EXHIBIT 99.524
INTER-SC TRADE ADJUSTMENT BIDS
Modeling Adjustment Bids on Inter-SC
Trades as Adjustment Bids on Loads
INTER-SC SALE EXAMPLE
o SC1 sells energy to SC2 in a zone.
- SC1 is to be paid SC2's market price for the energy.
- SC1 is willing to sell (and SC2 is willing to buy) 100 MWh at SC2's
unconstrained market price of $25/MWh.
o Congestion Management can cause SC2's market price in the zone to change.
- If zonal price falls, SC1 wants to decrease its sale to SC2.
- If zonal price rises, SC1 wants to sell more to SC2.
CHANGE TO INTER-SC SALE MODELED AS A LOAD
[GRAPHIC]
ADJUSTING AN INTER-SC SALE...
o SC1 specifies a load in SC2's portfolio in the zone.
- SC1 submits an IPS of zero for this load.
- SC1 can offer to buy back its inter-SC sale to SC2.
o Submit an adjustment bid to increase the load if the price falls.
- SC1 can offer to increase the sale to SC2.
o Submit an adjustment bid to decrease the load (to negative load)
if price rises.
... ADJUSTING AN INTER-SC SALE
[GRAPHIC]
INTER-SC PURCHASE EXAMPLE
o SC1 buys energy from SC2 in a zone.
- SC1 is to pay SC2's market price for the energy.
- SC1 is willing to buy (and SC2 is willing to sell) 100 MWh at SC2's
unconstrained market price of $15/MWh.
o Congestion Management can cause SC2's market price in the zone to change.
- If zonal price rises, SC1 wants to decrease its purchase from SC2.
- If zonal price falls, SC1 wants to buy more from SC2.
CHANGE TO INTER-SC PURCHASE AS A LOAD
[GRAPHIC]
ADJUSTING AN INTER-SC PURCHASE...
o SC1 specifies a load in SC2's portfolio in the zone.
- SC1 submits an IPS of zero for this load.
- SC1 can offer to sell back its inter-SC purchase from SC2.
o Submit and adjustment bid to decrease the load (to negative load)
if the price rises.
- SC1 can offer to increase the purchase from SC2.
o Submit an adjustment bid to increase the load if price falls.
...ADJUSTING AN INTER-SC PURCHASE
[GRAPH]
REQUIREMENT
o Only one SC involved in an inter-Sc trade may submit an adjustment bid for
the inter-SC trade:
- If SC1 submits the adjustment bid, SC1 will have a load in SC2's market to
model the adjustment.
- The prices in SC2's market govern how the CM process will adjust the
inter-SC trade by adjusting SC1's load in SC2's market.
EXAMPLE
o Two zones, A and B and two SCs, PX and SC.
o PX auction:
- G1 bids to sell up to 110 MWh @ $20/MWh
- G2 bids to sell up to 100 MWh @ $35/MWh
- SC bids to sell up to 30 MWh @ $30/MWh in Zone A
- L1 bids to buy 100 MWh @ $700/MWh
- L2 bids to buy 100 MWh @ $700/MWh
o PX UMCP = $35/MWh and SC sells 30 MWh via inter-SC trade.
- SC wants to back out of trade if PX zonal price in zone A falls below
$30/MWh.
ADJUSTMENT BIDS
[GRAPHIC]
FINAL SCHEDULE
[GRAPHIC]
Results
o PX zonal price in A falls to $20/MWh.
- SC buys back the energy it sells to PX.
o PX pays SC 30MWh * $20/MWh = $600 for inter-SC trade.
o SC pays PX 30MWh * $20/MWh = $600 for load to buy back.
o Increasing L(A,SC) to buy back inter-SC trade reduces flow from A to B.
- This has the same impact on inter-zonal congestion as reducing G3 and
reducing the inter-SC trade.
o Real-time imbalances:
- L(A,SC) is zero causing an imbalance of 30 MWh in load.
- SC reduces G3 by 30 MWh to account for the buy-back producing a 30
MWh imbalance in generation.
- SC's net imbalance is 0.
CHANGING RESOURCES...
o Suppose that SC1 models the adjustment bid on an inter-SC trade as a load in
SC2's market:
- The CM process will adjust SC2's resources to account for any change to
the inter-SC trade.
- SC1's resources will not be automatically adjusted to account for the
change to inter-SC trade.
o If the load that models the inter-SC adjustment is increased:
- CM does not decrease SC1's generation to account for the decreased
sale to (increased purchase from SC2).
- SC1 would decrease its actual generation in real-time because of
its decreased inter-SC sale (increased purchase).
- In real-time, the imbalance due to SC1's load would match the
imbalance due to the reduction in SC1 generation, so the imbalance
charge would be zero.
...CHANGING RESOURCES
o If the load used that models the inter-SC adjustment is decreased:
- CM does not increase SC1's genereation to account for the increased sale to
(decreased purchase from SC2)
- SC1 would increase its actual generation in real-time because of its
increased inter-SC sale (decreased inter-SC purchase).
- In real-time, the imbalance due to SC1's load would match the imbalance
due to the increase in SC1's generation, so the imbalance charge would be
zero.
LOCATION OF INTER-SC TRADE
o SC1 wishes to submit an adjustment bid on its inter-SC trade with SC2 in
Zone A.
- SC1 should have resources on Zone A that it will use to account for
any changes in the inter-SC trade.
- This prevents SC1 from scheduling inter-zonal transmission capacity
that it will not use.