Attachment A: Glossary of Terms

Transcription

1 Attachment A: Glssary f Terms Prjected Perfrmance Assessment Intervals the estimated number f Perfrmance Assessment Intervals expected t be in effect fr a Delivery Year, where this value shall be assumed t be 360 intervals (30 hurs) prir t the 2022/2023 Delivery Year; and effective with the 2022/2023 Delivery Year, calculated by taking the average number f Perfrmance Assessment Intervals declared fr the entire PJM Regin in the three Delivery Years immediately preceding the Base Residual Auctin fr such Delivery Year. Fr purpses f calculating the default Market Seller Offer Cap, as described in sectin 6.4 f Attachment DD f the PJM Tariff, the Prjected Perfrmance Assessment Hurs shall be n less than 60 intervals (5 hurs), and fr purpses f calculating the Nn-Perfrmance Charge Rate fr Capacity Perfrmance Resurces, shall be n less than 180 intervals (15 hurs). 5.4 Sell Offers in RPM Resurce-Specific Sell Offer Requirements Sell Offers fr the Base Residual and Incremental Auctins must be submitted in PJM s erpm system. Sell ffers are nly accepted during a fixed bidding windw which is pen fr at least five (5) business days. The bidding windw fr a Base Residual Auctin and Incremental Auctins will be psted n the PJM website. Sell ffers may nt be changed r withdrawn after the bidding windw fr a Base Residual Auctin r Incremental Auctin is clsed. The fllwing are business rules that apply t Resurce-Specific Sell Offers: The smallest increment that may be ffered int any auctin is 0.1 MW A resurce-specific sell ffer will specify, as apprpriate: Specific Generating Unit, Demand Resurce, Energy Efficiency Resurce, r Aggregate Resurce Fr the 2014/2015 thrugh the 2017/2018 Delivery Year, a demand resurce with the ptential t qualify as tw r mre prduct types may submit separate but cupled Sell Offers fr each prduct type fr which it qualifies at different sell ffer prices and the auctin clearing algrithm will select the Sell Offer that yields the least-cst slutin. Separate resurces will be mdeled in the erpm system fr each prduct type. Fr cupled Sell Offers, the ffer price f the Annual Demand Resurce ffer must be at least $.01/MW-day greater than the ffer price f the cupled Extended Summer Demand Resurce ffer and the ffer price f an Extended Summer Demand Resurce must be at least $.01/MW-day greater than the ffer price f the cupled Limited Demand Resurce ffer. Fr the 2018/2019 and 2019/2020 Delivery Year, a generatin, demand resurce, r energy efficiency resurce with the ptential t qualify as Base r Capacity

2 Perfrmance prduct type may submit separate, but cupled Base and Capacity Perfrmance sell ffer segments and the auctin clearing algrithm will select the sell ffer segment that yields the least-cst slutin. The submissin f a cupled sell ffer segments shall be mandatry fr any Capacity Perfrmance Resurce submitting a cst-justified sell ffer price greater than the prduct f the histrical balancing rati times the Net Cst f New Entry in the znal LDA where the resurce resides. Fr such cupled sell ffer segments, the sell ffer price f a Capacity Perfrmance sell ffer segment must be at least $.01 per MW-day greater than the sell ffer price f a cupled Base sell ffer segment. With the exceptin f Intermittent Resurces and Capacity Strage Resurces, each Generatin Capacity Resurce with available capacity that is capable r can reasnably becme capable f qualifying as a Capacity Perfrmance Resurce must submit a Capacity Perfrmance sell ffer segment. Intermittent Resurces are generatin capacity resurces with utput that can vary as a functin f its energy surce, such as wind, slar, landfill gas, run f river hydrelectric pwer and ther renewable resurces. An acceptable methd fr determining the quantity f unfrced capacity MWs that may ffer as Capacity Perfrmance fr an intermittent resurce is based n calculating the average f the hurly utput (MWh) f the intermittent resurce during the expected perfrmance hurs in the summer and winter. The expected perfrmance hurs in the summer are hurs ending 15:00 thrugh 20:00 EPT