to accomplish the following:
- Understand CDWR's short-term and long-term energy business functions;
- Document the existing CDWR information system status and conditions:
- Identify systems requirements necessary for Perot Systems to deliver the
selected solution to CDWR;
- Develop an initial system design of necessary changes to CDWR's internal
systems, if any, and CDWR's interface with Perot Systems and other
external systems; and
- Define Perot Systems and CDWR's respective implementation responsibility
and coordinate with CDWR's implementation schedule.
CDWR is expected to provide sufficient resources to ensure timely information
gathering and decision-making. Before the workshop, CDWR and Perot Systems will
agree on workshop attendees and agenda.
Within 15 business days after the workshop, Perot Systems will provide CDWR
with a draft of implementation plan.
- --------------------------------------------------------------------------------
STAGE TWO: INTEGRATION WITH CDWR BUSINESS PROCESSES/SYSTEMS
- --------------------------------------------------------------------------------
Particular to the solution chosen, Perot Systems will provide CDWR with the
standard interfaces, which:
- Enables a participant to upload and download via internet energy capacity
and transmission usage schedules in file format or via web entry;
PSC 016388
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(C)Perot Systems Corporation, 2001 February 11, 2001 Page 22
Solution Offering
- Enables CDWR to automatically generate and send schedule data received
from participants or created using its internal data sources and data
entry to Cal ISO;
- Allows a participant to view and save information on energy, capacity and
transmission usage schedules as well as a number of Cal ISO public
information items on a web page; and
- Permits viewing and downloading settlement statements and invoices in a
set of generic or customized formats on the Internet.
All data transmission over the Internet will follow standard security protocols
with server site electronic certificates, strong data encryption and password
protection.
In addition to the standard participant interface, Perot Systems offers the
following optional service to integrate with CDWR's internal business processes
and systems.
- Schedule data processing: This integration function will access CDWR's
contract database to convert contract data (e.g., 200 MW Monthly Peak
Energy Delivered in April to PCG1 in NP15) into hourly schedule data
(e.g., Day-Ahead inter-SC transfer-out schedule to PCG1 to 200 MW in
hour-ending 7 through hour-ending 22 in NP15), and upload the schedule
data to the Scheduling DB ready for upload to Cal ISO. It will also
download Cal ISO final schedules, AS reservation schedules etc., from
Perot Systems into CDWR's data sources at the push of a button.
- Settlement and billing data processing: This integration function will
allow CDWR personnel to directly load settlement statements, invoices and
supplemental control reports directly into CDWR's finance systems or,
alternatively, create files which can then be loaded into CDWR's finance
systems.
STAGE THREE: SERVICE OFFERING
DAY-AHEAD AND HOUR-AHEAD SCHEDULING
Perot Systems will interface with CDWR's existing data sources as well as its
participants data files for generating Day-Ahead and Hour-Ahead schedules
according to the specifications defined by Cal ISO in effect, electronically
and automatically submit them to Cal ISO's SI system. Perot Systems will also
automatically query and manage the interim and final schedules accepted by Cal
ISO.
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(C) Perot Systems Corporation, 2001 February 11, 2001 Page 23
Solution Offering
- --------------------------------------------------------------------------------
Specifically, Perot Systems will develop and manage the following types of
Day-Ahead and Hour-Ahead Schedules:
- Preferred and Revised Preferred Energy Generation
- Preferred and Revised Preferred Energy Internal Interchange
- Preferred and Revised Preferred Energy Load
- Preferred and Revised Preferred Ancillary Service Regulation Generation
- Preferred and Revised Preferred Ancillary Service Spinning Reserve
Generation
- Preferred and Revised Preferred Ancillary Service Replacement Reserve
Generation
- Preferred and Revised Preferred Ancillary Service Non-Spinning Reserve
Generation
- Ancillary Service Non-Spinning Reserve Dispatchable Load
- Ancillary Service Replacement Reserve Dispatchable Load
- Final and Adjusted Energy Generation
- Individual Final and Adjusted Energy and Ancillary Service Interchange
- Final and Adjusted Energy Load
- Final and Adjusted Energy Internal Interchange
- Final and Adjusted Ancillary Service Non-Spinning Reserve Dispatchable
Load
- Final and Adjusted Ancillary Service Non-Spinning Reserve Generation
- Final and Adjusted Ancillary Service Regulation
- Final and Adjusted Ancillary Service Replacement Reserve Dispatchable
Load
- Final and Adjusted Ancillary Service Replacement Reserve Generation
- Final and Adjusted Ancillary Service Spinning Reserve
- Final and Adjusted Ancillary Service Interchange Usage
- Final and Adjusted Ancillary Service Generation Usage
- Final and Adjusted Ancillary Service Load Usage
- Final and Adjusted Ancillary Service Trades Usage
- Final and Adjusted Ancillary Service Usage
In addition, Perot Systems will provide the following enhancements to the
scheduling services mentioned above:
- Complete audit trails for the data submission
PSC 016390
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(C) Perot Systems Corporation, 2001 February 11, 2001 Page 24
Solution Offering
- --------------------------------------------------------------------------------
- Pre-validations (schedule balance validation, or example).
