1. Arizona Corporation Commission Arizona Independent Scheduling Administrator (AzISA) September 22, 20009

2. 9/22/00 ACC AzISA Update 2 AGENDA WELCOME STAFF OVERVIEW SUMMARY OF AzISA FILING WITH FERC –OPERATING PROTOCOLS –IMPLEMENTATION PLAN & FUNDING STAKEHOLDER’S COMMENTS STAFF COMMENTS AND RECOMMENDATIONS

3. 9/22/00 ACC AzISA Update 3 Why ACC Requires ISA / ISO R14-2-1609 C “ ACC supports development of an ISO or, absent an ISO, an Arizona ISA.” R14-2-1609 D “ … necessary to provide non-discriminatory retail access and to facilitate a robust and efficient electricity market…”

4. 9/22/00 ACC AzISA Update 4 AzISA Formation Required by ACC R14-2-1609 D “ … Affected Utilities that own or operate Arizona transmission facilities shall form an AzISA which shall file with FERC …”

5. 9/22/00 ACC AzISA Update 5 STAKEHOLDERS COMMENTS

6. 9/22/00 ACC AzISA Update 6 Framework of Arizona’s Retail Competition Affected Utilities Affected Utilities CAO AzISAAzISA OASIS Energy Service Providers SC Retail Consumers Standard Offer Direct Access

7. 9/22/00 ACC AzISA Update 7 ACC Filing Requirements AzISA implementation plan filed with ACC ACC review & approval of AzISA must-run generation pricing / service availability protocols ACC approved distribution service charge for fixed must-run generation cost recovery

8. 9/22/00 ACC AzISA Update 8 Requirements of AzISA R14-2-1609 D1 AzISA shall: Calculate ATC for participants and develop and operate overarching statewide OASIS AzISA Phase II implementation R14-2-1609 D2 AzISA shall: Oversee non- discriminatory application of operating protocols (includes determining TTC, ATC, must-run generation, & energy scheduling / imbalance) AzISA Phase I implementation

9. 9/22/00 ACC AzISA Update 9 Requirements (continued) R14-2-1609 D3 AzISA shall: Provide dispute resolution AzISA Phase I implementation R14-2-1609 D4 AzISA shall: Use a standardized procedure for participants’ transmission reservation requests and schedules (Wholesale, Standard Offer Retail and Competitive Retail) AzISA Phase II implementation

10. 9/22/00 ACC AzISA Update 10 Requirements (continued) R14-2-1609 D5 AzISA shall: Implement a transmission planning process that includes all participants AzISA Phase II implementation R14-2-1609 E AzISA shall: File an Implementation Plan AzISA Phase I implementation

11. 9/22/00 ACC AzISA Update 11 Requirements (continued) R14-2-1609 I. AzISA shall: Develop statewide protocols for pricing and availability for Must-Run Generating Units AzISA Phase I implementation R14-2-1609 J. AzISA shall: Identify statewide services and develop fair and reasonable pricing mechanism to assure a consistent and fair settlement process AzISA Phase I implementation

12. 9/22/00 ACC AzISA Update 12 Framework of Arizona’s Retail Competition Affected Utilities Affected Utilities CAO AzISAAzISA OASIS Energy Service Providers SC Retail Consumers Standard Offer Direct Access