ISO New England Manual for



## Measurement and Verification of Demand Reduction Va lue from

Demand Resources Manual M-MVDR

Revision: 5 Effective Date: November 8, 2013

Prepared by ISO New England Inc.ISO New England Inc. i

Revision 5, Effective Date: November 8, 2013 ISO New England Manual for 

## Measurement and Verification of Demand Reduction Va lue from

Demand Resources
Table of Contents


### Introduction

About This Manual .................................

................................................... .................... INT-1 

### Section 1: Overview
1.1 Special Provision for Real-Time Demand Response and Real-Time Emergency Generation Resources Communications Compliance ...............

................................................... ........ 1-1 1.2 Special Provision for On-Peak Demand Resources, Seasonal Peak Demand Resources, Real-Time Demand Response Resources, Real-Time Emer gency Generation Resources Registration ......................................

................................................... .............................. 1-2
1.3 Reserved ......................................

................................................... ............................. 1-3 

### Section 2: Project Information
2.1 Description ...................................

................................................... ............................ 2-1 2.2 General Requirements ..........................

................................................... .................... 2-2 2.3 Additional Requirements for Distributed Generat ion ...............................................

.. 2-4 

### Section 3:Project General Assumptions
3.1 Description ...................................

................................................... ............................ 3-1 3.2 Requirements for All Demand Resources .........

................................................... ....... 3-2 

### Section 4: Equipment, Measure, and Practice Detail
4.1 Description ...................................

................................................... ............................ 4-1Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

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ISO New England Inc. ii Revision 5, Effective Date: November 8, 2013 4.2 Requirements ..................................

................................................... .......................... 4-2 

### Section 5: Measurement and Verification Approach
5.1 Description ...................................

................................................... ............................ 5-1 5.2 Acceptable Measurement and Verification Methodo logies ........................................ 5-2 5.2.1 Option A: Partially Measured Retrofit Isolati on/Stipulated Measurement ........... 5-2 5.2.2 Option B: Retrofit Isolation/Metered Equipmen t ................................................. . 5-3 5.2.3 Option C: Whole Facility/Regression .........

................................................... ....... 5-3 5.2.4 Option D: Calibrated Simulation .............

................................................... ........... 5-4 5.3 Alternative Measurement and Verification Method ologies ........................................ 5-5 5.4 Other Acceptable Methodological Techniques ....

................................................... .... 5-6 5.4.1 Engineering Calculations and Audit Results ..

................................................... .... 5-6 5.4.2 Load Shape Analyses .........................

................................................... ................ 5-6 5.5 Additional Supplemental Requirements ..........

................................................... ......... 5-7 5.6 Metering Configurations for Demand Resources De fined as Real-Time Demand Response or Real-Time Emergency Generation .................

................................................... ........... 5-8 5.6.1 Load reduction only with no Distributed Gener ation at the facility ...................... 5-8 5.6.2 Distributed Generation output directly metere d (includes Real-Time Emergency Generation Assets that are directly metered) ......

................................................... ........ 5-9 5.6.3 Distributed Generation only used to reduce lo ad at the facility (applies to facilities with Real-Time Emergency Generation Assets only) ..

.................................................. 5-9 5.6.4 Load reduction with directly metered Distribu ted Generation participating as a separate asset ....................................

................................................... ......................... 5-10 5.6.5 Distributed Generation used to reduce load at the asset and directly metered Distributed Generation used at another on-site asse t ................................................. .. 5-10 5.6.6 Load Reduction pursuant to a Measurement and Verification Plan (includes Statistical Sampling) .........................................

................................................... ......................... 5-11 

### Section 6: Establishing Baseline Conditions
6.1 Descriptions ..................................

................................................... ........................... 6-1 6.2 General Requirements for Baseline Conditions fo r All Demand Resources .............. 6-2 6.3 Requirements for Demand Resources Involving New Construction or Major Renovations

.................................................. ................................................... ...................................... 6-4Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

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ISO New England Inc. iii Revision 5, Effective Date: November 8, 2013 6.4 Requirements for Real-Time Demand Response, Rea l-Time Emergency Generation and Real-Time Price Response Program Assets ...........

................................................... ........ 6-5 

### Section 7: Statistical Significance
7.1 Description ...................................

................................................... ............................ 7-1 7.1.1 Requirements ................................

................................................... ...................... 7-1 7.2 Statistical Sampling ..........................

................................................... ........................ 7-3 7.2.1 General Requirements ........................

................................................... ................ 7-3 7.2.2 Sample Size Requirements ....................

................................................... ............. 7-3 7.2.3 Sample Size Calculation Requirements ........

................................................... ..... 7-4 7.3 Sample Size Recalibration Based on Monitoring D ata .............................................. 7-6 7.3.1 Sample Recalibration Requirements ...........

................................................... ....... 7-6 7.4 Sampling Over Load Zones or Dispatch Zones ....

................................................... ... 7-7 7.4.1 Requirements ................................

................................................... ...................... 7-7 

### Section 8: Demand Reduction Value Calculations
8.1 Description ...................................

................................................... ............................ 8-1 8.2 Requirements ..................................

................................................... .......................... 8-2 

### Section 9: Monitoring Parameters and Variables
9.1 Description ...................................

................................................... ............................ 9-1 9.2 Requirements ..................................

................................................... .......................... 9-2 9.3 Requirements for Real-Time Demand Response Reso urces and Real-Time Emergency Generation Resources ..............................

................................................... ...................... 9-4 9.3.1 Direct Communication Between ISO and DDE .... ................................................ 9- 4 9.3.2 Real-Time Demand Response Resources .........

................................................... .. 9-4 9.3.3 Real-Time Emergency Generation Resources ....

.................................................. 9-5 

### Section 10: Measurement Equipment Specifications
10.1 Description ..................................

................................................... ......................... 10-1 10.2 Requirements .................................

................................................... ....................... 10-2Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

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ISO New England Inc. iv Revision 5, Effective Date: November 8, 2013 10.3 Requirements for Demand Resources Defined as R eal-Time Demand Response or RealTime Emergency Generation .........................

................................................... .............. 10-4 10.3.1 Telemetering Requirements ..................

................................................... ......... 10-4 

### Section 11: Monitoring Frequency and Duration
11.1 Description ..................................

................................................... ......................... 11-1 11.2 Requirements .................................

................................................... ....................... 11-2
11.3 Reserved .....................................

................................................... .......................... 11-3 

### Section 12: Data Validation, Retention and Manageme nt
12.1 Description ..................................

................................................... ......................... 12-1 12.2 Requirements .................................

................................................... ....................... 12-2
12.3 Reserved .....................................

................................................... .......................... 12-4 

### Section 13: Performance Reporting
13.1 Description ..................................

................................................... ......................... 13-1 13.2 Requirements .................................

................................................... ....................... 13-2
13.3 Reserved .....................................

................................................... .......................... 13-4 

### Section 14: Independence and Auditing
14.1 Description ..................................

................................................... ......................... 14-1 14.2 Requirements .................................

................................................... ....................... 14-2
14.3 Reserved .....................................

................................................... .......................... 14-3 

### Section 15: Measurement and Verification Supporting Documents
15.1 Description ..................................

................................................... ......................... 15-1 15.2 Requirements .................................

................................................... ....................... 15-2Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

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ISO New England Inc. v Revision 5, Effective Date: November 8, 2013 

### Section 16: Responsible Parties
16.1 Description ..................................

................................................... ......................... 16-1 16.2 Requirements .................................

................................................... ....................... 16-2 

### Section 17: Measurement and Verification Plan Forma t
17.1 Descriptions .................................

................................................... ........................ 17-1 17.2 Requirements .................................

................................................... ....................... 17-2 

### Revision History
Approval ..........................................

................................................... ......................... REV-1 Revision History ..................................

................................................... ..................... REV-1Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

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ISO New England Inc. vi Revision 5, Effective Date: November 8, 2013 ISO New England Manual for 

## Measurement and Verification of Demand Reduction Va lue from

Demand Resources List of Figures and Tables Exhibit 5.1: Load reduction only with no Distribute d Generation at the facility .................. 5-8 Exhibit 5.2: Distributed Generation output directly metered .......................................... ....... 5-9 Exhibit 5.3: Distributed Generation only used to re duce load at the facility ....................... 5 -10 Exhibit 5.4: Load reduction with directly metered D istributed Generation participating as a separate asset ....................................

................................................... ................................. 5-10 Exhibit 5.5: Distributed Generation used to reduce load at the asset and directly metered Distributed Generation used at another on-site asse t ................................................. .......... 5-11ISO New England Inc. INT-1

Revision 5, Effective Date: November 8, 2013 

## Introduction

Welcome to the ISO New England Manual for Measurement and Verifica tion of Demand Reduction Value from Demand Resources . In this introduction, you will find the followin g information:

 What you can expect from this ISO New England Manua l (see “About This Manual”).


