Flowgate Allocation Method Examples of Proportional Curtailment of FIRM PTP and GTL Minneapolis, November 10-11, 2010

Proportional Curtailment of Firm PTP and Firm GTL – Problem Statement Provide equal treatment of FIRM Point-to-Point (PTP) Transaction impacts and FIRM Generation-to- Load (GTL) Impacts during a TLR event – Flowgate allocation does not downgrade FIRM PTP and GTL transactions to NON-FIRM – TLR curtailment of FIRM contributions requires the issuance of a TLR-5 or higher – FIRM contributions are NOT curtailed in TLR-3a, TLR-3b and TLR-4 Allocations are based on forecasted/reserved (Expected) FIRM usage of flowgates up to but not exceeding the flowgate limit – Expected FIRM usage is determined in the Day-Ahead and Hour-Ahead – All Expected FIRM contributions to the flow on the flowgate are included – The total Expected FIRM contributions does not exceed the flowgate limit: BAs and TSPs are allocated FIRM limits to their contribution on the flowgate that equals its total Expected FIRM contributions – The total Expected FIRM contributions exceeds the flowgate limit: BAs and TSPs are allocated FIRM limits to their contribution on the flowgate proportional to their contribution FIRM contributions are placed in two curtailment buckets – LAST TO CUT (LTC) and FIRST TO CUT (FTC) – Nomenclature: PTP transactions:FTC = 7-FLTC = 7-FC GTL:FTC = 7-FNLTC = 7-FCN – FIRM contributions in FTC and LTC are determined in real-time based on current system conditions – LTC: FIRM contributions in the LTC bucket are those that do NOT exceed the Expected FIRM usage of the flowgate for FIRM PTP and GTL impacts – FTC: FIRM contributions in the FTC bucket are those that exceed the Expected FIRM usage of the flowgate for FIRM PTP and GTL impacts

Proportional Curtailment of Firm PTP and Firm GTL - Example Flowgate limit:800 MW Allocation: – All Firm PTP transactions – Firm GTL up-to flowgate limit Total Firm PTP allocation:520 MW Total Firm GTL allocation:800 – 520 = 280 MW GTL allocation ratio:280 / 480 = – GTL allocation = (Firm GTL Impact ) x (GTL allocation ratio) EntityDA/HA Firm GTL Impact DA/HA Firm PTP Impact Firm PTP Allocation (1) Firm GTL Allocation (2) Firm Allocation (1)+(2) A B C D E Total ,000800

Proportional Curtailment of Firm PTP and Firm GTL - Example Flowgate limit:800 MW EntityFirm Allocation (1) RT Firm GTL Impact (2) RT Firm PTP Impact (3) Total Firm Impact (4)=(2)+(3) Over/(Under) Allocation (5)=(3)-(1) Last to Cut 7F+7FN (6)=Min(1,4) First to Cut 7FC+7FCN (7)=(4)-(6) 7FCN FTC GTL (7)x(2)/(4) 7FC FTC PTP (7)x(3)/(4) A B (13.3) C (13.3)80000 D E Total (10)

FTC and LTC Calculations TLR 5a requires curtailment of 10 MW of FIRM transactions after exhausting all NON-FIRM curtailments – 10 MW of relief will be provided pro-rata from 16.7 MW of FTC (7-FC and 7-FCN), using the existing TLR pro-rata formulas Total 7FCN Curtailment:2.5x10/16.7 = 1.5 MW Total 7FC Curtailment:14.2x10/16.7 = 8.5 MW Individual 7FC curtailment:8.5 MW distributed pro-rata among all 7FC transactions – MW of LTC (7-F and 7-FN) are not curtailed EntityLast to Cut 7F+7FN 7FCN FTC GTL 7FC FTC PTP 7FCN Curtailment 7FC Curtailment (*) 7F+7FN Curtailment A x10/16.7 = 6.00 B C D E x2.5/16.7 = 1.510x4.2/16.7 = 2.50 Total (*) Assumes all PTP transactions with the same TDF

Proportional Distribution of Under-Allocated Amounts to Over-Allocated GTL/PTP – Issues To Be Resolved Sum of all LTC (7-F and 7-FN) in Real-Time can be smaller than the flowgate limit – Only the over-allocated entities/transactions are penalized for over- allocating Remaining of flowgate limit can be reassigned to over- allocated entities/transactions so that LTC equals the flowgate limit – Reduces the FTC bucket size – Distribution Proportion Options: FIRM limits of over-allocated entities/transactions Real-Time over-allocation impact Real-Time impacts Other – If TLR-5 cannot be resolved with curtailments from FTC bucket, may need to curtail pro-rata the LTC bucket Entities/Transaction that do not over-allocate may be curtailed (see next examples)

FTC and LTC Calculations with Reassignment Total RT Impact < Flowgate limit – Reassign all FTC to LTC TLR 5a requires curtailment of 10 MW of FIRM transactions after exhausting all NON-FIRM curtailments – 10 MW of relief will be provided pro-rata from 790 MW of LTC (7-F and 7-FN), using the existing TLR pro-rata formulas – All impacting GTL and PTP are curtailed, even for entities where RT firm GTL and PTP are below the allocation EntityLast to Cut 7F+7FN 7FCN FTC GTL 7FC FTC PTP Reassigned LTC 7F+7FN 7F+7FN Curtailment A Pro-rata between firm GTL and PTP for all entities B20000 C8000 D27000 E Total