- Existing Transmission Contracts (ETC) scheduling
- Firm Transmission Right (FTR) scheduling
- Ancillary Service self scheduling
- Congestion management bidding (adjustment bids)
- Inter-SC schedule adjustment bids
SUPPLEMENTAL ENERGY/REAL-TIME SCHEDULING
----------------------------------------------------------------------
Perot Systems generates supplemental energy/Real-time schedules based on
CDWR's internal data sources or participant's data according to the
specifications defined by Cal ISO. Perot Systems then electronically and
automatically submits them to Cal ISO's SI system. In addition, Perot
Systems provides auditing trails for data submission.
In Solutions 1 and 2, Perot Systems will develop and manage the following
types of supplemental energy/real-time schedules:
- Supplemental Energy Bids Generation
- Supplemental Energy Bids Load
- Supplemental Energy Import Bids
REAL-TIME DISPATCH SERVICES (OPTIONAL)
----------------------------------------------------------------------
Perot Systems proposes to offer the following optional services for
Real-time dispatch and interactions with Cal ISO's Real-time dispatch
operation:
- Act on CDWR's behalf to interface with Cal ISO or other area
control operators;
- Consolidate Day-Ahead and Hour-Ahead schedules and tracking
changes of schedules for Real-time operation;
- Provide E-tagging services using third-party tagging system (such
as OATI Tagging System) to support market transactions, as
required by NERC to validate import/export schedules and provide
source generators for unscheduled power flow (loop flow, an
application under testing); and
- Collect and report real-time data by validating and logging
real-time schedule curtailment or settlements and disputes
resolutions.
PSC 016391
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(c)Perot Systems Corporation, 2001 February 11, 2001 Page 25
Solution Offering
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PMI DATA PRESENTATION
--------------------------------------------------------------------------
Public Market Information (PMI) data is available from Cal ISO via two
websites: the Scheduling Infrastructure (SI) and the Open Access Same Time
Information System (OASIS). The SI PMI can be accessed through Cal ISO's
private network, WENet, while OASIS is part of Cal ISO's public website.
The main differences between the two sites are in the data availability and
retention period. PMI data first become available on SI site and is later
republished on OASIS. The SI only retains the latest 7-day information
whereas OASIS contains more than a year's PMI.
Perot Systems offers to use its applications that can automatically
download and manage the PMI data. Perot Systems can also integrate its
utilities programs to parse in the PMI templates and insert the information
into any relational database. This approach allows other applications to
use the PMI data without being affected by changes in the format of the PMI
templates.
Specifically, Perot Systems will manage the following types of PMI data:
- Day Ahead Interim Zonal Congestion Price Difference
- Day Ahead Final Zonal Congestion Price Difference
- Day Ahead Market Interim Information
- Day Ahead Market Final Information
- Day Ahead Interim Ancillary Requirement Information
- Day Ahead Interim Ancillary Procurement Information
- Day Ahead Final Ancillary Requirement Information
- Day Ahead Final Ancillary Procurement Information
- Day Ahead Interim A/S Percentage Requirement
- Day Ahead Final A/S Percentage Requirement
- Day Ahead Interim A/S Region Information
- Day Ahead Final A/S Region Information
- Day Ahead Interim Branch Group Duration Information
- Day Ahead Final Branch Group Duration Information
- Day Ahead Interim A/S Interchange Information
- Day Ahead Final A/S Interchange Information
- Day Ahead Prescheduled Reliability Requirements
PSC 016392
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(C) Perot Systems Corporation, 2001 February 11, 2001 Page 26
Solution Offering
- -----------------------------------------------------------------------------
- - Day Ahead Interim Total And Available Capacity of Inter Zonal Interface
Information
- - Day Ahead Final Total And Available Capacity of Inter Zonal Interface
Information
- - Cal ISO Branch Group Actual Net Flow
- - Ex-Post 10 Minute Energy/Price Info
- - Out of Market (OOM) Calls
- - Hour Ahead Branch Group Duration
- - Hour Ahead Ancillary Requirement
- - Hour Ahead Ancillary Procurement
- - Hour Ahead Branch Group Congestion Prices
- - Hour Ahead Zonal Congestion Price Difference
- - Hour Ahead Generation Meter Multipliers
- - Hour Ahead Tie Meter Multipliers
- - Hour Ahead Branch Group Final Flow
- - Hour Ahead A/S Percentage Requirement
- - Hour Ahead A/S Region Information
- - Hour Ahead A/S Interchange Information
- - Hour Ahead Branch Group Duration
- - Hour Ahead Company Losses
- - Hour Ahead Total And Available Capacity Of Inter Zonal Interface
- - Ex-Post Branch Group Duration Information
- - Ex-Post Schedule/Price Info-Generation
- - Ex-Post Schedule/Price Info-Load
- - Ex-Post Schedule/Price Info-Interchange
- - Zonal Predispatched Prices
- - Ex-Post Region Definition
SETTLEMENTS SERVICES
- -----------------------------------------------------------------------------
Perot Systems' Settlements System interfaces with Cal ISO Settlements System
including performing 10-minute Settlements, providing Day-Ahead and Hour-Ahead
settlements, preliminary versus final statements (reconciliation) and
settlements dispute tracking.
