Schedulers Conference Portland Oregon May 14/15, 2014 Marketing Perspective 15 Minute Scheduling

1. Schedulers ConferencePortland OregonMay 14/15, 2014Marketing Perspective 15 Minute Scheduling Demetrios Fotiou

2. DISCLAIMER • The views expressed in this presentation are those of the presenter and do not necessarily reflect the views of Powerex Corp., its employees or directors. It is a presentation for the purpose of discussion, to express observations and to provoke discussion. Some of the information was submitted to me, I did not check its accuracy. Take this presentation for what it is worth, a bunch of slides, a bunch of information, and some interpretations of that information and some historical perspective.

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4. History (Preschedule – NW Focus) • Prior to 23 years ago • Custom deals between operations staff • Approximately 17-23 years ago • WSPP • Dedicated traders • Bilat, telephone • Larger Volume and custom trade volumes (i.e. 300 or 86) • Simple scheduling • Approximately 12-17 years ago • Volumes started to trend to 25/50/100 pieces • Electronic trading started to develop • Brokers came into the scene • Etags

5. History (Realtime - NW Focus) • Prior to17 years ago • Dispatcher to Dispatcher, Neighbour to Neighbor • High quantity, low volume, usually multiple hour deals • Some system Parking with return at later date • Most entities planned to meet their own peak load with no help (systems were over-built) • Approximately 17 years ago • organized Realtime Markets with separate RealtimeTraders • Realtime market was competitive, virtually everyone was long • December 1, 2009 • BPA began allowing “limited” intra-hour schedules with restrictions (export only, treated as NF, new etags only, existing tx) • July 1, 2011 • BPA allows full 30 minute access, restrictions lifted • Full intra-hour (30 min) access since

6. 30 Minute (Intra Hour) Scheduling • There are currently no restrictions preventing 30 minute scheduling • Approximately 0.4% of etags are intra-hour etags (NW) • Approximately 0.01% of etaggedMWHr volume is intra-hour (NW) • The vast majority of energy trading in the NW is still single or multiple hour blocks of energy

7. Potential Factors for Low Intra-Hour Volumes • Time requirement / Impact to existing business? • If not busy, definitely entertain added business, considering factors below • If busy, definitely need to consider the factors below • When do we receive requests for intra-hour service? • Calls come in typically near top of the hour • This gives you only about 5-15 minutes (peak time for hourly) • In comparison hourly deals typically give you 30-40 minutes notice • Transmission Costs double (need to purchase full hour to use 30 mins) • Quantity is half (40MW for 30 mins= 20MWHrs) • Ramped in at double the ramp rate (10min vs 20min) • For 50MWHrs (100MW - 30 min sched), ramp is equal to 200MW • Additional unit wear and tear • Need to do additional planning for system

8. Operationally – What is going on? • Units might need to go to/from S/C • Units might need to turn on/off • Units might need to be ramped up/down • Increased wear and tear • Result is increased maintenance costs • Result is more frequent maintenance • More frequent maintenance, means more unit down time • Communications with system person • Need to communicate regarding all of the above • This takes additional time, communication and approval • Hourly deals are core business, system is planned this way • If volumes were higher, planning and communication would adapt

9. Operations – Flat Loads

10. Operations - Ramps

11. Potential Factors for Low Intra-Hour Volume Continued • Catch 22 • Low volume deal, is it economic for impact? • High volume deal, need to consider operational impacts • Both end up (usually) requiring higher price than hourly price • Harder to agree on price • Hourly Price is not indicative of costs and impacts • Adder can be small or large depending on system and workload • It never hurts to ask

12. Additional Intangibles to Consider • Automation • We have upgraded many systems, including our trading system down to a 1 minute resolution • Automation cannot currently be 100%, there needs to be some human actions taken • Still takes time, similar to 17 years ago • Many systems to consider (billing, settlements, operations, etc..) • Updating Software • How do you recover cost? • It takes time to update all impacted systems • Increased volume would help justify expediting work • Firm Bumping rights within the hour

13. 15 Minute Market(What I Was Supposed to Talk About) • Impacts of 30 minute scheduling basically double for 15 minute schedules • A 100MW deal is only 25MWHrs • For a 25MWHr schedule, you ramp equal to 200MW hourly schedule (8 times higher than MWHr quantity) • Transmission paid for full hour (4 times hourly cost / only use portion) • Cost of service will usually be even higher (depends on conditions) • BPA not ready until October, preventing most NW participants access • CISO FMM • Can change bid/offer to reflect system limitations (i.e. ramping)

14. Questions / Comments / Discussion