Intertie Restoration Update September 15, 2010

Intertie Restoration Recommendation Paper Expected to be released by the end of September Will be released at the same time as the overall Intertie Framework Recommendation Paper Intertie restoration initiatives fit within the context of the overall intertie framework Intertie Restoration paper addresses both import and export restoration Both initiatives will be pursued by the AESO LSSi is the first step in restoring import capacity It is expected other import initiatives will be pursued

Intertie Restoration Policy Interpretations Intertie Restoration services will be treated as a system service with costs allocated to load Consistent with government transmission policy Treats imports and exports similarly to internal loads and generators LSSi or any other import restoration services will not confer transmission rights Infrastructure solutions for further import restoration will also be examined

Recommended LSSi Product Design Procurement to be done through term contracts (1-3 years) Three part price mechanism recommended (similar to standby market price structure) Availability payment – Fixed $/MW payment based on actual consumption and willingness to be armed Arming payment – Indexed to pool price based on volume actually armed Trip Payment – Fixed $/MW payment based on volume tripped when frequency drops below 59.5 Hz

Recommended LSSi Product Design Availability payment is paid only when service is physically available No payment when the load is not available due to reduced consumption and/or unwillingness to be armed Arming payment is paid when the service is dispatched on to support import flows Indexed to pool price Once armed, the service is firm for the hour to support import schedule

Implementation Activity Dispatch tool being developed Arm and disarm signal to be sent using SCADA Participants will send the AESO armed status, current availability and future availability (next and next + 1) AESO will arm providers as required to support scheduled import flow Settlement to be a ‘shadow settlement’ system Providers submit monthly invoice to the AESO AESO performs shadow settlement to verify accuracy

Implementation Activity OPP Changes Required to OPP 312 Arm and disarm duty for the system controller Update import capability (Revised ATC table) AESO will initiate consultation process on this change in the near future

Next Steps Finalize product design and initiate procurement process Contract being developed Procurement process will begin in the later part of Q4 Consultation initiated on required rule changes LSSi targeted to be in place and operational for Q2 2011

Questions?