Welcome to the California ISO

1. Welcome to the California ISO Jim Blatchford Manager, Short Term Forecasting Clyde Loutan Sr Advisor - Renewable Energy Integration March 31,2015 The information contained in these materials is provided for general information only and does not constitute legal or regulatory advice.   The ultimate responsibility for complying with the ISO FERC Tariff and other applicable laws, rules or regulations lies with you. In no event shall the ISO or its employees be liable to you or anyone else for any decision made or action taken in reliance on the information in these materials.

2. Today’s agenda

4. The birth of the ISO

5. The California ISO is one of 9 independent system operators/regional transmission operators (ISOs/RTOs) in North America.

6. Organized markets of North America March 2013

7. Western balancing authorities A balancing authority is responsible for operating a transmission control area. It matches generation with load and maintains electric frequency of the grid. The ISO is the largest of about 40 balancing authorities in the western interconnection, handling an estimated 35 percent of the electric load in the West.

8. Western Electricity Coordinating Council (WECC) • CA is one of 14 states withinWECC • Resource sharing enhances reliability, helps achieve renewable targets and manages cost • 25% of all the electricity that keeps the lights on during the summer comes from other parts of the west including parts of Canada and Mexico Page 8

9. Who oversees us? We are governed by a Governor appointed/Senate confirmed Five Member Board We are regulated by FERCFederal Energy Regulatory Commission We are compliant with NERCNorth American Electric Reliability Corporation We are part of WECCWestern Electricity Coordinating Council

10. ISO coordination with state agencies Air Resources Board Greenhouse gas regulations Energy Commission and Legislature Renewable Portfolio Standard Public Utilities Commission Resource Adequacy Generation Procurement Water ResourcesControl Board Once-through cooling

11. California balancing authorities The California ISO manages the flow of electricity for about 80 percent of California and a small portion of Nevada, which encompasses all of the investor-owned utility territories and some municipal utility service areas. There are certain pockets of California where local public power companies manage their own transmission systems. June 2014

12. California ISO by the numbers • 65,225 MW of power plant capacity (net dependable capacity) • 50,270 MW record peak demand (July 24, 2006) • 27,076 market transactions per day • 26,024 circuit-miles of transmission lines • 30 million people served • 244 million megawatt-hours of electricity delivered annually October 2014

13. The ISO is a non-profit public benefit corporation. Our responsibilities: • Maintain reliability • Implement State policy • Operate wholesale market • Plan for system expansion • Interconnect resources

14. Before the ISO… Utility Owned Generation Customer Utility

15. How the ISO fits in… Independent Generators Power Marketers Utility Owned Generation Scheduling Coordinators ISO Customer Local Utility

16. Electricity is produced, delivered, and consumed at the speed of light while balance must be maintained.

17. Two separate control rooms – 500 miles apart Redundant energy management system and market, software and hardware Diversified, secured communications networks Cross-trained system operators with specific responsibilities Control centers Page 17

18. Resource mix May 2014

19. The ISO has three basic functions – we will discuss these in the following slides.

20. The ISO market offers A full network model that analyzes generation and transmission schedules submitted a day in advance to better manage or avoidreal-time bottlenecks. An integrated forward market that provides a “one-stop shop” for trading and analyzing electricity bids, transmission capacity and reserves needed to keep the grid in balance. Locational marginal pricing - electricity pricing based on the cost of generating and delivering it.

21. The ISO’s markets

22. ISO energy-speak • Energy – The electrical power produced or supplied by a generating resource • Capacity – a reservation for energy; a resource is on standby for energy may be needed in the future • Congestion - A situation in which the lowest-priced electricity can’t flow freely to a specific area due to heavy use of the transmission system.

23. Products and services

24. Scheduling Coordinator - Flow Market Timeline: Day Ahead Market (DAM) T - 7 days 10:00 13:00 Bids Submitted SIBR Publish Results CMRI DAM Process Begins Clear the Market • Applications: • SIBR - Scheduling and Infrastructure Business Rules • CMRI – Customer Market Results Interface • ADS – Automated Dispatch System • SLIC – Scheduling and Logging for ISO of California – Outages • MRI-S – Market Results Interface-Settlements Triggers the Real Time Market Real Time Market (RTM) Beginning at midpoint of each 5min period T-1 after 13:00 T-75min Bids/Base Schedules Submitted SIBR/BSAP Receive Dispatches ADS RTM Process Begins Clear the Market • FMM – Fifteen Minute Market • RTD – Real-Time Dispatch Settlements MRI-S

25. Energy Imbalance Market • Extends real-time market and 5-minute dispatch outside the ISO • Builds on existing market platform • Easily scalable, offering low-cost, low risk option to new entities • Provides integration, economic, and reliability benefits. • PacifiCorp activated Oct 2014 • NVE scheduled for Oct 2015

26. caiso.com Page 26

27. Page 27

28. Page 28

29. Page 29

30. Page 30