Understanding and Validating Settlement Charges in

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1 EUCI presents a course on: Understanding and Validating Settlement Charges in Sheraton Indianapolis Hotel at Keyston Crossing Indianapolis, IN Testimonials from past attendees This was one of the best presentations I ve attended on MISO Market. The PCI instructors were able to take complex subject matters and simplify the material so that the average person can understand it and gain a desire to learn more about the subject.... MISO Market Participant who attended seminar in Indianapolis Very knowledgeable instructors, excellent source of information. Market Participant who attended SPP seminar in Omaha Fascinating material! I really like the methodology that PCI presented to validate MISO market results. Market Participant who attended workshop in Indianapolis Seminar was extremely informative and it was a lot of fun as well. I probably learned more in those two days than in all the other training sessions.... MISO Market Participant who attended workshop in Ann Arbor The seminar was a very positive educational experience, greatly increasing our knowledge base of the MISO market. It was a very good workshop and was well targeted toward our needs.... MISO Market Participant who attended workshop in Madison Very good material! Excellent insight! MISO Market Participant who attended seminar in Indianapolis Very informational! Good balance between overview and details. Market Participant who attended SPP seminar in Norman All speakers were very knowledgeable and successful in sharing this knowledge. Market Participant who attended SPP seminar in Kansas City EUCI is authorized by IACET to offer 1.3 CEUs for the course.

2 Objectives Sponsored by EUCI, this two-day seminar uses simple case studies to illustrate the settlement rules for the current MISO market and new SPP Integrated Marketplace. The workshop will learn how settlement can be used as a strategic tool to check ISO statements and invoices, identify settlement errors, submit settlement disputes, check the effectiveness of bidding strategies, compute profits & losses, compute credit exposure, and maximize the bottomline profit for your assets. The seminar covers the following hot issues: What are the main objectives of the current MISO market and new SPP Integrated Marketplace? What are the key settlement charge codes for the MISO and SPP markets? How do you validate ISO settlement charges? What data and tools do you need to check ISO settlement statements and invoices? Why perform shadow settlement? Do you need to have our own shadow settlement software to check ISO invoices? What are the main data sources for shadow settlement? What are the main causes for settlement disputes? What is the best way for managing settlement disputes? How can you validate DA market awards? What rules do MISO and SPP use to compute DA and RT make-whole payments for generators and allocate charges to generators, loads, and transactions? What is the main reason for P&L leakages? How can you quantify them? Can you use settlement results to compute profit & loss metrics and provide feedback to traders on bidding strategies? Do your plants collect enough revenues from the energy, capacity, and ancillary service markets to cover their operating and capital costs? Do you receive proper credits from your FTR, TCR, and ARR contracts? What are the potential impacts of Market Power Mitigation on settlement results? Should you build a data warehouse to store settlement data? What IT infrastructure should you build to automate the bid-to-bill process? In the course, you will have an opportunity to use a market simulator to simulate the full bid-to-bill workflow, ie submit your energy and ancillary-service offers, test your bidding strategies, clear the market, compute settlement, and determine the bottom-line profit for your generation and load assets. Who Should Attend Back-office personnel who are responsible for checking the accuracy of settlement statements and invoices Traders, portfolio managers, and risk managers who need to gain a better understanding of settlement rules, mitigation rules, and dispute resolution Power-plant managers who would like to understand the impact of settlements on their plant profitability Genco executives who need a good understanding of the potential impacts of the market regarding Genco profits and losses Employees of RTOs, attorneys, and regulators who need to understand the settlement implications of market rules, congestion management philosophy, and mitigation guidelines IACET EUCI has been approved as an Authorized Provider by the International Association for Continuing Education and Training (IACET), 1760 Old Meadow Road, Suite 500, McLean, VA In obtaining this approval, EUCI has demonstrated that it complies with the ANSI/IACET Standards, which are widely recognized as standards of good practice internationally. As a result of its Authorized Provider membership status, EUCI is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standards. EUCI is authorized by IACET to offer 1.3 CEUs for the course. Requirements for Successful Completion of Program Participants must sign in/out each day and be in attendance for the entirety of the course to be eligible for continuing education credit. Instructional Methods Case studies, PowerPoint presentations, and classroom discussion will be used in the course. 2

