1. 1 North American Energy Standards Board Overview of NAESB SGTF Recommendations for NIST PAPs 03, 04 & 09 NAESB Board Meeting June 24, 2010

2. Topics Acknowledgement History and Background Where we are? Overview of PAP 03, 04, 09 Recommendations What is Next? 2

3. Acknowledgement Since August 2009, many people have been involved in the development of NAESB Recommendations for NIST PAP 03, 04 & 09. The NAESB Smart Grid Task Force and NAESB Staff would like to thank everybody who has contributed to the this effort, and would welcome continued support and participation. We would also like to thank ISO/RTO Council (IRC), UCAiug OpenSG OpenADR task force, EPRI, NIST, OASIS, FIX Protocol, CalConnect, and other organizations that provided support to NAESB on this effort. 3

4. History & Background August 2009, NAESB took on the responsibility of developing use cases and requirements for NIST PAPs 03, 04 & 09: PAP03: Common Price Communication Model; PAP04: Common Scheduling Mechanism; PAP09: Standard DR and DER Signals NAESB formed Smart Grid Task Force (SGTF) to start working on the three PAPs A working paper – Framework for Integrated DR and DER Models - was first developed to help set the context for the requirements development thereafter; The PAP09 effort was split into two recommendations, one for wholesale and one for retail; Common terms & definitions as well as the entity relationship model were developed as a way to harmonize and ensure consistency across all three PAPs recommendations. Recently, NAESB was also identified by NIST as the SDO to standardize the Energy Usage Information Model – PAP 10, and has formed a Working Group accordingly. 4

5. Where We Are? 5 Priority Action Plan 3 – Both Wholesale and Retail Electric Market Applicability: http://www.naesb.org/pdf4/weq_req_ec061610a1.doc -WEQ, http://www.naesb.org/pdf4/weq_req_ec061610a4.doc - REQ (Recommendations Revised By Task Force and further revised and adopted by the ECs) http://www.naesb.org/pdf4/weq_req_ec061610a1.doc http://www.naesb.org/pdf4/weq_req_ec061610a4.doc Priority Action Plan 4 – Both Wholesale and Retail Electric Market Applicability: http://www.naesb.org/pdf4/weq_req_ec061610a2.doc -WEQ, http://www.naesb.org/pdf4/weq_req_ec061610a5.doc - REQ, (Recommendations Revised By Task Force and further revised and adopted by the ECs) http://www.naesb.org/pdf4/weq_req_ec061610a2.doc http://www.naesb.org/pdf4/weq_req_ec061610a5.doc Priority Action Plan 9 – Wholesale Electric Market Applicability: http://www.naesb.org/pdf4/weq_req_ec061610a3.doc (Recommendations Revised By Task Force and further revised and adopted by the ECs)) http://www.naesb.org/pdf4/weq_req_ec061610a3.doc Priority Action Plan 9 – Retail Electric Market Applicability: http://www.naesb.org/pdf4/weq_req_ec061610a6.doc (Recommendations Revised By Task Force) http://www.naesb.org/pdf4/weq_req_ec061610a6.doc Priority Action Plan 10 – Both Wholesale and Retail Electric Market Applicability: http://www.naesb.org/pdf4/smart_grid_pap10_schedule_announcement.doc (Task Force Announcement), http://www.naesb.org/misc/proposal_to_nist_052410.doc (NAESB Response to NIST Request); http://www.naesb.org/misc/pap10_report_to_sgip_gb_15jun2010.pdf (SGIP Report) http://www.naesb.org/pdf4/smart_grid_pap10_schedule_announcement.dochttp://www.naesb.org/misc/proposal_to_nist_052410.doc http://www.naesb.org/misc/pap10_report_to_sgip_gb_15jun2010.pdf

6. Overview of the PAPs 03,04 & 09 Recommendations Common Definitions Entity Relationship Model PAP03: Common Price Communication Model; PAP04: Common Scheduling Mechanism; PAP09: Standard DR and DER Signals Wholesale Recommendations Retail Recommendations 6

