2-Tier Firm Curtailment: First-to-Curtail & Last-to-Curtail Examples NAESB BPS: August 9-10, 201 1

2-Tier Firm Curtailment Legend: TSPs: A, B, C, D, E, F, G Firm Contract Path: Tie: Direct Agreements: Reciprocity: Congested FG: Notes: If any segment on the off-path tag is non-firm the 2-Tier Firm Curtailment process is not applicable. 2-Tier firm Curtailment only applies to off-path. B B G G F F D D E E A A C C

Last-to-Curtail Example Scenario: – Firm Tag – Off-Path Congestion on C – Coordinate Agmts in place C is coordinated with all TSPs on contract path: A-D-F Tag is Last-to-Curtail B B G G F F D D E E A A C C

First-to-Curtail Example Scenario: – Firm Tag – Off-Path Congestion on C – Some Coordinate Agmts C is not coordinated with all TSPs on contract path: A-D-F Tag is First-to-Curtail (Because A did not have coordination agreement with C) B B G G F F D D E E A A C C

-Tagged all firm A-C. No Coordination Agreements. Examples 1a & 1b 5 -Tag is First to Curtail in TSP B (off-path)-Tag is Last to Curtail in TSP C (on-path) B B G G F F D D E E A A C C B B G G F F D D E E A A C C

Examples 2a & 2b 6 -Tagged all firm A-C-D. No Coordination Agreements. -Tag is First to Curtail in TSP B-Tag is Last to Curtail in TSP C B B G G F F D D E E A A C C B B G G F F D D E E A A C C

Examples 3a & 3b 7 -Tagged firm intra-BA B (or TSP B Gen2Ld). -Coordination Agreement between B & C. B B G G F F D D E E A A C C B B G G F F D D E E A A C C -Tag is First to Curtail for TSP A FG-Tag is Last to Curtail for TSP C FG

Examples 4a & 4b 8 -Tagged firm A-B. Coordination Agreement between A, B & C. B B G G F F D D E E A A C C B B G G F F D D E E A A C C -Tag is First to Curtail for TSP E FG-Tag is Last to Curtail for TSP C FG

Further Discussion Items Multiple levels of reciprocity? Minimum Criteria: for including flowgates in transmission service request approval process Impact threshold of 5% or greater (Similar to the Reciprocal Coordinated Flowgate Test) Included in the Book of Flowgates (excluding Information flowgates) Flowgate owner requests the evaluating TSP include the flowgate in their transmission service request approval process There needs to be a requirement that the evaluating TSP include impacts of reservations from other Transmission Service Providers’ reservations on the evaluating TSP system when evaluating transmission service requests. Having all TSPs on the path have Coordination Agreements is the most restrictive. Should we consider less restrictive approach for the Last-to-Curtail? This may be accomplished by creating a higher level of “Monitoring Coordination Agreement” where two TSPs actually treat each other’s transactions as on path (through additional requirements). How to handle coordination with a transmission service provider on the contract does not meet the minimum requirements for including the congested flowgate in the transmission service request approval process? This comes into play with lengthy tags crossing multiple Transmission Service Providers systems. The issue of the lengthy tag can be resolved by considering that two TSPs that don’t meet the Minimum Criteria have an “Implicit Coordination Agreement” with the same last-to-curtailment rights as TSPs with Direct/Reciprocal Coordination Agreement. As such TSPs in Florida may not need to enter into formal agreements with anyone else in the Eastern Interconnection outside of Florida except, perhaps, Southern. MOD standards imply that they are applicable to 1 st tier neighbors and other neighbors. The evaluating TSP should apply the MOD standard requirements to all TSP with which they have Coordination Agreements. The same ATCs that result from the MOD standards will be used for evaluating Transmission Service Request. (Coordination Agreements would clarify TSPs considered as “1 st tier neighbors and other neighbors” )

Levels of Reciprocity Options 1.One level 2.Multiple levels (automatic) 3.Reciprocity by mutual acknowledgment 10 B B G G F F D D E E A A C C

Levels of Reciprocity Option 1: One Level o DC+DE=CE o CE+CB=EB, because CE is not a direct agreement 11 B B G G F F D D E E A A C C

Levels of Reciprocity Option 2: Multi-Level o DC+DE=CE o CE+CB=EB, even though CE is not a direct agreement 12 B B G G F F D D E E A A C C

Levels of Reciprocity Option 3a: Reciprocity by Agreement o DC+DE ? CE reciprocity exists if C & E both agree that reciprocity applies (minimum NAESB requirements for coordination agreements are in place) o CE+CB? BE can only result if CE exists, so there is a 2-level dependency. Also, BE exists only if B & E agree. 13 B B G G F F D D E E A A C C

Levels of Reciprocity Option 3b: Reciprocity by Agreement after 1 st Level o DC+DE = CE 1 st level reciprocity by default o CE+CB? BE exists only if B & E agree. That the CE and CB agreements meet minimum NAESB requirements for Coordinate Agmts. 14 B B G G F F D D E E A A C C

Rebuttals to reducing restrictions 15

What outcome do we want? First-to-Curtail Example E is not coordinated with all TSPs on contract path: A-H-K-M A, H, K & M have 5% impact. Tag is First-to-Curtail. The customer should not have scheduled circuitously. If H, K and M have <5% impact on FGs in C, they have Implicit Coordination Agreements and the tag is now treated as Last- to-Curtail. B B G G F F D D E E A A C C M M

First-to-Curtail Example C is not coordinated with A. A may grant service after C & D determine no ATC remains. A is completing partial path in this case. A will continue to grant service – exacerbating TSP C’s flowgate. Tag is First-to-Curtail If D has a Monitoring Coordination Agreement with C to treat FGs in C as on-path, than D granting wheeling path A-F requires D to treat FGs in C as if granting through C, and D will monitor the FG in C. In doing so, the tag will be on-path and becomes Last-to-Curtail. In general, the TSPs will not impact C; no need for coord agreement. In rare cases, customers may be impacted, but only when impacts exceed 5%. This should be addressed when selling service. Before accepting a network resource to service NNL, consider the firmness of delivery. B B G G F F D D E E A A C C Contending thoughts