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NEPOOL Markets Committee June 9, 2009

Load Reconstitution for Demand Resources Receiving Forward Capacity Market Payments Starting June 1, 2013. NEPOOL Markets Committee June 9, 2009. Agenda. Summary of Recommendations Stakeholders ISO New England Revised ISO New England Recommendation Next Steps.

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NEPOOL Markets Committee June 9, 2009

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  1. Load Reconstitution for Demand Resources Receiving Forward Capacity Market Payments Starting June 1, 2013 NEPOOL Markets Committee June 9, 2009

  2. Agenda • Summary of Recommendations • Stakeholders • ISO New England • Revised ISO New England Recommendation • Next Steps

  3. Summary of Stakeholder Recommendations(Presented on May 12, 2009) • 9 Stakeholders recommend Reconstitution: • National Grid, United Illuminating, Consolidated Edison Energy, GDF Suez Energy Marketing NA, Pepco Energy Services, Sempra Energy Solutions, Integrys Energy Services, Hess, Energy America • 4 Stakeholders recommend No Reconstitution: • NHEC, CDRI, EnerNOC, Massachusetts's Attorney General's Office • 6 Stakeholders recommend Deferring the Decision: • CT Office of Consumer Counsel, NH Office of Consumer Advocate, Union of Concerned Scientists , Conservation Services Group, VT Energy Investment Corporation, and Gas Recovery Systems

  4. ISO New England’s Recommendation (Presented on May 12, 2009) • Defer the decision to reconstitute Demand Resources until October 2012 to gain experience from three summers of operating experience with active Demand Resources. • At that time, consider implementing reconstitution • Criteria for reconstitution should be based on the distribution of Demand Resources by Load Zone relative to the distribution of Peak Load by Load Zone. • Approach should be integrated with any future Price Responsive Demand designs. • Methodology should recognize interval metering and data system limitations, as well as any recognized jurisdictional issues.

  5. Comparability of DR and Generation(Presented by INTMMU on May 22, 2009 – Slides 20 and 21) • Recommendations for Active DR • Voluntary ParticipationinWholesale Energy Market • Wholesale Energy Market Payments • LMP Minus the Retail Rate (generation portion) that Customers are Already Saving by Paying for Net Metered Load • PER Deduction • Benefits of Recommendations • Makes the Capacity Market Compensation More Comparable for Demand and Generation Resources • Increases Incentives for Demand Resources to be Available • Improves Efficiency in both the Energy Market and Capacity Markets DRAFT FOR INTERNAL REVIEW

  6. ISO New England’s Revised Recommendation • The ISO reconsidered load reconstitution for FCM DR within the broader context of: • INTMMU’s May 22nd recommendations on Active DR participation in the Wholesale Energy Market • The demand-side and supply-side approaches to achieving PRD currently being evaluated by the MC, • Stakeholder recommendations from April 17th, and • Stakeholder feedback from the May 12th MC Meeting

  7. ISO New England’s Revised Recommendation • Defer the decision on reconstitution for approximately 12 months so that the decision can take into consideration the following: • The final design decisions on PRD (i.e., supply-side, demand-side, hybrid, etc.) • Design decisions on the implementation of INTMMU’s recommendations on Demand Resource participation in the Wholesale Energy Markets. • Any policy direction from the FERC and NE State regulators on PRD. • Continue the Stakeholder process in February 2010 with the goal of having Market Rules approved before the August 2010 FCA for the 2013/14 Capacity Commitment Period

  8. Background / Schedule

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