1. Market Interface Committee Report Robert D. Schwermann MIC Chair April 30, 2009

2. MIC Topics for this Report Election of MIC Officers Merchant Alert Protocol Guideline Preschedule Evaluation Task Force Preschedule Process Drafting team ATC Drafting team State of the MIC

3. NEW MIC Leadership ● MIC -  Chair: Phil Tice – Deseret Power  Vice Chair: Robert Harshbarger – Puget Sound Energy ● MIS –  Chair: Emily Shults – Sempra  Vice-Chair: Shayleah LaBray - PacifiCorp ● SIS –  Chair: Steve Beuning – Xcel Energy  Vice-Chair: Dave Schiada - SCE

4. Merchant Alert Protocol (MAP) Guideline

5. 5 Background  July 2006 Record high temperatures  Four NERC Energy Emergency Alerts (EEA) issued  Northwest Power Pool (NWPP)/ Pacific Northwest Security Coordinator (PNSC) - grid not in jeopardy should not have been a problem  NWPP/PNSC - this was a merchant issue 5

6. Solution Merchant Communications Business Practice (MCBP) drafting team formed Guideline approved by the MIC on March 12, 2009 for implementation by June 1, 2009 Some raised concern that WECCNet may get inundated. MIS chair can suspend the use of the guideline.

7. 7 Merchant Alert Protocol Process: 1. With access to wesTTrans OASIS bulletin board  Submit requests online using a template 2. Without access to wesTTrans OASIS bulletin board  Requests BA to submit request 3. Respondents who have excess resource capability directly contact the requesting merchant to negotiate terms

8. Prescheduling Evaluation Task Force PETF

9. Summary of Conclusions ● Reliability incidents have occurred when prescheduling was done several days in advance of flow ● Present prescheduling practices do not line up well with the gas scheduling process ● No WECC documentation for region-wide prescheduling practices ● Daily assessment data needs to be clarified

10. PETF Status ● MIC accepted the report ● MIC released task force ● Thanks to:  Leesa Nayudu – PETF Chair  Emily Shults – PETF Vice Chair  WECC Staff – Mike Wells and Michelle Mizumori

11. Pre-schedule Process Regional Criterion Drafting Team Status

12. Background ● SRRC assigned MIC to develop Regional Criterion ● The Objectives:  Address issues noted in PETF report  Codify the pre-schedule process.  To the fullest extent practical, pre-scheduling should occur the day before the flow day.  Establish a pre-schedule process that aligns, as close as possible, electric and gas trading days.  Develop and document pre-schedule process definitions and calendar rules.

13. Current Status ● Drafting team formed with balance of TP/TC, regional and MIC/OC representation ● Team has developed an initial draft ● Team is developing questions for the comment form to accompany the draft ● Initial posting of draft planned for this week

14. ATC Drafting Team

15. 15 ATC Success: Why it Worked ● We were tuned into the NERC/FERC process  Silence is often deemed as consent  Engaged the NERC Standards process  Imbedded WECC membership into the NERC drafting process  Supported by a large group of stakeholders

16. 16 ATC Success: Lessons learned ● Moving forward at NERC/WECC  Follow through…  Answer the NOPRs / Interpretations “Approval” is not the final word  Place personnel on Future Drafting Teams  Engage WGs and TFs “before” submitting requests to draft a standard  They have flexibility and agility  “Pre-drafting” for inclusion in Requests

17. State of the MIC and the future

18. Where have we been ● Western Governors Association and WECC Board noted need to “address both commercial Issues and business practices”. ● 2006 Board changed bylaws to allow for expanded role of the Market interface Committee ● 2006 Board Approved new MIC Charter “…steward for commercial Business Practices in the Western Interconnection in support of the WECC reliability mission.” “…evaluate the existing and proposed BP’s of NAESB, NERC and WECC….”

19. MIC Major accomplishments ● Wrote Conditional Firm Strawman in response to Order 890 ● Prepared comprehensive evaluation of potential seams caused by MRTU and reported to FERC ● Developed Energy Product Codes which were adopted by NERC ● Created Preschedule Evaluation White Paper and working on the draft to codify the process

20. MIC Major accomplishments ● Developed Energy Trading Time Guideline ● Developed Merchant Alert Protocol Guideline ● Successfully lobbied and won Western point of view on NERC ATC standards ● Worked with OC/WSPP and other industry members to successfully pass BAL-002-WECC-1

21. Current and future MIC projects ● Within-Hour scheduling flexibility (from 2/14 Disturbance Report) ● Preschedule Process Regional Criterion ● Continuing monitoring of MRTU implementation ● Supporting implementation of BAL-002- WECC-1, ATEC and FRR

22. Current and future MIC projects ● Member outreach and education on NAESB efforts ● Coordination - Joint Initiatives ● Coordination - UFAS on congestion management procedures ● Coordination - Variable Generation Subcommittee

23. Challenges ● Biggest challenge is…..change in the WECC “culture” to:  acknowledge and accept the legitimacy and importance of commercial issues in the role of the WECC  deal with these issues in a responsive, balanced, and professional manner while still safeguarding the reliability of the power system. ● Coordinate with other committees that are doing parallel work

24. WHY DOES THE BOARD CARE?? ● Merchant Alert Protocol Guideline  To assure that WECC has access to energy to reliably operate the system ● ATC efforts  Assure that what FERC implements is acceptable to WECC interests

25. WHY DOES THE BOARD CARE?? ● Pre-Schedule Process Drafting Team  Answers ongoing debate  Consistent Approach ● The MIC effectiveness  To assure that commercial perspectives are heard and acted upon to reliably operate our Western Grid

26. Thank you for your guidance and leadership these past two years QUESTIONS???

27. MIC Voting Results – MAP Guideline VOTING CLASSYESNOABSTAIN TRANSMISSION PROVIDERS 1213 TRANSMISSION CUSTOMERS 1613 STATE and PROVINCIAL 000 TOTALS2826 Result: PASSED