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Background Under Market Redesign and Technology Upgrade (MRTU) Release 1, the CAISO has proposed a limited scarcity pricing mechanism that raises bids to the bid cap when there are insufficient energy bids in real time while no contingency events have occurred. In the July and September 2005 Orders, the Commission accepted, in concept, the CAISO’s initial limited scarcity proposal, but has directed the CAISO to develop a more extensive reserve shortage scarcity pricing approach with a later release of MRTU. In its September 2006 MRTU Order, Federal Energy Regulatory Commission (FERC) ordered a more comprehensive reserve shortage scarcity pricing mechanism to be implemented within 12 months of the implementation of MRTU Release 1. In its April 2007 MRTU Order, FERC further emphasized these requirements and urged the CAISO to develop a systematic scarcity pricing procedure to ensure that prices can rise during periods of genuine scarcity.

Outcome Pending closure of initiative

Process

Relevant Market Notices

Stakeholder Comments on Scarcity Pricing Final Proposal 15-Jul-2008 Reliant Energy Comments on Scarcity Pricing Final Proposal 15-Jul-2008 doc 75K | Abstract | 07/31/2008 14:23 PG&E Comments on Scarcity Pricing Final Proposal 15-Jul-2008 doc 73K | Abstract | 07/31/2008 14:22 Dynergy Comments on Scarcity Pricing Final Proposal 15-Jul-2008 pdf 11K | Abstract | 07/31/2008 14:21 CPUC Comments on Scarcity Pricing Final Proposal 15-Jul-2008 doc 60K | Abstract | 07/31/2008 14:20 CDWR Comments on Scarcity Pricing Final Proposal 15-Jul-2008 doc 51K | Abstract | 07/31/2008 14:19 WPTF Comments on Scarcity Pricing Final Proposal 15-Jul-2008 pdf 110K | Abstract | 07/31/2008 14:18 SCE Comments on Scarcity Pricing Final Proposal 15-Jul-2008 doc 410K | Abstract | 07/31/2008 14:16

Scarcity Pricing Stakeholder Conference Call 18-Jul-2008 Stakeholder Comments Template 18-Jul-2008 doc 37K | Abstract | 07/17/2008 10:50 Presentation - Scarcity Pricing Final Proposal 16-Jul-2008 pdf 596K | Abstract | 07/16/2008 16:42 Final Proposal for Reserve Scarcity Pricing Design 15-Jul-2008 pdf 317K | Abstract | 07/15/2008 13:06

Stakeholder Comments on Scarcity Pricing Conference Call 27-May-2008 CLECA Scarcity Pricing Comments 27-May-08 pdf 112K | Abstract | 06/16/2008 16:25 CPUC Scarcity Pricing Comments 27-May-08 pdf 115K | Abstract | 06/16/2008 16:26 DWR-SWP Scarcity Pricing Comments 27-May-08 pdf 72K | Abstract | 06/16/2008 16:27 Dynegy Scarcity Pricing Comments 27-May-08 pdf 13K | Abstract | 06/16/2008 16:28 Occidental Energy Scarcity Pricing Comments 27-May-08 pdf 18K | Abstract | 06/16/2008 16:29 PG&E Scarcity Pricing Comments 27-May-08 pdf 129K | Abstract | 06/16/2008 16:31 SCE Scarcity Pricing Comments 27-May-08 pdf 125K | Abstract | 06/16/2008 16:32 SDG&E Scarcity Pricing Comments 27-May-08 pdf 99K | Abstract | 06/16/2008 16:32 WPTF Scarcity Pricing Comments 27-May-08 pdf 118K | Abstract | 06/16/2008 16:34

Stakeholder Conference Call 27-May-2008 Summary of 2006-2007 A/S Bid Deficiency Data xls 139K | Abstract | 06/04/2008 15:05 Agenda - Stakeholder Conference Call 27-May-2008 pdf 34K | Abstract | 05/23/2008 16:41 Presentation - Scarcity Pricing Revised Draft Proposal 27-May-2008 pdf 400K | Abstract | 05/27/2008 12:43 WPTF Presentation - Local Scarcity Pricing 27-May-2008 pdf 223K | Abstract | 05/27/2008 12:36 Revised Draft Proposal for Reserve Scarcity Pricing Design 20-May-2008 pdf 287K | Abstract | 05/23/2008 16:49 Methodology for AS Cost Allocation by Location 20-May-2008 pdf 52K | Abstract | 05/21/2008 12:58 Financial Analysis on RA Resources AS Must-Offer 20-May-2008 pdf 83K | Abstract | 05/21/2008 13:01 Stakeholder Comments Template 27-May-2008 doc 39K | Abstract | 05/27/2008 10:24