3 Program Agenda Wednesday, October 17, 2012 Registration and Continental Breakfast: 8:00 8:30 a.m. Course Timing: 8:30 a.m. 5:00 p.m. Group Luncheon: 12:00 1:00 p.m. Overview on MISO ASM Market and SPP Integrated Marketplace Key Features of MISO & SPP Markets Understanding Full Network Model and Commercial Model Reviewing Day-Ahead and Real-Time Bidding Workflows Understanding SCUC Objectives for DA Market How Does the Two-Step Settlement Work? Quantifying P&L Leakages Why use Virtual Bids and Offers? Use FTR/TCR and ARR Contracts to Hedge Against Congestion Reviewing MISO Market Statistics Differences in Market Rules Between MISO and SPP Markets Bid-to-Bill Timeline & Challenges Uses of Nodal Locational Marginal Prices in Bidding & Settlement Using Full Network Model to Compute Nodal Locational Marginal Prices How are LMPs Computed? Understanding Three Components of LMPs: Energy, Loss, Congestion Understanding Impacts of Flowgates on Congestion Can LMPs be Negative? Day-Ahead Settlement Calculations Forecasting DA LMPs? Running Shadow Settlement to Check ISO Invoices Understanding MISO & SPP Settlement Statements and Charge Codes Why Perform Shadow Settlement? Data needed to Download to Validate Settlement Key Functions of Shadow Settlement Software Mapping Data Sources to Support Shadow Settlement What Meter Data is Needed to Compute Real-Time Settlement? What are the Most Common Causes for Settlement Disputes? Managing Settlement Disputes Goals for Settlement Allocation Understanding Settlement Charges for Generators Case Studies Illustrating DA & RT Settlement Calculations Market Principles Behind Make-Whole Payments & Charges Computing DA Make-Whole Payments for Generators Who will Pay DA & RT Make-Whole Charges? Computing Excessive-Energy & Non-Excessive-Energy Volumes & Charges Computing Deficient-Energy Volumes & Charges What are the Criteria for MISO to use Activate Failureto-Follow Dispatch Flags? When are Resources Exempt from Penalties? MISO Methodology to Compute RT RSG Charges Computing Penalties for Non Performance Computing Net Regulation Adjustment Payments & Charges Understanding Real-Time Price-Volatility Make-Whole Payment Calculations Using Profit & Loss Metrics to Provide Feedback to Traders Using Settlement and Production-Costing Results to Compute DA and DART Profits & Losses (P&L) for the Genco Portfolio (Units, Loads, and FTRs/TCRs) Key Factors Influencing Profits & Losses Computing P&L Gains and Leakages Using Profit & Loss Metrics to Provide Feedback to Traders on Effectiveness of DA and RT Bidding Strategies Using Profit & Loss Metrics to Provide Feedback to Plant Managers on Plant Performance Using Profit & Loss Metrics to Build Key Performance Indexes Settlement Forensics Where Front & Back Offices Meet Using Business-Intelligence Tools to Understand Key Factors that Affect Profits & Losses (P&L) for Portfolios Benefits for Building a Data Warehouse to Store Market Data 3

4 Program Agenda Thursday, October 18, 2012 Continental Breakfast: 8:00 8:30 a.m. Course Timing: 8:30 a.m. 4:30 p.m. Group Luncheon: 12:00 1:00 p.m. Understanding Ancillary-Service (A/S) Payments and Charges Ancillary-Service (A/S) Products Supported by MISO & SPP Formulating A/S Offers Understanding Lost Opportunity Costs Understanding A/S Deployment Costs and Probabilities Using Co-Optimization to Compute Prices, LMPs, and A/S Prices Does Co-Optimization Minimize Energy & Ancillary- Service Costs for ISO? Does Co-Optimization Maximize Revenues and Profits for Market Participants? How are A/S Charges Allocated? Understanding Causes for Price Reversal Computing Revenues and Costs for Providing Ancillary Services How do A/S Requirements Affect Unit Dispatch and LMPs? Are A/S Marginal Prices Influenced by Congestion? Validating DA Market Results Using PCI Market Simulator to Simulate Bid-to-Bill Workflow Formulating DA Energy and Ancillary-Service Offers Impacts of Self Scheduling on Profits Effectiveness of Self-Schedule Energy and Ancillary Services to Hedge Costs? Forecasting LMPs and Ancillary-Service Prices Quantifying DA Profits & Losses for Portfolio (Units, Loads, FTRs) Running Case Studies to Illustrate Impacts of Various Bidding Strategies on Portfolio Profits & Losses Running Market Simulation Round-Table Discussion Settlement Rules for Loads & Transactions Computing DA & RT Energy Charges for Loads When do Loads Have to Pay DA & RT Make-Whole Charges? Understanding Internal & External Bilateral Transactions Using Virtual Transactions for Hedging and Speculative Purposes Utilizing Virtual Transactions to Make Money? Why do MISO & SPP Provide Loss Rebates? Computing A/S Charges for LSEs Understanding Settlement Rules for ARR, FTR, and TCR Contracts Key Factors Causing Congestion in MISO Using ARR, FTR, & TCR Contracts to Hedge Against Congestion Computing DA Congestion Rent Reviewing MISO & SPP Congestion Statistics Understanding Settlement Calculations for ARR, FTR, TCR Contracts Using Settlement Results to Assess Whether Your Congestion Hedges are in the Money 4

