Pilot ProjectIntra-hour energy exchange

tests

NEPOOL Markets CommitteeSeptember 20, 2004

Harry Tom

ISO-NE Markets Development

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Presentation Overview

• Estimated Cost of Pilot Test Transactions

• Limit Cost Exposure to Participants

• Alternate Cost Allocation Method

• Objectives of Pilot

• Proposed Timeline of Pilot

• Other items

3

Estimated Cost of Pilot Test Transactions

• Using Roseton and Sandy Pond proxy bus data

from November 2003• In accordance with Pilot Project Description:

– Chose Tuesday/Wednesday– Scheduled flows between HE11-HE14– Total Test energy of 1,600MWhs

• The lowest net cost would have been $1,649• The highest net cost would have been $10,907

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Historical Proxy Bus Prices from November 2003

ISO NE NYISO (ROSETON) (SANDY PD)

LMP LBMP

Tuesday 4-Nov-03 1 28.61 26.06Tuesday 4-Nov-03 2 23.69 11.79Tuesday 4-Nov-03 3 26.51 17.66Tuesday 4-Nov-03 4 13.09 16.45Tuesday 4-Nov-03 5 22.36 15.03Tuesday 4-Nov-03 6 34.94 28.06Tuesday 4-Nov-03 7 37.25 34.62Tuesday 4-Nov-03 8 45.01 43.46Tuesday 4-Nov-03 9 43.63 42.87 NE Pays NY PaysTuesday 4-Nov-03 10 45.7 42.39 MW-hours Dollars DollarsTuesday 4-Nov-03 11 44.09 46.23 83.33 3,674$ 3,853$ Tuesday 4-Nov-03 12 43.96 51.91 283.33 12,455$ 14,708$ Tuesday 4-Nov-03 13 44 50.11 316.67 13,933$ 15,868$ Tuesday 4-Nov-03 14 46.96 46.81 116.67 5,479$ 5,461$ Tuesday 4-Nov-03 15 46.66 45.19 35,542$ 39,890$ Tuesday 4-Nov-03 16 47.89 44.92Tuesday 4-Nov-03 17 74.35 41.02Tuesday 4-Nov-03 18 66.18 50.1Tuesday 4-Nov-03 19 57.65 53.43Tuesday 4-Nov-03 20 51.67 46.35Tuesday 4-Nov-03 21 41.76 45.66Tuesday 4-Nov-03 22 37.81 41.69Tuesday 4-Nov-03 23 36.65 32.15Tuesday 4-Nov-03 24 34.31 19.83Wednesday 5-Nov-03 1 33.42 15.67Wednesday 5-Nov-03 2 34.11 19.22Wednesday 5-Nov-03 3 28.33 18.37Wednesday 5-Nov-03 4 32.41 14.13Wednesday 5-Nov-03 5 33.97 10.75Wednesday 5-Nov-03 6 36.18 19.38Wednesday 5-Nov-03 7 41.61 41.09Wednesday 5-Nov-03 8 42.71 41.7Wednesday 5-Nov-03 9 44.55 42.08 NE Pays NY PaysWednesday 5-Nov-03 10 45.28 45.99 MW-hours Dollars DollarsWednesday 5-Nov-03 11 47.74 41.48 83.33 3,978$ 3,457$ Wednesday 5-Nov-03 12 46.56 32.07 283.33 13,192$ 9,087$ Wednesday 5-Nov-03 13 45 27.92 316.67 14,250$ 8,841$ Wednesday 5-Nov-03 14 44.28 27.86 116.67 5,166$ 3,250$ Wednesday 5-Nov-03 15 43.15 26.05 36,586$ 24,635$

Hour Ending

NY pays $3,304NE pays $10,907

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Limiting Cost Exposure to Participants

• Estimated costs are based upon historical data

(price effect of power flows not accounted for)• Limit cost of actual tests

– Curtail Pilot transaction if price separation exceeds

$50/MWh– Test power (1,600 MWhs) cost to be no greater than

$80,000

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Alternate Cost Allocation Method

GOAL – gain needed information from empirical

testing with minimal impact on Participants

PROPOSAL - broaden the allocation – Utilize method similar to Inadvertent Energy Revenue

charges and credits– Allocate and charge to RTLO and RTGO over all locations– Incorporated into Pilot Project Description document

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Objectives of Pilot

• Identify operations issues associated with intra-hour short term exchanges of energy

• Evaluate tools and data needed to facilitate intra-hour exchanges

• Observe the effect of intra-hour energy exchanges on all Proxy Bus prices

• Collect information and issue report on Pilot tests

• Evaluate information in context of any future activities with respect to intra-hour energy exchanges

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Proposed Timeline• Develop Pilot and seek Market Participant

approvals – August 2004/September 2004

• FERC Filing – October 2004• Conduct Pilot testing –

December 2004 – January 2005

• Evaluate Pilot program – December 2004 – June 2005

• Determine next steps

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Other items

• Provide information on Proxy Bus

definition

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Questions