Demand Resources Working Group December 18, 2008

1. Metering Configurations for Real-Time Demand Response and Real-Time Emergency Generation Resources in the Forward Capacity Market Demand Resources Working Group December 18, 2008

2. M-MVDR Conforming Changes • The recently approved Market Rule changes for Demand Resources will require conforming changes to M-MVDR. • This presentation introduces the first set of proposed changes to M-MVDR – specifically Appendix A, Section A4.3 Performance Measurements and Compliance - designed to ensure the appropriate calculations of load reductions from RTEG and RTDR Resources with and without the presence of Distributed Generation. • The proposed metering configurations are also applicable to On-Peak, Seasonal Peak and Critical Peak Demand Resources - specifically those using Distributed Generation.

3. RTDR and RTEG Metering Configurations • The ISO proposes to replace the Metering Configurations described in Section A4.3.1 for RTDR and RTEG Assets with the following: • Type 1: RTEG / DG Directly Metered • Type 2: Load Reduction Only (No DG at the Asset) • Type 3: DG Used to Reduce Load at the Asset • Type 4: Load Reduction with DG used at a different Asset • Each Metering Configuration is described in the following slides.

4. Terms used in this Presentation • Facility • A n end-use metered customer’s building or home. • RTDR / RTEG Asset • One or more Facilities located at a single Node, reporting data as a single set of values and assigned a unique Asset ID by the ISO • DG Output (DG) • The directly metered output of a Distributed Generator • Customer Baseline (CB) • An estimate of a Asset’s electricity consumption had it not responded to a RTDR or RTEG event. • Facility Metered Load (FML) • Electricity consumed at a Facility that is purchased from the Grid. • Total Facility Load (TFL) • Total Facility Load is the total electricity consumed at a Facility inclusive of that purchased from the Grid and that produced on-site from a Distributed Generator. TFL = FML + DG • Hourly Reduction (HR) • The reduction in the RTDR or RTEG Asset’s electricity consumption resulting from responding to Dispatch Instructions.

5. Resources vs. Assets • ISO-NE will issue Dispatch Instructions to RTDR and RTEG Resources for all or a portion of the Capacity Supply Obligation. • Participants are responsible for managing the RTDR and/or RTEG Assets to respond to ISO-NE’s Dispatch Instructions. • Participants will be responsible for providing the ISO with the required meter data for all their RTDR and RTEG Assets. • ISO-NE will calculate the Average Hourly Load Reduction for a RTDR Resource as the sum of CB less the sum of the FML or TFL of all the RTDR Assets associated with the RTDR Resource. • ISO-NE will calculate the Average Hourly Output for a RTEG Resource as the sum of DG Output of all the RTEG Assets associated with the RTEG Resource.

6. Metering Configuration - Summary

7. Market Rule Section III.13.7.1.5.2 III.13.7.1.5.2. Capacity Values of Certain Distributed Generation. If across Demand Resource On-Peak Hours, Demand Resource Seasonal Peak Hours, Demand Resource Critical Peak Hours, Real-Time Demand Response Event Hours, or Real-Time Emergency Generation Event Hours, as appropriate, a Distributed Generation resource’s monthly average hourly output is greater than the monthly average hourly load of the end-use customer to which the resource is directly connected, the Capacity Value of the portion of output exceeding the customer’s load for the month will be the Demand Reduction Value for that portion of the output.

8. Market Rule Section III.13.7.1.5.2 (Example) • RTEG Asset with the ability to “push back” power onto the electricity grid.

9. Metering Configurations

10. Type 1: DG Directly Metered • Example: • Customer operates an emergency generator during OP4 Action 12 events. • DG unit is registered as part of an RTEG Resource. • CB: None • HR = DG Output • FML used to enforce MR1 Section III.13.7.1.5.2 Facility Metered Load = 50 kW DG Output = 150 kW Grid DG Facility Total Facility Load = 200 kW M M

11. Type 1: DG Output Directly Metered HR = DG No CB

12. Type 2: Load Reduction Only (No DG) • Example: • Customer reduces lighting load during RTDR events. • Asset is registered as part of a RTDR Resource. • CB based on FML • HR = CB - FML Facility Metered Load = 100 kW Grid Facility Total Facility Load = 100 kW M

