MOSC Meeting Operations Market Manual updates

1. MOSC MeetingOperations Market Manual updates October 22, 2003 Presented by: Ron Falsetti Steve Cooper

2. Changes • MM 4.3 - Real-Time Scheduling of Ph. Mkts. • IMO - NYISO Scheduling Protocol (IMDC 0051) • Dispatch instruction enhanced filtering (IMDC 0053) • MM 7.1, 7.4 Policies, Procedures & 7.8 OPSRP - Changes arising from: • August 14th blackout + other contingencies; • Power system restoration exercises; • Operating reserve pricing initiative;and • Voltage reduction test results.

3. IMO - NYISO Scheduling Protocol

4. IMOpre-dispatch schedule incorporatingNYISODay Ahead commitments posted IMOdetermines and posts first pre-dispatch schedule 15:30 11:00 12:00 14:00 15:00 NYISO passes Day-Ahead commitments (with pre-schedules identified) to the IMO NYISO posts Day-Ahead interchange schedules IMO-NYISO Scheduling Protocol IMO Pre-Dispatch /NYISODay Ahead Period

5. IMO determines projected interchange schedules for the dispatch hour based on 2-hour ahead pre-dispatch run and passes them toNYISO IMOandNYISO confirm final interchange schedules T-75 T-30 T-60 T-100 Dispatch Hour T-40 T-120 T=0 NYISOhour ahead market closes NYISOfilters BME bids using information on interchange schedules accepted by the IMO2-hour ahead pre-dispatch NYISOruns BME and posts BME results IMO-NYISO Scheduling Protocol IMOHourly Pre-Dispatch /NYISOBalancing Market Evaluation Period

6. Dispatch Instruction Filtering

7. Existing Dispatch Filtering • Filter prevents sending out dispatch instructions for small changes in scheduled quantities • New dispatch instructions issued for provision of energy change from the previous dispatch instruction provided greater than the lesser of 2% of maximum offer/bid capability and 10 MW

8. Filtering Enhancements • More adaptive filtering capability to help maintain adequacy and minimize CMSC that: • disables filtering of dispatch instruction within filter thresholds for: • energy resource dispatches to the facilities HIGH or LOW operating limit; and • energy reduction changes when previous dispatch instruction is > max. offer

9. Filtering Enhancements cont’d • disables filtering every 30 minutes & prior to dispatch hour (intervals 1, 7 and 12) • permits filter thresholds to be energy resource configurable

10. Operating Policies and Procedures

11. Policies & Procedures • Enhance operational communication protocols & communication content involving the IMO, transmitters & connected marketparticipants • Potential changes to controlled rotational & U/F load shedding • Clarify procedures for emergency reduction of majorgenerating facility output to mitigate OSL after a contingency.

12. OPSRP • Emergency Preparedness Task Force annual review of OPSRP - after the Nov. 26, 2003 exercise • Lessons learned from the Aug. 14 blackout • EPTF sponsored Restoration Working Group feedback - end of Nov.

13. OPSRP Cont’d • Reinforce need for key facility and critical component testing • Reinforce need for restoration plan market participants to open circuit breakers

14. Control Action Breakers

15. Control Action Breakers • By removing from service certain circuit breakers & eliminating the breaker failure contingency there are opportunities to improve transfer capabilities • This is required for TLR (TLR 4), but can also help to relieve interface congestion, enhance our ability to mitigate adequacy concerns, and provide additional transaction opportunities • Should this policy change be adopted it would require changes to market manual 7.4 and Appendix E “EOSCA list”