Arizona Corporation Commission Arizona Independent Scheduling Administrator (AzISA) September 22, 20009

9/22/00 ACC AzISA Update 2 AGENDA WELCOME STAFF OVERVIEW SUMMARY OF AzISA FILING WITH FERC –OPERATING PROTOCOLS –IMPLEMENTATION PLAN & FUNDING STAKEHOLDER’S COMMENTS STAFF COMMENTS AND RECOMMENDATIONS

9/22/00 ACC AzISA Update 3 Why ACC Requires ISA / ISO R C “ ACC supports development of an ISO or, absent an ISO, an Arizona ISA.” R D “ … necessary to provide non-discriminatory retail access and to facilitate a robust and efficient electricity market…”

9/22/00 ACC AzISA Update 4 AzISA Formation Required by ACC R D “ … Affected Utilities that own or operate Arizona transmission facilities shall form an AzISA which shall file with FERC …”

9/22/00 ACC AzISA Update 5 STAKEHOLDERS COMMENTS

9/22/00 ACC AzISA Update 6 Framework of Arizona’s Retail Competition Affected Utilities Affected Utilities CAO AzISAAzISA OASIS Energy Service Providers SC Retail Consumers Standard Offer Direct Access

9/22/00 ACC AzISA Update 7 ACC Filing Requirements AzISA implementation plan filed with ACC ACC review & approval of AzISA must-run generation pricing / service availability protocols ACC approved distribution service charge for fixed must-run generation cost recovery

9/22/00 ACC AzISA Update 8 Requirements of AzISA R D1 AzISA shall: Calculate ATC for participants and develop and operate overarching statewide OASIS AzISA Phase II implementation R D2 AzISA shall: Oversee non- discriminatory application of operating protocols (includes determining TTC, ATC, must-run generation, & energy scheduling / imbalance) AzISA Phase I implementation

9/22/00 ACC AzISA Update 9 Requirements (continued) R D3 AzISA shall: Provide dispute resolution AzISA Phase I implementation R D4 AzISA shall: Use a standardized procedure for participants’ transmission reservation requests and schedules (Wholesale, Standard Offer Retail and Competitive Retail) AzISA Phase II implementation

9/22/00 ACC AzISA Update 10 Requirements (continued) R D5 AzISA shall: Implement a transmission planning process that includes all participants AzISA Phase II implementation R E AzISA shall: File an Implementation Plan AzISA Phase I implementation

9/22/00 ACC AzISA Update 11 Requirements (continued) R I. AzISA shall: Develop statewide protocols for pricing and availability for Must-Run Generating Units AzISA Phase I implementation R J. AzISA shall: Identify statewide services and develop fair and reasonable pricing mechanism to assure a consistent and fair settlement process AzISA Phase I implementation

9/22/00 ACC AzISA Update 12 Framework of Arizona’s Retail Competition Affected Utilities Affected Utilities CAO AzISAAzISA OASIS Energy Service Providers SC Retail Consumers Standard Offer Direct Access