JUNE 12, 2012 MC MEETING

DENNIS ROBINSONMarket Operations

Timeline Adjustments for the Clearing of the DAM & RAA

Moving the Day Ahead Market & Reserve Adequacy Assessment Clearing Times

Outline – Moving DAM & RAA Timelines

• Why? - Operational Reliability Concern

• How it Works Today

• What? – Propose Moving the DAM & RAA Clearing timelines

• Next Steps - schedule

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WHY? - Operational Reliability Concern

• Current commitment timelines do not provide timely information regarding fuel availability for gas fired generation that allows for ISO operations to commit longer lead time resources.

• Why has this become a problem?

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WHY? - Operational Reliability Concern

• Increased Reliance on Natural Gas Fired Generation:– In 1990, Gas Fired Generation accounted for approximately 5% of

energy– Currently, Gas Fired accounts for approximately 50% of energy with oil

accounting for approximately 0.5%

• Increased Dependency on Gas Fired Generation will continue in the future– Economic & Environmentally Attractive– Counterbalancing the Variable Energy Resources (i.e. Wind)

• Majority of Gas Fired Generators are not Firm Customers of the Pipelines– Pipelines becoming more strict (OFOs, shut off valves)– 1/24 hour by hour level take

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WHY? - Operational Reliability Concern

• No Longer Just a Cold Weather Concern– Interrupted Fuel Supply (Sable Island)– Hot Temperatures Coupled with Pipeline Maintenance– Pipelines Forcing Generators Offline

• Unable to accommodate when delivery is not scheduled properly• Jeopardizing pipeline reliability -Current ISO timing provides inadequate

time to properly pack and schedule pipeline

• Late Notification of Commitment– Gas fired Generation may be unable to procure fuel– Late Communication/Notification to Control Room results in being

unable to call on longer lead time oil fired generators

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How It Works Today

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How It Works Today- Current ISO - NE Process

Daily Initial Nomination

Deadline12:30

Evening Nomination Deadline

19:00

22:00 (D-1) - 24:00 (D)Resource Adequacy AssessmentHourly SchedulingCurrent Operating Plan5-min. Dispatch

10:00 AM 10:00 AM

12:00 AM

Gas Day -1Intra-Day 1 Nomination

11:00

Gas Day -1Intra-Day 2 Nomination

18:00

Gas Day-1 Intra-Day 1 Effective

Flow18:00

Gas Day-1 Intra-Day 2

Effective Flow 22:00

16:00 DAM Clears

18:00 Reoffer Period Closes

12:00 DAM Closes

22:00 RAA Complete

12:00 AM 12:00 AM

Daily Initial & Evening Nomination Effective Flow 10:00

Gas DayIntra-Day 1 Nomination

11:00

Gas Day Intra-Day 1 Effective

Flow18:00

Gas Day vs.

Electric Day Timelines

Gas Day vs.

Electric Day Timelines

Gas Nomination Timing– NAESB Standards

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Nomination Cycle Nomination Deadline Nomination Effective Time

Timely Cycle Previous Day by 12:30 PM Next Day 10:00 AM*

Evening Cycle Previous Day by 07:00 PM Next Day 10:00 AM*

Intra-Day 1 11:00 AM 06:00 PM

Intra-Day 2 06:00 PM 10:00 PM

* Start of Gas Day / (All times are in Eastern Time (ET))

How it Works Today – NAESB Standards

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Scenario

# of Opportunities to

Nominate Gas using Intra-Day & (Hours of Flow)

# of Opportunities to Nominate Gas using the Daily & Evening & (Hours

of Flow)

Can they fully nominate their

gas? (YES or NO)

Current DAM 3 (HE1-10,19-24) 1 (HE 11 – 24) YES

Current RAA 2 (HE 19-24) 0 NO

What? – Propose Moving the DAM & RAA Clearing timelines

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• Produce DAM & Initial RAA Results/Schedules by 11:30 AM on the Day Prior to Operating Day

• Pros– Generators would know their schedules from both the DAM & initial RAA prior

to the 12:30 EST Timely Nomination Deadline• Better utilize the gas pipeline capability• Firm –up the fuel supply for gas generators (particularly those that cycle or needed

intermittently)–ensuring reliable commitment – Allow Control Room to call on long lead time replacement generators for units

who are unable to procure fuel or commit supplemental units for reliability after knowing market response

• Cons– Clearing Occurs Further Away from Operating Day (Load Forecast, Outage

information) – More Risk– Price Certainty on Offers – Offer Window closes prior to price discovery – More

Risk

What? – Propose Moving the DAM & RAA Clearing timelines

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• Other considerations as part of this proposed modification– Alignment of Mitigation Rules (review of rules)– Information /Communication requirements

Schedule

• Markets Committee– July Summer Meeting: ISO Proposed Timeline/Discussion– August: Proposed Rule Changes– September: Vote Market Rule Changes

• Participants Committee– October: Vote Market Rule Changes

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