PSC 016359
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(C)Perot Systems Corporation, 2001 February 11, 2001 Page 27
Solution Offering
- --------------------------------------------------------------------------------
Perot Systems' Settlements System process generates daily preliminary and
final settlement statements, validation reports, and periodic invoice
reconciliation reports for all energy transactions. Settlements will
ultimately serve as the financial reporting intermediary between Cal ISO
and any Scheduling Coordinator. It will also respond to participant's
inquiries, monitor the accuracy of statement activity, and manage the
dispute process in the event of discrepancies, which includes filing
disputes with Cal ISO on behalf of the participants.
For forward markets, the Settlements System will calculate the value of
each trade as determined by the final schedules and price, and send each
participant a daily statement containing the details of each trade.
The Real-time dispatch instructions and Cal ISO-supplied information about
adjustments and deviations from the Forward market schedules will form the
basis of the settlement statements and invoices for the Real-time market.
For this market, this function consists of receiving from Cal ISO the
actual payments and charges for Real-time energy generated or used.
As an optional service when CDWR needs to settle with its participants, our
processes and systems will calculate the value of each participant's actual
generation or use, sending each participant a daily statement of the
amounts and prices of their transactions. Also, on a periodic (monthly or
bi-weekly) basis sending an invoice summarizing an entire period of
Real-time transactions and stating the payment due to or from each
participant. Finally, on a periodic (monthly or bi-weekly) basis, each
participant will be sent an invoice report summarizing an entire period of
transactions and stating the payment due to or from the participant
(optional).
REAL-TIME ISO SETTLEMENTS
This process produces preliminary and final settlement statements for
actual metered energy, ancillary services and congestion relief, and Cal
ISO grid management charges. Cal ISO provides preliminary and final
settlements data detailing these transactions. Cal ISO also provides the
amount to be paid/charged for these types of transactions and settlement
processing passes these on to participants.
Some Cal ISO charges/payments are matched to specific participants while
others are shared across multiple participants. As stated above, this could
be provided as an optional service.
As an optional service, for shared charges, Settlements calculates the
share fractions to be applied to each participant. The shared transactions
are allocated to participants on a fair and equitable basis.
PSC 016394
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page 28
Solution Offering
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The following outlines specific characteristic and value added services
provided through our Real-time Settlement System:
- Tracking of all Cal ISO retired and new charge types
- Handling of Bilateral contracts and Inter SC trades
- Support of multiple settlement intervals, whether hourly or in any
minute increment
- Adherence to any payment calendar
- Handling of multiple ownership of resources including percentage
ownership and per contract (qualified facilities)
- Allowance for Dynamic Region to Zone Relation, including
redistribution of Cal ISO Charges/Payments based on dynamic
allocation of zones to regions.
- Handling all Cal ISO resource naming conventions
- Handling all Cal ISO Manual Line Items, to include prior day
adjustments, adjustments for disputes/errors, and DC loss on
Intertie
- Providing detailed information on all Cal ISO charges/payments
- Unbundled charge types
- Providing detailed information on prior day adjustments, including
information on specific dates and charge types
- Support for meter values to be used in the settlements process
(optional)
- Allocation of Cal ISO Ancillary Service charges based on metered
load and export rather than scheduled load and export (optional)
- Verification of Cal ISO meter quantities with participants Meter
Data Acquisition System (MDAS) data (optional)
- Handling of Questionable Data from Cal ISO
- Suspension and clearing of wrong charges/payments
- Charges and payments from Cal ISO that cannot be processed
- Unidentified charges and payments
- Cal ISO supplemental information needed to process statements
is inaccurate or does not match Cal ISO file
- Manual line items do not contain sufficient information to
process
- No resource, zone, hour
- Make reasonable effort to resolve Cal ISO and CDWR suspense
account issues
- Maintenance of Master Data consistency between Cal ISO and CDWR
(optional)
PSC 016395
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(c)Perot Systems Corporation, 2001 February 11, 2001 Page 29
Solution Offering
- --------------------------------------------------------------------------------
- - Redistribution of Cal ISO Charges/Payments based on geographic location
Share across the Control Area, Region, Zone, and Intertie
- - Handling of Customized Products
- Ancillary Service Self Provision
- - Determining Grid Management Charges
- Compatible with latest Cal ISO Unbundling of GMC charges
- Reconciliation of daily to monthly GMC charges
- - Handling of Regulatory Must Run units
- - End of Month processing
- Re-conciliation of daily to monthly charges/payments
- - Recalculation/Re-distribution of Imbalance Energy
- - Handling of Preliminary and Final statements from Cal ISO
- - Handling of multiple invoicing structure
- Dual Invoicing
- Netted Invoicing
- Invoicing based on Final
- - Handling of Administrative Charges
- Volumetric
- Fixed
- Global and Partial Fees
- - Settlements Web Site will allow for participants to self-configure settlement
statements with reports (optional)
SETTLEMENTS DISPUTE TRACKING
Our Settlements System produces Settlement Statements that clearly indicate to
market participants what they owe and what is owed to them for both Forward
market and Real-time energy transactions.