### About This Manual
The ISO New England Manual for Measurement and Verifica tion of Demand Reduction Value from Demand Resources is one of a series of manuals. The manual provide s guidance and required criteria for the measurement and verification of Demand Reduction Values for Demand Resources participating in the Fo rward Capacity Market (FCM) administered by the ISO pursuant to Section III.13 of Market Rule 1. A copy of the Market Rule and ISO Tariff may be obtained from the ISO we bsite at www.iso-ne.com. This manual was written assuming that the reader ha s read the Market Rule before or in conjunction with using this manual. Terms that are capitalized in this manual shall have the meaning ascribed to them in the Market Rule or ISO Tariff. The reader is referred first to the Market Rule for an explanation and information regarding that aspect of the operation of the FCM or requirem ents for complying with the FCM. This manual provides additional implementation or other detail for those provisions of the Market Rule which require the Market Participant to take a n action. Manual provisions are developed and refined through the NEPOOL stakeholde r processes. Manuals are not filed with or approved by the Federal Energy Regulatory C ommission. In the event of any conflict between a Market Rule provision and this m anual, the text of the Market Rule provision governs. To demonstrate a Demand Reduction Value, qualified Market Participants shall comply with the Measurement and Verification standards def ined in this manual. The measured and verified electrical energy reductions during Demand Resource On-Peak Hours, Demand Resource Seasonal Peak Hours, Real-Time Demand Resp onse Event Hours, or Real-Time Emergency Generation Event Hours or audits are the basis of FCM payments to Market Participants participating in the FCM. Section III.13.1.4 of Market Rule 1 requires Projec t Sponsors to submit a Measurement and Verification Plan, and Measurement and Verification Documents. The plan and documents shall be reviewed and subject to approval by ISO Ne w England. The ISO New England Manual for Measurement and Verification of Demand R eduction Value from Demand Resources describes the content of the Measurement and Verifi cation Plan necessary to comply with the requirements established in Section III.13.1.4. This manual specifies required information, details, approaches, methodol ogies, conditions, calculations, variables, parameters, monitoring, validations, reporting, cer tifications, responsibilities, and plan format for measurement and verification of Demand R eduction Values to be used for OnPeak Demand Resources, Seasonal Peak Demand Resourc es, Real-Time Demand ResponseMeasurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Introduction

ISO New England Inc. INT-2 Revision 5, Effective Date: November 8, 2013 Resources, Real-Time Emergency Generation Resources and provides information concerning how certain data must be submitted and h ow Real-Time Demand Response Resources and Real-Time Emergency Generation Resour ces are dispatched. This manual is divided into the following Sections: Section 1: Overview Section 2: Project Information Section 3: Project General Assumptions Section 4: Equipment, Measure, and Practice Detail Section 5: Measurement and Verification Approach Section 6: Establishing Baseline Conditions Section 7: Statistical Significance Section 8: Demand Reduction Value Calculations Section 9: Monitoring Parameters and Variables Section 10: Measurement Equipment Specifications Section 11: Monitoring Frequency and Duration Section 12: Data Validation, Retention and Manageme nt Section 13: Performance Reporting Section 14: Independence and Auditing Section 15: Measurement and Verification Supporting Documents Section 16: Responsible Parties Section 17: Measurement and Verification Plan Forma tISO New England Inc. 1-1

Revision 5, Effective Date: November 8, 2013 

## Section 1: Overview 1.1 Special Provision for Real-Time Demand Response and Real-Time Emergency Generation Resources Communications Compl iance Real-Time Demand Response and Real-Time Emergency G eneration Resources and their associated Demand Assets receive dispatch instructi ons through a Demand Designated Entity (DDE). The DDE is identified in Customer an d Asset Management System (CAMS) by the Project Sponsor. The communication mechanis m between the ISO and DDE is specified in ISO New England Operating Procedure No . 18, Metering and Telemetering Criteria. The communication mechanism specified in ISO New England Operating Procedure No. 18 is abbreviated “ISO CFE/RTU” in th is manual.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 1: Overview

ISO New England Inc. 1-2 Revision 5, Effective Date: November 8, 2013 

### 1.2 Special Provision for On-Peak Demand Resources, Seasonal Peak Demand Resources, Real-Time Demand Response Resourc es, RealTime Emergency Generation Resources Registration On-Peak Demand Resources, Seasonal Peak Demand Reso urces, Real-Time Demand Response Resources, and Real-Time Emergency Generat ion Resources qualified for participation in the Forward Capacity Market shall consist of demand reduction measures registered as Demand Assets in CAMS. All criteria and requirements for Asset registration are contained in other ISO New England Manuals not limited to the ISO New England Manual for Registration and Performance Auditing, M -RPA

.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 1: Overview

ISO New England Inc. 1-3 Revision 5, Effective Date: November 8, 2013 

### 1.3 ReservedISO New England Inc. 2-1

Revision 5, Effective Date: November 8, 2013 

## Section 2: Project Information 2.1 Description The Project Sponsor shall specify in its Measuremen t and Verification Plan each of the measures, systems, processes and/or strategies that make up its Project.
The Measurement and Verification Plan shall include how each of the measures, systems, processes and/or strategies will be installed and o perated to result in additional and verifiable reductions in end-use demand on the elec tricity network in the New England Control Area during Demand Resource On-Peak Hours, Demand Resource Seasonal Peak Hours, Real-Time Demand Response Event Hours, or Re al-Time Emergency Generation Event Hours. The Project description in the Measurement and Veri fication Plan and other Measurement and Verification Documents associated with the Proj ect shall be consistent with the Project description in the Project Sponsor’s New Demand Res ource Show of Interest Form submission, including the New Demand Resource Project Description form found on the ISO website.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 2: Project Information

ISO New England Inc. 2-2 Revision 5, Effective Date: November 8, 2013 

### 2.2 General Requirements The Project Sponsor shall specify in its Measuremen t and Verification Plan each of the following 1 : (1) Lead Market Participant; (2) Project contact name, phone and e-mail; (3) Resource name and ID; (4) Project name and ID; (5) Project Sponsor’s Market Participant status; (6) Demand Resource type (On-Peak Demand Resource, Seasonal Peak Demand Resource, Real-Time Demand Response Resource, or Real-Time Em ergency Generation Resource); (7) Load Zone for On-Peak and Seasonal Peak Demand Resources, Load Zone for RealTime Demand Response and Real-Time Emergency Genera tion Resources for the first delivery period starting on June 1, 2010, or Dispat ch Zone for Real-Time Demand Response and Real-Time Emergency Generation Resourc es for the delivery periods after June 1, 2011 and later within which the Proje ct will be located; (8) Project Location, including the name and addres s of the retail customer(s) where the Project will be implemented for projects including Distributed Generation or Energy Efficiency implemented at a single facility with a Demand Reduction Value greater than 5 MW or all other measures if known at the time the Measurement and Verification Plan is submitted to the ISO subject to the provisi ons in Section 12.2 of this manual; (9) Program Name, describing overall program or ope ration of Demand Resource, for example (residential lighting); (10) Measures, end uses, systems, processes or stra tegies that will be implemented; (11) Types of facilities in which the measures, sys tems, processes or strategies will be implemented; (12) Customer classes and end-uses served; (13) Types of measures that will be implemented inc luding but not limited to, energy efficiency, load management, Distributed Generation Demand Response, Emergency Generation;

1 Some of the required information is submitted thro ugh the Forward Capacity Market Tracking System (FC TS) interface. As a result, some of the information is inherently indentified by the registered user inpu tting the information (such as Project Sponsor and by default their Market Participant status).Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 2: Project Information

ISO New England Inc. 2-3 Revision 5, Effective Date: November 8, 2013 (14) Directly metered or stipulated/sampled measure s; (15) Weather sensitive measure; (16) Estimated Demand Reduction Value (MW) per meas ure and/or per customer facility (measured at the customer meter), including support ing documentation (e.g., engineering estimates or documentation of verified savings from comparable projects) to substantiate the reasonableness of the estimated Demand Reduction Value that the Project Sponsor intends to offer into the Forward C apacity Auction; (17) Estimated total Demand Reduction Value of the Project; (18) The date by which the Project Sponsor expects to reach commercial operation; (19) Status under the ISO generation interconnectio n procedures, if applicable; (20) A description of the typical qualifications an d experience of the Project Sponsor’s Project team members and subcontractors that will b e directly involved in measurement and verification activities. For Projects where one or more of the requirements identified in items (8) thru (13) listed above are not explicitly known at the time the Proj ect Sponsor submits its Measurement and Verification Plan to the ISO for review and approva l, the Project Sponsor shall provide best approximations of proposed activity with respect to programs, measures, customer classes served and location. The manner in which project d evelopment efforts will be pursued shall be consistent with the approach identified in the P roject Sponsor’s New Demand Resource Project Description , Customer Acquisition Plan, Measurement and Verifi cation Plan, Funding Plan and operable Capacity Analysis as defi ned in the Market Rule submitted to the ISO as part of the Project Qualification Process. The Project Sponsor shall provide to the ISO inform ation that demonstrates the products, services, systems, processes, and measures actually installed or affected are functionally equivalent to those identified in its Measurement a nd Verification Plan as part of Critical Path Schedule Monitoring.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 2: Project Information

