Automation of ROS DAM

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1 Automation of ROS DAM BPCG Mitigation Presenter MaryHelen Donnelly Operations and Reliability Products New York Independent System Operator Market Issues Working Group KCC May 15, 2012

2 Agenda Background Existing Manual Process Proposed DAM BPCG process Tariff Sections to be Updated Next Steps 2

3 Background Purpose of this project is to align the application of manually applied DA and RT BPCG mitigation measures RT currently handled by Settlements software DAM currently handled manually by MMA All BPCG mitigation standards/thresholds will remain the same as today, but application of DAM BPCG mitigation will be handled by Settlements software 3

currently handled manually by MMA All BPCG mitigation standards/thresholds will remain

4 Existing DAM BPCG Mitigation Manual Process For every market day a generator receives a DAM BPCG payment, MMA performs a manual evaluation of the following mitigation measures: Economic Withholding Conduct, Att. H, Section Incremental Energy and Minimum Generation Bids: An increase exceeding 300 percent or $100 per MWh, whichever is lower; provided, however, that Incremental Energy or Minimum Generation Bids below $25 per MWh shall be deemed d not to constitute t economic withholding. Impact, Att. H, Section an increase of 200 percent, or 50 percent for Generators in a Constrained Area in Bid Production Cost guarantee payments to a Market Party for a Generator for a day; 4

2.1.13 211 Incremental Energy and Minimum Generation Bids: An increase exceeding 300 percent or $100 per MWh, whichever is lower; provided, however, that Incremental Energy or

5 Existing DAM BPCG Mitigation Manual Process Cont d If conduct and impact tests triggered, MMA opens a consultation with MP Notification / Consultation requirements, Att. H, Section Consultation initiated by the ISO to determine if mitigation is appropriate: Applies to Market-Party-specific and/or Generator-specific mitigation, but not to mitigation that is applied pursuant to Sections , , or of these mitigation measures. If through the application of an appropriate p index or screen or other monitoring of market conditions, conduct is identified that (i) exceeds an applicable threshold, and (ii) has a material effect, as specified above, on one or more prices or guarantee payments in an ISO Administered Market, the ISO shall, as and to the extent specified in Attachment O or in Section of these Mitigation Measures, contact the Market Party engaging in the identified conduct to request an explanation of the conduct. Action NYISO may take after consultation, Att. H, Section If the criteria i contained in Section are met, the ISO may substitute t a default bid or bid parameter for a Bid or bid parameter submitted for an Electric Facility. The default bid or bid parameter shall establish a maximum or minimum value for one or more components of the submitted Bid or Bid parameters, equal to a reference level for that component determined as specified in Section The default bid is used to re-calculate the associated BPCG payment 5

pursuant to Sections 23.3.1.2.3, 23.3.2.2.3, or 23.5.2 of these mitigation measures.

6 Proposed DAM BPCG Process Existing DAM BPCG mitigation thresholds will not change. Method of application is changing from manual process to Settlements software process. This mitigation is not and will not be performed by AMP so it does not affect commitment or LBMP. Applies to all DAM BPCG payments not covered by AMP ROS generators NYC generators when AMP is not triggered 6

This mitigation is not and will not be performed by AMP so it does not affect commitment or

7 Proposed DAM BPCG Process Will parallel current RT BPCG Mitigation process in Settlements software For every market day a generator receives a RT BPCG payment, Settlements software will perform an evaluation of conduct. If conduct is triggered, Settlements software will perform an evaluation of BPCG impact. If impact is identified, RT BPCG payment will be re-calculated to reflect mitigation per Tariff section MPs that have provided appropriate contact information to the NYISO will be notified by of the mitigation and will have the opportunity to consult per Tariff section

If conduct is triggered, Settlements software will perform an evaluation of BPCG impact.

8 Proposed Tariff Changes Current Tariff language g for BPCG mitigation has separate sections for RT and DAM BPCG mitigation. Updated Tariff language age will be simplified such that DAM and RT BPCG will be covered in same language/section. Tariff sections to be updated include: and

Updated Tariff language age will be simplified such that DAM and RT BPCG

9 Next Steps Present Tariff language at July MIWG Present concept and Tariff language at August BIC Present concept and Tariff language at September MC Present concept and Tariff language at November BOD Proposing implementation ti as 2013 project 9

Tariff language at September MC Present concept and Tariff

10 The New York Independent System Operator (NYISO) is a not-for-profit corporation that began operations in The NYISO operates New York s bulk electricity grid, administers the state s wholesale electricity markets, and conducts comprehensive planning for the state s bulk electricity system. 10

The NYISO operates New York s bulk electricity grid, administers the state s

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