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North American Energy Standards North American Energy Standards BoardBoard

EPSA Regulatory Affairs EPSA Regulatory Affairs ConferenceConference

NAESB Activities in the Wholesale Electric NAESB Activities in the Wholesale Electric MarketMarket

Washington, DCWashington, DC

October 25, 2006October 25, 2006

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North American Energy Standards BoardNorth American Energy Standards BoardOrganizational ProfileOrganizational Profile

Organizational ProfileOrganizational Profile

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North American Energy Standards North American Energy Standards BoardBoard

Who we are: Who we are: Organizational ProfileOrganizational Profile

Organization by Quadrant and SegmentOrganization by Quadrant and Segment

Wholesale Gas – 5 SegmentsWholesale Electric – 5 Segments

12

3

4

5

1

2

34

Retail Electric – 4 Segments

1. End Users2. Local Distribution3. Pipelines 4. Producers5. Services

1. End Users2. Distributors3. Service

Providers4. Suppliers

Retail Gas – 4 Segments

1. End Users2. Distributors3. Service Providers4. Suppliers

1

2

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NAESB

1 2

3

4

5

1. End Users2. Distribution/

LSE3. Transmission 4. Generation5. Marketers/

Brokers

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North American Energy Standards North American Energy Standards BoardBoard

Who we are: Who we are: Organizational ProfileOrganizational Profile

WEQ, 140, 44%

WGQ, 125, 39%

REQ, 28, 9%

RGQ, 26, 8%

Membership Profile

September 2006

Total Membership

319

Quadrant Statistics WEQ WGQ REQ RGQ Total

Membership YE 2005 140 123 28 28 319

Net Change 0 +2 0 -2 0

Change in Quadrant 0 0 0 0 0

Membership YTD 140 125 28 26 319

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North American Energy Standards North American Energy Standards BoardBoard

Who we are: Who we are: Organizational ProfileOrganizational Profile

Two Governing Bodies with identical structures –

Board of Directors – strategic direction, financial well being, annual planning for standards development, coordination of activities with other groups

Executive Committee – Carries out the annual plan, develops and maintains the standards and business practices through its subcommittees and task forces

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North American Energy Standards BoardNorth American Energy Standards BoardNAESB Efforts – Interactions with FERCNAESB Efforts – Interactions with FERC

Interactions with FERCInteractions with FERC

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North American Energy Standards BoardNorth American Energy Standards BoardNAESB Efforts – Interactions with FERCNAESB Efforts – Interactions with FERC

NAESB Filing of standards with FERCNAESB Filing of standards with FERC All wholesale electric and wholesale gas standards

that are federally jurisdictional are filed with the FERC

The standards themselves and any standards that failed to pass due to a segment vote failure are forwarded

The NAESB record of minutes, work papers, voting, comments related to the standards are forwarded, including all minority positions noted in comments

Related transcripts are made available to FERC and can be purchased by any other interested party

Any regulatory agency can request access to or copies of NAESB standards

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North American Energy Standards North American Energy Standards BoardBoard

Active FERC Dockets Related to NAESB WEQ Active FERC Dockets Related to NAESB WEQ StandardsStandards

Active Dockets for WEQ:Active Dockets for WEQ:

RM05-5-000: RM05-5-000: Order No. 676 issued on April 25, Order No. 676 issued on April 25, 2006 for implementation by the industry on July 1, 2006 for implementation by the industry on July 1, 20062006

RM05-17-000 and RM05-25-000: RM05-17-000 and RM05-25-000: OATT NOPR OATT NOPR Reform – in the comment and reply comment phase. Reform – in the comment and reply comment phase.

RM05-28-000: RM05-28-000: Gas-Electric Interdependency. No Gas-Electric Interdependency. No NOPR issued yet. Standards and 6 issues identified NOPR issued yet. Standards and 6 issues identified and filed.and filed.