in the mnths f June, July, and August. The expected perfrmance hurs in the winter are hurs ending 6:00 thrugh 9:00 EPT and 18:00 thrugh 21:00 EPT in the mnths f January and February. Ntwithstanding the abve, PJM may review and accept alternative prpsed methds fr determining the quantity f unfrced capacity MWs that may be ffered as Capacity Perfrmance fr an Intermittent resurce. Capacity Strage Resurces shall mean any hydrelectric pwer plant, flywheel, battery strage, r ther such facility slely used fr shrt term strage and injectin f energy at a later time. An acceptable methd fr determining the quantity f unfrced capacity MWs that may ffer as Capacity Perfrmance fr a Capacity Strage Resurce is based n calculating the average f the hurly utput (MWh) f the intermittent resurce during the expected perfrmance hurs in the summer and winter. The expected perfrmance hurs in the summer are hurs ending 15:00 thrugh 20:00 EPT in the mnths f June, July, and August. The expected perfrmance hurs in the winter are hurs ending 6:00 thrugh 9:00 EPT and 18:00 thrugh 21:00 EPT in the mnths f January and February. Exceptins t the capacity perfrmance must-ffer requirement will be permitted fr a generatin capacity resurce which the Capacity Market Seller demnstrates is reasnably expected t be physically incapable f satisfying the requirements

3 fr a Capacity Perfrmance Generatin Resurce. The Seller must submit a request fr an exceptin (with all supprting infrmatin) n later than 120 days befre the ffer windw pens fr the relevant RPM Auctin. A generatin resurce that can qualify as Capacity Perfrmance prduct type, but requires substantial investment t d s, is nt excused frm the capacity perfrmance must-ffer requirement, but may submit cupled Base and Capacity Perfrmance ffer segments. Intermittent Resurces, Capacity Strage Resurces, Demand Resurces, Energy Efficiency Resurces are nt required t submit a Capacity Perfrmance sell ffer segment. Minimum and maximum amunt f installed capacity ffered in MWs fr the resurce by Offer Segment (Base r Capacity Perfrmance ffer segment effective fr 2018/2019 and 2019/2020 Delivery Years) Minimum and maximum amunt f installed capacity ffered in MWs fr the resurce by Capacity Perfrmance (annual) Offer Segment and Maximum amunt f installed capacity ffered in a Seasnal (summer r winter) Capacity Perfrmance Offer Segment. The Seasnal Capacity Perfrmance Offer Segment is cnsidered a flexible ffer segment with a minimum MW quantity set t zer MW. (Effective with the 2020/2021Delivery Year) Offer Segment price willing t receive in $/MW-day (in UCAP terms) Regular Schedule, Self-Schedule r Flexible Self-Schedule flag EFORd t apply t the ffered MWs (nly applicable in the Base Residual Auctin, First Incremental Auctin, and Secnd Incremental Auctin) fr generatin resurces New Unit Pricing participatin flag fr Planned Generatin Capacity Resurces requesting New Unit Pricing Adjustment. The ICAP MW quantity specified in the Offer Segment will be cnverted int an UCAP MW quantity by the sell ffer EFORd fr use in the auctin clearing. The sell ffer price specified in the Offer Segment is in UCAP terms and will nt be cnverted fr use in the auctin clearing. A Base, Capacity Perfrmance, r Seasnal Capacity Perfrmance Offer Segment may be ffered as either a single price quantity fr the capacity f the resurce r divided int up t ten ffer blcks with varying price-quantity pairs that represent varius segments f capacity frm the resurce. The Offer Segment will cnsist f blck segments at the specified price-quantity pairs. The seller specifies the EFORd t apply if participating in a Base Residual Auctin, First Incremental Auctin, r Secnd Incremental Auctin. The EFORd cannt exceed the greater f the EFORd calculated based n utage data fr 12 mnths ending September 30 th prir t the Base Residual Auctin, the 5 Year Average EFORd based n utage data fr 12 mnths ending September 30 th prir t the Base

