Resale Business Practice Standards 3 Options remain

Scope of the issue – 2 scenarios Resale is done in the unconditional window o Resale does not get competed or bumped Resale is done in the conditional window o Resale could be identified as a Defender in Short Term Competition and Preemption. Questions are: o What do you do with the Resale? o How do you do it?

Real Issue – When the parent is Conditional Current State: ISSUE: WEQ 001 and WEQ 013 are not consistent in the treatment of capacity on a Resale o BPS WEQ 001 refers to the movement of scheduling rights not capacity. o BPS WEQ 013 refers to the movement of capacity ISSUE: FERC language and guidance o FERC has already approved the current language and definition of Resales ISSUE: Transparency and traceability o Current BPS WEQ 001 and WEQ 013 do not explicitly call out how to ensure that the resale has capacity to redirect, they just state that a resale shall have the ability to redirect.

Option 1 – Status Quo Current WEQ Version 3 Standards and Implementation guide remain unchanged in regards to Resales o Assignees do not have ROFR o Resales are not subject to P&C Only the Parent is subject to Competition o This option allows TP to annul all Resales due to P&C on the parent ISSUES We will still have the same contradiction between WEQ 001 and WEQ 013 We will still have issues in traceability and transparency Billing Resale to self would shield TC from P&C Aggregation of Resales

Option 2 – Move Capacity Move Capacity from the parent to the Resale Assignee has ROFR Does not limit Secondary Transmission Market Customer Satisfaction ISSUES: o Business Practice Standards Change Changes to WEQ Resale definitions and WEQ 001 o TP Defender identification meta data tracking o WEQ EC and FERC Support o Billing (Although this is an issue, NAESB Should not be addressing Billing issues as a standards making organization) o System/Process updates o Aggregation of Resales

Option 3 - Restrict Resales to the Unconditional window Do not allow Resales until the Unconditional window o Conditionality transfers from the parent to the child o If parent tries to Resell in the conditional window, they will not be able to do so. ISSUES: o Business Practice Change o Implementation Guide Change o Minimizes Secondary Transmission Market o Low customer satisfaction

Agreement on Options Do you understand all Three options? Are there other options?

Issues with Each Option Option 1: o We will still have the same contradiction between WEQ 001 and WEQ 013 o We will still have issues in traceability and transparency o Billing (Although this is an issue, NAESB Should not be addressing Billing issues as a standards making organization) o Resale to self would shield TC from P&C o Still have issue with Daisy Chain o Aggregation of Resales Option 2: o Business Practice Standards Change Changes to WEQ Resale definitions and WEQ 001 o TP Defender identification meta data tracking o WEQ EC and FERC resistance to Support o Billing (Although this is an issue, NAESB Should not be addressing Billing issues as a standards making organization) o System/Process updates o Aggregation of Resales Option 3: o Business Practice Change o Implementation Guide Change o Minimizes Secondary Transmission Market o Low customer satisfaction o Possible FERC resistance to Support

Benefits of Each Option Option 1: o No changes to current Business Practice Standards o Already approved by WEQ EC and FERC Option 2: o Update to Standards will make WEQ 001 and WEQ 013 consistent o Traceability o Encourages Secondary Transmission Market Flexibility o Ability to redirect a Resale is already described in Standards Option 3: o Ease of implementation o Minimal WEQ Business Practice Standard changes required o Easiest for TP to implement

Options Side by Side Option 1Option 2Option 3 Change to Standard NoYes Is there a contradiction between WEQ BPS YesNo EC approvalYesNot yetNot Yet FERC ApprovalYesNot Yet Change to Implementation guide No Yes

Options Side by Side – continued Option 1Option 2Option 3 TraceabilityLittleYesLittle Secondary market impact Little to NoneLittleYes ConditionalityStays with the parent and the child is part of the parent (WEQ 001- scheduling rights ) Conditionality transfers from the Parent to the Child Un-conditionality transfers from the Parent to the Child DurationNot an issueMust be determined Not an issue Queue TimeNot an issueMust be determined Not an issue

Option 1Option 2Option 3 PriceNot an issueMust be considered Not an issue BillingSame Billing Issues as now Billing issues in regards to a Resale exercising ROFR, loss of capacity on Resale Billing does not have to account for loss of capacity on a Resale due to P&C AggregationIssue Not an Issue

Recommendation Option 2 o Keeps Secondary Market Flexibility o Treatment of Resales is both transparent and traceable o Facilitate consistency in BPS and Implementation o Consistent with current BPS regarding redirecting a Resale o Allows for Aggregation of Resales to be processed as their own capacity

Option 2 – Draft language Conditional Parent o Resale in the Conditional Window Child will inherit the Conditionality of the Parent o Child will inherit the Service Increment of Parent Child has it’s own Duration o Duration will be consistent with current motion 3 Based on Start Date and Time and End Date and Time Child has it’s own Queue Time o Queue time is set when the Resale is entered into OASIS Child has it’s own Price o Price is that amount entered into OASIS when the Resale is entered.

Option 2 – Draft Language A Resale will be evaluated to determine if it is a valid Defender on but not limited to the SERVICE_INCREMENT, Capacity and POR/POD inherited from the Parent, and the duration, queue time and price determined when the Resale is entered into OASIS A Resale will be identified as a Defender consistent with all other Business practice standards for P&C

Option 2 – Draft Language Resale Matching request will be based off of the Resale reservation in OASIS and must match duration of the Challenger

Resale Defender Example When Resale is identified as a valid Defender based on it’s TSR in OASIS, the resale will have ROFR. o To exercise ROFR the Resale must match the duration of the Valid Challenger Example o Parent is monthly, 3 month duration o Child has Service Increment of 1 month, but is 1 week in duration o Both the parent and the child are identified as valid defenders to a 4 month request o Parent must match the remaining month to exercise ROFR o Child must match all four months to exercise ROFR