1. DRAFT Request for Initiation of a NAESB Standard NAESB OS Oct 23-24, 2013 Richmond, VA

2. 2 Draft Request for Initiation of a NAESB Standard Description: 1. NAESB WEQ Business Practice Standards have mechanisms to reduce or eliminate transmission reservation capacity without advanced notice to or approval by the Transmission Customer (transmission reservation holder).

3. 3 Draft Request for Initiation of a NAESB Standard Description (con’t): 2. In instances where the impacted request or reservation has been tagged, prior to a reduction, at a capacity greater than the capacity left after the reduction, a reduction or termination of the tag is necessary to avoid unreserved use penalties.

4. 4 Draft Request for Initiation of a NAESB Standard Description (con’t): 3. When the tag is authored by a PSE other than the transmission reservation holder, such customer does not have a mechanism to force the tag author to take the corrective action.

5. 5 Draft Request for Initiation of a NAESB Standard Description (con’t): 4. The transmission reservation holders only have approval rights for new or adjusted tags but they don’t have any authority to reduce or adjust tags in the event transmission capacity is reduced or eliminated after a tag has been approved.

6. 6 Initiate Standards Request Description (con’t): 5. This inability to address tags which don’t have sufficient underlying transmission reservation capacity (orphaned tags) could contribute to unexpected real-time transmission loading and could, thereby, contribute to unreliable system operations.

7. 7 Draft Request for Initiation of a NAESB Standard Use of Proposed Standard or Enhancement: This enhancement will provide transmission contract rights holder an ability to adjust E-tags citing their transmission rights in situations where unexpected transmission capacity reductions take place. (As listed on next slide)

8. 8 Draft Request for Initiation of a NAESB Standard Use of Proposed Standard or Enhancement (con’t): Transmission customer (reservation holder) should be permitted to perform a tag adjustment A reservation status is set to DISPLACED A request status is set to SUPERSEDED A reservation status is set to ANNULLED A reservation’s capacity is reduced by a RECALL reservation

9. 9 Draft Request for Initiation of a NAESB Standard Use of Proposed Standard or Enhancement (con’t) In instances where the reductions of reservation scheduling capacity are initiated by the transmission contract rights holder for purposes such as: a resale or redirect, this request does not propose any corrective actions be made available to the transmission contract rights holder to adjust E-tags.

10. 10 Draft Request for Initiation of a NAESB Standard Options to consider including: E-tag Re-validation –(NAESB should decide which entities need to be involved in the revalidation of the E-tag). Ability to add reservation capacity (new e.g. Aref for Matching Request Type)

11. 11 Draft Request for Initiation of a NAESB Standard Include E-tag Revalidation?????: Options: Remain Silent on request for E-tag Re- validation Explicitly include request for E-tag Re-validation –(NAESB should decide which entities need to be involved in the revalidation of the E-tag).

12. 12 Draft Request for Initiation of a NAESB Standard Ability to add reservation capacity (new e.g. Aref) ?????: In instances where a replacement reservation has been established (e.g., MATCHING), the Transmission Customer should be permitted to add the replacement reservation and its associated transmission allocation in the E-tag adjustment.

13. 13 Draft Request for Initiation of a NAESB Standard Tangible/Intangible Benefits: This enhancement provides the transmission contract rights holder an active role in ensuring that any reductions in their transmission rights are properly reflected in the E-tag. The ability for the transmission contract rights holder to address tags which don’t have sufficient underlying transmission reservation capacity (orphaned tags) could reduced the likelihood of unexpected real-time transmission loading and could, thereby, reduce the likelihood of unreliable system operations.

14. 14 Draft Request for Initiation of a NAESB Standard Estimate of Incremental Specific Costs: Cost estimates can be developed as the standard is further developed. Depending upon the specifics of the standard, it may be able to use aspects of existing structure and existing code.

15. 15 Draft Request for Initiation of a NAESB Standard Description of Any Specific Legal or Other Considerations: This enhancement helps, PSEs that are transmission contract rights holders, the ability to limit unauthorized use of their physical aspect of the transaction above the amount contractually available to them after the E-tag has been confirmed.

16. 16 Draft Request for Initiation of a NAESB Standard If This Proposed Standard or Enhancement Is Not Tested Yet, List Trading Partners Willing to Test Standard or Enhancement (Corporations and contacts) : Once the enhancement is ready for testing, XXXX??? entities have unofficially indicated their willingness to participate in testing.

17. 17 Draft Standards Initiation Request Next Steps Obtain suggested edits from OS members November 12, 2013. Send out for final review to OS members November 18, 2013 NAESB OS November 19-21 provide summary of suggested edits and review updated draft and finalize for submission to NAESB. Submit to Final Standards Initiation Request to NAESB December 3, 2013 (after NAESB OS conference call.)