4 Residual Auctin, r the EFORd submitted by the market participant in their Base Residual Auctin Sell Offer. 1 The EFORd applied t the Third Incremental Auctin will be determined by PJM using the frced utage data fr the 12 mnths ending n September 30 prir t the relevant Delivery Year. The seller is willing t accept the clearing f any amunt equal t r greater than the minimum MW amunt ffered and equal t r less than the maximum MW ffered. If the self-scheduled flag is enabled in the Base r Capacity Perfrmance Offer segment, the sell ffer price must be set t zer and the minimum and maximum amunts specified in the sell ffer must be equal. The acceptance f the sell ffer is based n the party s Maximum Available ICAP Psitin fr the Delivery Year at the pening f the auctin s bidding windw. Effective with the 2020/2021 Delivery Year, the acceptance f the sell ffer is based n the party s Maximum Available ICAP Psitin fr the entire Delivery Year (annual psitin) if Capacity Perfrmance Resurce, Maximum Available ICAP Psitin fr summer perid (summer psitin) if Summer-Perid Capacity Perfrmance Resurce, Maximum Available ICAP Psitin fr winter perid (winter psitin) if Winter-Perid Capacity Perfrmance Resurce. If a participant has a psitive Maximum Available ICAP Psitin fr the Delivery Year, PJM nly accepts a sell ffer up t the Maximum Available ICAP Psitin fr the Delivery Year. (Prir t 2020/2021 Delivery Year) Effective with the 2020/2021 Delivery Year, the ttal MWs ffered acrss all Capacity Perfrmance ffer segments may nt exceed the Maximum Available ICAP Psitin fr the Delivery Year (i.e., the annual psitin). The ttal MWs ffered acrss the Capacity Perfrmance ffer segments and the Seasnal Capacity Perfrmance-Summer ffer segments may nt exceed the Maximum Available ICAP Psitin fr summer perid (i.e., the summer psitin). The ttal MWs ffered acrss the Capacity Perfrmance ffer segments and the Seasnal Capacity Perfrmance-Winter ffer segments may nt exceed the Maximum Available ICAP Psitin fr winter perid (i.e., the winter psitin). If a participant has a zer r negative Maximum Available ICAP Psitin, PJM will reject the sell ffer. A sell ffer in an RPM Auctin that vilates any Cnditins n Sales by FRR Entities as presented in the FRR Business Rules will be rejected. Fr Planned Resurces and external resurces withut firm transmissin, sell ffers fr which the RPM Credit Requirement exceeds the credit available will be rejected. Prir t the 2022/2023 Delivery Year, aa generatin resurce s default sell ffer cap fr any capacity perfrmance ffer segment shall be the prduct f the average histrical balancing ratis, as prvided in Sectin 6.4(a) f Attachment DD f the PJM Tariff, times the Net CONE f the znal LDA in which the resurce resides. Effective with the 2022/2023 Delivery Year, a generatin resurce s default sell ffer cap fr any capacity 1Prir t March 27, 2009, the EFORd culd nt exceed the EFORd calculated based n utage data fr 12 mnths ending September 30th prir t the auctin.

5 perfrmance ffer segment shall be the prduct f the applicable CP Nn-Perfrmance Charge Rate times the Prjected Perfrmance Assessment Intervals times the average histrical balancing ratis, as prvided in Sectin 6.4(a) f Attachment DD f the PJM Tariff. Market Sellers may qualify t submit a sell ffer price abve the default ffer cap fr a capacity perfrmance ffer segment by submitting Avidable Cst Rate data t IMM and PJM 120 days prir t the RPM Auctin. All sell ffers fr a supplier that fails the Three-Pivtal Supplier Test will be capped within the mitigated LDA Prir t the 2020/2021 Delivery Year, cleared sell ffers and ffers receiving Make-Whle payments are binding cmmitments t prvide capacity fr the entire Delivery Year. Effective with the 2020/2021 Delivery Year, cleared MWs and make-whle MWs fr Capacity Perfrmance Offer Segments are binding cmmitments t prvide capacity fr the entire Delivery Year. Cleared MWs fr Seasnal Capacity Perfrmance-Summer Offer Segments are binding cmmitments t prvide capacity fr the summer perid f June thrugh Octber and May f the Delivery Year. Cleared MWs fr Seasnal Capacity Perfrmance-Winter Offer Segments are binding cmmitments t prvide capacity fr the winter perid f Nvember thrugh April f the Delivery