ISO New England Inc. 2-4 Revision 5, Effective Date: November 8, 2013 

### 2.3 Additional Requirements for Distributed Generat ion For Projects involving the use of Distributed Gener ation measures for On-Peak Demand Resource, Seasonal Peak Demand Resource, Real-Time Demand Response Resource, and Real-Time Emergency Generation Resources, the Proje ct Sponsor shall include the following information in the New Demand Resource Project Description form submitted during the New Capacity Show of Interest Submission Window and related details in the Measurement and Verification Documents submitted by the New Capacity Qualification Deadline: (1) The aggregate nameplate capacity of the Distrib uted Generation; (2) The most recent annual non-coincident peak dema nd (absent Distributed Generation output) of the end-use metered customer at the loca tion where the Distributed Generation is directly connected; (3) The Distributed Generation output during the mo st recent annual non-coincident peak; (4) An estimate of the monthly average hourly load at the metering point in accordance with Market Rule 1 for each month of the Capacity C ommitment Period (absent Distributed Generation output) of the end-use custo mer to which the Distributed Generation is directly connected; and (5) An estimate of the Distributed Generation’s mon thly average hourly output for each month of the Capacity Commitment Period.ISO New England Inc. 3-1

Revision 5, Effective Date: November 8, 2013 

## Section 3: Project General Assumptions 3.1 Description The Project Sponsor shall specify in its Measuremen t and Verification Plan any variables that affect the Project’s electrical energy usage o r Distributed Generation output (such as outside temperature, time of day, process changes, occupancy, etc.) that will be measured or monitored and used in the determination of the Proj ect’s Demand Reduction Value during Demand Resource On-Peak Hours, Demand Resource Seas onal Peak Hours, Real-Time Demand Response Event Hours, or Real-Time Emergency Generation Event Hours.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 3: Project General Requirements

ISO New England Inc. 3-2 Revision 5, Effective Date: November 8, 2013 

### 3.2 Requirements for All Demand Resources The Project Sponsor shall specify in its Measuremen t and Verification Plan all substantive assumptions for the Project’s Demand Reduction Valu e, including but not limited to, baseline energy usage, post measure installation en ergy usage, process changes, and measure life.
If one or more of the variables that will be measur ed or monitored and/or assumptions that will be used in the determination of the Project’s Demand Reduction Value during Demand Resource On-Peak Hours, Demand Resource Seasonal Pe ak Hours, Real-Time Demand Response Event Hours, and Real-Time Emergency Gener ation Event Hours are not known at the time the Project Sponsor submits its Measure ment and Verification Plan to the ISO for review and approval, the Project Sponsor may provid e alternative information and/or forecasts and specify the portion of the Demand Red uction Value associated with such variables and/or assumptions and explain the basis for such forecasts.ISO New England Inc. 4-1

Revision 5, Effective Date: November 8, 2013



## Section 4: Equipment, Measure, and Practice Detail 4.1 Description The Project Sponsor shall specify in its Measuremen t and Verification Plan a description of the equipment, measures, and/or practices to be imp lemented for the On-Peak Demand Resource, Seasonal Peak Demand Resource, Real-Time Demand Response Resource, and Real-Time Emergency Generation Resources.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 4: Equipment, Measure, and Practice Detail

ISO New England Inc. 4-2 Revision 5, Effective Date: November 8, 2013 

### 4.2 Requirements The Project Sponsor shall provide in its Measuremen t and Verification Plan and Measurement and Verification Documents specificatio ns of the equipment or types of equipment for projects being installed and/or modif ied. The equipment, measure, and practice specifications may include, but is not lim ited to, engineering analysis utilized to specify equipment, program design measures and/or p ractices, or applications of equipment, measure, or practice relative to end use or process es in the facility. For Projects involving changes to business practice s or strategies, the Project Sponsor shall specify the practice or strategy that will affect t he facility’s energy usage during the Demand Resource On-Peak Hours, Demand Resource Seasonal Pe ak Hours, Real-Time Demand Response Event Hours, and Real-Time Emergency Gener ation Event Hours relative to baseline conditions.ISO New England Inc. 5-1

Revision 5, Effective Date: November 8, 2013



## Section 5: Measurement and Verification Approach 5.1 Description The Project Sponsor shall specify in its Measuremen t and Verification Plan which of the approved methodologies or combination of methodolog ies identified in Section 5.2 are proposed for use in determining its Project’s Deman d Reduction Value. If the Project Sponsor elects a methodology other t han those listed, the Project Sponsor shall include in its Measurement and Verification Plan ac ceptable justification for the methodology or combination of methodologies propose d for its Project. Project Sponsors shall provide references not limited to: engineerin g practices in the Measurement and Verification literature, reference reports, local, state or federal manuals or code to demonstrate that it’s proposed Measurement and Veri fication approach is appropriate for the Demand Resource type and will produce accurate and reliable Demand Reduction Values.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 5: Measurement and Verification Approach

ISO New England Inc. 5-2 Revision 5, Effective Date: November 8, 2013 

### 5.2 Acceptable Measurement and Verification Methodo logies This manual contains the minimum standards required for measurement and verification methodologies for On-Peak Demand Resource, Seasonal Peak Demand Resource, RealTime Demand Response Resource, and Real-Time Emerge ncy Generation Resource. 

### 5.2.1 Option A: Partially Measured Retrofit Isolati on/Stipulated Measurement Option A may involve an equipment specific retrofit or replacement, new installation or a system level Measurement and Verification assessmen t. The approach is intended for measures where either performance factors (such as lighting wattage) or operational factors (such as operating hours) can be measured on a spot or short-term basis during baseline establishment and post-installation periods, or for measures for which a measured proxy variable can, in combination with well-established algorithms and/or stipulated factors, can provide an accurate estimate of the Demand Reductio n Value. Option A methodology consists of the following: (1) The factors, parameters, and/or variables not m easured can be stipulated based on assumptions, analysis of historical data, or manufa cturer's data. If a stipulated factor is subject to change over the Demand Resource On-Peak Hours, Demand Resource Seasonal Peak Hours, Real-Time Demand Response Even t Hours, and/or measure life of the Demand Resource, the Project Sponsor shall s pecify how the changes will be factored into the calculation of the Demand Reducti on Value. (2) Option A involves measuring a variable other th an electrical demand (MW) and using that variable in the calculation of the Demand Redu ction Value. Measurements can include short-term or long-term end-use metering of a variable such as current (amperage) and voltage to calculate demand, equipme nt operating status (on/off), equipment operating times, equipment quantities (i. e., number of units installed, cubic feet of insulation installed) or facilities served where the Demand Reduction Value per facility is constant. (3) Option A requires that a correlation be establi shed between the metered/monitored proxy variable and electrical demand (MW). The Proj ect Sponsor may establish the correlation by conducting short-term monitoring or a series of spot measurements of both stipulated parameters, and correlating the dat a sets (e.g., by performing a regression analysis) to determine the functional re lationship between the two parameters. (4) Engineering correlations may also be specified using documented engineering algorithms or as part of an engineering simulation. (5) Equipment manufacturer’s data, equipment data c ompiled by a recognized industry group or equipment data compiled as part of a State -sponsored demand sideMeasurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 5: Measurement and Verification Approach

ISO New England Inc. 5-3 Revision 5, Effective Date: November 8, 2013 management program (i.e., lighting fixture wattage tables) may be used in combination with the other measurements, variables or factors a s identified above to calculate Demand Reduction Value. Data from a manufacturer sh all be determined in a manner consistent with standards established by a recogniz ed United States government agency or national recognized industrial manufacturing ass ociation. 

