1. Enhanced Day Ahead Commitment Project: Enhancements to the DACP IESOTP 244-3d

2. 2 What is Day Ahead Commitment Process? A mechanism for: Developing a dependable view of the next day’s available supply and anticipated Ontario demand The economic commitment of certain dispatchable generators the day before dispatch in return for a financial guarantee The economic scheduling of imports the day before dispatch in return for a financial guarantee

3. 3 DACP Enhancements New calculation engine performing 24 hour optimization for energy and operating reserve while considering: –Three-part offers and commitment parameters –Combined cycle plant modeling –Inclusion of exports and linked wheel transactions Revised cost guarantee principles Revised/new failure charges

4. 4 24 Hour Optimization The objective of the engine is to minimize the total cost for scheduling of energy and reserve over the entire day Scheduling decisions are made that benefit the entire day over that of a single hour Examples include –committing a not QS resource that may be more expensive than an import in a single hour but has a benefit for several hours over other alternatives –committing a not QS resource that may be more expensive than another not QS resource who has a longer run time

5. 5 Multi-Pass Run Pass 1: determines initial set of schedules required to satisfy average hourly forecast demand. Pass 2: determines additional schedules required to satisfy peak hourly forecast demand (utilizing pass 1 results). Pass 3: determines final set of schedules for all resources based on average hourly forecast demand (utilizing pass 2 results). Pass 1 Commitment Pass 1 Commitment Pass 2 Reliability Pass 2 Reliability Pass 3 Scheduling Pass 3 Scheduling Average Forecast Average Forecast Average Forecast Average Forecast Peak Forecast Peak Forecast

6. Fixed cost associated with starting a resource in a given hour. 6 Resource Scheduling According to Three Part Offers 2. Speed-no-load costs Minimum Loading Point Start-UpSynchronize 3. Energy Offer 1.Start-up Costs Three Part Offer = 1 + 2 + 3 t MW Fixed cost associated with scheduling a resource in a given hour. Variable cost associated with scheduled quantity in a given hour. *three part offers are applicable to not quick start resources

7. 7 Scheduling According to Commitment Parameters Minimum Generation Block Run Time 1 st Start Minimum Generation Block Down Time Synchronize Minimum Loading Point Synchronize De-Synchronize 2 nd Start Maximum number of starts/day = 2 *commitment parameters are applicable to not quick start resources

8. 8 Pseudo Unit Modeling PSU 1 = CT 1 + 1/3 ST PSU 2 = CT 2 + 1/3 ST PSU 3 = CT 3 + 1/3 ST PSU 1 PSU 2 PSU 3 Physical UnitsPseudo Units For a combined cycle plant, modeling allows scheduling of a combustion turbine in parallel with the associated portion of the steam turbine Scheduling is done in proportion to the gas/steam relationship at the facility CT 1 CT 2 CT 3 ST Line ALine B

9. 9 Offer Resubmission for Cascading Hydroelectric Resources GEN A GEN B 3 Hour Delay Same River System Hydroelectric resources that are energy limited and have a cascading dependency with a resource owned by the same market participant May resubmit offers for the second run of the DACP in order to receive schedules that reflect the hydraulic time lag between adjacent resources HE1HE2HE3HE4HE5HE6HE7HE8HE9 GEN A25MW27MW32MW22MW GEN B17MW19MW24MW14MW

10. 10 Inclusion of Export and Linked Wheel Transactions IMPORT EXPORT LINKED WHEEL All transaction types can participate in the day-ahead. -Imports -Exports -Linked Wheels Scheduling of internal resources accounts for intertie traffic and its impact to internal power flow. Commitments reflect both internal and external demands.

11. 11 New Generator Commitment Guarantee Guarantees a generator its day-ahead costs for the total amount and duration of its day-ahead schedule. –guarantee is based entirely on day-ahead offer –revenue shortfall is assessed by comparing the day-ahead cost versus real-time revenue (energy, operating reserve, CMSC) Guarantee structure encourages: –punctual start-up for the first hour of a commitment start –close compliance with real-time dispatch –a real-time offer strategy that aims to fully utilize day-ahead schedule

12. 12 New Withdrawal Charge for Committed Generators Committed generators have their entire day-ahead costs guaranteed. Withdrawals of commitments impacts the least cost solution attained in the day-ahead. New withdrawal charge applies to committed generators who withdraw due to financial decisions. –Reasons outside of market participant control are exempt (ie. generator outage)

13. 13 New Import Offer Guarantee Guarantees the day-ahead costs for arranging an import. –guarantee is based entirely on day-ahead offer –revenue shortfall is assessed by comparing the day-ahead cost versus real-time revenue (energy and CMSC) Guarantee structure encourages: –a real-time offer strategy that aims to fully utilize day-ahead schedule Excludes import legs of a linked wheel transaction.

14. 14 New/Revised Day-Ahead Intertie Failure Charges Import, export and linked wheel transactions that do not match their day-ahead schedules impact the least cost solution attained in the day-ahead. Assessed on scheduled quantities between day- ahead and the final pre-dispatch. Day-Ahead Failure Charge Real-Time Failure Charge Day-Ahead Schedule Pre-Dispatch Schedule Real-Time Schedule

15. 15 Net Result of Enhancement Operational efficiency Efficient resource commitment Meaningful day-ahead results Guarantees & charges that encourage wanted behaviors