Year. 8.4A Nn-Perfrmance Assessment Effective with the 2018/2019 Delivery Year 2, a new Nn-Perfrmance Assessment 3 will assess perfrmance f resurces during emergency cnditins. Nn-Perfrmance Assessment applies t bth Base Capacity Resurce and Capacity Perfrmance Resurce cmmitments. Base Capacity Resurce cmmitments are expsed t Nn-Perfrmance Charges nly fr under-perfrmance during Emergency Actins in summer mnths f June thrugh September. Capacity Perfrmance Resurce cmmitments are expsed t Nn-Perfrmance Charges fr under-perfrmance during Emergency Actins thrughut the entire Delivery Year. Resurces that fail t perfrm are subject t Nn-Perfrmance Charge and resurces that ver-perfrm may be eligible fr Bnus Perfrmance Credit. Implementatin f the Nn-Perfrmance Assessment will eliminate Peak Seasn Maintenance Cmpliance and Peak-Hur Perid Availability Assessment fr generatin resurces and Lad Management Event Cmpliance fr Demand Resurces. The Nn-Perfrmance Assessment will cmpare each Capacity Resurce s Expected Perfrmance against its Actual Perfrmance fr each Perfrmance Assessment Interval. Perfrmance Assessment Interval shall mean each Real-time Settlement Interval fr which an Emergency Actin has been declared by PJM. Perfrmance Assessment Intervals are delineated by PJM s 2Resurces with Capacity Perfrmance Cmmitments in 2016/2017 Transitinal Incremental Auctin r 2017/2018 Transitinal Incremental Auctin will be the nly resurces subject t the Nn-Perfrmance Assessment in such transitin Delivery Years. 3OATT, Attachment DD, Sectin 10A

6 declaratin f Emergency Actins. Emergency Actins shall mean any emergency actin fr lcatinal r system-wide capacity shrtages that either utilizes pre-emergency mandatry lad management reductins r ther emergency capacity, r initiates a mre severe actin, including but nt limited t, a Vltage Reductin Warning, Vltage Reductin Actin, Manual Lad Dump Warning, r Manual Lad Dump Actins. Perfrmance is assessed fr each interval that PJM declares the fllwing actins: Pre-Emergency Lad Management Reductin Actin Emergency Lad Management Reductin Actin Primary Reserve Warning Maximum Generatin Emergency Actin Emergency Vluntary Energy Only Demand Respnse Reductins Vltage Reductin Warning and Reductin f Nn-Critical Plant Lad Curtailment f Nn-Essential Business Lad Deply All Resurces Actin Manual Lad Dump Warning Vltage Reductin Actin Manual Lad Dump Actin Lad Shed Directive The Nn-Perfrmance Assessment will encmpass all resurces lcated in the area defined by the Emergency Actin. If the Emergency Actin area is PJM-wide then External Generatin Capacity Resurces (prir t the 2020/2021 Delivery Year nly) and Net Energy Imprts are included in this assessment. Effective with the 2021/2022 Delivery Year, External Generatin Capacity Resurces are included in the assessment if such external resurce wuld have helped reslve the declared Emergency Actin that was the subject f the assessment. At the start f the Delivery Year, PJM will infrm the Capacity Market Seller f an external resurce as t which Lcatinal Deliverability Area it has been assigned fr Nn-Perfrmance Assessment purpses. QTUs will be deemed t be lcated in the LDA int which such upgrade increased the CETL and the QTU will be included in the Nn-Perfrmance Assessment nly if, and t the extent that, the declared Emergency Actin encmpasses nly the LDA int which the upgrade increased the CETL. Fr each Perfrmance Assessment Interval, the Actual Perfrmance and the Expected Perfrmance is used t calculate a Perfrmance Shrtfall that determines bth the Nn- Perfrmance Charge and Bnus Perfrmance Credit applicability. Fr each Perfrmance Assessment Interval, the Actual Perfrmance is equal t: fr each generatin resurce (including External Generatin Capacity Resurces when applicable), the metered utput f delivered energy plus the resurce s real-time reserve r regulatin assignment 4, if any; hwever, the resulting MW quantity is flred at 0 MW; 4 The metered utput f jintly wned generatin resurces is allcated t each wner pr-rata with each wner s share f the ttal Installed Capacity f the resurce.

