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2009 State of the Market Report

External Transactions

allows. Therefore, it is critical to identify and eliminate barriers that inefficiently hinder such transactions.

With regard to imports, the current requirement that a deliverability study be performed in advance of participation by an external entity in the capacity market is an onerous, time-intensive requirement that creates an effective barrier to entry. Hence, we recommend the Midwest ISO modify its deliverability requirement for external resources to establish a maximum amount by interface that can be utilized to satisfy LSEs’ capacity requirements under Module E.

With regard to exports to PJM, relatively little capacity has managed to be exported to PJM, despite the current price differences. This may be due to a number of factors, including deliverability requirements, operational requirements, or other market obligations. We believe it is important for the Midwest ISO and PJM to work together to identify inefficient barriers to capacity transactions and develop solutions to eliminate those barriers.

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