1. 1 Minimum Generation Emergency Operating Reserve Proposal Gary Zielanski Markets Committee Meeting September 30, 2004

2. 2 Overview of Issue During Min Gen Emergencies increment LMPs are set to zero Certain units are ramped up (some to EcoMax) during these situations. This is due to a problem with dispatch software. These units are not being compensated in RT –In Energy MWs * $0 LMP = $0 –In OR, if unit for the day was whole then, there would be no OR compensation.

3. 3 Overview of Issue (Cont) Concern: There are not proper market signals to ensure units will respond to Dispatch Instructions in Real Time. –Costs were incurred to provide Energy but there was No Energy or OR compensation for these Min Gen Emergency hours.

4. 4 Drag the side handles to Overview of Proposal The Settlement Department would manually compensate Eligible Units in hours when the Pool is in a Min Gen Emergency. Set units ineligible in the automated OR during Min Gen hours to avoid the potential of double compensation.

5. 5 Drag the side handles to Definition of Eligible Units Units ([min(DDP,RQM)]-EcoMin) > 5 MWs. Otherwise, OR eligible (e.g. No FTF flag) Participants would be required to submit written request to the ISO seeking compensation.

6. 6 Drag the side handles to Proposal of Charge Allocation Proposed Charge Allocation is hourly prorata share of RTGO during the hours of Min Gen Emergency

7. 7 What additional information do you need to vote at the next meeting?

8. 8 Questions?