Under current regulations, market participants have a designated number of
business days within which to dispute the charges and/or payments on the
statement. Dispute Tracking is responsible for dispute registration, Cal ISO
communication, participant communication, and dispute resolution.
Common dispute scenarios include:
PSC 016396
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page
SOLUTION OFFERING
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- A participant may question a specific dollar amount on the daily
Forward market or Real-time market statement (optional);
- A participant may question Cal ISO policy governing the calculation of
the dollar amount (optional);
- Real-time statements may not be processed due to insufficient
information from Cal ISO; and
- The validation process may flag inconsistency between Cal ISO
Real-time transactions and provided information.
Our Dispute Tracking establishes a prompt daily dispute resolution process and
provides timely resolution of disputes within payment calendar and Cal ISO
guideline.
Within Perot Systems' system, and as an option, disputes may be submitted to
Cal ISO on behalf of the participant (Proactive Disputes) or received from the
participant to be placed with Cal ISO. The following functionalities are
available:
- Submission of Proactive Disputes to Cal ISO based on agreed criteria
such as:
- Missing information in settlement files from Cal ISO
- Inconsistency between Cal ISO meter data and participant's meter
data
- Research, validation and submission of participant's disputes to Cal
ISO with supporting data:
- Process resolved disputes from Cal ISO;
- Assign a tracking numbers to all disputes and track disputes from
inception through resolution;
- Retain a communication log related to all dispute research,
resolutions, or correspondence;
- Provide web based dispute inquiry capability;
- Provide web based dispute submission capability;
- Provide participant capability to download dispute data;
- Provide acknowledgement of dispute; and
- Provide summary report capability.
FORWARD MARKET (DAY-AHEAD/HOUR-AHEAD) SETTLEMENTS (OPTIONAL)
This optional settlements service will be part of a potential trading operation
that CDWR may run with its participants in the future to balance its supply and
demand in light of long-term supply contracts that it will manage. Cal ISO will
manage transmission congestion in the forward schedule market (pre Real-time).
Cal ISO
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(C)Perot Systems Corporation, 2001 February 11, 2001 Page 31
Solution Offering
- -----------------------------------------------------------------------------
will use adjustment bids to adjust individual resource schedules to relieve
congestion and to calculate the usage charge rate.
The followings outlines Day Ahead and Hour Ahead settlement processes:
- - Loading and validation of final schedules and prices from scheduling
systems;
- - Validation of participant information against market portfolio;
- - Validation of Cal ISO final schedules;
- - Importation of Cal ISO line duration data;
- - Using the Day-Ahead and Hour-Ahead to determine what trades were made and
the price, calculate for each participant the preliminary payments and/or
charges for each product traded;
- - Calculation of each participant's share of line duration charges;
- - Calculation of an administration fee and other service fees for CDWR
participants, if applicable, based on provided guidelines;
- - Production of a settlement statement according specific guidelines;
- - Operational and financial reporting; and
- - Production of verification reports, status reports and optional participant
specific reports.
This process calculates the value of electricity trades made in the Day-Ahead
and Hour-Ahead auctions. It creates a statement for each participant detailing
the resource, type of energy traded, the amount of energy, and the dollar
value. The preliminary statements will be delivered to participants within
specific timeline.
The participants have specific time after receipt of the preliminary statement
to review and dispute any items on the preliminary statement. Final statements,
on which invoices are based, are delivered to participants within provided
timeline after the review period ends.
INVOICE RECONCILIATION
- -----------------------------------------------------------------------------
Perot Systems will reconcile Cal ISO monthly charges/payments against daily
settlement statements. Perot Systems will also provide comprehensive reports
with detailed explanation of monthly Cal ISO charges and payments based on
daily activities provided through Settlement Statements. Additionally, Perot
Systems offer both Dual Invoicing and payment transfer through its FedWire
interface.
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(C)Perot Systems Corporation, 2001 February 11, 2001 Page 32
Solution Offering
- --------------------------------------------------------------------------------
METER DATA PROCESSING AND VALIDATION (OPTIONAL)
- --------------------------------------------------------------------------------
Our Settlements System can use meter data to determine the energy generated and
used in Real-time. Meter data is the basis of charges and payments for
Real-time generation and load.
If this option is chosen, the following validation processes are available to
ensure Settlement Quality Meter Data:
- Verification of authorization and authentication;
- Tracking of participants' changes to portfolio of loads and
generation;
- Validation of submitted meter data against participants' portfolio
of active loads and generation;
- Validation of submission of meter data through authorized
participants only;
- Validation of submitted meter data against participants' schedule
data and reported deviation above certain tolerance or missing meter
reads;
- Validation of submitted meter data for completion and accuracy;
- Verification of data accuracy for Daylight Saving and Pacific
Standard Time;
- Verification of submission of meter data to Cal ISO based on Cal
ISO's calendar;
- Retention of an acknowledgment note from Cal ISO upon submission and
validation;
- Resolution of any inconsistency between meter data submission with
Cal ISO;
- Daily production of a report that is submitted to each participant
listing out the result of validation. Upon re-submission of
corrected meter data, the validation process is applied again to
ensure accuracy and timeliness; and
- Availability of grid-polled meter data through submission of a
request to Cal ISO for providing settlement reading meter data.