### 5.2.2 Option B: Retrofit Isolation/Metered Equipmen t Option B involves a retrofit or system-level Measur ement and Verification assessment. The approach is intended for retrofits with performance factors and operational factors that can be measured at the component or system level using interval electrical demand meters, as defined in Section 10 of this manual, installed on the affected end-use. Option B shall be used for Real-Time Demand Response Assets and Real- Time Emergency Generation Assets and On-Peak Demand Resources and Seasonal Peak Dema nd Resources consisting of Distributed Generation pursuant to ISO New England Manual M-28 unless an alternative methodology is approved by the ISO in accordance wi th Section 5.3 of this manual. Any alternative methodology must comply with the requir ements in Market Rule 1. Option B methodology consists of the following: (1) Spot or short-term electrical demand measuremen ts can only be used when variations in operations are not expected to change over the meas ure life. (2) When temporal variations are expected, electric al demand measurements shall be made over a period of time sufficient to represent perfo rmance during the Demand Resource On-Peak Hours, Demand Resource Seasonal Peak Hours, Real-Time Demand Response Event Hours, and Real-Time Emergency Generation Eve nt Hours and across the measure life of the project. (3) This method may be applied when the electrical loads to be impacted by the Project are small relative to the building load, a facility doe s not currently have whole-premise interval metering, or if end-use electrical demand data can be readily obtained from a building energy management or control system. (4) The Project Sponsor shall take into considerati on any interactive effects that may alter electrical loads on other end-use equipment being m onitored. 

### 5.2.3 Option C: Whole Facility/Regression Option C estimates Demand Reduction Values by analy zing the overall energy use in a facility and identifying the impact of the implemen ted measure on the total building or facility energy use patterns. The evaluation of who le-building or facility level metered data is completed using techniques ranging from simple b illing comparison to multivariate regression analysis. Option C methodology consists of the following:Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 5: Measurement and Verification Approach

ISO New England Inc. 5-4 Revision 5, Effective Date: November 8, 2013 (1) Demand Reduction Value is measured using whole- premise interval meters during the Demand Resource On-Peak Hours or Demand Resource Se asonal Peak Hours. (2) Option C is applicable to measures that cannot be measured directly, such as insulation or other building envelope measures. (3) Option C should not be used if the Demand Reduc tion Value is expected to be small relative to the total facility load, due to the sma ll “signal-to-noise ratio,” 

### 5.2.4 Option D: Calibrated Simulation Option D involves calibrated computer simulation mo dels of component or whole building energy usage to determine measure energy savings. Engineering simulation models (such as DOE-2) can model both residential buildings (homes, apartments and condominiums) as well as more complex commercial buildings. Operati onal simulations can be used for industrial processes that take into account the spe cifics of the process addressed by the energy efficiency actions. Both engineering and op erational simulations are made more powerful by calibrating these methods to actual MW and MWh data from the site or process being examined, even if these data are available fo r a monitoring period shorter than or different from the required Demand Resource On-Peak Hours or Demand Resource Seasonal Peak Hours. Short-term metering and monit oring are methods that produce data that can be used to adjust engineering simulations. This approach is generally termed "calibrated engineering simulations." Linking simu lation inputs to baseline and postinstallation conditions completes the calibration. Characterizing baseline and postinstallation conditions may involve metering perfor mance and operating factors both before and after the retrofit. Long-term whole-building e nergy use data may be used to calibrate the simulations.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 5: Measurement and Verification Approach

ISO New England Inc. 5-5 Revision 5, Effective Date: November 8, 2013 

### 5.3 Alternative Measurement and Verification Method ologies The Project Sponsors may propose alternative method ologies not listed in Section 5.2. Project Sponsors proposing alternative methodologie s shall demonstrate that the alternative methodologies will be equivalent to one of the acce pted methodologies described in Section 5.2 above, conform to Market Rule 1, and demonstrat e justifiable need for deviation from the acceptable methodologies described in Section 5 .2 based on unique Project requirements. Alternative measurement and verifica tion methodologies are subject to approval by the ISO.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 5: Measurement and Verification Approach

ISO New England Inc. 5-6 Revision 5, Effective Date: November 8, 2013 

### 5.4 Other Acceptable Methodological Techniques In addition to the acceptable methodological approa ches described above, several techniques may be applied to one or more of the methods descri bed in Section 5.2. The following describe other acceptable methodological techniques

. 

### 5.4.1 Engineering Calculations and Audit Results The Project Sponsor may use engineering algorithms to calculate the Project’s Demand Reduction Value during the Demand Resource On-Peak Hours, and Demand Resource Seasonal Peak Hours. Engineering algorithms shall be supplemented with data collected on the energy-consuming equipment affected by the meas ures. 

### 5.4.2 Load Shape Analyses The Project Sponsor may use verifiable measure hour ly load shapes to calculate a Project’s Demand Reduction Value during the Demand Resource O n-Peak Hours, or Demand Resource Seasonal Peak Hours. Measure load shapes shall be based on actual metering data, load research, and/or simulation modeling. Values for monthly or annual energy savings, whethe r from engineering calculations, analysis of billing data, simulation modeling or ot her means described in this manual, can be combined with information on verifiable measures to produce values for electrical energy reduction (MWh) during the Demand Resource On-Peak Hours, and Demand Resource Seasonal Peak Hours. Measure load shapes shall be based on actual metering data, load research (meeting the requirements in Section 15 of this manual), and/or simulation modeling.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 5: Measurement and Verification Approach

ISO New England Inc. 5-7 Revision 5, Effective Date: November 8, 2013 

### 5.5 Additional Supplemental Requirements The Project Sponsor shall specify methods to comply with each of the applicable requirements listed below. (1) Project Sponsors using Option D for existing bu ildings, systems, processes, or equipment shall calibrate the simulation model to a ctual MW or MWh data from the buildings, systems, processes, or equipment being m odeled. (2) Projects that include the use of Distributed Ge neration shall follow Option B and directly measure the electrical demand (MW) output of the Distributed Generation; however, if the Distributed Generation is a Real-Ti me Emergency Generation Asset and no other Demand Resource is at the facility, direct measurement of the entire facility load is an acceptable meter configuration (see acce ptable metering configurations described in Section 5.6 in this manual). (3) If statistical sampling is used to determine an y variables, factors, parameters, engineering factors, or load shapes used in the cal culation of Demand Reduction Values, the statistical sampling shall satisfy the requirements described in Section 7.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 5: Measurement and Verification Approach

ISO New England Inc. 5-8 Revision 5, Effective Date: November 8, 2013 

### 5.6 Metering Configurations for Demand Resources De fined as RealTime Demand Response or Real-Time Emergency Generat ion 2 Acceptable metering configurations for Real-Time De mand Response and Real-Time Emergency Generation Resources are described below. The ISO may at its discretion approve alternative metering configurations or alte rnate uses of the acceptable metering configurations listed below. The Demand Reduction Values calculated for assets using metering configurations that include load reduction shall be calculated as the difference between the adjusted Demand Response Baseline and t he actual metered usage of the facility. However, for facilities with Distributed Generation at the site, determination of total facility load (load actually served from the grid plus load served from the Distributed Generation) must be measured as provided in Section III.E.2.1 of Market Rule 1. A Project Sponsor proposing to use the alternative configurat ion shall demonstrate that the alternative configuration will be equivalent to one of the pref erred configurations. The Facility Metered Load (FML) is the electricity used at a facility that is purchased from the grid. The Total Facility Load (TFL) is the total electric ity used at a facility inclusive of that purchased from the grid and that produced on-site f rom Distributed Generation.
TFL = FML + Distributed Generation 

### 5.6.1 Load reduction only with no Distributed Gener ation at the facility Exhibit 5.1: Load reduction only with no Distribute d Generation at the facility

For facilities subscribing only the load, performan ce for each hour shall be calculated in accordance with Sections III.E.2.1 and III.8 of Mar ket Rule 1.

2 RTEG is a defined term in Section III.1.3 of Marke t Rule 1.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 5: Measurement and Verification Approach

ISO New England Inc. 5-9 Revision 5, Effective Date: November 8, 2013 

### 5.6.2 Distributed Generation output directly metere d (includes Real-Time Emergency Generation Assets that are dire ctly metered) Exhibit 5.2: Distributed Generation output directly metered

Performance for Real-Time Demand Response Assets sh all be calculated in accordance with Sections III.E.2.1 and III.8 of Market Rule 1. For Real-Time Emergency Generation Assets metered a t the generator, performance for each hour shall be calculated as: P h = OG h

Where: P h = performance for the hour

OG h = Metered Distributed Generator output for the hou r
For Real-Time Demand Response Assets consisting of Distributed Generation and metered at the generator, performance for each hour shall b e calculated as: P h = AO - CB h
Where: P h = performance for the hour AO = actual output for the DG

CB h = Customer Baseline for the hour as calculated usi ng the methodologies defined in Section 6 of this manual.