Stakeholder Comments on Scarcity Pricing Draft Proposal 06-Feb-2008 AReM Comments on Scarcity Pricing Draft Proposal 06-Feb-2008 pdf 25K | Abstract | 03/06/2008 15:50 BTG Comments on Scarcity Pricing Draft Proposal 06-Feb-2008 pdf 29K | Abstract | 03/06/2008 15:54 CLECA Comments on Scarcity Pricing Draft Proposal 06-Feb-2008 pdf 27K | Abstract | 03/06/2008 15:58 CPUC Comments on Scarcity Pricing Draft Proposal 06-Feb-2008 pdf 39K | Abstract | 03/06/2008 16:00 PG&E Comments on Scarcity Pricing Draft Proposal 06-Feb-2008 pdf 37K | Abstract | 03/06/2008 16:04 SCE Comments on Scarcity Pricing Draft Proposal 06-Feb-2008 pdf 24K | Abstract | 03/06/2008 15:48 WPTF Comments on Scarcity Pricing Draft Proposal 06-Feb-2008 pdf 34K | Abstract | 03/06/2008 16:02

Scarcity Pricing Stakeholder Meeting 13-Feb-2008 Agenda - Stakeholder Meeting 13-Feb-2008 pdf 40K | Abstract | 02/07/2008 10:11 Draft Proposal for Reserve Scarcity Pricing Design 06-Feb-2008 pdf 288K | Abstract | 02/06/2008 15:29 Presentation - Scarcity Pricing Draft Proposal 13-Feb-2008 pdf 256K | Abstract | 02/11/2008 10:42 Presentation - Scarcity Pricing Numerical Examples 13-Feb-2008 pdf 598K | Abstract | 02/11/2008 10:45 Revised Scarcity Pricing Design Numerical Examples 06-Feb-2008 pdf 88K | Abstract | 02/11/2008 10:39 Presentation - Interaction between Scarcity Pricing and Demand Response 13-Feb-2008 ppt 482K | Abstract | 02/11/2008 18:12 Presentation - CPUC - Scarcity Pricing Draft Proposal 13-Feb-2008 pdf 71K | Abstract | 02/13/2008 13:46 Presentation - PG&E- Scarcity Pricing Draft Proposal 13-Feb-2008 pdf 57K | Abstract | 02/13/2008 11:01 Presentation - SCE's Perspective on Administrative Scarcity Pricing pdf 123K | Abstract | 02/12/2008 15:44 Template for Stakeholder Comments 13-Feb-2008 doc 38K | Abstract | 02/11/2008 10:35

Scarcity Pricing Stakeholder Meeting 26-Nov-2007 Agenda - Scarcity Pricing Stakeholder Meeting 26-Nov-2007 pdf 35K | Abstract | 11/21/2007 13:08 Presentation - Scarcity Pricing Revised Straw Proposal 26-Nov-2007 pdf 379K | Abstract | 11/26/2007 08:58 Revised Straw Proposal for Reserve Scarcity Pricing Design 19-Nov-2007 doc 545K | pdf 305K | Abstract | 12/06/2007 14:43 Template for Stakeholder Comments 26-Nov-2007 doc 39K | Abstract | 11/26/2007 09:02 Numerical Examples for Scarcity Pricing Design 06-Dec-2007 doc 458K | Abstract | 12/06/2007 14:47 AReM Comments on Scarcity Pricing 10-Dec-2007 pdf 29K | Abstract | 12/18/2007 09:32 CPUC Comments on Scarcity Pricing 10-Dec-2007 pdf 41K | Abstract | 12/18/2007 09:34 End-Use Customer Comments on Scarcity Pricing 10-Dec-2007 pdf 20K | Abstract | 12/18/2007 09:37 EOB Comments on Scarcity Pricing 10-Dec-2007 pdf 18K | Abstract | 12/18/2007 09:39 PG&E Comments on Scarcity Pricing 10-Dec-2007 pdf 31K | Abstract | 12/18/2007 09:41 SCE Comments on Scarcity Pricing 10-Dec-2007 pdf 34K | Abstract | 12/18/2007 09:44 SDG&E Comments on Scarcity Pricing 10-Dec-2007 pdf 27K | Abstract | 12/18/2007 09:46 TURN Comments on Scarcity Pricing 10-Dec-2007 pdf 34K | Abstract | 12/18/2007 09:50 WPTF Comments on Scarcity Pricing 10-Dec-2007 pdf 297K | Abstract | 12/18/2007 09:52

