1 Market Flow Threshold Field Test NERC ORS Meeting November 14 th and 15 th

2 Introduction Market flows are assigned an amount of relief by the IDC based on level of TLR, amount of curtailment requested and the priority/sub-priority of tags relative to the market flows. On some flowgates, MISO and PJM are unable to consistently accomplish their relief where they have very small impacts. On some flowgates, the markets will either have no generation they can move or will require a large amount of redispatch for a small amount of relief. Reason For Change In Threshold

3 Market Flow Threshold Field Test The FERC, NERC ORS and NERC Standards Committee approved a field test to calculate relief requests based on a down to three percent market flow. This is for all entities that report market flows. Conditions placed on field test: 12 month test to be completed by 12/31/08 Can start before 6/1/07 or after 9/1/07 Must start no later than 12/31/07 At least one market must be ready to start NERC TLR SDT will monitor progress and make periodic reports to the NERC SC

4 Implementation On May 29 th, the field test began. In addition to reporting market flows down to zero percent, PJM started reporting market flows to the IDC down to three percent. On May 29 th, the IDC began calculating PJM relief based on the down to three percent market flows. SPP implemented on October 1 st and MISO implemented on November 1 st. A summary of results was provided to the NERC ORS on September This is a follow-up summary with an additional two months of data.

5 Failure to Meet Relief Obligation What does it mean to have a failure? MISO, PJM and/or SPP did not meet its relief obligation. Not all failures involve the use of three percent threshold (PJM participation started May 29, SPP participation started October 1, MISO participation started November 1). If one or more five minute window failed to meet the relief obligation, this was counted as a violation event. In reality, you cannot expect an instantaneous change in market flows to meet relief obligations.

6 Summary Results IDC threshold reports analyzed for July, August, September and October. The table below shows the number of TLRs where an entity was unable to provide the IDC requested market flow relief. MISOPJMSPP Total TLR 3+ Reports July53022 August September October312731

7 Result Observations/Issues 1.Because there was a delay in setting the market flow threshold by flowgate in the IDC, the use of 3% market flows for TLR curtailments was delayed (PJM-June 12, SPP-October 3, MISO- November 1). 2.The NERC/NAESB TLR SDT asked that the field test extend for a minimum of 12 months for each market participant. Based on a MISO start date of 11/1/07, the field test will continue through 10/31/08 3.There were some reporting problems when the field test first started that prevented using the June reports and requiring manual processing of reports in the first 18 days in July. 4.Problems that continue to exist in the reports: 1.Gaps in the data where a TLR relief obligation existed but there is no market flow threshold report for this time interval.

8 Result Observations/Issues Continued 4.Problems that continue to exist in the reports (continued): 2.The market flow threshold report sometimes shows a market did not meets its relief obligation for a time interval when there was no TLR and/or no relief obligation. 3.The market flow threshold report sometimes shows a markets did not have a relief obligation for a time interval when it did. 5.There appears to be some problems with the TLR events themselves where the markets are assigned a relief obligation based on firm market flows during TLR 3. Also see cases where there are large market flow relief obligations (100 MW or greater). 6.These and other issues will be discussed as the NERC ORS TF does a detailed review of the market flow threshold reports.

9 Next Steps Continue to collect data. MISO, PJM and SPP are preparing reports that track not only the number of relief obligation failures but also the magnitude of the failures using plots from IDC (see slide 10). Schedule an ORS Task Force call to analyze the data. ORS TF participants: Daryn Barker (E.ON.)Richard McCall (NCEMC) Jim Burlew (PJM)Lanny Nickell (SPP) Jim Busbin (SoCo)Greg Stone (Duke) Frank Koza (PJM)Mark Wilson (IESO) Tom Mallinger (MISO)David Zwergel (MISO) NERC/NAESB TLR SDT will be invited to participate in the review. Are there other NERC ORS members interested in participating in the review?

10 Sample Data Being Collected - PJM MF During TLR