7 fr each Demand Resurce, the demand respnse prvided plus the resurce s real-time reserve r regulatin assignment, if any; fr each Energy Efficiency Resurce, the lad reductin quantity apprved by PJM subsequent t the pre-delivery year submittal f a pst-installatin M&V Reprt 5 ; fr each entity prviding Net Energy Imprts during a PJM-wide event, the Net Energy Imprt quantity excluding any energy delivered frm External Generatin Capacity Resurces ; and, fr each Qualified Transmissin Upgrade, the cleared MW quantity f the QTU if it is inservice prir t the start f the day f the Perfrmance Assessment Interval, and zer if it is nt in-service prir t the start f such day. Fr each Perfrmance Assessment Interval, the Expected Perfrmance is equal t: fr each generatin resurce (including External Generatin Capacity Resurces when applicable), the resurce s cmmitted Unfrced Capacity times the rati 6 f [(ttal amunt f Actual Perfrmance fr all generatin resurces, plus net energy imprts 7, plus ttal Demand Respnse Bnus Perfrmance fr that interval) / (ttal amunt f cmmitted Unfrced Capacity f all Generatin Capacity Resurces)]; and, fr each Demand Resurce and Energy Efficiency Resurce, the resurces cmmitted capacity withut making any adjustment fr the Frecast Pl Requirement (i.e., the actual lad reductin quantity the resurce cmmitted t prvide); and, fr each Qualified Transmissin Upgrade, the cmmitted MW quantity. The Perfrmance Shrtfall fr a resurce is calculated as Expected Perfrmance minus the Actual Perfrmance. If the Perfrmance Shrtfall fr such resurce is a psitive number, the underperfrming resurce is subject t a Nn-Perfrmance Charge. If the Perfrmance Shrtfall is a negative number, the ver-perfrming resurce may be eligible fr Bnus Perfrmance Credit. Fr generatin resurces with a psitive Perfrmance Shrtfall amunt, the Perfrmance Shrtfall may be adjusted dwnward due t exempt MWs. Exempt MWs cnsist f the fllwing: Unavailable MWs assciated with a generatr s apprved planned r maintenance utage during the Perfrmance Assessment Interval; MWs fr which the resurce was nt scheduled t perate by PJM; r MWs fr which the resurce was n-line but was scheduled dwn by PJM based n the determinatin by PJM that such scheduling actin was apprpriate t the security cnstrained ecnmic dispatch f the PJM Regin. If such resurce was needed by PJM and wuld therwise have been scheduled by PJM t perfrm, but was nt scheduled t perate, r was scheduled dwn slely due t (1) any perating parameter limitatins submitted in the resurce s ffer r (2) submissin f a 5 Base Capacity Energy Efficiency Resurces are nt included in the assessment f Perfrmance Assessment Intervals that ccur utside f the summer mnths f June thrugh September, inclusive. 6 This rati will be capped at 1. 7 Net Energy Imprts are nly included in this frmula fr PJM-wide emergency events.

8 market-based ffer higher than its cst-based ffer, then these MWs will nt be cnsidered exempted and will nt result in a dwnward adjustment t the Perfrmance Shrtfall. Fr purpses f the Nn-Perfrmance Assessment fr demand resurces, cmpliance will be measured in accrdance with Sectin 8.7A f this manual. During the Perfrmance Shrtfall calculatin and the exempt MW determinatin, PJM will ensure that each energy ffer cmplies with Manual 11, Sectin and has the required assciated infrmatin. If this infrmatin is nt included, then n MWs will be exempt. Fr Nn-Perfrmance Assessment purpses, the Actual Perfrmance f any resurce that has bth Base Capacity Cmmitments and Capacity Perfrmance Cmmitments will first be assigned t meet the resurce s Expected Perfrmance as a Capacity Perfrmance Resurce with any remaining Actual Perfrmance next assigned t meet the resurce s Expected Perfrmance as a Base Capacity Resurce. Fr Nn-Perfrmance Assessment purpses during the 2016/2017 and 2017/2018 transitin years, the Actual Perfrmance f any generatin resurce that has bth an Annual Resurce cmmitment and a Capacity Perfrmance cmmitment will first be assigned t meet the resurce s Expected Perfrmance as a Capacity Perfrmance Resurce. Actual Perfrmance abve the resurce s Expected Perfrmance will then be assigned t meet the resurce s Annual cmmitment with any remaining Actual Perfrmance used fr purpses f determining Bnus Perfrmance. Fr Perfrmance Assessment Intervals ccurring utside f the summer perid (June-September), Generatin Capacity Resurces that have a Base Capacity cmmitment, and Base Capacity Demand