Additional services available:
- Calculation of meter data based on schedule data;
- Calculation of meter data based on SMUD Bubble calculation; and
- Presentation of metering values and trend curves.
PSC 016399
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page 33
Solution Offering
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CHARGE/PAYMENT ALLOCATION AMONG CDWR PARTICIPANTS
PER CDWR REQUIREMENTS (OPTIONAL)
- --------------------------------------------------------------------------------
Perot Systems are fully able to redistribute Cal ISO's deviation charges across
the participant pool, if applicable. To do this, Perot Systems will:
- Apply netting concept at participant level when applying uninstructed
deviation through participant pool;
- Apply uninstructed deviations at resource level deviation or any other
guideline;
- Use appropriate incremental or decremental prices;
- Distribute any savings balance using pro rata guideline;
- Re-distribute Cal ISO's Neutrality Adjustment to participant pool based on
the control area demand share fraction;
- Re-distribute Cal ISO's Intrazonal congestion charges/payments based on
demand zonal share fractions;
- Re-distribute of Transmission Owner Debit based on supply and demand;
- Re-distribute Unaccounted for Energy (UFE) charges/payment based on
schedule;
- Re-distribute Cal ISO Grid Management Charges based on schedule;
TRACKING ISO PROCESSES AND SYSTEMS CHANGES
- --------------------------------------------------------------------------------
A key element of the value in Perot Systems capability is its experience and
success in keeping up with Cal ISO processes and data configuration
modifications. Cal ISO has filed 37 amendments before FERC for its operating
tariffs.(7) The scheduling templates have undergone 17 major revisions with over
125 changes.
Perot Systems offer to track Cal ISO's process changes and keep its applications
and systems in line. Perot Systems will mitigate the risk to CDWR caused by such
changes. Perot Systems have done this through the following means:
- Being an active member of Cal ISO Technical Standard Working Group (TSWG);
- Our ability to provide comprehensive assessment of Cal ISO changes and
quickly perform impact analysis;
- --------------
(7) Last year alone CalPX spent $3.5M in software development to keep pace
with Cal ISO business process and system changes.
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page 34
Solution Offering
- --------------------------------------------------------------------------------
- Creating flexible and configurable software;
- Using comprehensive testing methodology and tools;
- Possessing an effective, high quality change management process; and
- Our experienced and knowledgeable staff familiar with the IOUs' market
simulation process.
Perot Systems anticipate several important changes in Cal ISO's systems in the
near term:
- OASIS Replacement: The new OASIS system will include additional reports,
new query parameters and most important using XML/DTD data Schema.
- Congestion Management (CM) reform. Cal ISO has been undergone in a
comprehensive review and redesign of Cal ISO's CM processes and
protocols. The redesign effort was directed by the FERC directive in
January 2000 and reaffirmed in the FERC's order of December 2000. The
reform will have major ramifications to the scheduling system.
Additionally, Perot Systems have demonstrated ability for rapid implementation
of market regulation changes as defined by FERC and CPUC.
DATA ARCHIVING
- --------------------------------------------------------------------------------
Perot Systems defines data archiving as the removal of aged data from a
database or file so as to maintain performance and usability of associated
applications and query tools against "current" data. "Current" data is defined
as 30 calendar days after settlement.
Archived data will be accessible through query service requests for a minimum
three-year period. After three years, the data will be reviewed for continued
retention based on its business need.
Archived data will be maintained in its operational data structure format. It
will not be reformulated into data warehouse structures.
Data will be archived on a quarterly basis, at minimum and an inventory of
archived data will be available through a secure web interface.
PSC 016401
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(C)Perot Systems Corporation, 2001 February 11, 2001 Page 35
Solution Offering
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INTEGRATION WITH NEW SYSTEMS EXTERNAL TO CDWR AND
INTEGRATION WITH ENTITIES OTHER THAN ISO (OPTIONAL)
At the request of CDWR, Perot Systems will scope, design and implement
interfaces to integrate its system and/or the CDWR system as appropriate
with other systems external to CDWR, such as an external energy market
from which CDWR may be purchasing energy. Such systems exclude Cal ISO,
whose integration is already internalized within the Perot Systems service.
TRADING AND CREDIT EVALUATION CAPABILITY (OPTIONAL)
Perot Systems can provide the following optional service related to energy
market related activities that CDWR could potentially engage. In
particular, Perot Systems can provide solutions in the following areas:
- Auctions for energy procurements. Perot Systems have built all the
web interfaces, auction validation rules, and auction operator
interface for the Alberta's power supply auctions. the auctions
were conducted on August 2000 with over $2.3 billion transactions.
