1. OPSI Annual Meeting October 8 th 2013

2. 2 -Should all capacity resources be paid the same? -Demand Response operational deployment

3. 3 What is Capacity? -Procured to maintain reliable operations by ensuring sufficient amount and diversity of resources are available to the system operator to meet peak load requirements plus a planning reserve margin. -Physical commitment by resource owners -Provides a call option on energy

4. 4 Performance Requirements -Ensure resources available during operating day & perform when needed -Standard expectations of availability given the common definition of Capacity -Comparable while respecting unique physical characteristics and economic motivations of different resources

5. 5 Performance Requirements Demand Response -Keep it simple; overly burdening capacity definition can detract from objectives -Energy and Ancillary Service markets best suited to incent & compensate different operational characteristics

6. 6 Performance Requirements Demand Response -Preserve benefits and efficiencies of aggregation

7. 7 Performance Requirements Demand Response -No barriers to entry for customer participation -Respect physical and economic realities of retail customers who provide reliable reductions

8. 8 Performance Requirements Demand Response -No retro-active changes