Resurces, are nt evaluated fr nn-perfrmance, but are eligible fr Bnus Perfrmance Credit. Fr Base Capacity Generatin Resurces, the Bnus Perfrmance quantity is equal t the resurce s Actual Perfrmance minus the resurce s Expected Perfrmance. Fr Base Capacity Demand Resurces, the Bnus Perfrmance quantity is equal t the resurce s Actual Perfrmance. Fr purpses f calculating Bnus Perfrmance quantity, the Actual Perfrmance fr a dispatchable resurce shall nt exceed the MW level at which such resurce was scheduled and dispatched by PJM during the Perfrmance Assessment Interval. During the Bnus Perfrmance quantity calculatin, PJM will ensure that each energy ffer cmplies with Manual 11, Sectin and has the required assciated infrmatin assciated. If this infrmatin is nt included, then the Bnus Perfrmance quantity will be zer. Fr self-scheduled generatin resurces nt dispatchable by PJM, the Actual Perfrmance will nt exceed the LMP Desired MW value as calculated by PJM based upn the higher f the cst r price schedules submitted fr the resurce, and will be zer if the LMP Desired MW is less than the lwest pint n the higher f the cst r price schedules submitted fr the resurce. The interval Nn-Perfrmance Charge is calculated as Perfrmance Shrtfall multiplied by the Nn-Perfrmance Charge Rate. The Nn-Perfrmance Charge Rate fr Capacity Perfrmance

9 cmmitments is equal t {[the mdeled LDA Net CONE ($/MW-day in installed capacity terms) fr which the resurce resides times 365 days] divided by 30the Prjected Perfrmance Assessment Intervals} divided by the number f Real-Time Settlement Intervals in an hur. The mdeled LDAs and their respective Net CONE are prvided in the Delivery Year BRA Planning Parameters psted n the PJM website. The interval Nn-Perfrmance Charge Rate fr Base Capacity cmmitments is equal t [(Weighted Average Resurce Clearing Price ($/MW-day) fr such resurce times 365 days) divided by 30] divided by the number f Real-Time Settlement Intervals in an hur. The number 30 is intended t represent the number f hurs during a year that Emergency Actins culd reasnably be expected t be in effect. Stp-lss prvisins limit the ttal Nn-Perfrmance Charge that can be assessed n each Capacity Resurce. Fr Capacity Perfrmance Resurces, the maximum yearly Nn-Perfrmance Charge is 1.5 times the mdeled LDA Net CONE ($/MW-day in installed capacity terms) times 365 days times the maximum daily unfrced capacity cmmitted by the resurce during June 1 f the Delivery Year thrugh the end f the mnth fr which the Nn-Perfrmance Charge was assessed. Fr Seasnal Capacity Perfrmance Resurces, the maximum yearly Nn-Perfrmance Charge is based the number f days f the applicable seasn and the maximum daily unfrced capacity cmmitted by the resurce fr such seasn. The mdeled LDAs and their respective Net CONE are prvided in the Delivery Year BRA Planning Parameters psted n the PJM website. Fr Base Capacity Resurces, there is an annual limit n ttal Nn-Perfrmance Charges, equal t the ttal capacity revenues due t the resurce fr the Delivery Year. Revenue cllected frm payment f Nn-Perfrmance Charges will be distributed t resurces (f any type, even if they are nt Capacity Resurces) that perfrm abve expectatins. A resurce with Actual Perfrmance abve its Expected Perfrmance is cnsidered t have prvided Bnus Perfrmance, and will be assigned a share f the cllected Nn-Perfrmance Charge revenues in the frm f a Bnus Perfrmance Credit. This credit is based n the rati f its Bnus Perfrmance quantity t the ttal Bnus Perfrmance quantity (frm all resurces) fr the same Perfrmance Assessment Interval. The Nn-Perfrmance Assessment will apply t resurces with Capacity Perfrmance cmmitments fr the 2016/2017 r 2017/2018 Delivery Year; hwever the Nn-Perfrmance Charge fr the 2016/2017 Delivery Year is based n 50 percent f the Nn-Perfrmance Charge Rate and the Nn-Perfrmance Charge fr the 2017/2018 Delivery Year is based n 60 percent f the Nn-Perfrmance Charge Rate. The maximum Nn-Perfrmance Charge expsure in the stplss calculatin is crrespndingly reduced such that fr 2016/2017, the maximum yearly Nn- Perfrmance Charge is 0.75 times Net CONE times the maximum daily unfrced capacity cmmitted by the resurce during June 1 f the Delivery Year thrugh the end f the mnth fr which the Nn-Perfrmance Charge was assessed. Fr the 2017/2018 Delivery Year, the maximum yearly Nn-Perfrmance Assessment Charge is 0.9 times Net CONE times the maximum daily unfrced capacity cmmitted by the resurce during June 1 f the Delivery Year thrugh the end f the mnth fr which the Nn-Perfrmance Charge was assessed. Ttal revenues cllected

