©2008 PJM EIS Emissions Tracking in the Generation Attribute Tracking System (GATS) NJ RGGI Working Group Newark, NJ June 5, 2008

©2008 PJM EIS 2 Presentation Overview GATS Functionality -What is GATS? -Design Overview -Certificate Creation -Emissions Data Sources -Certificate Trading Period -PJM-EIS Web Site -Public Reports RGGI Enhancements

©2008 PJM EIS 3 What is GATS? GATS - a regional environmental registry and information system that will track the environmental and fuel attributes of generation. The system will: assist LSEs in their compliance with applicable emissions and fuel disclosure requirements and with state-level Renewable Portfolio Standard (RPS) regulation or renewable policy enable voluntary bilateral markets and marketing claims for renewables. provide state agencies with reporting and verification provide renewable generators with a means to monetize their renewable attributes and qualification

©2008 PJM EIS 4 Needs of the PJM States / Market PJM initiated the GATS project in response to state regulatory commission inquiries and effected stakeholders -Fuel Mix and Emissions Disclosure Delaware: fuel mix Pennsylvania: fuel mix Maryland: fuel mix and emissions New Jersey: fuel mix and emissions Ohio: fuel mix and emissions Virginia: fuel mix and emissions Illinois: fuel mix and emissions District of Columbia: fuel mix and emissions -Renewable Portfolio Standards New Jersey: began in Maryland: requirements in effect in 2006 Pennsylvania: requirements in effect in 2007 District of Columbia: requirements in effect in 2007 Delaware: requirements in effect in 2007

©2008 PJM EIS 5 All MWhs of PJM generation are tracked. A certificate market separate from energy is enabled for renewable generation. -Certificates (i.e., credits) traded separate from energy -Certificates can have different value depending on their attributes (e.g., fuel type, location, date of generation, etc). It is a single information system that will support a range of reporting, verification, and compliance requirements (e.g., disclosure, RPS, voluntary retail markets, etc). It is a regional system that will enable PJM states and market participants to support varying needs and priorities. A system that is flexible enough to meet evolving state requirements. Design Overview

©2008 PJM EIS 6 Design Overview GATS is designed to be policy-neutral to the greatest extent possible The system accommodates: -banking certificates to accommodate varying certificate life spans as determined by state policy or regulation -enabling varying state programs and their definitions of preferred attributes: -wind, solar, biomass, etc. -energy efficiency -waste coal -pumped storage generation -moving certificates to non-LSEs for bilateral voluntary markets, i.e. direct sales to retail entities -a bulletin board to facilitate bilateral trades -behind the meter generation, imports and exports

©2008 PJM EIS 7 Each MWh is given a unique electronic certificate This certificate may contain any information relevant to market participants and capable of being tracked by GATS. - Certificates’ data will be compiled using PJM generation and publicly available data from EPA and EIA. - Where data do not exist or are faulty, generators may choose to update their information based on agreed upon best practices. - Default assumptions will be developed as a last resort for generators with faulty or no data who choose not to update their information. Certificate No Pollutant lbs NOx 0.0 SO2 0.0 CO2 0.0 Acme Generating Station Fuel: Wind Location: Example, MD. MD. Tier I: Yes 1 MWh Certificate Creation

©2008 PJM EIS 8 Certificate Creation Account Holder Review Period spans from the 10 th business day to the day before certificates are created Certificates created monthly, on the last business day of the following month

©2008 PJM EIS 9 Emissions data tracked in GATS: -Carbon dioxide -Nitrogen oxides -Sulfur dioxide Emissions data comes from a hierarchy of sources: 1)Entered by the generation owner during the Account Holder Review Period (in lbs) 2)Emission rate (lbs/MWh) calculated by PJM-EIS using EPA unit-level annual emissions for generators in the Acid Rain Program. Preliminary 2007 date is currently available. 3)EPA Emissions & Generation Resource Integrated Database (eGRID) emission rate (lbs/MWh). eGRID2006 Version 2.1 contains 2004 data. 4)Fuel Type Default (lbs/MWh) Emissions Data Sources

©2008 PJM EIS 10 Updating Emissions Information Once the facility has been “Approved” Emissions information may be updated for each Unit if necessary Once the facility has been “Approved” Emissions information may be updated for each Unit if necessary

©2008 PJM EIS 11 Updating Emissions Information Update/change emissions information for each fuel type if necessary Note: Default emissions information will be prefilled based on fuel type Update/change emissions information for each fuel type if necessary Note: Default emissions information will be prefilled based on fuel type

©2008 PJM EIS 12 Certificate Trading Period Certificates created monthly to increase flexibility and accommodate differing state reporting periods Preliminary reports issued each quarter Annual settlement in late February for the preceding calendar year RPS-eligible certificates can be “banked” any time prior to the annual settlement date so that they can continue to be traded.

©2008 PJM EIS 13 PJM-EIS Website For more information on GATS, access the PJM-EIS website at: The PJM-EIS website The PJM-EIS website provides links to the provides links to the “GATS Operating “GATS Operating Rules” and “GATS Rules” and “GATS Terms of Use” for your Terms of Use” for your reference The PJM-EIS website The PJM-EIS website provides links to the provides links to the “GATS Operating “GATS Operating Rules” and “GATS Rules” and “GATS Terms of Use” for your Terms of Use” for your reference Link to the GATS Login Page Link to the GATS Login Page Link to the GATS Login Page Link to the GATS Login Page

©2008 PJM EIS 14 GATS Login Page Public Reports Public Reports Public Reports Public Reports

©2008 PJM EIS 15 GATS Public Reports Sample Public Report: PJM System Mix

©2008 PJM EIS 16 GATS PJM System Mix Report 2007 PJM SYSTEM MIX

©2008 PJM EIS Enhancements to Support RGGI

©2008 PJM EIS 18 New Generator Attributes -RGGI-affected unit -Unaffected small fossil fuel-fire unit -RGGI-region unit Infer net “imports” into RGGI portion of PJM -“Imports” = difference between load and generation in the RGGI portion of PJM -Environmental attributes of net “imports” will be based on non-RGGI PJM residual mix New Reports -Total PJM load subject to RGGI -Total PJM generation in RGGI-region -“RGGI emissions mix” -“RGGI residual mix” -“Unaffected small fossil fuel-fired RGGI-region unit emissions mix” For details on these calculations refer to: -“Initial Report of the RGGI Emissions Leakage Multi-State Staff Working Group” dated 3/14/2007: Enhancements will be implemented by end of 2008 RGGI Enhancements

©2008 PJM EIS 19 GATS Contacts GATS Technical & Customer Service / Administrative Support GATS Hotline: Phone - (610) Fax - (610)