The contracts were for one-year terms for 2001, 2002 and 2003. More
than 2,800 megawatts of electricity contracts were sold to
forty-five successful bidders. Over sixty bidders had qualified to
participate in the auction.
- Bid/Ask based trading. Perot Systems have built the web
interfaces, price info applications for the CalPX's Block Forward
Markets, CalPX recently announced savings of almost $1.2 billion by
participants in Block Forwards Market from last May to December.
Perot Systems have in-depth knowledge on all aspects of trading and
can offer a web-based trading system and set up energy exchange for
buyers and sellers to trade in Real-time. Perot Systems also have
systems in place to settle and invoice these trades.
- Bilateral matching and RFP/RFQ. Perot systems can also set up
bulletin board applications to allow buyers and sellers to
negotiate purchasing agreements and on flexible terms. With this
system, buyer can send detailed RFP/RFQ requests to the market or
to a set of sellers and awaits responses/completion.
- Credit Evaluation. Perot Systems have developed the risk
computation and credit management systems for the CalPX's Block
Forward Markets. In the risk model, Perot Systems compute the risk
values based on the position held in any participants. The risk
value is determined by four factors:
PSC 016402
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page 36
Solution Offering
- -------------------------------------------------------------------------------
- Underlying product market prices
- Volatility (variability)
- Time to expiration
- Correlations of the different products
In addition, Perot Systems have also developed database applications to
track each participant's collaterals that include letter of credit, surety
bond, cash and insurances.
PSC 016403
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page 37
Technology
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TECHNOLOGY
--------------------------------------------------------------------------
WEB-BASED ARCHITECTURE
--------------------------------------------------------------------------
The diagram below shows the technical architecture of Perot Systems'
solution. The applications are web-centric and using Component Object Model
(COM) architecture to facilitate the structure of Web applications. Perot
Systems' technology platform is based on Microsoft's Web solution platform
(formerly known as DNA) and offer complete scalability affordable
performances. Perot Systems' applications and tools take full advantage of
n-tiered distributed application architecture. The presentation, business
logic, and data tiers, which share services are separated and communicate
via the Component Object Model (COM).
Internet security is achieved through enforcement of security policies.
Access to all data and applications will be based on access control policy
and external communication of private information are encrypted using HTTPS
(SSL) protocols.
Our proposed architecture has the following benefits:
- Fast development.
- Reduced hardware costs
- Interoperability: Working with Existing Data & Applications
- Scaleable and adaptable to future needs (XML)
- Easy support and maintenance
PSC 016404
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page 38
Technology
- -------------------------------------------------------------------------------
[3-Tier Architecture and Interface Graphic]
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FULL REDUNDANCY
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Perot Systems uses a fully redundant solution from application and data
storage point of view in order to minimize operations risks.
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BACKUP SITE (AVAILABLE 6/30/01)
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Procedures and systems will be followed to prevent avoidable system
failures and to minimize the adverse effects of unavoidable system failures
and disasters. For example, data will be backed-up daily and stored at an
offsite location. Also, change management procedures will be rigorously
followed.
Disaster recovery plans will be established and implemented establishing
redundant systems at Perot Systems Dallas corporate office. Data will be
replicated between Alhambra and Dallas on a Real-time basis.
PSC016405
- --------------------------------------------------------------------------------
(c) Perot Systems Corporation, 2001 February 11, 2001 Page 39
Technology
- --------------------------------------------------------------------------------
Critical systems to scheduling and settlements will be recoverable within two
hours of declaration of a disaster. Users and administrators will be able to
access the disaster recovery site remotely through a secure Internet
connection. The remainder of the systems will be recoverable at the disaster
recovery site within 48 hours, if required.
Disaster recovery test plans will be established and tested on an annual basis.
Change management procedures will include the disaster recovery site so that
the site continually mirrors the production environment.
- --------------------------------------------------------------------------------
DATABASE PLATFORMS
- --------------------------------------------------------------------------------
Our preferred database platform is based on Microsoft's Web solution platform
(formerly known as DNA). The database will use Microsoft SQL 7.0 or SQL 2000
products that are running on PC platforms with cluster controllers.
The platform has the following advantages:
- Scalability and high availability. SQL products have multiprocessor
replication and cluster supports.
- Affordability. SQL products are less costly compared with other
relational databases.
- XML support from Microsoft. Microsoft continues integrating and
embedding an XML parser into SQL Server 2000.
However, for Solution 3 (software solution) Perot Systems is willing to adapt
its solution using other database technologies.
PSC016406
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(C) Perot Systems Corporation, 2001 February 11, 2001 Page 40
Technology
- --------------------------------------------------------------------------------
----------------------------------------------------------------------
HARDWARE AND SOFTWARE PLATFORMS
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Our preferred hardware platform is based on Microsoft's NT operating
system. However, for Solution 3 (software solution) Perot Systems can
adapt its solution to other operating systems.
