Common use of Description and background Clause in Contracts

Description and background. The Regional Resource Adequacy Model (RAM) Working Group (formerly the JCAG Working Group) was set up to develop longer-range UCAP markets in NY, PJM and ISO-NE than currently exist. The RAM Working Group developed initial recommendations in mid-2002. The work plan was reassessed in light of the SMD NOPR and the ISOs/RTOs filed joint comments addressing resource adequacy on January 10, 2003. The comments described a central market-based resource adequacy framework, which is consistent with the goals of the SMD NOPR. XXXX was selected to analyze the proposed central resource adequacy market design, and presented their final report at the February 26 regional RAM meeting. A NYISO status report was filed with FERC on February 27, 2004. The broad range of concerns raised by stakeholder groups in each ISO/RTO make it unlikely that all of the ISO/RTOs will adopt the RAM proposal as it is currently formulated. It is anticipated that this effort may lead, instead, to enhancements in the capacity markets in each region. In enhancing their existing markets, the ISO/RTOs have committed to maintain the same product (UCAP) to enable trade between regions to occur and to identify and remove any remaining barriers to the trading of capacity between regions. Each region has Resource Adequacy/ICAP working groups looking at this issue. No plans have yet been established as yet to change the markets in any of the ISOs. The NYISO has submitted a hybrid proposal to its stakeholders for consideration which incorporates a forward capacity market for procurement of a portion of its future resource requirements.

Description and background. The Regional Resource Adequacy Model (RAM) Working Group (formerly the JCAG Working Group) was set up to develop longer-range UCAP markets in NY, PJM and ISO-NE than currently exist. The RAM Working Group developed initial recommendations in mid-2002. The work plan was reassessed in light of the SMD NOPR and the ISOs/RTOs filed joint comments addressing resource adequacy on January 10, 2003. The comments described a central market-based resource adequacy framework, which is consistent with the goals of the SMD NOPR. XXXX was selected to analyze the proposed central resource adequacy market design, and presented their final report at the February 26 regional RAM meeting. A NYISO status report was filed with FERC on February 27, 2004. The broad range of concerns raised by stakeholder groups in each ISO/RTO make it unlikely that all of the ISO/RTOs will adopt the RAM proposal as it is currently formulated. It is anticipated that this effort may lead, instead, to enhancements in the capacity markets in each region. In enhancing their existing markets, the ISO/RTOs have committed to maintain the ability to trade the same product (UCAP) to enable trade between regions to occur and to identify and remove any remaining barriers to the trading of capacity between regions. Each region has Resource Adequacy/ICAP working groups looking at this issue. No plans have yet been established as yet to change the markets in any of the ISOs. The NYISO has submitted a hybrid proposal to its stakeholders for consideration which incorporates a forward capacity market for procurement of a portion of its future resource requirements. ISO-NE is currently engaged in an evidentiary hearing process regarding certain aspects of its proposed locational capacity market, and PJM has started work on the development and implementation of a centralized locational capacity market design similar in some respects to the NERA proposal.

Description and background. The Regional Resource Adequacy Model (RAM) Working Group (formerly the JCAG Working Group) was set up to develop longer-range UCAP markets in NY, PJM and ISO-NE than currently exist. The RAM Working Group developed initial recommendations in mid-2002. The work plan was reassessed in light of the SMD NOPR and the ISOs/RTOs filed joint comments addressing resource adequacy on January 10, 2003. The comments described a central market-based resource adequacy framework, which is consistent with the goals of the SMD NOPR. XXXX was selected to analyze the proposed central resource adequacy market design, and presented their the ir final report at the February 26 regional RAM meeting. A NYISO status report was filed with FERC on February 27, 2004. The broad range of concerns raised by stakeholder groups in each ISO/RTO make it unlikely that all of the ISO/RTOs will adopt the RAM proposal as it is currently formulated. It is anticipated that this effort may lead, instead, to enhancements in the capacity markets in each region. In enhancing their existing markets, the ISO/RTOs have committed to maintain the same product (UCAP) to enable trade between regions to occur and to identify and remove any remaining barriers to the trading of capacity between regions. Each region has Resource Adequacy/ICAP working groups looking at this issue. No plans have yet been established as yet to change the markets in any of the ISOs. The NYISO has submitted a hybrid proposal to its stakeholders for consideration which incorporates a forward capacity market for procurement of a portion of its future resource requirements.

Description and background. The Regional Resource Adequacy Model (RAM) Working Group (formerly the JCAG Working Group) was set up to develop longer-range UCAP markets in NY, PJM and ISO-NE than currently exist. The RAM Working Group developed initial recommendations in mid-2002. The work plan was reassessed in light of the SMD NOPR and the ISOs/RTOs filed joint comments addressing resource adequacy on January 10, 2003. The comments described a central market-based resource adequacy framework, which is consistent with the goals of the SMD NOPR. XXXX was selected to analyze the proposed central resource adequacy market design, and presented their final report at the February 26 regional RAM meeting. A NYISO status report was filed with FERC on February 27, 2004. The broad range of concerns raised by stakeholder groups in each ISO/RTO make it unlikely that all of the ISO/RTOs will adopt the RAM proposal as it is currently formulated. It is anticipated that this effort may lead, instead, to enhancements in the capacity markets in each region. In enhancing their existing markets, the ISO/RTOs have committed to maintain the ability to trade the same product (UCAP) to enable trade between regions to occur and to identify and remove any remaining barriers to the trading of capacity between regions. Each region has Resource Adequacy/ICAP working groups looking at this issue. No plans have yet been established as yet to change the markets in any of the ISOs. The NYISO has submitted a hybrid proposal to its stakeholders for consideration which incorporates a forward capacity market for procurement of a portion of its future resource requirements. ISO-NE is currently engaged in an evidentiary hearing process regarding certain aspects of its proposed locational capacity market, and PJM has started work on the development and implementation of a centralized locational capacity market design similar in some respects to the NERA proposal. • Milestones and timetable: ▪ It is expected that the NYISO hybrid proposal will be considered along with RAM and other proposals brought forth by NYISO stakeholders. Although it is unclear what design may finally emerge from this process, a key requirement imposed on the development process is to ensure that any proposal finally accepted is compatible with the New York market. ▪ The NYISO will continue to coordinate its efforts with PJM and ISO-NE and will bring any resulting proposal back to the RAM Group for discussion by July 31, 2005. ▪ On March 1, 2004, ISO-NE filed a locational capacity market with the Commission. The design of this market was based strongly on the extant design developed by XXXXX. In an order issued June 2, 2004, the Commission established hearing procedures and specified that a locational capacity market would be implemented in New England on January 1, 2006. ▪ The Partial Unit ICAP Sales project (#4 below) will also improve the ability to trade capacity between regions. ▪ In the status update to be submitted to FERC in April 2005 (See FERC Order Accepting Compliance Filing and Providing Guidance, issued on October 7, 2004 in Docket No. ER03-647-005), the ISOs will report on how their respective efforts have been able to identify and remove the remaining barriers to the trading of ICAP between their regions. The ISOs will also report on efforts to eliminate or minimize any new barriers that might be created by new proposals currently under development. ▪ Following implementation of a locational capacity market in New England, an assessment will be made to identify further enhancements that may be desirable to further facilitate trading of capacity between the regions. A report will be issued by June 30, 2007.