### 5.6.3 Distributed Generation only used to reduce lo ad at the facility (applies to facilities with Real-Time Emergency Gen eration Assets only)Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 5: Measurement and Verification Approach

ISO New England Inc. 5-10 Revision 5, Effective Date: November 8, 2013

Exhibit 5.3: Distributed Generation only used to re duce load at the facility

For facilities subscribing only a Real-Time Emergen cy Generation Asset where the generator output is not metered, but the Real-Time Emergency Generation operation is isolated from the grid, the performance for each ho ur shall be calculated as: P h = CB h – AL

Where: P h = performance for the hour

CB h = Customer Baseline for the hour as calculated usi ng the methodologies defined in Section 6 of this manual.

AL = actual load for the hour


### 5.6.4 Load reduction with directly metered Distribu ted Generation participating as a separate asset
Exhibit 5.4: Load reduction with directly metered D istributed Generation participating as a separate a sset

Performance of Real-Time Demand Response Assets sha ll be calculated pursuant to Sections III.E.2.1 and III.8 of Market Rule 1. 

### 5.6.5 Distributed Generation used to reduce load at the asset and directly metered Distributed Generation used at ano ther on-site assetMeasurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 5: Measurement and Verification Approach

ISO New England Inc. 5-11 Revision 5, Effective Date: November 8, 2013 Exhibit 5.5: Distributed Generation used to reduce load at the asset and directly metered Distributed Generation used at another on-site asset

Performance of Real-Time Demand Response Assets sha ll be calculated pursuant to Sections III.E.2.1 and III.8 of Market Rule 1. For facilities using both a Real-Time Emergency Gen eration Resource and other Distributed Generation as separate Assets, the Real-Time Emerge ncy Generation Asset must be directly metered. 

### 5.6.6 Load Reduction pursuant to a Measurement and Verification Plan (includes Statistical Sampling) Where the load reduction of a Real-Time Demand Resp onse Asset is provided from an aggregation of direct load control, the performance for each interval shall be calculated in accordance with an approved Measurement and Verific ation methodology. The performance shall be reported to the ISO in real-ti me by the DDE through the ISO CFE/RTU. This Measurement and Verification methodo logy shall not be applicable to Distributed Generation.ISO New England Inc. 6-1

Revision 5, Effective Date: November 8, 2013



## Section 6: Establishing Baseline Conditions 6.1 Descriptions The Project Sponsor shall specify in its Measuremen t and Verification Plan the methodology used to determine baseline conditions for the measu res comprising its Project. Baseline conditions are defined as the load (MW) that would have existed, but for the implementation of a demand reduction measure that affected such me asure’s load in use during Demand Resource On-Peak Hours and Demand Resource Seasonal Peak Hours. Real-Time Demand Response Resources and Real-Time Emergency Generati on Resources must establish, maintain, and adjust Demand Response Baselines as p rovided in Section III.8 of Market Rule 1. Baseline conditions may be used synonymous ly with the term Demand Response Baseline for Real-Time Demand Response Assets and R eal-Time Emergency Generation Assets in this manual. The Project Sponsor shall identify in its Measureme nt and Verification Plan any and all equipment, systems, practices or strategies or type of the aforementioned, whose alteration from its baseline condition operation will lead to reduced demand during the Demand Resource On-Peak Hours, Demand Resource Seasonal Pe ak Hours, Real-Time Demand Response Event Hours, and Real-Time Emergency Gener ation Event Hours.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 6: Establishing Baseline Conditions

ISO New England Inc. 6-2 Revision 5, Effective Date: November 8, 2013 

### 6.2 General Requirements for Baseline Conditions fo r All Demand Resources The Project Sponsor shall specify in its Measuremen t and Verification Plan compliance with each of the applicable requirements listed below. (1) For Projects where the Demand Reduction results from measures involving variable load equipment or equipment whose operation is time -dependent or weather-dependent, the baseline conditions shall be calculated for eac h hour across the Demand Resource On-Peak Hours and Demand Resource Seasonal Peak Hou rs. (2) For Projects where Demand Reduction is actively controlled by the Project Sponsor, facility personnel, or an energy management system, results from measures involving variable load equipment or equipment whose operatio n is time-dependent or weatherdependent and baseline conditions are calculated ba sed on historical hourly load or output data, the Project Sponsor shall demonstrate that the variance in the historical hourly load or output data used in the calculations of baseline conditions comply with the statistical reliability criteria set forth in S ection 7.2 of this manual. (3) For Projects where the Demand Reduction is acti vely controlled by the end-use facility personnel, or an energy management system and basel ine conditions are calculated using a rolling average of historical hourly load o r output data over some period prior to the Demand Resource On-Peak Hours and Demand Resour ce Seasonal Peak Hours, the Project Sponsor shall exclude historical hourly loa ds or output coincident with the Demand Resource On-Peak Hours and Demand Resource S easonal Peak Hours from the baseline condition calculations. (4) For Projects in which existing and operating eq uipment is removed from service during the defined Demand Resource On-Peak Hours and Deman d Resource Seasonal Peak Hours or has its electrical usage reduced during th e defined Demand Resource On-Peak Hours and Demand Resource Seasonal Peak Hours, the baseline conditions shall be the load (MW) of that operating equipment across the De mand Resource On-Peak Hours and Demand Resource Seasonal Peak Hours, prior to s uch equipment removal or reduced use. (5) For Projects in which failed equipment is repla ced by a more efficient equivalent or by an alternative strategy for delivering comparable e quipment operation or process function or output, the baseline condition shall be the nameplate rating of the equipment meeting the level of efficiency required by applica ble state code, federal product efficiency standard, or standard practice, whicheve r is most stringent. If there is no applicable state code or federal energy efficiency standard, then standard practice shall be used as the basis for establishing baseline cond itions and shall be documented in the Measurement and Verification Plan. (6) For Projects in which operating equipment is re placed with a more efficient equivalent unit, the baseline condition is the MW load of that operating equipment across theMeasurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 6: Establishing Baseline Conditions

ISO New England Inc. 6-3 Revision 5, Effective Date: November 8, 2013 Demand Resource On-Peak Hours and Demand Resource S easonal Peak Hours. In the absence of a measured baseline, the baseline values shall be level of efficiency required by applicable state code or federal energy efficien cy standard or standard practice if there is no applicable state code or federal energy efficiency standard. If applicable, the Project Sponsor shall indentify the method by which the baseline condition may be adjusted over the Measure Life. If standard practi ce is used as the basis for the baseline condition, it shall be documented in the Measuremen t and Verification Plan. (7) For Emergency Generation Projects metered at th e generator output, (Demand Resources whose operation is limited to loss of ext ernal power to the facility or the implementation by the ISO of voltage reduction of 5 % requiring more than 10 minutes to implement), the baseline condition electricity o utput shall be zero. (8) For Emergency Generation Projects metered at th e customer billing meter or a submeter within the facility, the Project Sponsor is r equired to submit real-time five minute data from the billing meter or sub-meter within the facility as described above. (9) For all Demand Resources, Project Sponsors shal l indicate compliance with Baseline Methodologies as well as specify Performance Measur e Methodology consistent with North American Energy Standards Board (NEASB) Busin ess Practices for Measurement and Verification of Wholesale Electrici ty Demand Response: (a) Baseline Type-I: A Baseline performance evaluat ion methodology based on a Demand Resource's historical interval meter data wh ich may also include other variables such as weather and calendar data. (Requi red for Real-Time Demand Response, and Real-Time Emergency Generation Resour ces). (b) Baseline Type-II: A Baseline performance evalua tion methodology that uses statistical sampling to estimate the electricity us age of an aggregated Demand Resource where interval metering is not available o n the entire population. (c) Metering Generator Output: A performance evalua tion methodology, used when a generation asset is located behind the Demand Resou rce's revenue meter, in which the Demand Reduction Value is based on the output o f the generation asset. (Distributed Generation, including Real-Time Emerge ncy Generation Resources, are required to use one of the metering configurations defined in Section 5 of this manual.) (10) Real-Time Demand Response Resources, Real-Time Demand Response Assets, and Real-Time Emergency Generation Resources are requir ed to comply with the Demand Response Baseline (Section III.8) and metering prov isions (primarily in Appendix III.E.2) of Market Rule 1.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 6: Establishing Baseline Conditions

ISO New England Inc. 6-4 Revision 5, Effective Date: November 8, 2013 

### 6.3 Requirements for Demand Resources Involving New Construction or Major Renovations For new construction or major renovation Projects, the baseline conditions shall be equal to the load during the applicable Demand Resource On-P eak Hours and Demand Resource Seasonal Peak Hours of equipment meeting the level of efficiency required by: (1) Applicable state code or federal energy efficie ncy standard, or (2) Standard practices, provided the Project Sponso r can document the standard practices in the Measurement and Verification Plan, if there ar e no applicable state codes or federal energy efficiency standards, or (3) Standard practices that are less stringent than applicable state code or federal energy efficiency standards, provided the Project Sponsor can document the less stringent standard practices by providing a study, report or analysis conducted in a manner consistent with the requirements in Section 7 and o ther applicable Sections of this manual, or (4) Standard practices that are more stringent than applicable state code or federal energy efficiency standards, provided the Project Sponsor can document the more stringent standard practices in the Measurement and Verificat ion Plan.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 6: Establishing Baseline Conditions

