Market Participants:

Please assure that this Notification is forwarded to your respective
Operating Departments ---

Notification of Operating Procedure Update

*	The following new or revised ISO Operating Procedures have been
implemented and are posted for reference on the ISO Website.

ISO Operating Procedure posted:  M-430 Splitting Operating Reserve Energy
from Imbalance Energy
			** Please Note: Attachment A is NOT Posted for
Security Reasons
Version: 1.1
Effective Date: 6-21-2001
Procedure Purpose: In the previous Ancillary Service (AS) Market, Operating
Reserves (OR) were combined with Supplemental and Replacement Reserve energy
bids to construct the Imbalance Energy (IE) stack.  It was often necessary
to skip Spinning and Non-Spinning energy bids when dispatching IE in order
to preserve OR margin.  Additionally, AS suppliers that were capacity rich
but energy limited were reluctant to bid into the AS market due to the
possibility of frequent energy dispatches.  Typical examples of energy
limited resources are hydro units capable of fast ramp rates and energy
production but only for a limited duration due to water availability and
emission limited resources that can only generate for a limited amount of
time.   All these resources could provide OR energy for system contingencies
and emergencies, but not for routine IE. 
Summary of changes: This is a new ISO Operating Procedure

*	Please find them at
http://www1.caiso.com/thegrid/operations/opsdoc/index.html under the
appropriate Operating Procedure section heading.

If you have any questions, please e-mail the 'Procedure Control Desk'
mailbox [mailto:procctrldesk@caiso.com] and we will respond as soon as
possible.

Thank-You,

Operations Support and Training