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North American Energy Standards North American Energy Standards BoardBoard

NAESB WEQ Standards – RM05-5-000NAESB WEQ Standards – RM05-5-000

OASIS Standards (WEQ BPS-001-000)

OASIS Standards &Communication Protocols (WEQ SCP-001-000)

OASIS Data Dictionary (WEQ DD-001-000)

Coordinate Interchange Standards (WEQ BPS-002-000)

Area Control Error Equation Special Cases Standards (WEQ BPS-003-000)

Manual Time Error Correction Standards (WEQ BPS-004-000)

Inadvertent Interchange Payback Standards (WEQ BPS-005-000)

Standards of Conduct (WEQ BPS-007-000)

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North American Energy Standards North American Energy Standards BoardBoard

NAESB WEQ Possible Activities – RM05-25-000NAESB WEQ Possible Activities – RM05-25-000

Timeline RM05-25-000:Timeline RM05-25-000: March 29, 2005: NAESB and NERC reviewed need for

OASIS 2 development versus incremental improvements to existing OASIS systems. Report provided to FERC on April 22, 2005.

September 15, 2005: Notice of Inquiry issued by FERC regarding comments on reforming Order No. 888 Open Access Tariff

May 19, 2006: Notice of Proposed Rule-making on RM05-5-000/RM05-17-000 issued.

August 7, 2006: NAESB files comments on areas that may need standards developed and initial assessment of the level of difficulty.

October 12, 2006: NAESB participates in a FERC Technical Conference on this issue.

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North American Energy Standards North American Energy Standards BoardBoard

NAESB WEQ Standards – RM05-28-000NAESB WEQ Standards – RM05-28-000

Timeline RM05-28-000:Timeline RM05-28-000: November 14, 2003: Letter from Chm. Wood asking

NAESB to develop interdependency standards

April 16, 2004: Gas Electric Coordination Interim Status Report, filed with FERC

November 30, 2004: Gas Electric Coordination Final Report, filed with FERC, 31 issues discussed

June 27, 2005: Gas-Electric Communication Standards filed with the FERC in Docket No. RM05-28-000, 13 issues described

February 24, 2006: 6 Interdependency Issues raised in Docket No. RM05-28-000

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North American Energy Standards North American Energy Standards BoardBoard

NAESB WEQ Standards – RM05-28-000NAESB WEQ Standards – RM05-28-000

Summary of Report Filed June 27, 2005 for RM05-28-Summary of Report Filed June 27, 2005 for RM05-28-000: 000:

Business practices were developed to address communications between pipelines and generators in three situations (R04021):

For generation facilities that have gas scheduled

For generation facilities that do not have gas scheduled but need it

For gas that is needed in extreme unanticipated demand

13 issues were identified related to gas-electric interdependency, and were categorized as to the type of issue raised –policy, business practices, reliability, regional or infrastructure related

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North American Energy Standards North American Energy Standards BoardBoard

NAESB WEQ Standards – RM05-28-000NAESB WEQ Standards – RM05-28-000

Summary of Report Filed February 2006 for RM05-Summary of Report Filed February 2006 for RM05-28-000: 28-000:

6 issues were identified in the report – three focus primarily on gas market changes, and 3 focus primarily on electric market changes

All six issues have policy implications.

All could result in standards development if so directed by either the market participants or the regulators.

The report does not ask regulators to give policy direction, but it does note that it would be very difficult to garner industry consensus without either strong direction from the market participants or strong direction from policy makers.

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North American Energy Standards North American Energy Standards BoardBoard

NAESB WEQ Standards – RM05-28-000NAESB WEQ Standards – RM05-28-000

NAESB Report February 2006 for RM05-28-000: Gas NAESB Report February 2006 for RM05-28-000: Gas IssuesIssues

Issue 1: Consider the development of standards to support Capacity Release pricing on an index for pipelines that have the FERC authority to enter into negotiated rates and discount capacity on an index basis.

Issue 2: Review the possibility of adding an additional intraday nomination cycle with bumping rights to provide more flexibility to shippers, including power generators, with firm transportation rights such that they can nominate for natural gas supporting their market clearing times.

