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G. Elsoe Jorgensen Select Energy, Inc. February 6, 2006

Additional Proposed Changes to MR-1 Eliminate allocation of Posturing Cost and RT NCPC to RT Dispatchable Asset Related Demand when dispatched in accordance with ISO-NE scheduling rules. G. Elsoe Jorgensen Select Energy, Inc. February 6, 2006.

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G. Elsoe Jorgensen Select Energy, Inc. February 6, 2006

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  1. Additional Proposed Changes to MR-1Eliminate allocation of Posturing Cost and RT NCPC to RT Dispatchable Asset Related Demand when dispatched in accordance with ISO-NE scheduling rules. G. Elsoe Jorgensen Select Energy, Inc. February 6, 2006

  2. ISO-NE is proposing the following permanent changes to MR-1 Per Winter Action plan: • Change posturing cost allocation from RT deviation to RTLO • Eliminate allocation of RT NCPC charges to EETs Select assumes that ISO-NE also will carry forward, on a permanent basis, its similar provisions from the Winter Action plan pertaining to “Dispatchable Asset Related Demand” New ISO-NE NPCP cost allocation rule: • Eliminate allocation of RT NCPC to RT Dispatchable External Transaction purchases flowing in accordance with ISO scheduling rules Select proposes that the same rule be applicable to Dispatchable Asset Related Demand

  3. “Dispatchable Asset Related Demand (Resource)” • “Dispatchable Asset Related Demand” is any portion of an Asset Related Demand of a Market Participant that meets the requirements of the ISO New England Manuals to have its energy consumption modified in Real-Time because of its ability to respond to remote dispatch instructions from the ISO. A Dispatchable Asset Related Demand must have Electronic Dispatch Capability, must be able to increase or decrease energy consumption between its Minimum Consumption Limit and Maximum Consumption Limit in accordance with ISO dispatch instructions and must meet the technical requirements specified in the ISO New England Manuals. • “Dispatchable Asset Related Demand” provides comparable market products such as Energy, Operating Reserve, Localized Forward Reserve and ICAP is comparable to Dispatchable Generation Assets, EETs and Dispatchable External Transactions (purchases)

  4. Select Recommends Additional Changes • Proposal: Dispatchable Asset Related Demands are not to be allocated posturing cost or RT NCPC charges based on Deviation or RTLO when dispatched in accordance with ISO-NE dispatchable rule • Reason: Cost allocation methodology pertaining Dispatchable Asset Related Demands should be treated in a fashion similar to Dispatchable Generation Assets, EETs and Dispatchable External Transaction purchases as long as Dispatchable Asset Related Demands are dispatchable under ISO-NE operational control.

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