March 13, 2014 | NEPOOL markets committee

1. March 13, 2014 | NEPOOL markets committee Janine Dombrowski jdombrowski@iso-ne.com | 413.540.4448 Additional clean-up changes to support implementation Energy Market Offer Flexibility: Conforming Rules

2. Additional changes are required to support the Energy Market Offer Flexibility and NCPC Payments projects • The ISO has identified conforming changes to the Forward Reserve Market and the Regulation Market • The ISO is proposing to remove obsolete provisions and references and has identified some instances of defined terms which are not capitalized • Additional changes are required to Market Rule 1, Appendix A and Appendix F

3. Forward Reserve Market • Modify the deadline for submitting offers above the Forward Reserve Threshold Price from the close of the Re-Offer Period to no later than 30 minutes prior to the start of the operating hour.

4. Regulation Market • Modify the Regulation Market rules to consider a scenario introduced by the Energy Market Offer Flexibility functionality that permits a resource to self-schedule intra hour. • A unit selected for regulation that updates its offer through an intra hour self-schedule will have its energy opportunity cost set to zero. • The ISO is continuing to evaluate the impacts of negative energy offers on the Regulation Market design scheduled to be implemented in May 2014.

5. Additional Changes • Remove transition provision added to provide flexibility during the interim between the current market and the hourly markets implementation. These include: • The Appendix A Cost Recovery Provisions added to the tariff by the ISO’s August 13, 2014 filing with the Commission • The Dual-Fuel Switching Provisions added to the tariff by the ISO’s December 19, 2013 filing with the Commission

6. Additional Changes (continued) • Capitalize and add newly defined terms, revise terms with obsolete references and delete terms that are no longer defined. • Remove language that is no longer required as it has been superseded by the Energy Market Offer Flexibility and NCPC Payments tariff provisions. These include: • Obsolete cancelled start credit • Obsolete references to NCPC • A participant obligation to provide non-binding forecasts of supply offers.

7. Additional Changes (continued) • Changes to Appendix A • Correct a typographical error; Section III.A.7.2.2.(d)(iii) should be labeled as III.A.7.2.2(e) to indicate that a cost-based Reference Level will be used when a fuel price is submitted pursuant to III.A.3.4. • Clarify, in the newly labeled Section III.A.7.2.2(e), that a cost-based Reference Level will apply for the Operating Day or remainder of the Operating Day. • Delete the recently added III.F.1(c) provision for Treatment of Minimum Run Time Changes in Subsequent Operating Day that is unnecessary under the Energy Market Offer Flexibility implementation. • A resource commitment to operate across an operating day boundary will continue through the hours of the original commitment decision duration in the subsequent day, irrespective of a change to its Minimum Run Time.

8. Additional changes are required to support the Energy Market Offer Flexibility and NCPC Payments projects • The ISO is continuing to assess whether additional changes will be required to support the implementation. • Proposed Markets Committee Schedule: • February MC – introduce additional changes • April MC – draft tariff language plus any newly identified changes • May MC (June, if substantial new items are identified) – request vote