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

• MRTU Go-Live Date
• Integrated Market Simulation Start
• APX Client Participation in Market Simulation
• SC Readiness Assessments

As widely anticipated, the CAISO announced on Wednesday August 22, 2007 that the go live date for MRTU is now March 31, 2008 for trade date April 1, 2008. While this modest two month delay might appear to provide a bit of breathing room, it is still aggressive and requires a significant amount of time, energy and effort for the CAISO, vendors and market participants. Reasons sited for the delay were: System integration issues; Stakeholder input and feedback from market simulations; CAISO vendor delivery challenges; and incorporation of recent FERC directives.

The change to the go live date effectively eliminates the need to run the allocation and auctions for the first season (Q1) during the annual Congestion Revenue Rights (CRR) process that proceeds the actual go-live date. It also does away with the need to release Long Term CRRs for Season 1 in 2008. Several processes unique to the initial annual allocation and auction of CRR’s will have to be performed in late 2008 for the 2009 operating year since it will be the first time that Season 1 products will be relevant. The deadline to submit requests for Tier 1 annual allocations has also been extended to September 14, 2007.

The CAISO has regrouped and rescheduled the continuation of the market simulation phases designed to assure that both the CAISO and Market Participants are ready for MRTU go live. This next phase picks up where the last ended in terms of functionality and applications and adds the real-time market to the simulation. The current target start date is Monday September 24. IMS Release 3 will have two distinct phases with the first two weeks identified as structured, where the CAISO loads a predetermined set of bids and schedules into the Scheduling Infrastructure Business Rules (SIBR) application. The uploaded data is validated prior to being sent to and used by the CAISO market software. The Day Ahead market outcomes/results are then made available to market participants for review and become the starting point for the real-time markets. Unused bids from the Day Ahead market are then processed and validated for each hour of the real-time market and simulated dispatches are sent to market participants. Settlement Statements are then prepared and posted for viewing by the market participants approximately 5 days after each simulation day is run.

The subsequent three weeks of market simulation, named semi-structured, are run with the same predetermined set of bids, with the market participant responsible for submitting the bid data to the CAISO with some very limited modifications. This semi-structured period is designed to allow market participants to test in house business practices that lead up to preparing and submitting bids and schedules. APX will be participating in both phases of the market simulation on a daily basis to verify that the specific aspects of the APX Platform MRTU applications and MRTU processes are properly interacting with the CAISO applications.

To prepare the subsequent round of market participation, currently scheduled to begin in early November, the CAISO began distributing another version of Resource Data Templates (RDTs), sometimes referred to as Masterfile data, to Scheduling Coordinators. This version of the RDT will synchronize with the version of the network model that will be used during the November phase of market simulation. There is an opportunity for corrections and adjustments to the information that is being used for the November market simulation, but a deadline of September 19th to send any changes back to the CAISO. Please contact APX if you would like any assistance in reviewing and updating your RDT information, of general clarification on what is contained in the data file(s).

APX is excited to reveal the look and feel of its new Power Market Applications Suite to users during this next round of MRTU market simulation. Because the APX development effort is staged and dependent on the CASIO market simulation environment to test various aspects of functionality, only certain elements are being released during this phase to give our clients a chance to look at and “test drive” in the APX sandbox environment. The full suite of applications necessary to comprehensively participate in the MRTU markets are intended to be released early Q1 2008.

APX clients will have the opportunity to view the static bid set used during this next phase of market simulation in the APX Bid/Offer User Interface, download market results through the APX Platform Explorer and view select Charge Codes through the ISO Settlement application. The ISO Settlement application will also allow clients to verify that the select Charge Codes have be calculated correctly by the CAISO.

APX will be contacting clients to determine their interest in actively participating in this round of market simulation in the next few weeks. The process will involve scheduling a webcast with APX for a walk through and demonstration of the applications and then registering as a user in the APX sandbox. Because APX is dependent on the CASIO IMS Start process to populate databases with client specific information, these webcasts can’t begin until the simulation is in the third week of operation, during the semi-structured phase. Once clients have participated in a webcast and self register in the APX sandbox, they will be able to view simulation activity and results for several weeks beyond the actual end of the CAISO simulation.

Please contact Cris Gallegos at (408) 517-2154 for more information if you would like additional information on how market simulation would work specifically for your company.

APX clients with their own Scheduling Coordinator Agreement with the CAISO completed a second readiness assessment (First Follow Up) earlier in the summer. These CAISO led self-assessments on MRTU preparedness are designed to assure that the market will be ready for MRTU at the go-live date along with the CAISO. APX has completed its second self assessment with the CAISO and is on track for the change over to MRTU.

For those clients that completed the second readiness assessment, the CAISO will be issuing a letter in the next few weeks summarizing the results of the First Follow Up Assessment. It will highlight areas of concern and presumably answer any questions directed at the CAISO during the assessment.

The next full assessment (Second Follow Up) has been deferred until late December or early January after there is some additional experience with market simulation. The CAISO is planning on conducting "Participant Touchpoint" interviews during October to get interim feedback. As with the previous readiness assessments, APX will gladly participate with clients as requested.