7. Common Definitions 7 TermDefinition Business EntityThe wholesale or retail entity that interacts with other entities in its market. Communication MethodThe method by which an object communicates with another object to instruct, measure, report or control. ControlThe role associated with the control of an End Device. Designated Dispatch Entity (DDE)A role which carries the responsibility of receiving and processing demand resource dispatch instructions or market information and (optionally) providing response information. Distributed Energy Resources (DER)DERs are small, modular, energy generation and storage technologies that provide electric capacity or energy where it is needed. DERs may be either connected to the local electric power grid (e.g., for voltage support) or isolated from the grid in stand-alone applications, such as part of a MicroGrid. Definition of DER provided by the Department of Energy, http://www1.eere.energy.gov/femp/pdfs/31570.pdfhttp://www1.eere.energy.gov/femp/pdfs/31570.pdf End Device (ED)A physical end-use device that consumes or supplies electricity. Environmental Authority (EA)A regulatory authority responsible for the development, reporting and enforcement of environmental activities. Federal Regulator (FR)A federal regulatory authority. Load Serving Entity (LSE)A role which carries the responsibility of serving end-users and selling electric energy to end-users. Local Authority (LA)A regulatory authority responsible for the oversight and administration of utility service-related functions within its jurisdiction. Market EnrollmentThe collection of enrollment or tariff data for a Resource Object to provide a specific market product or service. Market Participant (MP)An organization registered with the System Operator that may take on roles such as SP, LSE, TDSP, DDE, SE, and/or MA in accordance with the SOs market rules. MeasurementThe role associated with the device or algorithm that measures the consumption or supply of an End Device. Meter Authority (MA)A role which carries the responsibility of providing data necessary to determine the performance of a Resource. P-NodeThe price location of the Premise in the transmission and/or distribution network. ParticipantThe entity that represents resources to a market or distribution operator. PremiseThe location at which connection to the transmission or distribution system is made. RegulatorA rule-making and enforcement entity. Response MethodA measurable action taken in response to an instruction to change consumption. Response Method Aggregation (RMA) A logical entity that has a reportable interval level consumption, e.g. an RMA may be a physical entity with its own meter, a neighborhood of homes that has a net meter, or an estimate of consumption of an aggregation of retail customers. ResourceA market-dependent group of Response Method Aggregations that represents a dispatchable entity. Resource ObjectPhysical and logical types of demand response resource objects. Scheduling Entity(SE)A role which carries the responsibility of submitting bids/offers and receives schedules and awards. Service Provider (SP)A role which carries the responsibility of coordinating resources to deliver electricity products and services to a market or distribution operator. State Regulator (SR)A regulatory authority responsible for the oversight and administration of electric utilities. Supporting ObjectsObjects that support the interaction of Business Entities and Resource Objects. Transmission/Distribution Service Provider (TDSP) A role which carries the responsibility of operating a local electricity transmission and/or distribution system. Utility Customer (UC)An end-use customer of the Utility Distribution Operator that takes on roles such as Premise or Resource. Utility Distribution Operator (UDO)An entity which carries the responsibility of operating an electricity distribution system. ZoneA physical or electrical region.

8. Entity Relationship Model 8

9. PAP 03 Recommendations The recommendation deals exclusively with the pricing related requirements at both the wholesale and retail levels. The requirements are captured in the form of UML models, where business requirements are captured in use case narrative format and data requirements are captured in tabular format. The main use cases that are affected by pricing are: Demand Response Non-Price (Environmental) Response Load-follower Price-takers Reliability based responses, both wholesale and retail, is addressed by PAP-09 on DR Signaling. The purpose of the recommendation is to capture business and data requirements related to the definition of a common model for capturing the attributes of an electricity product offered at wholesale and/or retail level. Such attributes will mainly include but are not limited to the pricing information of the product being offered to the end consumers of electricity. 9

10. Pricing Related Use Cases 10

11. Tariff Rate Types 11 Tariff Rate TypeTarget CustomersDescription block rateC&I, residentialAn energy supply rate structure in which the per unit energy price increases or decreases for each successive block of energy consumed. critical peak priceC&I, residentialA pricing structure in which the customer receives notification identifying a time interval, (critical hours) during which special higher prices apply over and above whatever other rate they may be charged. Critical hours generally represent a small percentage of the hours in the year. demand rateMainly for C&I customers, pilot for residential customers A component of an energy supply rate structure based on the highest demand for electricity measured in a billing period. day ahead market rateC&I, residentialAn energy supply rate structure, typically hourly, based on the day- ahead wholesale market price. market clearing price for energy C&IAn energy rate structure that allows for price changes every interval (e.g. 5 minutes, 15 minutes, hourly, etc.) based on real-time wholesale market prices. peak time rebateC&I, residentialAn incentive rate in which the utility pays a rebate to customers who reduced demand during peak periods on critical days real time price rateC&IAn energy supply rate structure in which prices can vary, typically on an hourly basis, based on forecast (day-ahead) or actual (real-time) market conditions. time of use rateC&I, residentialAn energy supply rate structure where the per unit charge (kWh or kW) varies according to the time of day. Time of use rates may have daily and seasonal variations. variable peak pricingC&I, residentialAn energy supply rate structure that combines features of time of use and real time price structures to include the flexibility of market price variation and the fixed time periods of a time of use rate.

