Market Interface Committee

1. Market Interface Committee Report to the WECC Board of Directors December 6-7, 2007 Robert D. Schwermann MIC Chair Western Electricity Coordinating Council

2. MIC Topics for this Report Approval Item • E-Tag Energy Product Codes Specific to the WECC INT-BPS-WECC0004-0 Seams Issues Subcommittee (SIS) • Report of Findings Seams Issues EvaluationCal ISO Market Redesign and Technology Upgrade Market Issues Subcommittee (MIS) • FERC Order 890 Activities • Conditional Firm Strawman Business Practice Western Electricity Coordinating Council

3. Board Approval Item E-Tag Energy Product Codes Specific to the WECC INT-BPS-WECC0004-0 Western Electricity Coordinating Council

4. E-Tag Energy Product Codes Purpose of Business Practice: • E-Tags include “energy product codes” to identify categories of energy transactions • Definitions included for all retained Energy Product Codes, including the NERC codes • Energy Product Codes for “Capacity” previously approved in BP 9 and 11 are included for completeness Western Electricity Coordinating Council

5. MIC Voting Results Western Electricity Coordinating Council

6. E-Tag Energy Product Codes Request for Motion The Market Interface Committee recommends the Board approve the Business Practice INT-BPS-WECC0004-0 E-Tag Energy Product Codes Specific to the WECC Western Electricity Coordinating Council

7. Seams Issues SubcommitteeChair, Jerry Smith (AZPS) Report of FindingsSeams Issues Evaluation California Independent System OperatorMarket Redesign and Technology Upgrade Western Electricity Coordinating Council

8. Why an Evaluation? • SIS Mission is to Identify, Evaluate, and Propose Solutions to Seams Issues in the WECC • Cal ISO MRTU Conditionally accepted by FERC • Member concerns about potential seams issues • FERC Technical Conference on Seams Issues held December 2006 in Phoenix – SIS Chair, Jerry Smith reported SIS evaluation already underway Western Electricity Coordinating Council

9. SIS Findings Congestion Management • Real-time congestion management issues exist in the WECC today, are an interconnection-wide issue, and are not specifically related to MRTU. Resource Adequacy Resources • The CISO’s treatment of export schedules under MRTU is consistent with general operating practice in the WECC. Market Timing/E-Tagging/Scheduling • MRTU does not create any new seams issues related either to e-tagging or market timelines. Western Electricity Coordinating Council

10. SIS Findings Congestion Revenue Rights • The SIS does not find specific new seams issues related to CRRs. LMP impact on System Operations • The current system monitoring processes in the WECC are sufficient to maintain the integrity of the interconnection. Parallel Operations during Cutover • The SIS is satisfied the FERC required Readiness Certification, that will include a Cutover and Reversion Plan, should be sufficient to address concerns related to a failure of the MRTU software. Western Electricity Coordinating Council

11. SIS Overall Conclusion “The SIS finds no specific seams issues, appropriate for regional solutions, that are either created by MRTU or existing seams issues that are substantially worsened by MRTU implementation.” Western Electricity Coordinating Council

12. WHY DOES THE BOARD CARE?? • California ISO – Market Redesign and Technology Upgrade • The SIS has done it’s homework on MRTU • The implementation of MRTU will create no new regional seams issues which could affect reliability of the Interconnection • FERC stated concerns with the implementation of MRTU • Concerns have been addressed Western Electricity Coordinating Council

13. Market Issues SubcommitteeChair, Phil Tice (DGTM) FERC Order 890 Activities Conditional Firm Strawman Business Practice Western Electricity Coordinating Council

14. FERC Order 890 Preventing Undue Discrimination andPreference in Transmission Service Purpose of MIC Facilitation • WECC has over 40 registered Transmission Service Providers • Tariff is an individual company responsibility • Coordination and sharing of information to gain common understandings and promote consistency Western Electricity Coordinating Council

15. FERC Order 890 Preventing Undue Discrimination andPreference in Transmission Service • MIC Meeting Agenda in March, June, and October 2007 • MIC Sponsored “Open Mic” Conference Calls • July 17 • August 1 • August 21 Western Electricity Coordinating Council

16. FERC Order 890 Conditional Firm Transmission Service Conditional Firm Task Force (CFTF) • Co-Chaired by Lauren Nichols-Kinas (BPAT) • Transmission Providers and Customers including advocates for wind energy • Consulted with FERC staff and members of the financing community • Close collaboration with WestConnect Western Electricity Coordinating Council

17. FERC Order 890 Conditional Firm Transmission Service Principle purposes of the Strawman • Meet the FERC requirement for TSPs to coordinate on developing Conditional Firm • Encourage consistency across TSPs • Give TSPs a good starting point for individual tariff business practices • Provide potential users of conditional firm service with as much clarity as possible Western Electricity Coordinating Council

18. Market Interface Committee In Summary • Business Practice – Energy Products • SIS Report of Findings – CISO MRTU Seams • FERC Order 890 – Facilitation • Conditional Firm Strawman Business Practice Western Electricity Coordinating Council

19. Market Interface Committee In Addition • ATC Task Force for NERC Standards • Evaluation of Prescheduling Practices • NAESB Communication/Coordination • Merchant Communications in Emergency • Implementation of Reserves Policies • Congestion Management – Interconnection • Coordination of Scheduling Curtailments • Day-Ahead Trading Timeline • SIS Charter Revision – Define “Seams Issue” Western Electricity Coordinating Council

20. Market Interface Committee QUESTIONS??? Western Electricity Coordinating Council