1. Forecasts and Assessments Presented to the Independent Power Producers’ Society of Ontario Pat Doran, Supervising Technical Officer Independent Electricity Market Operator June 27, 2002

2. Forecasts and Assessments 18 - Month Forecast Forecast margins Key messages Outage process Challenges Statistics 18 - Month Forecast Forecast margins Key messages Outage process Challenges Statistics

3. Reserve Margins

4. 18-Month Outlook Reference scenario assumes: forecast demand based on normal weather existing generation availability per market participants 3000 MW of new/returning generation on dates indicated by market participants generator outage plans as of May 2002 Delayed scenario assumes all new/returning generation delayed by one year. Reference scenario assumes: forecast demand based on normal weather existing generation availability per market participants 3000 MW of new/returning generation on dates indicated by market participants generator outage plans as of May 2002 Delayed scenario assumes all new/returning generation delayed by one year.

5. 18-Month Outlook Basic message: Until generation planned to be placed in-service within the next 12 months actually begins to operate, there will continue to be significant periods when reserves are lower than required (i.e negative reserve margins) Basic message: Until generation planned to be placed in-service within the next 12 months actually begins to operate, there will continue to be significant periods when reserves are lower than required (i.e negative reserve margins)

6. 18-Month Outlook Reserves are required to account for unforeseen events (e.g extreme weather and generator forced outages) Past experience suggests that sufficient external resources should be available to offer into the Ontario market during low reserve periods However, extreme weather or higher than forecast generator forced outages could require emergency operating procedures to be invoked Reserves are required to account for unforeseen events (e.g extreme weather and generator forced outages) Past experience suggests that sufficient external resources should be available to offer into the Ontario market during low reserve periods However, extreme weather or higher than forecast generator forced outages could require emergency operating procedures to be invoked

7. 18-Month Outlook Potential market impacts during low reserve periods include: upward pressure on market prices increased importance of external resources limited opportunities for the IMO to approve the release of generators for planned outages (time stamp is critical) Potential market impacts during low reserve periods include: upward pressure on market prices increased importance of external resources limited opportunities for the IMO to approve the release of generators for planned outages (time stamp is critical)

8. 18-Month Outlook Anticipated market responses include: Ontario generators maximizing their availability to offer in the Ontario market Marketers arranging imports to meet Ontario requirements Consumers taking measures to reduce their consumption Anticipated market responses include: Ontario generators maximizing their availability to offer in the Ontario market Marketers arranging imports to meet Ontario requirements Consumers taking measures to reduce their consumption

9. 18-Month Outlook Market participants are required to provide updated information to the IMO in a timely manner (MR 1-11.3) Validity of generator adequacy assessments depends on having the most accurate information available (particularly generator in-service dates or return-to-service dates) Market participants are required to provide updated information to the IMO in a timely manner (MR 1-11.3) Validity of generator adequacy assessments depends on having the most accurate information available (particularly generator in-service dates or return-to-service dates)

10. Outage Process Challenges Calculation of unavailable capacity Request for outage web form Outage volume Equipment names and cross referencing Outage reporting requirements Challenges Calculation of unavailable capacity Request for outage web form Outage volume Equipment names and cross referencing Outage reporting requirements

11. Outage Volume

12. Outage Participants 114 Market Participants with equipment requiring outage reporting 267 non OPG/Hydro One outages in May Co-operation and communication are essential Contact information Provide current information for outage contact 114 Market Participants with equipment requiring outage reporting 267 non OPG/Hydro One outages in May Co-operation and communication are essential Contact information Provide current information for outage contact