Issue 3: Review the ability of pipelines to shift gas for primary firm transportation within a pipeline path without having to re-offer as secondary firm transportation service.

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North American Energy Standards North American Energy Standards BoardBoard

NAESB WEQ Standards – RM05-28-000NAESB WEQ Standards – RM05-28-000

NAESB Report February 2006 for RM05-28-000: NAESB Report February 2006 for RM05-28-000: Electric IssuesElectric Issues

Issue 4: Review and modify the requirements for organized electric markets so that the markets clear in sufficient time to nominate within the existing gas nomination timelines.

Issue 5: Consider the development of business practices for generators that offer into the day ahead market to have the appropriate commercial arrangements to fulfill the needed obligations.

Issue 6: Develop the appropriate supporting definitions for new business practices for the Wholesale Electric Quadrant, including but not limited to definitions for: alternate fuel capability, usable alternate fuel capability, firm transportation service, firm sales service, firm supply, and “must run” generator.

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North American Energy Standards BoardNorth American Energy Standards Board2006 Wholesale Electric Quadrant Annual 2006 Wholesale Electric Quadrant Annual

PlanPlan

2006 Annual Plan for WEQ2006 Annual Plan for WEQ

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North American Energy Standards BoardNorth American Energy Standards BoardWholesale Electric Quadrant 2006 Annual Wholesale Electric Quadrant 2006 Annual

PlanPlan

2006 Wholesale Electric Annual Plan:2006 Wholesale Electric Annual Plan: Continue to develop business practices to Continue to develop business practices to

complement reliability standardscomplement reliability standards

Develop joint operators training manual with NERCDevelop joint operators training manual with NERC

Identify e-Tag enhancements, Registry enhancements Identify e-Tag enhancements, Registry enhancements and IDC enhancements with NERCand IDC enhancements with NERC

Complete PKI standards for securityComplete PKI standards for security

Modify and complete business practices standards for Modify and complete business practices standards for Standards of Conduct and Affiliate ReportingStandards of Conduct and Affiliate Reporting

Enhance OASIS business practices to support market Enhance OASIS business practices to support market needsneeds

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North American Energy Standards Board North American Energy Standards Board

How to Contact NAESBHow to Contact NAESB

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North American Energy Standards North American Energy Standards BoardBoard

How to Participate

Join the distribution lists on the NAESB Web Site : www.naesb.org

All meetings are open and accessible via telephone

All materials are posted on the NAESB web site

Your comments are welcome and will be posted on any NAESB standards issues

If you are not a member, but are interested in membership, please call the NAESB Office: 713-356-0060

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North American Energy Standards North American Energy Standards BoardBoard

Contact Information

Web Site : www.naesb.org

Quadrant Procedures, Bylaws, Certificate for NAESB

Calendar of Meetings, Agendas, Work Papers, Comments

Board minutes, EC Minutes, How to order Transcripts

Standards and Related Work Products

Membership Information

Contact Information

Phone – 713-356-0060

Fax – 713-356-0067

Email – naesb@naesb.org

For further information on the organization, please contact Veronica Thomason (713-356-0060, naesb@naesb.org)

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North American Energy Standards North American Energy Standards BoardBoard

How To Monitor ActivitiesHow To Monitor Activities Monthly Update Calls: Monthly Update Calls:

http://www.naesb.org/monthly_update.asp

Review updated annual plans quarterly: Review updated annual plans quarterly: http://www.naesb.org/materials/gov.asp

Review Board minutes quarterly: http://Review Board minutes quarterly: http://www.naesb.org/weq/weq_bod.asp

Sign up for email distribution notices on Sign up for email distribution notices on subcommittees of interest: subcommittees of interest: http://www.naesb.org/listserv/mail/mail_register.cfm

Call NAESB office (713-356-0060, Call NAESB office (713-356-0060, naesb@naesb.org)