ISO New England Inc. 6-5 Revision 5, Effective Date: November 8, 2013 

### 6.4 Requirements for Real-Time Demand Response and Real-Time Emergency Generation Assets The requirements for determining baseline condition s (Demand Response Baseline calculation) for Real-Time Demand Response Resource s and Real-Time Emergency Generation Resources are in Section III.8 of Market Rule 1.ISO New England Inc. 7-1

Revision 5, Effective Date: November 8, 2013 

## Section 7: Statistical Significance 7.1 Description The Project Sponsor shall demonstrate in its Measur ement and Verification Plan that statistical sampling will meet or exceed the statis tical precision and accuracy requirements as identified in the Market Rule and in this Sectio n. The Measurement and Verification Plan shall include a description of the methods used to mitigate and adjust for the potential types of bias resulting from statistical methods. Where monitoring is specified over the measure life, the Measurement and Verification Plan shall d emonstrate how accuracy and precision will be maintained over the measure life. 

### 7.1.1 Requirements (1) All Project Sponsors shall include a descriptio n of methods used to achieve precision and accuracy requirements applicable to the measure ment and verification approach. (2) If the measurement and verification methodology includes the use of measurement and verification reference documents including but not limited to, engineering estimates, load profiles, measure life, and coincidence factor s, shall provide justification for use in the measurement and verification methodology. (3) If the measurement and verification methodology includes calculations based on engineering-based direct measurements, measurement of proxy variables or simulations, the Project Sponsor shall include methods to contro l relevant types of bias including, but not limited to: (a) accuracy and calibration of the measurement tools described elsewhere in this manual); (b) measurement error; ( c) engineering model bias; (d) modeler bias; (e) deemed parameter bias; (f) meter bias; (g) sensor placement bias; and (h) sample selection bias or non-random selection o f equipment and/or circuits to monitor. (4) If the measurement and verification methodology includes calculations using regression or statistical analyses, the Project Sponsor shall include methods to control relevant types of bias including, but not limited to: (a) mo del misspecification; (b) statistical validity; (c) error in measuring variables; (d) aut ocorrelation; (e) heteroscedasticity; (f) collinearity; (g) outlier data points; and (h) miss ing data. (5) If the measurement and verification methodology includes any form of population sampling, survey or interview data, the Project Spo nsor shall include methods to control relevant types of bias including, but not limited t o: (a) construct validity; (b) sampling frame versus population; (c) selection bias (for a sample and for a census attempt where not all sites within the census received usable dat a); (d) non-response bias; (e) error in measuring variables; (f) sample homogeneity relativ e to project (external validity); (g) outlier data points; and (h) missing data.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 7: Statistical Significance

ISO New England Inc. 7-2 Revision 5, Effective Date: November 8, 2013 (6) All requirements in Section 7 shall be include d in the Measurement and Verification Plan and included in a sampling plan attached to th e Measurement and Verification Plan as part of the supporting Measurement and Verificat ion Documents.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 7: Statistical Significance

ISO New England Inc. 7-3 Revision 5, Effective Date: November 8, 2013 

### 7.2 Statistical Sampling Sampling the total population of demand reduction m easures is permitted, provided the population estimates derived from sampling achieve 10% relative precision with no less than 80% confidence interval. Additional statistical sa mpling requirements as it relates to precision and accuracy are described below. 

### 7.2.1 General Requirements If sampling will be conducted, the Project Sponsor shall include each of the following general sampling conditions: (1) A description of the population to be sampled, (2) The required sample size in accordance with thi s manual, (3) The estimated sample size, plus contingencies f or sampling bias, as described in Section 7.2.2, (4) All assumptions and calculations for determinin g the sample size, and (5) The method for selecting sample points. 

### 7.2.2 Sample Size Requirements If population sampling will be conducted, the Proje ct Sponsor shall satisfy each of the requirements listed below for determining the sampl e size: (1) Where one or more samples are used, the require d sample size(s) shall be based upon achieving 10% relative precision with an 80% confid ence level. If a Demand Resource Project consists of multiple facilities or measures and the Project Sponsor uses multiple sample sets to estimate the aggregated Demand Reduc tion Value, the estimate shall have the minimum a precision and accuracy requireme nt applied to (1) each sample or combination of samples used, (2) the combination of all samples, or (3) stratified samples as described in Section 7.2.2(2). (2) If the Demand Reduction Value is estimated from a sample drawn from two or more strata, the overall sample size shall be based upon achieving 10% relative precision with an 80% confidence interval. Strata shall be define d as any subset of the Project’s population that is based on operation constants, va riables and characteristics. The concept of strata includes, but is not limited to: measures, practices, equipment, programs in a state sponsored demand side managemen t portfolio or subsets of an entire population of affected equipment at a facility havi ng similar operating characteristics. (3) All sampling calculations shall incorporate met hods to compensate for potential data loss through,Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 7: Statistical Significance

ISO New England Inc. 7-4 Revision 5, Effective Date: November 8, 2013 (a) Over sampling (b) Sample site replacement in the course of the st udy, (c) Demonstration that precision and confidence tar gets will still be met with a smaller sample size. (4) The Project Sponsor shall identify methods for controlling bias in sample selection including, but not limited to random sampling, cens us or rolling census for each sample and strata used. (5) The Coefficient of Variation (c.v.) used to der ive the required sample size shall be the measured c.v. for the primary measurement including all its error components. (6) The Project Sponsor shall identify methods for controlling bias attributed to the c.v. as it relates to sample size determination. (7) If a c.v. from a prior Measurement and Verifica tion Plan or supporting document approved by ISO New England is not available for th e primary measurement applicable to the segments of sites, installed measures, and/o r strategy, the Project Sponsor shall use a default value for the initial c.v., not less than 0.5 for homogeneous samples (samples from populations that are uniform with res pect to operation constants, variables and characteristics) and 1.0 for heteroge neous samples (samples from populations that are variable with respect to opera tion constants, variables and characteristics), until such time that a c.v. can b e estimated from the Project sample population. (8) If a method such as stratified ratio estimation is used to take advantage of supporting information for the population, the c.v. may be adj usted to take account of the added efficiency of the stratification and estimation met hodology and must still meet the requirements in Section 7.2.2. 

### 7.2.3 Sample Size Calculation Requirements
The formulas below shall be used for the calculatio n of required sample size and precision. Alternative sample size determination may be used p rovided they meet the minimum requirements set forth in Section 7.2.2 and are doc umented in the Measurement and Verification Plan. (1) The Project Sponsor shall calculate the sample number to achieve a precision of 10% using the following equation, utilizing a t value of 1.282, which corresponds to a two tailed 80% confidence interval of an infinite popul ation, where n’ = number of samples in an infinite population c.v. = coefficient of variation as set by a default value or where it is known, andMeasurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 7: Statistical Significance

ISO New England Inc. 7-5 Revision 5, Effective Date: November 8, 2013

r.p = precision

2

. . .. 282 .1 ' 

     ×
= p r v c n

(2) The sample size ( n ) for the finite population ( N ) less than 200 shall be calculated using the following equation, where

n’ = number of samples in an infinite population

N n n n ' 1 '

+ =Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 7: Statistical Significance

ISO New England Inc. 7-6 Revision 5, Effective Date: November 8, 2013 

### 7.3 Sample Size Recalibration Based on Monitoring D ata In the absence of a reliable c.v. the Project Spons or may use a default c.v. as described in Section 7.2.2. However, once performance data has been collected, the Project Sponsor shall demonstrate that the level of precision and a ccuracy is met using the sampling methodology by calculating the relative precision w ith a new estimate of the c.v. 

### 7.3.1 Sample Recalibration Requirements (1) The Project Sponsor shall calculate and report (as determined by ISO New England) the relative precision of sampling studies based on the measured estimate of the sample coefficient of variation calculated using the follo wing equations, where:  ̄x = sample mean,
s = standard deviation, and n’ = number of samples in an infinite population.

x s v c = ..