10 frm Nn-Perfrmance Charges fr a Perfrmance Assessment Interval during the 2016/2017 r 2017/2018 Delivery Year will be allcated nly t ver-perfrming capacity resurces with a Capacity Perfrmance cmmitment. The billing f any Nn-Perfrmance Charges incurred in any given mnth will be dne within three calendar mnths after the calendar mnth that included such Perfrmance Assessment Intervals and such billing f charges will be spread ver the remaining mnths in the Delivery Year. Bnus Perfrmance Credits will fllw the same billing methdlgy as Nn- Perfrmance Charges. 9.1 Deficiency and Penalty Charges Nn-Perfrmance Charge/Bnus Perfrmance Credit Nn-Perfrmance Charge will be assessed t a resurce prvider that had a Perfrmance Shrtfall fr a Perfrmance Assessment Interval. Nn-Perfrmance Charge is equal t the Perfrmance Assessment Interval Perfrmance Shrtfall (MW) times Nn-Perfrmance Charge Rate ($/MWh) The Nn-Perfrmance Charge Rate t be applied t shrtfalls assciated with Capacity Perfrmance cmmitments is equal t {[the mdeled LDA Net CONE fr which the resurce resides ($/MW-day in installed capacity terms) times 365 divided by 30the Prjected Perfrmance Assessment Intervals} divided by the number f Real-Time Settlement Intervals in an hur. The Nn-Perfrmance Charge Rate t be applied t shrtfalls assciated with Base Capacity cmmitments is equal t [(Weighted Average Resurce Clearing Price ($/MW-day) fr such resurce times 365) divided by 30] divided by the number f Real-Time Settlement Intervals in an hur. Stp-lss prvisins limit the ttal Nn-Perfrmance Charge that can be assessed n each Capacity Resurce. Fr Capacity Perfrmance Resurces, the maximum yearly Nn-Perfrmance Charge is 1.5 times mdeled Net CONE fr which the resurce resides ($/MW-day in installed capacity terms) times 365 times the maximum daily unfrced capacity cmmitted by the resurce during June 1 f the Delivery Year thrugh the end f the mnth fr which the Nn-Perfrmance Charge was assessed. Fr Seasnal Capacity Perfrmance Resurces, the maximum yearly Nn- Perfrmance Charge is based the number f days f the applicable seasn and the maximum daily unfrced capacity cmmitted by the resurce fr such seasn. Fr Base Capacity Resurces, there is an annual limit n ttal Nn-Perfrmance Charges, equal t the ttal capacity revenues due t the resurce fr the Delivery Year. Revenue cllected frm payment f Nn-Perfrmance Charges will be distributed t resurces (f any type, even if they are nt Capacity Resurces) that perfrm abve expectatins. A resurce with Actual Perfrmance abve its Expected Perfrmance is cnsidered t have prvided Bnus Perfrmance, and will be assigned a share f the cllected Nn-Perfrmance Charge revenues in the frm f a Bnus Perfrmance Credit. This credit is based n the rati f its Bnus Perfrmance

11 quantity t the ttal Bnus Perfrmance quantity (frm all resurces) fr the same Perfrmance Assessment Interval. The Nn-Perfrmance Assessment will apply t resurces with Capacity Perfrmance cmmitments fr the 2016/2017 r 2017/2018 Delivery Year; hwever the Nn-Perfrmance Charge fr the 2016/2017 Deliver Year is based n 50 percent f the Nn-Perfrmance Charge Rate and the Nn-Perfrmance Charge fr the 2017/2018 Delivery Year is based n 60 percent f the Nn-Perfrmance Charge Rate. The maximum Nn-Perfrmance Charge expsure in the stplss calculatin is crrespndingly reduced such that fr 2016/2017, the maximum yearly Nn- Perfrmance Charge is 0.75 times Net CONE times the maximum daily unfrced capacity cmmitted by the resurce during June 1 f the Delivery Year thrugh the end f the mnth fr which the Nn-Perfrmance Charge was assessed. Fr the 2017/2018 Delivery Year, the maximum yearly Nn-Perfrmance Charge is 0.9 times Net CONE times the maximum daily unfrced capacity cmmitted by the resurce during June 1 f the Delivery Year thrugh the end f the mnth fr which the Nn-Perfrmance Charge was assessed. Ttal revenues cllected frm Nn-Perfrmance Charges fr a Perfrmance Assessment Interval during the 2016/2017 r 2017/2018 Delivery Year will be allcated nly t ver-perfrming capacity resurces with a Capacity Perfrmance cmmitment. The billing f any Nn-Perfrmance Charges incurred in any given mnth will be dne within three calendar mnths after the calendar mnth that included such Perfrmance Assessment Intervals and such billing f charges will