APX is pleased to present the current and future activities of the CAISO Market Redesign and Technology Upgrade (MRTU). This issue includes:

• Market Simulation
• APX PowerSuite™
• CAISO MRTU Training

After a break in simulation activities to shore up the CAISO systems, Integrated Market Simulation was restarted on February 19 incorporating a systematic approach with static data focused on verifying base functionality prior to advancing to an open simulation.  This approach, with an onsite team of market participants including APX, allowed functionality to be observed and verified by the CAISO and market participants simultaneously.  In cases where there were variances, they could be replicated by numerous parties immediately and revealed to CAISO personnel accelerating the issue tracking, resolution and retesting process.

CAISO system stability and performance are noticeably better now than in previous phases of market simulation with very few issues related to the ability to access and use the Scheduling Infrastructure/Business Rules (SIBR) system.  The Day Ahead market has run successfully for each day and the real-time market runs executing a usable solution over 90% of the time.  In the first two weeks of the simulation there were significant issues from related systems and processes that prevented the markets from closing and publishing results on time.  The most notable problems were related to nightly masterfile updates, market participants deviating from the scripted data issues related to Daylight Savings Time and data payload issues that made it difficult for market participants to validate settlement statements using ISO source data. These issues, and the desire to correct them prior to moving to an open simulation environment without scripted data, have driven the decision to take another hiatus beginning March 21.

During this break, in addition to resolving variances surfaced during the current four week simulation, the CAISO will be promoting a software drop that completes the market functionality that will be in place at MRTU go-live.  Both the CAISO and market participants believe this will best assure that once simulation resumes, the functional issues that slowed the current simulation phase will be resolved, full market functionality will be in place and the simulation can advance to an open phase.  The current target date for resuming market simulation is April, 7 2008.

It is anticipated that once simulation resumes in April, only a few days of using static data will be required to establish that variance fixes and the software promotion was successful. After that point, market participants will be free to formulate and submit data that more closely reflects their expected business activity under MRTU. Coincidently, there are 56 market scenarios that have been developed by market participants and the CAISO to test various market and load conditions that may occur during the course of business. Conceptually as each of these scenarios are tested, the ability of the MRTU systems to provide a reliable and reasonable outcome will be proven. With the current plan, it will take upwards of seven weeks of simulation to cycle through the test cases.

If you have any questions regarding details of market simulation or the next steps, contact Spence Gerber at sgerber@apx.com or (916) 351-9759

APX has tested the latest APX PowerSuite MRTU functionality as part of the current short run market simulation and will be deploying to the Sandbox environment that will be available to clients shortly after the CAISO resumes market simulation.  During the current phase of simulation, APX personnel and a limited number of clients used the APX PowerSuite Bid-Offer, Trade and Checkout applications to successfully enter and submit bids/offers and bilateral trades to the CAISO.  To the extent that the CAISO systems were open to market participants to use API transmittal and receipt of market simulation data, the APX PowerSuite operated seamlessly.

When CAISO resumes market simulation, the APX PowerSuite will provide capabilities including:

• Creating and submitting bids/offers and trades that conform to DST (including wheels and ETCs/TORs)
• Overriding default resource parameters (for generators and interties)
• Viewing pre market and post market activity with status indicators to highlight when user action is required
• Running automated workflows to submit templates, query for bid and trade results download ISO public and private data including market results, prices, and settlement statements
• Monitoring all automated workflows via Platform Monitor
• Retrieving CAISO source files via Platform Explorer
• Reviewing and analyzing initial settlement statements via a sampling of standard settlement reports

APX encourages its clients to register for and start using the APX PowerSuite which will be available during the second or third week of the next round of market simulation. Clients can use the APX PowerSuite to conduct a variety of bidding and trading scenarios in order to better understand the MRTU scheduling rules and settlement implications to their portfolio.

The MRTU scheduling rules are complex making it critical that market participants have a detailed understanding of the interdependence of self schedules and market bids/offers, the various priorities of export schedules, how to schedule RA obligations, and what CAISO SIBR will insert on your behalf upon market closing if there is missing data.

The CAISO has released a high level 2008 MRTU training plan and indicates that it will be offering a variety of new courses on a monthly basis. The existing group of multi-day, on-site courses, such as the Level 200 and Bid to Bill classes, will still be available via computer based training. The new classes will be web-based and are likely to be delivered in two to four hour sessions. These classes are expected to be repeated several times throughout the month.

Topics under consideration are:

• MRTU "Lite", a high level overview of the new market
• Specific settlement Charge Code validations for some of the major charge codes
• The relationship between the Day Ahead and Real-time markets
• Implications of power contracts in the MRTU market.

Details, timing and content for these classes are currently under development.  The CAISO should have an updated training calendar out by the end of March to detail the spring offerings.  If you happen to miss any market notices with the updated calendar, check the training section on the CAISO website.

Contact your Account Manager Cris Gallegos (408.517.2154) or Tony Frontino (714.544.1774) for more information.