### ' . 282 .1

. . n v

c p r ×
=

(2) Where a study design is based on a finite popul ation ( N ) less than 200, the relative precision of the sampling study shall be calculated using the following equation, where: n = number of samples in a finite population, and

N = total number of units in the population



### n v c N n p r .

282 .1 1

. . ×

− =

(3) If a method such as stratified ratio estimation is used to take advantage of supporting information for the population, the estimated c.v. and achieved relative precision may be adjusted to take account of the added efficiency of the stratification and estimation methodology.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 7: Statistical Significance

ISO New England Inc. 7-7 Revision 5, Effective Date: November 8, 2013 

### 7.4 Sampling Over Load Zones or Dispatch Zones If the Project Sponsor conducts sampling for a popu lation of similar Demand Assets spanning multiple Load Zones or Dispatch Zones, the Project Sponsor shall include in its Measurement and Verification Plan the requirements listed below: 

### 7.4.1 Requirements (1) The Project Sponsor shall demonstrate that the accuracy and precision requirements discussed above apply to the overall population of Demand Assets being studied, rather than to the Project or Projects within each individ ual Load Zone or Dispatch Zone. (2) The Project Sponsor shall demonstrate the metho d for controlling any bias attributed to sampling across Load Zones or Dispatch Zones.ISO New England Inc. 8-1

Revision 5, Effective Date: November 8, 2013



## Section 8: Demand Reduction Value Calculations 8.1 Description The Project Sponsor shall specify in its Measuremen t and Verification Plan methodologies for calculation of the Demand Reduction Value durin g the applicable Demand Resource OnPeak Hours and Demand Resource Seasonal Peak Hours for the Project. Such information shall be provided in the Demand Reduction Value cal culation supporting documents and attached to additional Measurement and Verification Plan as supporting Measurement and Verification Documents. The description shall incl ude, but not be limited to the following factors used in the Demand Reduction Value calculat ions: (1) Equations and Formulas (2) Assumptions (3) Manufacturers Equipment Specifications (4) Direct Measurement Data (5) Indirect Measurement Data (6) Engineering Factors, Parameters and Other Varia bles
If the one or more of the factors listed above are not known or not available at the time the Project Sponsor submits its Measurement and Verific ation Plan to the ISO, the Project Sponsor shall specify when the unknown or unavailab le factors will be known and available. Further, the Project Sponsor shall indicate if the absence of known factors would at any time during the performance hours in a Commitment Period , cause the statistical precision and accuracy of the Demand Reduction Value to fall belo w the minimum requirement established in the Market Rule and Section 7 of thi s manual.
The Demand Reduction Values for Real Time Demand Re sponse Resources and Real Time Emergency Generator Resources shall be calculated i n accordance with Market Rule 1. Such calculation will be reflective of asset mappin gs and un-mappings effective in a given month. Demand Reduction Value calculations for a m onth will take into account the valid audit or event performance contributions from asset s mapped to each resource in the month, but will not take into account performance from ass ets that are not mapped to the Resource in the month.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 8: Demand Reduction Value Calculations

ISO New England Inc. 8-2 Revision 5, Effective Date: November 8, 2013 

### 8.2 Requirements The Project Sponsor shall specify in its Measuremen t and Verification Plan compliance with the following requirements: (1) The reported monthly Demand Reduction Value sha ll achieve at least a 10% relative precision at an 80% confidence level. (2) If baseline conditions are used in the calculat ion of Demand Reduction Value, the Project Sponsor shall make adjustments to the basel ine conditions to reflect operating conditions at the time of the Demand Resource On-Pe ak Hours, Demand Resource Seasonal Peak Hours, Real-Time Demand Response Even t Hours, or Real-Time Emergency Generation Event Hours. (3) Formulas used by the Project Sponsor to determi ne Demand Reduction Values shall include any modifying factors, including, but not l imited to, coincidence with applicable performance hours, realization rate, measure life, and equipment failure rate. (4) If a Demand Resource Project consists of multiple s ites and/or measures, the Project Sponsor may calculate the aggregated Demand Reducti on Value during the applicable performance hours for each asset as the sum of all measured Demand Reduction Values, provided that each measured Demand Reduction Value achieves at least a 10% relative precision at an 80% confidence level, or the aggreg ated Demand Reduction Value achieves at least a 10% relative precision at an 80 % confidence level. (5) If sampling will be conducted, the Project's ag gregated Demand Reduction Value in each Load Zone or Dispatch Zone shall be calculated from the measured data of the sample, consistent with the methodologies indicated in the sampling plan.ISO New England Inc. 9-1

Revision 5, Effective Date: November 8, 2013



## Section 9: Monitoring Parameters and Variables 9.1 Description The Project Sponsor shall specify in its Measuremen t and Verification Plan compliance with requirements relative to the variables that will be measured, monitored, counted, recorded, collected, and maintained to determine the Project’ s Demand Reduction Value during Demand Resource On-Peak Hours, Demand Resource Seas onal Peak Hours, Real-Time Demand Response Event Hours, and Real-Time Emergenc y Generation Event Hours. The Project Sponsor shall specify in its Measuremen t and Verification Plan if alternative variables other than kW, MW, kWh or MWh will be mea sured, monitored, recorded, collected and maintained.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 9: Monitoring Parameters and Variables

ISO New England Inc. 9-2 Revision 5, Effective Date: November 8, 2013 

### 9.2 Requirements The Project Sponsor shall specify in its Measuremen t and Verification Plan compliance with each of the requirements listed below. When equipm ent manufacturer, model, serial number and age are not readily available, the Project Spon sor must specify alternative means of acquiring or estimating the required information. (1) For Projects affecting HVAC Systems, the Project Sponsor shall, at a minimum, collect and maintain the following information: (a) On HVAC equipment: equipment capacity, quantity , manufacturer, model and serial numbers, and age. (b) On HVAC system controls: location of zones, tem perature set-points, control setpoints and schedules, and any special control featu res. (2) For Projects affecting Building Envelope, the Project Sponsor shall, at a minimum, collect, maintain and report on all key variables e ffecting savings associated with the measures. (3) For Projects affecting Interior or Exterior Lighting Systems, the Project Sponsor shall, at a minimum, collect and maintain the follo wing information: number and types of lamps and ballasts, with nameplate data. (4) For Projects affecting Major Electric Consuming Equipment, the Project Sponsor shall, at a minimum, collect and maintain the follo wing information: equipment capacity, quantity, manufacturer, model and serial numbers and age. (5) For Projects affecting Weather Sensitive Electrical Loads including HVAC , where temperature, humidity or degree-days will be used i n the calculation of Demand Reduction Value, the Project Sponsor shall collect and maintain representative site weather data, either measured on-site or obtained f or a nearby site, from the National Climatic Data Center. On-site measurement equipmen t shall satisfy the measurement equipment requirements described in Section 10 of t his manual. (6) For Projects that include Distributed Generatio n, including Real-Time Emergency Generation Resources, the Project Sponsor shall mea sure and record the electrical output of the generator during Demand Resource On-P eak Hours, Demand Resource Seasonal Peak Hours, Real-Time Demand Response Even t Hours, or Real-Time Emergency Generation Event Hours (as appropriate) u sing an interval meter that satisfies the measurement equipment requirements de scribed in Section 10 of this manual. Additionally, the Project Sponsor shall re port in a manner specified by ISO New England: (a) The most recent annual non-coincident peak dema nd (absent Distributed Generation output) of the end-use metered customer at the location where the Distributed Generation is directly connected for ea ch year that the DistributedMeasurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 9: Monitoring Parameters and Variables

ISO New England Inc. 9-3 Revision 5, Effective Date: November 8, 2013

Generation participates in the FCM along with the o utput of the Distributed Generation during the most recent annual non-coinci dent peak; and (b) The monthly average hourly load of the end-use customer to which the Distributed Generation is directly connected separately from th e Distributed Generation’s monthly average hourly output for each month of the Capacity Commitment Period.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 9: Monitoring Parameters and Variables

ISO New England Inc. 9-4 Revision 5, Effective Date: November 8, 2013 

### 9.3 Requirements for Real-Time Demand Response Reso urces and Real-Time Emergency Generation Resources For Real-Time Demand Response Resources and Real-Ti me Emergency Generation Resources, the Project Sponsor shall specify compli ance with the following metering and telemetry requirements. (1) Receive dispatch instructions from the ISO thro ugh direct communication with Demand Designated Entities (DDE). (2) Transmit in real-time, five-minute interval dat a (for all intervals in an operating day) from the DDE to ISO through the direct communicatio n link between the DDE and the ISO. 

