1. Draft Rev 1 2004 Corporate Performance Targets Management Recommendation Presentation to the Regulatory Affairs Standing Committee November 28, 2003 Don Lee Director, Business Development

2. Draft 2004 Performance Drivers Continued challenges from the IMO tariff freeze On-ramp activities Prudent investment in market evolution Renewed focus on reliability 2003 experience and feedback 1

3. Draft Comparison with other ISO’s Confirmed our understanding of measures used by others at a meeting of Regulatory Affairs staff from NYISO, ISO-NE, California ISO, Alberta ESO, SeTrans, BC Trans Co, ERCOT, and PJM, in September 2003 Shared targets and standards with NYISO The IMO tends to have more detail relative to others 2

4. Draft 2003 Corporate Performance Measures and Recommendations for 2004 Maintain focus on capital management Maintain market evolution measure Improve suite of market operations performance measures Maintain measures comparing IMO tie line control to other large Control Areas in the Eastern Interconnection Enhance assessment of customer and stakeholder satisfaction Maintain reliability assessment Recommendations for 2004 Recommendations for 2004 2003 Expand focus on financial management from OM&A only, to Total Costs 3

5. Draft Effective Use of Constrained Funds The IMO tariff freeze continues to place pressure on management around managing day to day spending related to the current Market Operation Program The IMO recommends this measure be expanded to include all costs associated with operating the marketplace. The objective is to improve the IMO’s ability to respond to the marketplace and achieve its vision. Recommended 2004 Measures: Expand focus on financial management from OM&A only, to Total Costs Maintain focus on capital management 4

6. Draft Marketplace Evolution Effectively Managed The need for marketplace evolution and improvements continues The performance expectation focuses on program management and on prudent investment for marketplace evolution Recommended 2004 Measure: Maintain market evolution measure 5

7. Draft Customer & Stakeholder Satisfaction The IMO recommends that this measure be improved in 2004 to separately focus on the provision of 3 key customer/stakeholder services: stakeholdering to support timely decisions communications and market information customer inquiries, issues, and training The assessments are to be based on: surveys, interviews, and/or focus groups customer comments other anecdotal evidence Recommended 2004 Measure: 6 Enhance assessment of customer and stakeholder satisfaction

8. Draft Operational Effectiveness IMO will continue to focus on maintaining electrical reliability and effectively operating the marketplace Recommended 2004 Measures: 7 Improve suite of market operations performance measures Maintain measures comparing IMO tie line control to other large Control Areas in the Eastern Interconnection Maintain reliability assessment

9. Draft Market Operations Performance Measures - Summary of Recommended Improvements For the existing 22 customer-oriented operational measures: Increased performance standards for 6 measures in 2004 Removed 1 measure - Meter Trouble Report closure will continue to be used, but at the Business Unit level Added 1 measure - corporate web site availability Revised all IT systems reliability measures improved relevance to customer increased performance standards Improved consistency, customer focus, understandability 8

10. Draft Market Operations Performance Measures 9 2003 2004

11. Draft Market Operations Performance Measures (continued) 10 2003 2004

12. Draft Market Operations Performance Measures (continued) 11 2003 2004

13. Draft Market Operations Performance Measures (continued) 12 2003 2004

14. Draft Recommended Weighting for 2004 Incentive Purposes 13

15. Draft Comments?