Scarcity Pricing Stakeholder Conference Call 01-Nov-2007 Agenda - Scarcity Pricing Stakeholder Conference Call 01-Nov-2007 pdf 34K | Abstract | 10/30/2007 12:33 Presentation - Scarcity Pricing in NY and NE 01-Nov-2007 pdf 204K | Abstract | 10/30/2007 12:37 Presentation - ISO-NE Ancillary Services 01-Nov-2007 pdf 165K | Abstract | 10/30/2007 12:54

Stakeholder Comments on Scarcity Pricing 05-Sep-2007 AReM Comments - Scarcity Pricing 05-Sep-2007 pdf 25K | Abstract | 09/28/2007 14:18 CDWR SWP Comments - Scarcity Pricing 05-Sep-2007 pdf 30K | Abstract | 09/28/2007 14:21 Constellation Comments - Scarcity Pricing 05-Sep-2007 pdf 32K | Abstract | 09/28/2007 14:23 CPUC Comments - Scarcity Pricing 05-Sep-2007 pdf 37K | Abstract | 10/03/2007 15:57 PG&E Comments - Scarcity Pricing 05-Sep-2007 pdf 35K | Abstract | 09/28/2007 14:26 PSCo Comments - Scarcity Pricing 05-Sep-2007 pdf 24K | Abstract | 09/28/2007 14:31 SCE Comments - Scarcity Pricing 05-Sep-2007 pdf 44K | Abstract | 09/28/2007 14:34 Sempra Global Comments - Scarcity Pricing 05-Sep-2007 pdf 181K | Abstract | 09/28/2007 14:39 WPTF Comments - Scarcity Pricing 05-Sep-2007 pdf 80K | Abstract | 09/28/2007 14:41

Scarcity Pricing & Convergence Bidding Stakeholder Meeting 12-Sep-2007 Agenda - Scarcity Pricing & Convergence Bidding Stakeholder Meeting 12-Sep-2007 pdf 66K | Abstract | 09/11/2007 15:40 Straw Proposal for Reserve Scarcity Pricing Design - 05-Sep-2007 pdf 330K | Abstract | 09/11/2007 09:35 Presentation – Scarcity Pricing Straw Proposal - 11-Sep-2007 pdf 354K | Abstract | 09/11/2007 11:32 Presentation – Convergence Bidding Credit Policy 12-Sep-2007 pdf 86K | Abstract | 09/06/2007 12:52 Presentation - DMM Recommendations on Convergence Bidding pdf 628K | Abstract | 09/11/2007 15:45 Presentation – Status of Convergence Bidding Design pdf 343K | Abstract | 09/12/2007 09:42 Template for Stakeholder Comments – Scarcity Pricing Straw Proposal - 11-Sep-2007 doc 47K | Abstract | 09/11/2007 11:34

Scarcity Pricing Issue Paper – 31-May-2007 Reserve Shortage Pricing Design Issue Paper pdf 242K | Abstract | 06/01/2007 10:19

Stakeholder Comments on Reserve Shortage Issue Paper Constellation Comments on 31-May-2007 Issue Paper pdf 75K | Abstract | 06/25/2007 08:51 CPUC Comments on 31-May-2007 Issue Paper pdf 142K | Abstract | 06/19/2007 16:36 EOB Comments on 31-May-2007 Issue Paper pdf 100K | Abstract | 06/19/2007 16:38 SCE Comments on 31-May-2007 Issue Paper pdf 76K | Abstract | 06/19/2007 16:39 Williams Power Company Comments on 31-May-2007 Issue Paper pdf 45K | Abstract | 06/19/2007 16:32 WPTF Comments on 31-May-2007 Issue Paper pdf 307K | Abstract | 06/19/2007 16:31