5 Instructors Khai Le, Vice President, PCI Over the past 36 years, Khai Le has conducted over 500 seminars on market-based operations, RTO operations, bidding strategies, portfolio optimization, and shadow settlement for utilities and ISOs worldwide. He is currently working with market participants in MISO, SPP, PJM, CAISO, and ERCOT to deploy the PCI Generation Supply Management System (PCI GenManager, PCI GenTrader, and PCI GenPortal) to automate their bid-to-bill workflow. Khai authored over 100 technical papers on unit commitment, hydro-thermal coordination, emission dispatch, optimization of ancillary services, post analysis, and short-term planning. Five of his papers received prize awards. Khai received his BS from Harvey Mudd College and his MS from Carnegie Mellon University. He is a Fellow of the IEEE and a Registered Professional Engineer in Pennsylvania. Tony Delacluyse, Director, PCI Tony Delacluyse is a well-recognized authority on MISO & SPP settlement, settlement disputes, and market rules. Tony has over 27 years of experience with nuclear power plant operations, origination, deregulated retail, and ISO settlements. Since joining PCI in 2005, he has designed back-office solutions for MISO, SPP, ERCOT, CAISO, and PJM markets. Tony actively participates in the SPP market meetings and works with SPP markets participants on planning and strategies for the new Integrated Marketplace. He received both his BA and MBA from St Ambrose University. Jeremy Pober, Manager, PCI Jeremy Pober is currently working with MISO & PJM market participants to automate their settlement workflow. He is leading the development of the PCI Back-Office Suite in MISO and PJM. Jeremy has actively participated in the MISO settlement group in the past 5 years. Ken Lukowski, Principal Analyst, PCI Ken is currently managing the deployment of PCI P&L Analyzer for a number of MISO market participants. Ken has over 7 years of MISO and PJM Settlements experience. He is currently chairing the MISO Market Settlements Working Group. Ken received his BS in Finance from Southern Illinois University and his MBA from Lindenwood University. 5

6 PROCEEDINGS The proceedings of the course will be published, and one copy will be distributed to each registrant at the course. Event Location A room block has been reserved at Sheraton Indianapolis Hotel at Keystone Crossing, 8787 Keystone Crossing, Indianapolis, IN, 46240, for the nights of October 16-17, Room rates are $119, plus applicable tax. Call for reservations, and mention the EUCI course to get the group rate. The cutoff date to receive the group rate is September 16, 2012, but as there are a limited number of rooms available at this rate, sometimes the room block will close sooner. Please make your reservations early. REGISTRATION INFORMATION Remember: every fourth registrant is free For instant registration, call or fax the registration form to Register Three; Send Fourth Free! Any organization wishing to send multiple attendees to this course may send one FREE for every three delegates registered. Please note that all registrations must be made at the same time to qualify. All cancellations received on or before September 14, 2012, will be subject to a $195 processing fee. Written cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other EUCI event or publication. This credit will be good for six months. In case of event cancellation, Electric Utility Consultants liability is limited to refund of the event registration fee only. For more information regarding administrative policies such as complaints and refunds, please contact our offices at EUCI reserves the right to alter this program without prior notice. Mail Directly To: Electric Utility Consultants, Inc. (EUCI) 4601 DTC Blvd., Ste. 800 Denver, CO Fax To: Phone: Online: PLEASE REGISTER THE FOLLOWING Understanding and Validating Settlement Charges in : US $1495 Early bird on or before October 5, 2012: US $1295 Energize Weekly EUCI s Energize Weekly newsletter compiles and reports on the latest news and trends in the energy industry. Newsletter recipients also receive a different, complimentary conference presentation every week on a relevant industry topic. The presentations are selected from a massive library of more than 1,000 current presentations that EUCI has gathered during its 25 years organizing conferences. Sign me up for Energize Weekly. How did you hear about this event? (direct , colleague, speaker(s), etc.) Name Job Title Name Preferred for Badge Company Telephone Address City State Zip Check here if you have any dietary or accessibility needs. We will contact you for more details. PAYMENT METHOD Please charge my credit card: Visa MC AMEX Discover Security Code Visa and MC cards have a 3-digit code on the signature panel on the back of the card, following the account number. American Express cards have a 4-digit code on the front of the card, above the card number. Name on Card Signature Account Number Exp. Date Card Holder Phone Number Billing Address Billing Zip Code OR enclosed is a check for $ to cover registrations. 6