DRAFT DRAFT

Net Commitment Period Compensation Review

NCPC

10/10/01

Agenda Item #310/30/01 MC Mtg.

2

NCPC Calculation (5.4.5.2)

NCPC =

The sum of Eligible Start-up Bids for the Schedule Dispatch Period

plus

The sum of the Trading Interval Revenue Shortfalls (TIRS) for the Scheduled Dispatch Period

If the calculation = a negative number, the NCPC = 0

3

A Closer Look at TIRS

Supplied Energy X Bid Block Prices

+ Designated TMSR X Bid Price

+ Designated TMNSR X Bid Price

+ Designated TMOR X Bid Price

+ Supplied Regs X Bid Price

+ Supplied AGC Service X Bid Price

Supplied Energy X MCP

+ Designated TMSR X MCP

+ Designated TMNSR X MCP

+ Designated TMOR X MCP

+ Supplied Regs X MCP

+ Supplied AGC Service X MCP

+ AGC LOC

Total Costs = Total Revenues =

TIRS = No-load + Total Costs - Total Revenues

4

TIRS Walk-through Example

Energy Reserves

MW $ AGC $ 4.00/Reg

Bid Block 1 100 $20.00 TMSR $ 2.00

Bid Block 2 20 $30.00 TMNSR $ 1.50

Bid Block 3 30 $35.00 TMOR $ 1.00

Bid Block 4 25 $40.00

Bid Block 5 25 $50.00

No Load $1,000.00

Bid Information

5

TIRS Walk-through Example

Market MW MCP Revenue

Energy 150 $38.00 $ 5,700

TMSR 10 $ 3.00 $ 30

TMNSR 0 $ 1.00 0

AGC 0 $ 2.25 0

Total Revenue $ 5,730

Dispatch

Revenue

6

TIRS Walk-through Example

Energy

Dispatch = 150 MW

100 MW X $20.00 = $2,000

20 MW X $30.00 = $ 600

30 MW X $35.00 = $1,050

150 MW = $3,650

Reserves

TMSR Designated = 10 MW

10 MW X $2.00 = $ 20

Costs

7

TIRS Walk-through Example

Costs Revenue

No Load + (Energy + TMSR) Energy + TMSR

$1,000 + ( $3,650 + $ 20 ) $5,700 + $ 30

$4,670 $5,730

TIRS = Cost - Revenue

$4,670 - $5,730 - $ 1,060

8

NCPCWalk-through Example

Hour 15 16 17 18 19 20 21 22ECP $38 $38 $38 $22 $22 $22 $22 $22TIRS (1,060)$ (1,060)$ (1,060)$ 800$ 800$ 800$ 800$ 800$

Min Run = 8 hoursStart Up = $100

NCPC = Eligible Start-Ups + Sum of TIRS

$ 100 + $ 820

$ 920