13. Type 2: Load Reduction Only (No DG) HR = CB – FML CB based on FML

14. Type 3: DG Used to Reduce Load • Example: • Customer increases the output of their Combined Heat & Power DG unit during RTDR events. • CB based on FML • HR = CB - FML • FML to calculate CB and used to enforce MR1 Section III.13.7.1.5.2 Facility Metered Load = 170 kW DG Output = 100 kW Grid DG Facility Total Facility Load = 270 kW M M

15. Type 3: DG Used to Reduce Load HR = CB – FML CB based on FML

16. Type 4: Load Reduction with DG used at a different Asset • Example: • Customer reduces lighting loads during RTDR events. • The customer’s emergency generator is registered as part of a different RTEG Asset. • CB based on TFL • HR = CB – TFL Facility Metered Load = 50 kW DG Output = 150 kW Grid DG Facility Total Facility Load = 200 kW M M

17. Type 4: Load Reduction with DG used at a different RTEG Asset HR = CB – TFL CB based on TML

18. Type 4 avoids paying twice for the same reduction. If we use Type 3 for the RTDR Asset reductions will be double counted. For example, in HE 14 Assets 11102 and 11103 would be credited 150 kW.

19. General Conditions for All Metering Configurations • Assets can use only one Metering Configuration. • All Facilities associated with an Asset must use the same Metering Configuration. • Assets with different Metering Configurations can be associated with a single Demand Resource of the same Demand Resource Type.

20. Appendix: Market Rule and M-MVDR References

21. Market Rule Definitions • For purposes of the Forward Capacity Market, “Distributed Generation” shall mean generation resources directly connected to end-use customer load and located behind the end-use customer’s billing meter, which reduce the amount of energy that would otherwise have been produced by other capacity resources on the electricity network in the New England Control Area during Demand Resource On-Peak Hours, Demand Resource Seasonal Peak Hours, Demand Resource Critical Peak Hours, Real-Time Demand Response Event Hours, or Real-Time Emergency Generation Event Hours, provided that the aggregate nameplate capacity of the generation resource does not exceed 5 MW, or does not exceed the most recent annual non-coincident peak demand of the end-use metered customer at the location where the generation resource is directly connected, whichever is greater. Distributed Generation resources are not eligible for energy payments from ISO-administered energy markets. Generation resources cannot participate in the Forward Capacity Market as Demand Resources, unless they meet the definition of Distributed Generation.

22. Market Rule Definitions (Continued) • “Real-Time Emergency Generation Resource” is Distributed Generation whose Federal, State and/or local air quality permit(s) limit the operation of these generators in response to requests from the ISO to the times when the ISO implements voltage reductions of five percent of normal operating voltage that require more than 10 minutes to implement. Real-Time Emergency Generation Resources must be: (i) capable of curtailing their electric consumption from the New England grid within 30 minutes of receiving a Dispatch Instruction from the ISO; and (ii) continue that curtailment until receiving a Dispatch Instruction to restore their consumption

23. M-MVDR Appendix A: • Section A2.7 (6) and (7) requires Distributed Generation to provide facility load data consistent with Sections 9.2 (6a) and (6b) • (6)The Project Sponsor must report to the ISO the most recent annual non-coincident peak demand (absent Distributed Generation output) of the end-use metered customer at the location where the Distributed Generation resource is directly connected for each year that the Distributed Generation resource participates in the Forward Capacity Market. • (7) For each month of the Capacity Commitment Period, the Project Sponsor must report the monthly average hourly load of the end-use customer to which the Distributed Generation resource is directly connected separately from the Distributed Generation resource’s monthly average hourly output. • Section A4.1 establishes the requirement that the term Interval Meter used in Appendix A will mean a meter that records in 5-minute intervals. • The term Interval Meter as used throughout this Appendix A refers to a meter that records energy consumption (or generation) on at least a five minute basis and may store energy consumption (or generation) to a finer granularity.

24. M-MVDR • Sections 9.2 (6a) and (6b) requires a Participant to measure and report on the load at the facility where Distributed Generation is installed • (a) Report to the ISO the most recent annual non-coincident peak demand (absent Distributed Generation output) of the end-use metered customer at the location where the Distributed Generation resource is directly connected for each year that the Distributed Generation resource participates in the Forward Capacity Market; and • (b) Report the monthly average hourly load of the end-use customer to which the Distributed Generation resource is directly connected separately from the Distributed Generation resource’s monthly average hourly output for each month of the Capacity Commitment Period. • The annual non-coincident peak demand data is used for qualification to ensure the resource complies with the definition of Distributed Generation. The monthly average hourly load data is used in monthly settlement as described in Section III.13.7.5.2