MINUTES OF THE
MARKETS COMMITTEE (MC) MEETING
HELD ON WEDNESDAY AND THURSDAY, SEPTEMBER 3 and 4, 2014

IN WESTBOROUGH, MASSACHUSETTS

Attendee / 09/03 / 09/04 / Member/
Alternate / Market Participant
A. DiGrande / ü / ü / Chair / ISO New England Inc.
E. Abend / ü* / ü* / Member / Summit Hydropower, Inc.
C. Belew / ü / ü / Member / Mass Attorney General’s Office
R. Borghesani / ü / ü* / Member / The Energy Consortium
Temporary Alternate / Associated Industries of Massachusetts, Harvard Dedicated Energy Limited, and The Energy Council of Rhode Island
C. A. Bowie / ü / ü / Member / Northeast Utilities Service Company
T. J. Brennan / ü / ü* / Member / National Grid, US
R. Cables / ü / ü* / Member / United Illuminating Company
R. Carrier / ü / ü / Member / Energy America, LLC
D. Cavanaugh / ü / ü / Member / Wallingford, Town of
Alternate / Braintree Electric Light Dept, Concord Municipal Light Plant, Georgetown Municipal Light Dept, Hingham Municipal Lighting Plant, Littleton (MA) Electric Light Dept, Merrimac Municipal Light Dept, Middleton Municipal Light Dept, Pascoag Utility District, Rowley Municipal Lighting Plant, Taunton Municipal Lighting Plant, and Wellesley Municipal Light Plant
N. Chafetz / ü / ü / Member / Galt Power Inc.
Temporary Alternate / Customized Energy Solutions for BP Energy Company, DTE Energy Trading, Inc., Energy America, LLC, Gulf Oil, Hess Corporation, and Integrys Energy Services, Inc.
J. Dannels / ü / ü / Member / Consolidated Edison Energy, Inc.
S. Dimou / ü / ü / Vice-Chair/
Member / Emera Maine, Inc.
J. Driscoll / ü* / ü* / Member / Enerwise Global Technologies
J. Elmer / ü / ü / Alternate / Conservation Law Foundation
D. A. Errichetti / ü / ü / Alternate / Northeast Utilities Service Company
M. A. Erskine / ü* / ü* / Alternate / Central Maine Power Company
W. Fowler / ü / ü / Member / Granite Ridge Energy, LLC
Alternate / EquiPower Resources Management, LLC and Exelon New England Holdings, LLC
Temporary Alternate / Dynegy Power Marketing, LLC, Calpine Energy Services, LP and Entergy Nuclear Power Marketing LLC
P. Fuller / ü / Member / NRG Power Marketing, LLC
M. Gardner / ü* / Member / NextEra Energy Resources, LLC
G. Geller / ü / ü / Alternate / EnerNOC, Inc.
J. S. Gordon / ü / ü / Member / PSEG Energy Resources & Trade LLC
R. Hart / ü* / ü* / Member / Dominion Energy Marketing, Inc.
C. Hebert / ü / Member / Beacon Power, LLC
D. Hurley / ü / Member / Conservation Services Group, Inc. and Energy Federation Inc.
Alternate / NH Office of Consumer Advocate
Temporary Alternate / EnerNOC, Inc., Harvard Dedicated Energy Limited, The Energy Consortium, Union of Concerned Scientists and Vermont Energy Investment Corporation
S. Jackson / ü / Alternate / CT Office of Consumer Counsel and Vermont Energy Investment Corporation
Temporary Alternate / Conservation Services Group, Inc., NH Office of Consumer Advocate, PowerOptions, Inc., and Union of Concerned Scientists
J. Jones / ü* / Alternate / Emera Maine, Inc.
S. Kaminski / ü* / Member / NH Electric Cooperative, Inc.
T. Kaslow / ü / ü / Member / GDF SUEZ Energy Marketing NA, Inc./FirstLight Power Resources Management, LLC
W. Killgoar / ü / ü / Member / Long Island Power Authority
S. Kirk / ü / ü / Member / Exelon New England Holdings, LLC
A. Krich / ü* / Alternate / Generation Group Member
A. W. Kuznecow / ü / ü / Secretary / ISO New England Inc.
A. Mitreski / ü / ü / Member / Brookfield Energy Marketing, Inc.
G. E. Morse / ü / ü / Temporary Alternate / Vermont Public Power Supply Authority
D. Norman / ü / ü / Alternate / Verso Maine Energy, LLC
F. Plett / ü / ü / Alternate / Mass Attorney General’s Office
J. A. Rotger / ü / ü / Member / Cross Sound Cable Company, LLC
D. J. Sipe / ü* / ü* / Member / Industrial Energy Consumer Group and Maine Skiing Inc.
R. de R. Stein / ü / ü / Alternate / Signal Hill for Footprint Power LLC and H.Q. Energy Services (U.S.) Inc.
Temporary Alternate / Signal Hill for First Wind Energy Marketing and Generation Group Member
L. Sunga / ü / ü / Temporary Alternate / Noble Americas Gas & Power Corp.
B. Swalwell / ü* / Member / Tangent Energy Solutions, Inc.
B. S. Trayers / ü / ü / Member / Citigroup Energy Inc.
A. Trotta / ü / ü* / Alternate / United Illuminating Company
S. J. Weber / ü* / ü* / Member / PPL EnergyPlus LLC
G. Will / ü / ü / Member / MMWEC
Temporary Alternate / CMEEC
Guest / Affiliation
P. Alivand / ü / ISO New England Inc.
B. Anderson / ü / ü / NEPGA
P. Asarese / ü / ü / ISO New England Inc.
J. Bentz / ü / ü / NESCOE
D. Bergeron / ü* / ME PUC
M. Berlinski / ü* / Customized Energy Solutions
T. Bessette / ü / MA DPU
M. Brewster / ü / ISO New England Inc.
R. Burke / ü* / ISO New England Inc.
L. Corcoran / ü / ISO New England Inc.
J. Douglass / ü / ü / ISO New England Inc.
J. Dwyer / ü / ISO New England Inc.
C. Geissler / ü / ISO New England Inc.
M. Giaimo / ü / ISO New England Inc.
A. Gillespie / ü / ü / ISO New England Inc.
C. Hamlen / ü / ISO New England Inc.
H. Hammer / ü / ISO New England Inc.
T. J. Higgins / ü* / Waterside Power
R. Howland / ü* / NH Electric Cooperative, Inc.
E. Jacobi / ü / ü / CT DEEP
M. Karl / ü* / ISO New England Inc.
M. J. Krolewski / ü / ü / VT PSB
R. Laurita / ü* / ü / ISO New England Inc.
S. Lombardi / ü / ü / Day Pitney
J. Lowell / ü / ISO New England Inc.
R. McCarthy / ü / ISO New England Inc.
C. McDonough / ü / ISO New England Inc.
R. Morrow / ü* / ISO New England Inc.
J. Murphy / ü / ü / MA DPU
C. Parent / ü / ü / ISO New England Inc.
J. Wolfson / ü / ISO New England Inc.
H. Yoshimura / ü / ISO New England Inc.

