<p> CAISO</p><p>Settlements & Billing </p><p>BPM Configuration Guide: BPM - CG CC 4533 GMC Virtual Award Charge CC 4533</p><p>Version 5.10 Settlements & Billing Version: 5.10 Configuration Guide for: BPM - CG CC 4533 GMC Virtual Award Charge Date: 01/31/11 9/15/11</p><p>Table of Contents</p><p>1. Purpose of Document 3</p><p>2. Introduction 3 2.1 Background 3 2.2 Description 4</p><p>3. Charge Code Requirements 4 3.1 Business Rules 4 3.2 Internal Business Rules 4 3.3 Successor Charge Codes 5 3.4 Inputs – External Systems 5 3.5 Inputs - Predecessor Charge Codes or Pre-calculations 5 3.6 CAISO Formula 6 3.7 Outputs 6</p><p>4. Charge Code Effective Date 7</p><p>ÓCAISO, 2018 Page 2 of 7 Settlements & Billing Version: 5.10 Configuration Guide for: BPM - CG CC 4533 GMC Virtual Award Charge Date: 01/31/11 9/15/11</p><p>1. Purpose of Document</p><p>The purpose of this document is to capture the requirements and design specification for a SaMC Charge Code in one document.</p><p>2. Introduction</p><p>2.1 Background</p><p>On September 21, 2006, FERC issued an Order directing “…the CAISO to file tariff language for our review for the implementation of convergence bidding within 12 months after the effective date of MRTU Release 1..” FERC recognized that, although convergence bidding was important, implementing it simultaneously with MRTU Release 1 would impede the CAISO’s ability to timely implement MRTU. By implementing Convergence Bidding and other elements of Markets and </p><p>Performance (“MAP”) in a phased approach following implementation of MRTU, the CAISO </p><p> should be able to successfully balance the need to timely implement and stabilize the “base” </p><p>MRTU design while gaining the benefits of adding market efficiencies within a reasonable time after MRTU Go Live. </p><p>The California ISO (the CAISO) became engaged in an on-going stakeholder process to develop the key features for convergence bidding that began in summer of 2006. The ISO requested final comments from stakeholders on the Draft Final Proposal for Convergence Bidding by close of business October 14. Then, on October 21, 2009, CAISO issued a Board memo that described and presented the final policy on convergence bidding for Board approval. On October 29, 2009, CAISO Board of Governors approved the proposed market enhancement, convergence bidding, as described in the Board memo.</p><p>While the MRTU design provides a complete framework for a nodal-based electricity market that generates Locational Marginal Prices (LMPs), the elements contained within MAP will increase the efficiency and liquidity of the MRTU design by adding bidding tools, creating incentives for increased supply/reduced demand and removing impediments to bidding. These enhancements can be expected to increase participation in the CAISO market, provide more robust competition for supply and demand and, ultimately, may reduce prices paid by end users. </p><p>Convergence bidding tends to cause DAM and RTM prices to move closer together, or "converge," thus the term convergence bidding. The narrowing of price differences between the </p><p>ÓCAISO, 2018 Page 3 of 7 Settlements & Billing Version: 5.10 Configuration Guide for: BPM - CG CC 4533 GMC Virtual Award Charge Date: 01/31/11 9/15/11</p><p> two markets reduces incentives for under-scheduling Load in the DAM by reducing potential financial benefits for waiting until the RTM. In addition to reducing price disparity, convergence bidding also provides greater market transparency by providing bids that are explicit rather than implicit. Additionally, the increased market liquidity from convergence bidding can help mitigate the market power of physical suppliers. Some market participants can use convergence bidding as a risk management tool to hedge the possibility of a generator outage. A Virtual Bid in convergence bidding is defined to be either a Virtual Demand Bid or Virtual Supply Bid. A Virtual Demand Bid is a Bid submitted in the CAISO Day-Ahead (DA) Market that, if cleared in the Integrated Forward Market (IFM), represents a commitment to purchase Energy at the price determined in the DA Market, and to sell any Virtual Award resulting from the Virtual Bid at