12. Product Identification 12 AttributeDescriptionConsiderations Product IdentifierEnergy, although largely a non-storable and transitory commodity, is nonetheless still a tradable and sellable entity. Any commodity benefits from having a unique identifier (external) that can unambiguously be used by consumers to identify what it is that they are purchasing. Examples of product identification scheme used in the financial world is the ISIN and stock ticker symbols used by exchanges. This not a transaction identifier – this would be an industry agreed upon identifier for a particular energy product offering. Identifier SourceIdentification of the source of the Product Identifier. In most systems there are competing or alternative product identification schemes. The Identifier Source references the product identification scheme for the Product Identifier. Product TypeA product type.Attempt to fit the product type within already in place ontologies or product classifications used within industry for trading energy. Product Sub-TypeThe sub-type of productProducts may be further divided into subtypes, for example reserve products may be 10-minute or 30-minute response. Unit of Measure for Product Unit of measure the product.The unit of measure such as MWh or kWh.

13. Pricing Attributes 13 AttributeDescriptionConsiderations Total PriceTotal Price of the product at point of delivery Price is expressed as currency per unit of measure, i.e. quantity is not required, e.g. $/MWh The sum of all Price Components must equal the Total Price. Set of 1..n Price Components Price ComponentA component of the price.Price may have one or more components. Price Component Type The type of Price ComponentA standard set of price component types shall be enumerated, such as: Wholesale electricity cost Transmission costs Distribution costs Price TypeType of priceA standard set of price types will need to be defined real time, 5 minute, day ahead, as examples for price types Override Unit of Measure for the Product Unit of measure which is used to determine the price Alternative unit of measure used in calculating the price. CurrencyEconomic unit of exchange in which the total price and price components are stated (i.e. dollars, euros) Currency is required to determine the units of measure of the Total Price and Price Components. The energy units of measure are defined by the Product Type. Time and IntervalInterval of energy deliveryTimezone conventions and use need to be unambiguously defined. Daily blocks, hourly markets, 5 minute markets. A decision in how basic product information will reference and interact with the WS-Calendar initiative being completed as part of PAP-04. Source Location IdentifierLocation of the source of the electric energy Electric energy cost and value are greatly impacted by the distance between generation and consumption. Indicating the source of the generation is important in terms of pricing decisions on part of consumers and intermediaries. The use of source location would mainly be used for bilateral transactions. Source Location Identifier Type Type of location.The mechanism used to identify location can be defined in multiple sources based upon specific usage from control areas to GPS coordinates it is anticipated that there may need to be more than one method to identify a geographical location. Where possible existing industry standards should be adopted to identify geographic locations.

14. PAP 04 Recommendations The recommendation contains a set of requirements relating to the use of date and time based data elements that are used in transactions for Demand Response programs. This information is being provided to NIST in order to aid in the development of a standard representation for date/time based data elements derived from an XML representation of iCalendar. Although there are many other areas where date/time based data elements are used in energy industry transactions this recommendation is limited in scope to only those date/time based data elements that are utilized in Demand Response programs. The purpose of this action is to define the requirements for standard communication of date, time, schedule, and interval by smart grid actors, with particular attention to DR. 14

15. Representative Data Requirements 15 Type of RepresentationRepresentative InstanceSample Data Absolute date/timeEffective start date Effective start date and time 2009-11-01 2009-11-01T01:00:00-Z Absolute Periods (range)Deployment Period2009-11-01T01:00:00-Z/ 2009- 11-02T24:00:00-Z Relative date/time (time-point)Reduction Deadline30 minutes from a specified point in time Recurring date/timeMarket ClosingEvery day at 12:00 noon Absolute IntervalMeter Data Recording Interval System Frequency Every 5 minutes 60 cycles per second Absolute DurationOutage Duration Minimum Run Time 2 days 4 hours

