Transmission Rights

The Markets EnergyForwardTransmissionRightsAncillaryServices Must Run Contracts Energy OperatingReserveCapacityReserve Procurement Financial Real-time Physical IMO - Administered Markets

Participant The company or organization that is authorized to participate in the Financial Transmission Rights Market E.g., Company Light-Bright

Users Users: The various people within a member company that are authorized to participate in auctions on behalf of their company. JoeJoe GregGreg MikeMike KimKim From Company Light-Bright

Ontario Manitoba Michigan Quebec New York Minnesota Interconnection Features

Congestion Occurs when physical capability of the transmission system cannot meet market requirements

Ontario New York NYIntertieZone Ontario Proxy Bus External Market (New York Example) IMO-Administered Markets Import of Energy Into Ontario Transfer of MWs from one market to the other is achieved when both markets are navigated successfully MWs Imported to Ontario MWs Exported from New York

Intertie Zone MCP: Offers/No Congestion MCP = 16 Ontario Import Scheduling Limit $10 $22 $14 $12 Intertie Zone $10 $16 $14 $12 $22 $24

Intertie Zone MCP: Offers/Congestion Ontario MCP = 16 Ontario Import Scheduling Limit $10 $22 $14 $12 Intertie Zone $10 $16 $14 $12 $22 $24 Intertie Zone MCP no congestion 16 - no congestion

Intertie Zone MCP: Bids/No Congestion Ontario Scheduling Limit 400 Mw $10 $1000 $500 $12 Intertie Zone $10 $16 $14 $12 $500 $1000 Dispatchable Load Served Dispatchable Load Not Served Boundary Entity Load Not Served MCP = 16

Intertie Zone MCP: Bids/Congestion Ontario MCP = 16 Ontario Scheduling Limit Intertie Zone $10 $1000 $500 $12 $10 $16 $14 $12 $500 $1000 Intertie Zone MCP Dispatchable Load Served Dispatchable Load Not Served

Bids and Offers in Intertie Zones $10 $1000 $500 $12 $10 $16 $14 $12 $500 $100 $16 BidsOffers

Settlement Price for Withdrawals and Injections Zone PriceUniform Market Clearing Price in Ontario ICP Pre Dispatch Real TimeMCPICP + Intertie Energy Price -

Price ($/ MW ) () Quantity ( MW ) Real Time MCP Calculation Exports Primary Demand Fixed LoadDispatchable Load MMCP -MMCP MCP Dispatchable Generation Available to algorithm to optimize Imports Self- Scheduling Fixed Generation Exports Non Dispatchable Load

Time Structure Period of time for which transmission rights are being sold. Three components: Duration for which rights are valid Days of the week Hours of the day Period of time for which transmission rights are being sold. Three components: Duration for which rights are valid Days of the week Hours of the day

Time Structure - Business Rules Times are based on a 24 hour clock and are defined in “hour ending” units Times correspond to EST (throughout the year) Bids for portions of time within a time structure will not be not accepted. Times are based on a 24 hour clock and are defined in “hour ending” units Times correspond to EST (throughout the year) Bids for portions of time within a time structure will not be not accepted.

12 Hour 1 Hour Time Structure

Transmission Paths A transmission path specifies the injection and withdrawal zones for transmission and is designated by abbreviation pairs. ON - NY Ontario is the injection zone New York is the withdrawal zone

How Are FTRs Acquired? TransmissionRights Long-term TR Auctions Short-term

Long-term and Short-term TRs Month Mw Intertie upper limit forecast by IMO

Long-term and Short-term TRs Month Mw Intertie upper limit forecast by IMO Long Term TR Short Term TR

Long-term and Short-term TRs Month Mw Intertie upper limit forecast by IMO Short Term TR

Long-term and Short-term TRs Month LT 1 MW Intertie upper limit forecast by IMO

Long-term and Short-term TRs Month LT 2 LT 3 LT 4 LT 1 MW ST

Long-term and Short-term TRs Month MW ST

Long-term and Short-term TRs Month MW ST

Rounds A round is an attempt to sell a product within an auction. Products can be sold in multiple attempts rather than all at once. Round 1 Round 2 Round 3 Auction: ST-May all hours all days

Round - Example Auction: ST- May all hours all days Total Power = 1000 MW 20% of total power sold Round Fraction = MW Remain 50% of remaining power sold Round Fraction = MW Remain 100% of remaining power sold Round Fraction = 1.00 No MW Remain Round 1 Round 2 Round 3 (Final)

Long Term Sub Auctions Month MW ST LT SA1

Long Term Sub Auctions Month MW ST LT SA1 ST

LT Sub Auctions and Rounds Month MW LT SA1 R1 LT SA1 R2 LT SA1 R3 ST

Bid A bid in the TR Auction System consists of three key pieces of information: Transmission Path Quantity Price/MW

How Are FTRs Acquired? TransmissionRights Financial Transmission Rights Financial Transmission Rights T.R. Long-term TR Auctions Short-term