be spread ver the remaining mnths in the Delivery Year. Bnus Perfrmance Credits will fllw the same billing methdlgy as Nn- Perfrmance Charges Deficiency Charges & Penalties Physical Nn-Perfrmance Assessment An FRR Entity that elected t be subject t physical nn-perfrmance assessment fr resurces cmmitted t the Delivery Year FRR Capacity Plan as ppsed t financial nn-perfrmance assessment fr such resurces will be required t update the subsequent Delivery Year s FRR Capacity Plan and cmmit additinal Capacity Perfrmance Resurces r Seasnal Capacity Perfrmance Resurces beynd the amunt f Capacity Perfrmance Resurces required fr the subsequent Delivery Year as a penalty fr thse resurces cmmitted t the FRR Capacity Plan that experienced Perfrmance Shrtfalls fr Perfrmance Assessment Interval during the relevant Delivery Year. Fr each Perfrmance Assessment Interval, the Actual Perfrmance and Expected Perfrmance f each resurce cntained in an FRR Entity' Capacity Plan will be determined accrding t the rules and frmulas described in the Nn-Perfrmance Assessment sectin 8.4A,and fr such hur, a net Perfrmance Shrtfall shall be determined separately fr Capacity Perfrmance Resurces and fr Base Capacity Resurces. If the cmbined Actual Perfrmance f all Capacity Perfrmance Resurces cmmitted t the FRR Entity s Capacity Plan exceeds the Expected Perfrmance f such resurces, then such ver-perfrmance may be applied t any psitive Perfrmance shrtfall

12 experienced by such FRR Entity s Base Capacity Resurces during the Perfrmance Assessment Interval. If the cmbined Actual Perfrmance f all Base Capacity Resurces cmmitted t the FRR Entity s Capacity Plan exceeds the Expected Perfrmance f such resurces, then such verperfrmance may be applied t any psitive Perfrmance Shrtfall experienced by such FRR Entity s Capacity Perfrmance Resurces during the Perfrmance Assessment Interval. Effective with the 2020/2021 Delivery Year, the net Perfrmance Shrtfall fr Capacity Perfrmance Resurces shall include the perfrmance f Seasnal Capacity Perfrmance Resurces included in the FRR Capacity Plan. The FRR Entity s net Perfrmance Shrtfall amng Capacity Perfrmance Resurces, if any, fr each Perfrmance Assessment Interval shall by multiplied by a rate f MWs/Perfrmance Assessment Interval [i.e., 0.5 MWs/30 PAHsthe Prjected Perfrmance Assessment Intervals/12 intervals per hur]] t establish the additinal MW f Capacity Perfrmance Resurces that such FRR Entity must add t its FRR Capacity Plan fr the fllwing Delivery Year. The maximum additinal MW required by the FRR Entity as a result f nn-perfrmance frm the FRR Entity s Capacity Perfrmance Resurces during a Delivery Year shall nt exceed 50% f the MW quantity f the Capacity Perfrmance Resurces cmmitted in the FRR Capacity Plan fr such Delivery Year. The FRR Entity s net Perfrmance Shrtfall amng Base Capacity Resurces, if any, fr each Perfrmance Assessment Interval shall by multiplied by a rate f [( MWs/Perfrmance Assessment Interval) times (the Base Capacity Resurce clearing prices acrss all RPM Auctins fr the Delivery Year fr the LDA encmpassing the zne f the FRR Entity, weighted by the quantities cleared in the RPM Auctins divided by the Net CONE established fr such LDA fr the Delivery Year)] t establish the additinal MW f Capacity Perfrmance Resurces that such FRR Entity must add t its FRR Capacity Plan fr the fllwing Delivery Year. The maximum additinal MW required by the FRR Entity as a result f nn-perfrmance frm the FRR Entity s Base Capacity Resurces during a Delivery Year shall nt exceed a MW quantity equal t [(0.5 times the MW quantity f the Base Capacity Resurces cmmitted in the FRR Capacity Plan fr such Delivery Year) times (the Base Capacity Resurce clearing prices acrss all RPM Auctins fr the Delivery Year fr the LDA encmpassing the zne f the FRR Entity, weighted by the quantities cleared in the RPM Auctins divided by the Net CONE established fr such LDA fr the Delivery Year)] The additinal MWs f Capacity Perfrmance Resurces required fr Perfrmance Assessment Intervals (PAIs) that ccur during February thrugh May f the Delivery Year shall be cmmitted t the FRR Entity s FRR Capacity Plan fr the remainder f the fllwing Delivery Year by established deadlines belw. February PAIs: by July 1 f the fllwing Delivery Year March PAIs: by August 1 f the fllwing Delivery Year April PAIs: by September 1 f the fllwing Delivery Year May PAIs: by Octber 1 f the fllwing Delivery Year