the price determined in the Real-Time Market. Likewise, a Virtual Supply Bid is a Bid submitted in the CAISO DA Market that, if cleared in the IFM, represents a commitment to sell Energy at the price determined in the DA Market, and to buy the same quantity back at the price determined in the Real Time Market. </p><p>2.2 Description </p><p>Virtual Award Charge is the component of Grid Management Charge (GMC) that provides for the recovery of the CAISO’s costs related to Virtual Awards. This new GMC component for convergence bidding will have a billing determinant of $ per cleared gross MWh per Scheduling Coordinator (SC) ID. The revenue generated from the Virtual Award Charge will be applied to the existing Forward Scheduling Charge and Market Usage (Day Ahead) Charge.</p><p>3. Charge Code Requirements</p><p>3.1 Business Rules</p><p>Bus Req Business Rule ID Virtual Award Charge amount shall be calculated by multiplying the 1.0 GMC rate for convergence bidding by the cleared gross MWh per SC. Rate is based on the FERC approved GMC rate for Virtual Award 2.0 Charge per MWh. 3.0 Cleared gross MWh refers to Virtual Awards MWh. Virtual Awards may refer to Virtual Supply Award and/or Virtual 3.1 Demand Award. Virtual Award Charge shall be calculated and output on a daily basis 4.0 and summed to a value for a period processed for invoicing in accordance with the CAISO Payment Calendar.</p><p>ÓCAISO, 2018 Page 4 of 7 Settlements & Billing Version: 5.10 Configuration Guide for: BPM - CG CC 4533 GMC Virtual Award Charge Date: 01/31/11 9/15/11</p><p>3.2 Internal Business Rules</p><p>Bus Req Internal Business Rule ID Business Associate ID shall be used in Settlements calculation in the 1.0 place of SCID. The billable quantity for Virtual Award Charge shall be the absolute 2.0 value of Virtual Supply Award and/or Virtual Demand Award. </p><p>3.3 Successor Charge Codes</p><p>Charge Code/ Pre-calc Name < None ></p><p>3.4 Inputs – External Systems</p><p>Row # Variable Name Description 1.0 BAHourlyDAVirtualAwardNodalQu The input provides the DA Virtual antity BA’aj’y’mdh Award cleared Energy quantity in association with Business Associate B, Aggregated PNode type A’, bid type a, Eligible PNode/Aggregated PNode j’, Node Location Type y’, Trading Month m, Trading Day d, and Trading Hour h. (MW)</p><p>2.0 GMCVirtualAwardChargeRate md FERC approved GMC rate from settlements standing data based on applicable start and end dates.</p><p>3.5 Inputs - Predecessor Charge Codes or Pre-calculations</p><p>Predecessor Charge Code/ Pre-calc Row # Variable Name Configuration < None ></p><p>ÓCAISO, 2018 Page 5 of 7 Settlements & Billing Version: 5.10 Configuration Guide for: BPM - CG CC 4533 GMC Virtual Award Charge Date: 01/31/11 9/15/11</p><p>3.6 CAISO Formula</p><p>BATotalGMCVirtualAwardChargeAmount Bmd = BATotalGMCVirtualAwardQuantity Bmd * GMCVirtualAwardChargeRate md</p><p>3.6.1.1 BATotalGMCVirtualAwardQuantity Bmd =  A' a j' y' h</p><p>BAHourlyGMCVirtualAwardQuantity BA’aj’y’mdh</p><p>3.6.1.2 BAHourlyGMCVirtualAwardQuantity BA’aj’y’mdh = ABS(BAHourlyDAVirtualAwardNodalQuantity BA’aj’y’mdh )</p><p>3.7 Outputs</p><p>Output Name Description Req ID In addition to any outputs listed below, all inputs shall be included as outputs.</p><p>BATotalGMCVirtualAwardChargeA Total daily GMC Virtual Award 1 Charge amount by Business mount Bmd Associate. BATotalGMCVirtualAwardQuantity 2 Total daily GMC Virtual Award Bmd quantity by Business Associate. Absolute value of hourly GMC Virtual Award quantity by Business Associate, Aggregated PNode BAHourlyGMCVirtualAwardQuantit 3 Type, Bid Type, Eligible y BA’aj’y’mdh PNode/Aggregated PNode and Node Location Type, Trading Month, Trading Day and Trading Hour.</p><p>4. Charge Code Effective Date</p><p>ÓCAISO, 2018 Page 6 of 7 Settlements & Billing Version: 5.10 Configuration Guide for: BPM - CG CC 4533 GMC Virtual Award Charge Date: 01/31/11 9/15/11</p><p>Effective Charge Code/ Document Effective Version Update Start Version End Date Type Pre-calc Name Date CC 4533 GMC Open Configuration Virtual Award 5.0 02/01/11 1/31/11 Impacted Charge CC 4533 GMC Configuration Virtual Award 5.1 02/01/11 12/31/11 Impacted Charge</p><p>ÓCAISO, 2018 Page 7 of 7</p>