* -- Indicates participated by telephone

ii

After determining that a quorum was present, the meeting was called to order.

Agenda Item #1: CHAIRWOMAN’S OPENING REMARKS

The Chair welcomed the Committee members and had those participating by telephone identify themselves. It was moved, seconded and unanimously approved by the Markets Committee on a show of hands to accept the minutes of the July 8th, 9th and 10th, July 25th and August 5th and 6th Markets Committee meetings.

Agenda Item #2: REGULATION MARKET (ORDER 755) – FERC COMPLIANCE

Mr. Lowell presented the ISO’s proposed revisions to Market Rule 1 and Appendix F to Market Rule 1 to address the issues raised and guidance provided in FERC’s 5/20/14 rejection of the ISO’s filing on 3/20/14 which includes regulation enhancements for storage management to the Committee. After the presentation, the following points were raised:

(1) A Committee member asked the ISO to explain what an “energy only” trinary AGC dispatch signal is.

(ISO: The ISO replied the “energy only” trinary AGC dispatch signal would send only one of three signals to the resource providing regulation; high, low or midpoint.)

(2) A Committee member stated he has not seen the details of the “energy only” trinary AGC dispatch signal design; therefore his company will abstain on today’s vote.

The following motion was moved and seconded by the Markets Committee:

RESOLVED, that the Markets Committee recommends that the Participants Committee support the revisions to Market Rule 1 and Appendix F to Market Rule 1 to address the issues raised and guidance provided in FERC’s May 20, 2014 rejection of the ISO’s filing on March 20, 2014 which includes regulation enhancements for storage management as proposed by ISO New England Inc. (the “ISO”) and as circulated for this meeting with those further changes recommended by this Committee and supported by the ISO and such further non-substantive changes as the Chair and Vice-Chair approve.

The motion was then voted. Based on a show of hands, the motion passed. 1 abstention within the Alternative Resources Sector was recorded.

Agenda Item #3: FUEL PRICE ADJUSTMENT

Mr. Hamlen presented the IMM’s proposed revisions to Appendix A to Market Rule 1 to implement a modified fuel price adjustment verification process to the Committee. During and after the presentation, the following points were raised:

(1) A Committee member asked if the IMM is only going to apply this clause if the IMM identifies a Market Participant with a market power condition.

(ISO: ISO Counsel answered the proposed Appendix A language requires a Market Participant to provide documentation to the IMM in support of its submitted fuel price.)

(2) A Committee member asked if the proposed Appendix A language that replaces the 10% band (i.e., no greater than 110% and no less than 90%) of the Reference Level calculated with the submitted fuel price is more lenient or more restrictive than the replaced language.

