1. 1 Defender Mitigation Proposed Name Change: Defender Reservation True-up Jan 15, 2012 NAESB OASIS Subcommittee Progress Report

2. 2 Motion 32 In the event a CONFIRMED reservation with or without ROFR is preempted by a challenger for only a portion of their reserved capacity, in addition to any option to exercise ROFR where applicable the Transmission Provider shall provide the defenders with an option to reduce the remaining capacity available on the preempted reservation to any value less than the capacity remaining after preemption (as included in Motion 20). Laymans Terms: If – after all the dust settles from ROFR or Non-ROFR – a Defender is left with a reduced capacity reservation, said reservation may be Reduced to a lower level – or to zero, if desired.

3. 3 Defender Reservation True-up Consensus on recommendation not reached Task Force Discussing approach that might lead to consensus

4. 4 Perspectives - Two Ends of the spectrum Some Transmission Owners are adverse to Letting Go of a confirmed sale (even though the capacity would be returned to inventory, available for purchase by other entities).

5. 5 Perspectives - Two Ends of the spectrum cont Many PSEs feel as the Defender (or incumbant): Defender should have option to opt-out of a reservation it did not request Wish to return capacity that is no longer commercially viable Allows the TSP to re-aggregate in its ATC inventory for other purchasers desiring capacity on congested path. PSEs believe it is more efficient than bilateral sales of remaining capacity

6. 6 Defender Reservation True-up Consensus on recommendation not reached Task Force options Develop Defender Reservation True-up standards that apply broadly to all TSPs Develop Defender Reservation True-up standard that leaves the TSPs the option to implement.

7. 7 Defender Reservation True-up Task Force Recommends Developing Specific Standards even if ultimate Recommendation is to leave it to the TSP to implement

8. 8 Defender Reservation True-up Next Steps: Jan 15-17 Receive feedback from NAESB OS Jan 15-17 Consider how options my be influenced by Tech Team Task Force work to date. Week of Jan 22 nd Meet to further discuss detailed implementation options outlined during Jan 11, 2013 team meeting.