SCHEDULING SERVICES FOR CERS -- A SYSTEM OVERVIEW
[GRAPHIC]
PSC 016407
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(c)Perot Systems Corporation, 2001 February 11, 2001 Page 41
Pricing
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING
- --------------------------------------------------------------------------------
As indicated above, our pricing will vary depending on the selected
solution. In the following we present our pricing options.
- --------------------------------------------------------------------------------
PRICING FOR SOLUTION 1
- --------------------------------------------------------------------------------
In this solution Perot Systems will charge a monthly subscription fee and
a monthly volumetric fee for its scheduling and ISO settlements operations
services.(8) The minimum term for this service is two years. There will
also be separate T&M charges for our services in Stages 1 and 2 of the
proposal. However, these charges will be fully refunded over the two-year
term. Under this solution Perot Systems will track ISO business process
and systems changes to ensure compatibility with such changes.
<Table>
<Caption>
---------------------------------------------------------------------------
STAGE PRICING RATE COMMENTS
MECHANISM
---------------------------------------------------------------------------
1. T&M $200/hr Will not exceed $100K. Fees will
Req. study with a cap be fully refunded during the
2-year operation term.
---------------------------------------------------------------------------
2. T&M $200/hr Will determine a cap based on
File based with a cap Stage 1. Fees will be fully
Integration refunded during the 2-year
operation term.
---------------------------------------------------------------------------
3. Subscription Subscription - Subscription fee covers 2.5
Business plus $550,000/month TWh per month of energy and
Operation Volumetric 250 GWh per month of capacity
Volumetric: scheduling and ISO settlements
2.5-5(cents)
Per side - Volumetric fee is 5(cents)/MWh
per side for the second 2.5
TWh of energy or the second
250 GWh per month of capacity
scheduling and settlements per
month
- Volumetric fee is 2.5(cents)/
MWh per
- --------------------------------------------------------------------------------
</Table>
- ------------
(8) 20% discount will apply to subscription and volumetric fees if 7x24
operation is not required.
PSC 016408
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(C) Perot Systems Corporation, 2001 February 11, 2001 Page 42
Pricing
- -------------------------------------------------------------------------------
<Table>
<Caption>
- -----------------------------------------------------------------------------
STAGE PRICING RATE COMMENTS
MECHANISM
- -----------------------------------------------------------------------------
side for energy or capacity
scheduling and settlements
exceeding 5 TWh per month for
energy and 500 GWh for
capacity.
</Table>
- -----------------------------------------------------------------------------
PRICING FOR SOLUTION 2
- -----------------------------------------------------------------------------
In this solution, Perot Systems will charge a monthly subscription fee and a
monthly volumetric fee for its scheduling and settlements application hosting
services.(9) The minimum term for this service is two years. There will also be
separate T&M charges for our services in Stages 1 and 2 of the proposal.
However, these charges will be fully refunded over the two-year term. Under
this solution Perot Systems will track ISO systems changes to ensure
compatibility with such changes.
<Table>
<Caption>
- ------------------------------------------------------------------------------
STAGE PRICING RATE COMMENTS
MECHANISM
- ------------------------------------------------------------------------------
1. T&M $200/hr Will not exceed $100K. Fees will
Req study with a cap be fully refunded during the 2-year
service term.
- ------------------------------------------------------------------------------
2. T&M $200/hr Will determine a cap based on
File based with a cap Stage 1. Fees will be fully refunded
Integration during the 2-year service term.
- ------------------------------------------------------------------------------
3. Subscription Subscription - Subscription fee covers 2.5 TWh
Application plus $300,000/month per month of energy and 250
Hosting Volumetric GWh per month of capacity
Volumetric: scheduling and settlements
1.5-3(cents)/MWh
Per side - Volumetric fee is 3(cents)/MWh per
side for the second 2.5 TWh of
energy or the second 250 GWh
- ------------------------------------------------------------------------------
</Table>
- -----------------------------------
(9) 20% discount will apply to subscription
and volumetric fees if 7x24 operation is not required. PSC 016409
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(C)Perot Systems Corporation, 2001 February 11, 2001 Page 43
Pricing
- --------------------------------------------------------------------------------
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------
STAGE PRICING RATE COMMENTS
MECHANISM
- ------------------------------------------------------------------------------------------------
per month of capacity scheduling
and settlements per month
- Volumetric fee is 1.5 cents/MWh
per side for energy or capacity
scheduling and settlements
exceeding 5 TWh per month for
energy and 500 GWh for
capacity.
- ------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
PRICING FOR SOLUTION 3
- --------------------------------------------------------------------------------
In this solution Perot Systems will charge a license fee and an annual
maintenance fee for its scheduling and settlements applications. There will
also be separate T&M charges for our services in Stages 1 and 2 of the
proposal. Under this solution, Perot Systems will track ISO systems changes to
ensure compatibility with such charges. CDWR will pay for installation and
integration of such charges.
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------
STAGE PRICING RATE COMMENTS
MECHANISM
- ------------------------------------------------------------------------------------------------
1. T&M $200/hr Will not exceed $100K. Will
Req study with a cap provide up to 100 hours of study
at no charge to CDWR once license
fee is paid.
