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Proposed Revision To Reserve Demand Curve

Proposed Revision To Reserve Demand Curve. By Select Energy. WHY IS INTERIM RESERVE REFORM NEEDED. INCENT FLEXIBILITY IN UNIT CHARACTERISTICS REDUCE RESERVE DRIVEN UPLIFT RECOGNIZE REPLACEMENT RESERVE IN COST OF RESERVE PART OF A PACKAGE OF INTERIM MARKET REFORMS.

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Proposed Revision To Reserve Demand Curve

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  1. Proposed Revision To Reserve Demand Curve By Select Energy

  2. WHY IS INTERIM RESERVE REFORM NEEDED • INCENT FLEXIBILITY IN UNIT CHARACTERISTICS • REDUCE RESERVE DRIVEN UPLIFT • RECOGNIZE REPLACEMENT RESERVE IN COST OF RESERVE • PART OF A PACKAGE OF INTERIM MARKET REFORMS

  3. WHAT REVISIONS ARE PROPOSED TO RESERVE DEMAND CURVE PROPOSAL • CHANGE SHAPE TO INCREASE PREDICTABILITY OF RESERVE REVENUES • ELIMINATE CURVE WHEN OP-8 RESERVE LEVELS CANNOT BE MET • PROVIDE FULL BACK CASCADING OF RESERVE PRICES • USE NEW YORK EXPERIENCE AND EXPECTED BENEFITS TO SET PROJECTED RESERVE REVENUES

  4. TMOR PAYMENTS RECEIVED BY SUPPLIERS Price Cap At ECP $/MWH Price paid by load for TMOR Inclucing Replacement Reserve Target Level When OP-8 Can Be Met 2400 2100 OP-8 Reserves Not met OP-8 Reserves Met MW OF RESERVE IN ACTUAL DISPATCH

  5. NEW ENGLAND TARGET TMOR RATE BASED ON NY EXPERIENCE • NY TOTAL RESERVE REVENUE APPROX. $85M/YR FOR 1800 MW • NEW ENGLAND TOTAL RESERVE REVENUE APPROX $85M/YR X (2400/1800) = APPROX $110M/YR • NEW ENGLAND RESERVE REVENUE WHEN OP-8 CAN’T BE MET APPROX $25M/YR • NEW ENGLAND RESERVE REVENUE WHEN OP-8 CAN BE MET APPROX $85M/YR • NEW ENGLAND TARGET TMOR RATE APPROX $85M/YR DIVIDED BY (2400 MW X 8600 HRS) =APPROX. $4/MWH

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