1. Tiers 1 & 3 Assignment Flat Profile Recommendation

2. Tiers 1 & 3 Assignment Flat Profile Recommendation Motion 2: A valid challenger must be for a fixed capacity over the term of the request. Recommendation: Tier 1 and Tier 3 challengers should not be required to have a fixed capacity over the term of the request to be valid challengers. 10/22/2013Alan Pritchard2

3. Tiers 1 & 3 Assignment Flat Profile Recommendation FERC and NAESB Flat Profile Requirement FERC: – Flat profile requirements were put into place in FERC Order 638 in order to address a gaming opportunity to obtain longer duration requests in order to receive higher priority. NAESB Table 4-3: – Duration is only a factor in P&C of Tier 2 by Tier 2 (rows 3b, 3c, 3e, 3h) and Tier 4 by Tier 4(rows 7b,7c, 7e, 7f, 7h). – Duration is not a factor in P&C by Tier 1 and Tier 3, the current Table 4-3 does not include this requirement for rows where Tier 1 or Tier 3 are challengers 10/22/2013Alan Pritchard3

4. Tiers 1 & 3 Assignment Flat Profile Recommendation Problems with Flat Profile Requirement 1.Where capacity is inflated to meet the requirement, NITS customers could immediately reduce capacity upon confirmation. – needless displacement (bumping) of lower priority reservations/requests – Customers with displaced reservations/requests could submit replacement requests after capacity is released by NITS customer but would lose queue position. 10/22/2013Alan Pritchard4

5. Tiers 1 & 3 Assignment Flat Profile Recommendation Problems with Flat Profile Requirement 2.The NITS customer may not have rights to the additional DNR capacity needed for the inflated (see #1) flat profile request and could not legally provide an attestation. Possible work-around to get DNR capacity: submit multiple shorter duration flat-profile DNR requests (Tier 1). – DNR request cannot be granted without a work-around. – Work-around: Would result in multiple requests processed and longer queue processing time than for a single request – Work-around: The ultimate impact would likely grant the same capacity as would be granted through processing of a single profiled DNR request. 10/22/2013Alan Pritchard5

6. Tiers 1 & 3 Assignment Flat Profile Recommendation Issue NITS (Excluding OATT 2.2) PTP (within same Tier) PTP (Higher Tier vs. lower Tier) DurationNot applicable for NITS as challengers. Duration is only used for response timing table (See Table 105- A). There are no specified Service Increments for NITS Only applicable in Tier 2 vs Tier 2 or Tier 4 vs Tier 4 P&C (see slide 3). Not applicable to Higher Tier PTP vs Lower Tier PTP P&C. 10/22/2013Alan Pritchard6

7. Tiers 1 & 3 Assignment Flat Profile Recommendation Issue NITS (Excluding OATT 2.2) PTP (within same Tier) PTP (Higher Tier vs. lower Tier) Profiled RequestsIncluded in NITS standards (WEQ-001-101.2) Necessary for DNR because the customer can only request capacity that customer owns or controls (i.e., meets attestation requirements) Permitted at Transmission Providers option (WEQ-013-2.6.1) Permitted at Transmission Providers option (WEQ-013-2.6.1) 10/22/2013Alan Pritchard7

8. Tiers 1 & 3 Assignment Flat Profile Recommendation NAESB Business Practices – Profiled Requests WEQ-001-101.2 (NITS) OASIS shall support capability that allows the Eligible Customer or Transmission Customer to submit information required for arranging of NITS through multiple requests that together, represent the requested service. This shall include multiple requests submitted as part of a single NITS Application, as well as multiple requests submitted as modifications of service (including Concomitant Evaluations and Coordinated Requests). WEQ-013-2.6.1 (PTP) The Transmission Customer may submit a time varying profile of capacity as allowed by the Transmission Providers Business Practice by repeating the template Data Elements of BID_PRICE, CAPACITY_REQUESTED, START_TIME and STOP_TIME in template continuation records. The segments of any submitted profile must not overlap in time 10/22/2013Alan Pritchard8

9. Tiers 1 & 3 Assignment Flat Profile Recommendation Summary Duration is only considered in P&C for: Tier 2 vs. Tier 2 and Tier 4 vs. Tier 4 For Tiers 1 & 3 Challengers: Flat profiles are not needed to prevent gaming since duration is not a factor NITS customers who inflate capacity to get to flat profile then release unneeded capacity upset market dynamics Requests for DNR capacity may not be able to inflate capacity to meet flat profile requirements (attestation restrictions) NITS customers who submit multiple small flat profile requests impact queue processing efficiency 10/22/2013Alan Pritchard9

10. Tiers 1 & 3 Assignment Flat Profile Recommendation Recommendation Tier 1 and Tier 3 challengers should not be required to have a fixed capacity over the term of the request to be valid challengers. Rescind Motion 2 and replace it with a motion that applies only to Tier 2 vs. Tier 2 and Tier 4 vs. Tier 4 preemption and competition. 10/22/2013Alan Pritchard10

11. Tiers 1 & 3 Assignment Flat Profile Recommendation Draft Language for Replacement for Motion 2 In each row of Table 4-3 where duration is included in the column labeled Is Preempted by Subsequent Request 2, a valid challenger must be for a fixed capacity over the term of the request. 10/22/2013Alan Pritchard11