Day Ahead Market Working Group April 14, 2003

2 Agenda Discussion of SMD-style DAM review questions posed by the DAM WG and Coral regarding the SMD- style DAM Discussion of Coral Bid-Ask Trade DAM resolution of status NYISO Imports/Exports in DAM Next Steps -- April 22 Face-to-Face

3 NYISO Imports/Exports in DAM Introduction: Reference to NYISO Market Participant Manuals and Technical Examine NYISO as potential IMO model Consider current RT Intertie procedures relative to DAM Unique elements of NYISO

4 NYISO Imports/Exports in DAM Submitting Import/Export Bids: All transactions from external control areas are required to be submitted into the NERC ETAG system prior to becoming active schedules DAM closes 05:00 – Results posted 11:00 E-Tag changes can be made before DAM closes, after DAM posts results, but before 22:00 (All times prior day)

5 NYISO Imports/Exports in DAM NYISO Reference Bus: External generators and loads submit transaction bids into the NYISO DAM against the Marcy LBMP reference bus - NYISO_LBMP_REFERENCE Used to calculate all marginal loss and congestion costs in the system External energy sales or purchases are settled on the LBMP (Locational Based Marginal Price) LBMP = Reference Bus Energy $ + Losses - Congestion For Ontario Zone - source bus (exports to NYISO) or sink bus (imports from NYISO) is - OH_GEN_BRUCE or OH_LOAD_BRUCE Additional points for PJM, NE and HQ

6 NYISO Imports/Exports in DAM Scheduling: Import/Export bids are approved through SCUC or BME Schedules must be coordinated with corresponding control area With respect to BME and for economic priority, default price -$1000 assigned for imports External transactions scheduled in the Day-Ahead Market (DAM) have economic priority over resources bid competitively in the Hour-Ahead Market (HAM) in the determination of which transactions are permitted to flow in real-time Transactions are financially binding in DAM regardless if curtailed

7 NYISO Imports/Exports in DAM Multi-Hour Block Transactions: DA firm external transaction bids may be offered, specifying a minimum run-time, and if accepted, awarded a multi-hour block schedule at the bid MW amount Evaluated in the Day-Ahead Market relative to alternative offers Easier to coordinate scheduled external transactions with corresponding transactions in neighboring control areas Checkout process with the neighboring control area confirms each hour of a DAM scheduled multi-hour block transaction independently Transaction hours are subject to curtailment in real-time based upon HAM bid parameters Minimum run times will only be honoured within a commitment day, i.e., beginning Hour 1 ending Hour 24

8 NYISO Imports/Exports in DAM Pre-Scheduling Transactions: MP can preschedule an external import or export transaction with the NYISO up to 18 months prior to the transaction date Acceptance is determined by the availability of adequate hourly ramping and transmission capacity related to the affected external interface Given an economic priority over other external transactions that are not prescheduled - will be a “price taker” and the entities involved agree to accept the DAM clearing prices in effect for the transaction Submission deadline - 2:00 PM two days before transaction date Imports/Exports are assigned bid prices of -$1000/+$1000 to ensure priority scheduling in DAM Parameters of DAM bids cannot be altered after submission deadline and if withdrawals are not approved then bids are financially binding once scheduled

9 NYISO Imports/Exports in DAM IMO/NYISO Transaction Scheduling: Currently IMO and NYISO use a specific transaction scheduling protocol to schedule transactions and ensure fair and efficient use of the IMO/NYISO interface Introduction of a DAM in Ontario will likely require a review and modification to this protocol to ensure resolution of new seams issues that may arise

10 Discussion Points Ramp Capacity or Transfer Capabilities across interties Transmission Congestion Costs - TCC’s Financial Transmission Rights - FTRs Transmission Usage Costs TUCs

11 Next Meetings April 22 WG Face-to-Face meeting