- ------------------------------------------------------------------------------------------------
2. T&M $200/hr Cap will be determined at the end
File based with a cap of Stage 1. Will provide up to 400
Integration hours of integration services at
no charge to CDWR once license fee
is paid.
- ------------------------------------------------------------------------------------------------
3. Upfront and License: All major system/application
License fee annual license $2,000,000 changes due to ISO will be priced
on T&M basis.
Maintenance:
$400,000/year
- ------------------------------------------------------------------------------------------------
</Table>
PSC 016410
- --------------------------------------------------------------------------------
(c) Perot Systems Corporation, 2001 February 11, 2001 Page 44
Pricing
- --------------------------------------------------------------------------------
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PRICING FOR OPTIONAL SERVICES
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The following present the price menu of our optional services. All three
options of operations services, application hosting and software solution
are available for these optional services. CDWR may choose one or more of
these services and the method of delivery in conjunction with one of the
base solutions offered earlier. It is necessary the delivery option for
optional services to be consistent with that of the selected solution
option.
<Table>
<Caption>
- ---------------------------------------------------------------------------------------
Optional Service Operations Applications Software Solution
Service(10) Hosting(11)
- ---------------------------------------------------------------------------------------
Integration with Subscription: Subscription: License:
CDWR $60,000/month $40,000/month $500,000
"participants" and (3 participants) (3 participants)
allocation of all Maintenance:
charges among $8,000/month per $5,000/month per $100,000/Year
these participants additional additional
participant participant Integration:
$200/hr
(For more than 100
hours of services)
- ---------------------------------------------------------------------------------------
Real-time Dispatch $25,000/month per Subscription: License:
and Tagging staff $25,000/month $250,000
Services
Maintenance:
$50,000/Year
Integration:
$200/hr
(For more than 50
hours of services)
- ---------------------------------------------------------------------------------------
Trading: 2(cents)/MWh per side 1.2(cents)/MWh per License:
Clearing Auction (No clearing) side $500,000
Bilateral Matching
Pay as bid Maintenance:
$100,000/Year
- ---------------------------------------------------------------------------------------
</Table>
- -----------
(10) Integration services are included.
(11) Integration services are included.
PSC 016411
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page 45
Pricing
- --------------------------------------------------------------------------------
<Table>
<Caption>
Optional Service Operations Applications Software Solution
Service(10) Hosting(11)
- -----------------------------------------------------------------------------------------------------
Integration:
$200/hr
(For more than 100
hours of services)
- -----------------------------------------------------------------------------------------------------
Transparent N/A N/A $200/hr
integration with
existing & new
systems
- -----------------------------------------------------------------------------------------------------
Meter data Subscription: Subscription:
processing and $45,000/month $25,000/month
validation (3 participants) (3 participants)
(includes MDAS & &
and metering $5,000/month per $3,000/month per
interface software) additional additional
participant participant
- -----------------------------------------------------------------------------------------------------
</Table>
EXAMPLE PRICING OF OUR SERVICES
- --------------------------------------------------------------------------------
We are presenting the following pricing scenario to better illustrate our
comprehensive pricing proposal.
SCENARIO:
Monthly energy scheduling: 5 TMh
Monthly capacity scheduling: 500 GWh
Number of participants: 3 (settlements with participants required)
<Table>
<Caption>
Solution Option 1 2 3
- -------------------------------------------------------------------------------
Monthly $550,000 $300,000 None
Subscription
- -------------------------------------------------------------------------------
License Fee None None $2,000,000 up front
- -------------------------------------------------------------------------------
</Table>
PSC 016412
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page 46
PRICING
- -------------------------------------------------------------------------------
<Table>
<Caption>
- ---------------------------------------------------------------------------------------
Maintenance None None $400,000/year
- ---------------------------------------------------------------------------------------
Monthly First 2,500,000 First 2,500,000 None
volumetric Fee MWh is free MWh is free
for energy
$.05 x 2 x 2,500,000 $.03 x 2 x 2,500,00
MWh = $250,000 MWh = $150,000
- ---------------------------------------------------------------------------------------
Monthly First 250,000 MWh First 250,000 MWh None
volumetric Fee is free is free
for capacity $.05 x 250,000 MWh $.03 x 250,000 MWh
= $12,500 = $7,500
- ---------------------------------------------------------------------------------------
Share Fraction $60,000 $40,000 $500,000 up front
Solution (3 $100,000/year
participants) $200/hr Integration
- ---------------------------------------------------------------------------------------
Other Costs Negligible 20 FTE's to Operate Hardware costs plus
System and their 35 FTE's to integrate
systems, and cost of and operate, and
link between CDWR modify for ISO
and Perot sites changes
- ---------------------------------------------------------------------------------------
Monthly Service $872,500 $497,500 $2,500,000 upfront
Fees Plus Plus
20 FTE + some 35 FTE + systems +
systems + plus ISO integration + ISO
process tracking and process and system
modification tracking and
expenses modification
expenses
- ---------------------------------------------------------------------------------------
</Table>
PSC016413
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(c) Perot Systems Corporation, 2001 February 11, 2001 Page 47