16. PAP 09 Wholesale Recommendations The business process flows and use cases contained in this recommendation address the requirements for standardizing the information exchanged during interactions between the System Operator and various Market Participants for the administration and deployment of demand response resources in organized wholesale electric markets. Common terminology from the NAESB Measurement and Verification Standards for Demand Response has been incorporated into the development of the business process flows and use cases. As a result of the development of this document, a standard set of actors and additional terminology will expand the existing NAESB documentation of associated terms and definitions for demand response. 16

17. Guiding Principles Demand Response practices must be consistent with NERC and applicable regional reliability authority requirements. All involved entities are registered through the applicable ISO/RTO market participant registration process, which may include credit checks. However, the specifics related to the business processes associated with registration are not documented in these requirements. Settlement input parameters are defined as an output to the measurement and performance business process. However, specific business processes associated with settlements are not documented in these requirements. Intra-system operator information exchanges and specific system operators market rules, calculations, algorithms, and Performance Evaluation models are excluded. Planning functions are not documented in these requirements. This includes, but is not limited to, long-term load forecasting and transmission planning. Capacity auctions, awards processes, and resource certification are not documented in these requirements. References in these Recommendations to Dispatch, Markets, and Reliability, are made relative to Demand Response and apply to Demand Response resources only, not to Generation resources. Compliance standards for Demand Response resources are determined by the market rules of the respective system operator and are specific to the product or service and the reliability need being addressed. 17

18. Actor Roles 18 TermActor ID Designated Dispatch Entity3.4 Load Serving Entity3.2 Meter Authority3.6 Scheduling Entity3.3 Service Provider3.1 System Operator2.1 Transmission/Distribution Service Provider 3.5

19. Use Case Dimensions and Sample List 19 Product Energy (Economic)E Energy (Reliability)R CapacityC ReserveV RegulationG Deployment BulkB ResourceR SelfS Performance Evaluation Baseline1 MB/MA2 MBL3 MGO4

20. Wholesale Demand Response Process Flow 20

21. Specific Use Case Example – Enrollment and Qualification 21

22. PAP 09 Retail Recommendations The purpose of the following is to capture business and data requirements for Retail Level DR signals between entities that controls and manages the DR programs and entities that provide demand response with DR resources and assets. The top level use cases for retail DR are: Administrate DR Program Administrate Customer for DR Administrate DR Resource Execute DR Event Post DR Event Management In the context of this report, Distributed Energy Resources (DER) are dispatchable energy generation and storage technologies, typically up to ten MWs in size, that are interconnected to the distribution grid to provide electric capacity and/or energy to a customer or a group of customers and potentially export the excess to the grid for economical purposes. DER is considered in this recommendation only within the context of Demand Response. 22

23. DR/DER Framework Key Findings DR signals standardization must support all four market types; i.e. regions with a) no open wholesale and retail competition, b) open wholesale market only, c) open retail market only, d) open wholesale and retail competition. It must also consider key differences that exist and will continue to exist in all four market types. Wholesale market DR and pricing signals have different characteristics than retail market DR and pricing signals, although commonality in format is feasible. Most Customers (with a few exception of Commercial and Industrial (C&I) Customers will not interact directly with wholesale market when it comes to DR and pricing signals. Retail pricing models are complex, due to the numerous tariff rate structures that exist in both regulated and un-regulated markets. Attempts to standardize DR control and pricing signals must not hinder regulatory changes or market innovations when it comes to future tariff or pricing models. New business entities (Energy Service Providers (ESP), Demand Response Providers (DRP), DR Aggregators, and Energy Information Service Providers (ESIP)) will play an increasing role in DR implementation. DER will play an increasingly important role in DR, yet the development of tariff and/or pricing models that support DERs role in DR is still in its infancy. The Customers perspective and ability to react to DR control and pricing signals must be a key driver during the development of DR standards. 23

24. Retail DR Use Case Overview 24 Note: the details of UC 1.0 and 2.0 are outside the scope of this recommendation.

25. Use Case – Administrate DR Resource 25

26. Use Case – Execute DR Event 26

27. What is Next? NAESB SGTF Phase II Effort: Develop a consolidated and harmonized set of data requirements across PAPs 03, 04 and 09 Wholesale and Retail. This is to provide further details behind the current recommendations of three PAPs with the intent to make the whole set of recommendations more actionable by the regulatory and users community. NAESB SGTF announced the formation of PAP10 WG. Formation of the WG and its leadership team with broad participation; Developed a high level plan to get the Energy Usage Information Model standard completed in six months. Continued to look for opportunities to develop Smart Grid standards that are of great value to its members. 27