1. Slide 1 Convergence Bidding Working Group – 10/22/09 Teleconference Information Dial-in Number: (800) 401-8436 International Dial-in: (612) 332-0418 There is no conference ID number. Web Conference Information Web Address: www.webmeeting.att.com www.webmeeting.att.com Meeting Number: 511.468.2337 Access Code: 93.41.896

2. Slide 2 Agenda

3. Slide 3 Introduction  This is the fourth in the series of Convergence Bidding Working Group conference calls focused on technical and implementation challenges  Due to the MSC meeting the CAISO rescheduled the 10/15 conference call for 10/22 at stakeholder request

4. Slide 4 Next Steps  Policy Finalization  Board Documents Posted – October 22  Board Meeting – October 29-30  FERC Filings  Motion for extension of implementation date – November 13  Conceptual design filing – November 13  Tariff filing – Late January 2010

5. Slide 5 Implementation Milestones AprilMayJune July AugSeptOctNovDecJanFebMarAprilMayJuneJulyAugSeptOctNovDecJanFeb 20092010 2011 Design Build System Test Market Sim Requirements SIBR rules versions 4.0 (published) External Business Requirements Technical Specifications BPM Change Management External Training MilestoneDate Publish Business RequirementsDec 2009 Publish Technical SpecificationsQ2 2010 Publish BPM DraftsQ3 2010 Begin Market Simulations10/1/2010 End Market Simulations1/31/2011 Go-Live2/1/2011

6. Slide 6 Position Limits – Background  The CAISO will implement convergence bidding (CB) position limits in the initial implementation of this market element.  The position limits apply at the "corporate entity" level.  Example: If SC1 and SC2 are registered by the same corporate entity AND both of them submit supply convergence bids for a given internal Pnode1, then the sum of those two bid MWs (based on the maximum bid segment MWs) will be used to check against the position limit on Pnode1.  A given CB enabled SCID can submit a single supply convergence bid and a single demand convergence bid at a given location.

7. Slide 7 Request for Market Participant Feedback  Assumption: Corporate entity has more than one SCID that they use to submit physical bids to the CAISO  Questions: 1. Will one or multiple SCIDs be used to submit convergence bids? 2. If multiple SCIDs, is the intent to use multiple SCIDs to submit multiple bids at a single Pnode or will different CB enabled SCIDs be used to submit bids at mutually exclusive Pnodes/Apnodes?

8. Slide 8 Request for Market Participant Feedback  3. If multiple convergence bids submitted for a single Pnode using multiple SCIDs, is the intent to allocate a fixed percentage of the nodal limit to each SCID, or is the intent to allow flexibility in the “use” of the position limit by either SCID.  Consider SC1 and SC2 controlled by the same corporate entity.  If the overall position limit is 10% and the nodal MW limit is 10MW, is it the intent to have the corporate entity determine that SC1 has a static limit of 7 MWs and SC2 has a static limit of 3 MWs.

9. Slide 9 AC Power Flow Convergence Testing – Summary  A whitepaper describing AC power flow testing executed by the CAISO has been posted. http://www.caiso.com/2437/243786845a9d0ex.html http://www.caiso.com/2437/243786845a9d0ex.html  The paper describes the scenarios executed, a summary of the results and key conclusions.  The results were discussed on the October 1 Working Group call.

10. Slide 10 Open Q&A