(ISO: ISO Counsel answered the intent of the 10% band was to ensure the Market Participant was going to submit fuel price documentation that reflects the adjustment. The purchase of fuel and the submittal of the fuel price adjustment may not coincide with the submittal process. That is the reason for the potential difference between the two fuel prices (i.e., supply offer submitted to the ISO and the actual price incurred by the Market Participant.).

The Committee member asked if the ISO plans to place the previously provided response in its filing letter or in the minutes for this meeting. This proposal may be more restrictive rather than less restrictive.

(ISO: ISO Counsel replied removing the 10% band will be explained in the filing letter. The ISO stated the activity is a qualitative assessment and not a quantitative assessment. The IMM explanation is contained in the posted meeting materials.)

The following motion was moved and seconded by the Markets Committee:

RESOLVED, that the Markets Committee recommends that the Participants Committee support the revisions to Appendix A to Market Rule 1 to implement a modified fuel price adjustment verification process and a clean-up correction to Appendix F to Market Rule 1 (to be filed with the fuel price adjustment subject) as proposed by ISO New England Inc. (the “ISO”) and as circulated for this meeting with those further changes recommended by this Committee and supported by the ISO and such further non-substantive changes as the Chair and Vice-Chair approve.

The motion was then voted. Based on a show of hands, the motion passed. 1 abstention within the End User Sector was recorded.

Agenda Item #4 FCM ADMINISTRATIVE CLARIFICATIONS

Mr. Gillespie presented the ISO’s proposed revisions to Market Rule 1 to implement the corrections to the application of PER for certain demand resources, the corrections to include Real-Time Reserve Designations in the calculation of Actual Capacity Provided for resources under the previously filed FCM Performance Incentives provisions and clarifications regarding pricing terminology under certain situations to the Committee. During and after the presentation, the following points were raised:

(1) A Committee member asked the ISO why the availability penalty section did not reflect the FCA 7 and FCA 8 differentiation in the FCA clearing price as detailed in the previous section (see Section III.13.2.8.2 of Market Rule 1 for the February 2015 effective date).

(ISO: The ISO replied that one rate is to be applied to all resources regarding the availability penalty subject. The proposed Market Rule 1 language pertains to availability, and specifically, the one rate to be used for all of the cap adjustments.)

The Committee member replied new resources have much more than 5% at risk (see Section III.13.7.2.7.1.2 of Market Rule 1 for the February 2015 effective date).

(ISO: The ISO replied the relevant clearing price or the administrative rate is the current rule. The ISO is addressing what rate is to be used for the existing resource vs. new resource with this set of proposed Market Rule 1 changes.)

The following motion was moved and seconded by the Markets Committee:

RESOLVED, that the Markets Committee recommends that the Participants Committee support the revisions to Market Rule 1 to implement the corrections to the application of PER for certain demand resources, the corrections to include Real-Time Reserve Designations in the calculation of Actual Capacity Provided for resources under the previously filed FCM Performance Incentives provisions and clarifications regarding pricing terminology under certain situations as proposed by ISO New England Inc. (the “ISO”) and as circulated for this meeting with those further changes recommended by this Committee and supported by the ISO and such further non-substantive changes as the Chair and Vice-Chair approve.

The motion was then voted. Based on a show of hands, the motion passed. 1 abstention within the Transmission Sector and 1 abstention within the Supplier Sector were recorded.

Agenda Item #5 ENERGY MARKET OFFER FLEXIBILITY – CONFORMING MANUAL CHANGES, CLEAN-UP CHANGES, AND ISO-NE MANUAL M-11 REVISIONS TO REFLECT CURRENT MANUAL STRUCTURE AND PURPOSE

Mr. Dwyer presented the ISO’s proposed revisions to ISO-NE Manuals M-11, M-20, M-28, M-35, M-36 and M-RPA for the following items to the Committee:

(1) ISO-NE Manuals conformed to Market Rule 1 implementing the NCPC payments design.

(2) Clean-up/update changes to the ISO-NE Manuals listed in item (A) above.

(3) Retirement of ISO-NE Manual M-29.

During and after the presentation, the following points were raised:

(1) NEPOOL Counsel stated the proposed Manual changes fall generally into two categories. The first category of changes are intended to conform Manuals M-11, M-20, M-28 and M-36 to the Market Rule 1 energy market offer flexibility changes. These changes were reviewed by NEPOOL Counsel and they are consistent with the Market Rule 1 changes. The second category includes a re-write of Manual M-11 to reflect the ISO’s new approach to the type of information included in the ISO-NE Manuals. These changes include the proposed elimination of certain examples and rationales in Manual M-11 that are captured elsewhere in the Tariff or in other documentation, such as ISO-NE training materials, which are available on the ISO’s website but are not reviewed by the Markets Committee.