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2013/14 Firm Fuel RFP

2013/14 Firm Fuel RFP. RFP Objectives. Exelon believes that the RFP should be open to non-oil/dual fuel units but understands the time constraints the ISO is under. If the RFP is extended beyond this winter, other fuels need to be included in the RFP.

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2013/14 Firm Fuel RFP

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  1. 2013/14 Firm Fuel RFP

  2. RFP Objectives • Exelon believes that the RFP should be open to non-oil/dual fuel units but understands the time constraints the ISO is under. • If the RFP is extended beyond this winter, other fuels need to be included in the RFP. • Needs to be market based to minimize uplift • Purchase 2.4 million MWHs not 4.2 million barrels of oil • Single clearing price, dollars per MWh • Reference Price adder to permit RFP participants to manage fuel supply and to partially reflect the costs of firm fuel in the market. • Penalties for failure to perform should be significant, including the replacement costs of barrels of oil. • . Presentation Title

  3. MWHs versus Barrels • Less expensive (reduce uplift/out of market payments) - load will not be forced to pay for the carrying costs of 4.2 million barrels of oil. RFP participants will be able to fulfill their commitments through the combination of oil in the tank, replenishment strategies and pricing the value of the product into the energy market. • ISO’s proposed penalties are substantial (including the replacement cost for a barrel of oil) and provide the incentive for RFP participants to meet their obligation. Presentation Title

  4. $75 Reference Price Adder • Participants can add up to $75 to their otherwise applicable reference price to manage their fuel supply (up to the number of MWHs they cleared in the RFP). • The adder is permitted when the differential between the Henry Hub and Algonquin price exceeds $10/mmbtu. • Will partially reflect the cost of the “firm fuel” product in the LMP’s versus 100% uplift. Presentation Title

  5. Amendment(s) • Resolved, that the Markets Committee supports the Exelon amendment(s) to the ISO proposal to address Winter 2013/2014 reliability concerns, as distributed to the Markets Committee before the meeting, together with such further changes as were agreed to at the meeting.   Presentation Title

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