Summary of Major Changes from Draft 3.0 CMS PHASE 1 DRAFT MARKET RULES

1. Summary of Major Changes from Draft 3.0CMS PHASE 1 DRAFT MARKET RULES “Group 1 Rules- Draft 4 and 5” February 20, 2001 ISO New England

2. SECTION 1 - DEFINITIONS • Clarified and added definitions based on comments received: • Deleted Base Supply Obligation, retained Base Settlement Obligation • Deleted CLL and Scheduled Dispatch Period • Added External Transaction • Modified numerous others for consistency and clarification (Demand Bid, Fast Start Resource, Low Operating Limit, Self-decommit, Self-Schedule)

3. SECTION 2 - SCHEDULING AND DISPATCH • Section 2.1- Scheduling and Dispatch Rights • Added Self-Schedule reduction language • Clarified requests for changes 90 minutes prior to hour are evaluated first come, first served.

4. SECTION 2 - SCHEDULING AND DISPATCH – Cont’d • Section 2.2 - Scheduling Process • Forecast Schedule update now issued every two hours. • Load Forecast section revised to allow ISO increased flexibility to utilize most current techniques to develop Forecast Demand • Section 2.3.1 - Dispatch Process • Removed reference to MRP-14 with regard to redeclarations in Real-Time

5. SECTION 2 - SCHEDULING AND DISPATCH – Cont’d • Section 2.3.4 – Self-commitment • Request must be made at least 2 hours priors to next Forecast Schedule update • No Self-decommitment allowed except in Excess Generation Condition • May request to advance commitment time or delay de-commitment times that were approved Day-Ahead

6. SECTION 2 - SCHEDULING AND DISPATCH – Cont’d • Section 2.3.4 – Self-commitment • Clarified Fast Start Resource treatment • Requests may consist of two Energy Blocks • First block zero or negative price • Second block zero price • ISO approves/denies request no later than 30 minutes prior to next Forecast Schedule update

7. SECTION 2 - SCHEDULING AND DISPATCH – Cont’d • Section 2.3.5 – Self-Schedules • Self-Schedule requests made 90 minutes prior to Trading Interval • Fast Start Resources included • May not request to reduce Self-Schedule below amounts Self-Scheduled Day-Ahead • Self-Schedule requests evaluated on one Trading Interval basis

8. SECTION 2 - SCHEDULING AND DISPATCH – Cont’d • Section 2.3.5 – Self-Schedules • ISO to approve/deny SS requests no later than 30 minutes prior to Trading Interval • ISO may deny request if request may impact unit commitment • Prices must be zero for Supply Offer SS increases and 9999 for Demand Bid SS increases.

9. SECTION 2 - SCHEDULING AND DISPATCH – Cont’d • Section 2.3.6 – Fast Start Resources • Clarified dispatch determination rules for both Generators and Dispatchable Loads • Created separate Section (2.3.7) for dispatch of transactions at External Nodes

10. SECTION 2 - SCHEDULING AND DISPATCH – Cont’d • Section 2.3.8 – EET’s • Modified language associated with settlements of pool-to-pool Emergency purchases • Pool-to-pool purchase costs initially collected from Participant’s with Settlement Obligations pro-rata based on Nodal Price at External Node and MW amount of purchase

11. SECTION 2 - SCHEDULING AND DISPATCH – Cont’d • Section 2.3.8 – EET’s • Payments to other CA by ISO in excess of amounts collected are collected from Participants pro-rata based on negative ANI. • Payments to other CA by ISO that are less than amounts collected are paid to Participants pro-rata based on negative ANI. • EET Uplift collected from Participants based on negative ANI

12. SECTION 2 - SCHEDULING AND DISPATCH – Cont’d Section 2.3.10 – Excess Gen • Excess Generation Condition: • Sum of SS plus sum of LOL’s not meeting Min Run Time exceeds Forecast Demand plus Demand Bids at External Nodes • SS reduced pro-rata to LOL • Participants may request de-commitment

13. SECTION 2 - SCHEDULING AND DISPATCH – Cont’d Section 2.3.10 – Excess Gen • Excess Generation Emergency • Sum of LOL’s exceeds Forecast Demand plus Demand Bids at External Nodes • ISO issues Dispatch Instructions to de-commit. • Prices allowed to go negative based on Supply Offer prices submitted

14. SECTION 2 - SCHEDULING AND DISPATCH – Cont’d Section 2.3.10 – Excess Gen • Excess Generation Termination • Excess Generation Emergency cancelled when dispatch above LOL in an amount equal to MWs de-committed is achieved or unit is committed. • Excess Generation Condition is cancelled when all SS are restored.

15. SECTION 3 - SUPPLY OFFERS AND DEMAND BIDS Section 3.2.2 - Self-Schedule Submission • Removed Claimed Low Limit (CLL). • Two Self-Schedule blocks allowed for Generator Supply Offers: • Must indicate that block 1 and/or block 2 are Self-Schedules • First block equals LOL and must be zero or negative • Second block must be equal to zero • Blocks not Self-Scheduled must have positive price.

16. SECTION 3 - SUPPLY OFFERS AND DEMAND BIDS Section 3.3.1 - Self-Schedule Submission • Dispatchable Load Self-Schedules must be so indicated and price must be equal to 9999 • Section 3.4 – External Nodes • Supply Offer or Demand Bid limited to single price/quantity pair • Clarified Through Transaction submittal: • Only price associated with “up-to” congestion needs to be submitted.

17. SECTION 4 - BILATERAL CONTRACTS • Corrected description of Firm Obligation Transfer Contract • Added curtailment language for ICAP Sales

18. SECTION 5 - ENERGY Section 5.3.1 – Clearing Price Eligibility • Clarified language describing Generator eligibility to set Clearing Price

19. SECTION 5 - ENERGY Appendix 5E – Emergency Sales • Removed all requirements to recalculate Nodal Prices for emergency sales • Cost of sale initially collected from Participant’s based on pro-rata share of Settlement Obligation • Participants paid amounts received by ISO from other Control Area based on pro-rata share of Settlement Obligation

20. SECTION 6 - SETTLEMENTS • Section 6.4.1 – Settlement Amounts • Clarified calculation of Settlement Obligations and Supply Obligations • Retained Base Settlement Obligation specifically for ease of use with reference to Obligation Transfer Contracts

21. SECTIONS 7, 8, 9, 10 – AGC, TMNSR, TMOR AND TMSR • No major changes.