### 9.3.1. Direct Communication Between ISO and DDE The dispatch of Real-Time Demand Response and Real- Time Emergency Generation Resources will be communicated from the ISO to the DDE as prescribed in ISO New England Operating Procedure No. 18, Metering And Te lemetering Criteria, (available on the ISO website). The DDE will be responsible for dete rmining which Real-Time Demand Response Assets and Real-Time Emergency Generation Assets to dispatch to fulfill the Resource’s dispatch instruction. Dispatch instructions issued by ISO New England to a DDE for the dispatch of Real-Time Demand Response Resources or Real-Time Emergency Ge neration Resources shall be directed to end-use customers by the DDE. Failure of a Project Sponsor to establish a DDE for a Real-Time Demand Response Resource or Real-Time Emergency Generation Resource may result in a zero Demand Reduction Value for those Resources. Inadequate ma nagement of the ISO CFE/RTU, and failure to provide telemetering of Real-Time Demand Response Assets or Real-Time Emergency Generation Assets, may also result in the removal of the contribution of those Demand Assets to the Demand Reduction Values. 

### 9.3.2 Real-Time Demand Response Resources (1) The ISO will issue Dispatch Instructions to spe cific Real-Time Demand Response Resources in Real-Time Demand Response Event Hours or Real-Time Demand Response Dispatch Hours. The Dispatch Instruction shall include the amount (MW) of load reduction (up to the Resource’s net CSO) that the ISO determines is required. The ISO may additionally issue Dispatch Instructions in real-time that reduce or increase the amount dispatched. (2) A Project Sponsor shall manage its Real-Time De mand Response Assets that are mapped to a Real-Time Demand Response Resource as o f the first of a month such thatMeasurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 9: Monitoring Parameters and Variables

ISO New England Inc. 9-5 Revision 5, Effective Date: November 8, 2013 the Real-Time Demand Response Resource shall be cap able of responding to Dispatch Instructions requiring 100% of the net Capacity Sup ply Obligation. (3) Real-Time Demand Response Resources will receiv e a separate Dispatch Instruction indicating the end of the Deployment Period 3 when it can restore its loads to Normal Operations 4

. 

### 9.3.3 Real-Time Emergency Generation Resources (1) The ISO shall issue Dispatch Instructions to Re al-Time Emergency Generation Resources to curtail (including the Reduction Deadl ine) and restore loads to Normal Operations during Real-Time Emergency Generation Ev ent Hours. Dispatch Instructions shall apply to specific Real-Time Emer gency Generation Resources. The amount of Real-Time Emergency Generation Resources dispatched for each Real-Time Emergency Generation Event Hour will be the amount the ISO determines is necessary to meet the capacity deficiency. (2) A Project Sponsor shall manage its Real-Time Em ergency Generation Assets that are mapped to a Real-Time Emergency Generation Resource as of the first of a month such that the Real-Time Emergency Generation Resource co mplies with Dispatch Instructions. (3) Real-Time Emergency Generation Resources will r eceive a separate Dispatch Instruction indicating the end of the Deployment Pe riod when it can restore its loads to Normal Operations.

3 Defined term in NAESB Wholesale Demand Response St andards. 4 Defined term in NAESB Wholesale Demand Response St andards.ISO New England Inc. 10-1

Revision 5, Effective Date: November 8, 2012



## Section 10: Measurement Equipment Specifications 10.1 Description The Project Sponsor shall specify in its Measuremen t and Verification Plan compliance with requirements for measurement, monitoring and/or dat a recording device type that will be used to measure, monitor and record data for each p arameter and variable indicated in the Project Sponsor’s Measurement and Verification Plan pursuant to Section 9 of this manual. The Project Sponsor may specify in its Measurement and Verification Plan and or Measurement and Verification Documents alternatives to the requirements in this Section provided the alternatives meet the minimum specific ations, function and quality for measurement, monitoring and/or data recording devic es that will be installed and operated to measure, monitor and/or record data from each of th e parameters and variables indicated in the Project Sponsor’s Measurement and Verification Plan pursuant to Section 9 of this manual.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 10: Measurement Equipment Specifications

ISO New England Inc. 10-2 Revision 5, Effective Date: November 8, 2013 

### 10.2 Requirements The Project Sponsor shall specify in its Measuremen t and Verification Plan compliance with the following requirements: (1) All solid-state measurement, monitoring and dat a recording equipment shall meet or exceed the relevant standards set by the American N ational Standard Institute (“ANSI”) or equivalent standard for the equipment. (2) Measurement, monitoring and data recording equi pment that is directly measuring watthour, volt-hour, volt-ampere-hours, reactive volt-a mpere-hour, and the associated demand components should conform to ANSI or equival ent standards for the equipment. (3) Instruments or transducers for the analog or di gital measurement of volt, volts-squared, amperes, amperes-squared, phase angle, volt-amperes , watts, and reactive volt-amperes should conform to ANSI or equivalent standards for the equipment. (4) Data recorders that are recording pulses from m easurement and monitoring devices shall utilize a pulse rate within the resolution ca pabilities of the recorder. (5) All measurement, monitoring and data recording equipment installed on electric circuits with significant harmonics shall meet the relevant standards provided by the Institute of Electrical and Electronics Engineers (IEEE). (6) Any measurement or monitoring equipment that di rectly measures electrical demand (MW) shall be a true RMS 5 measurement device with an accuracy of no less tha n ± 2%. (7) Any measurement or monitoring equipment that di rectly measures electrical demand from three-phase devices shall be installed such th at measurements are taken on all three-phases to account for any phase imbalance or an equivalent method that can measure electrical demand using two phases. (8) Any measurement or monitoring equipment that di rectly measures electrical demand on circuits with significant harmonics shall have a di gital sampling rate of at least 2.6 kHz as defined in the relevant IEEE Standards. (9) Any measurement or monitoring equipment of prox y variables that do not directly measure electrical demand, including but not limite d to voltage, current, temperature, flow rates and operating hours, shall have an accur acy rating such that the overall accuracy of the calculated demand (MW) using the pr oxy variables is not less than ± 2%.

5 Root Mean SquareMeasurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 10: Measurement Equipment Specifications

ISO New England Inc. 10-3 Revision 5, Effective Date: November 8, 2013 (10) Any measurement or monitoring equipment of cur rent (amps) and nominal voltage used to calculate electrical demand shall include the po wer factor of the end-uses in the demand (MW) calculations. (11) Data recorders shall be synchronized in time, within an accuracy of ± 2 minutes per month, with the National Institute of Standards and Technology (“NIST”). (12) All measurement, monitoring and data recording equipment shall be calibrated by the Project Sponsor or its independent calibration cont ractor in such a way to meet or exceed the Federal Energy Management Program (“FEMP ”) Measurement and Verification Guidelines, applicable American Societ y of Heating, Refrigeration and Air Conditioning Engineers (“ASHRAE”) standards, NIST, or equivalent standard for the equipment. (13) The Project Sponsor shall ensure that all meas urement, monitoring and data logging equipment shall be maintained in such a way as to m eet or exceed industry and manufacturer maintenance standards. (14) The Project Sponsor shall maintain documentati on on all measurement, monitoring and data recording equipment maintenance and calibratio n activities. Documentation and records shall be maintained as specified in Section 12 of this manual. (15) The Project Sponsor shall provide to ISO, upon request, measurement equipment maintenance, calibration and testing records to dem onstrate that the Project Sponsor’s measurement equipment is calibrated and maintained in accordance the requirements described in this manual. (16) Interval metering devices shall collect electr icity usage data at a frequency of 15 minutes or less. (17) The Project Sponsor may propose alternative me thods to demonstrate the measurement, monitoring and data recording equipment used in the determination of Demand Reduction Value provided it satisfies the accuracy, calibration and maintenance standards described in this manual subject to ISO a pproval.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 10: Measurement Equipment Specifications

ISO New England Inc. 10-4 Revision 5, Effective Date: November 8, 2013 

### 10.3 Requirements for Demand Resources Defined as R eal-Time Demand Response or Real-Time Emergency Generation 10.3.1 Telemetering Requirements The term Interval Meter as used with respect to Rea l-Time Demand Response Assets and Real-Time Emergency Generation Assets in this manua l refers to a meter that records energy usage (or generation) on at least a five min ute interval basis and may store energy usage (or generation) at a smaller interval. For R eal-Time Demand Response Resources and Real-Time Emergency Generation Resources, the Proje ct Sponsor shall comply with the requirements established in Market Rule 1, ISO New England Operating Procedure No. 18, Metering And Telemetering Criteria, and the ISO New England Manuals.ISO New England Inc. 11-1

Revision 5, Effective Date: November 8, 2013



## Section 11: Monitoring Frequency and Duration 11.1 Description The Project Sponsor shall specify in its Measuremen t and Verification Plan compliance with requirements for monitoring frequency and duration of each monitoring parameter and variables indicated in the Project Sponsor’s Measur ement and Verification Plan pursuant to Section 9 of this manual.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 11: Monitoring Frequency and Duration

ISO New England Inc. 11-2 Revision 5, Effective Date: November 8, 2013 

### 11.2 Requirements The Project Sponsor shall specify in its Measuremen t and Verification Plan compliance with the following requirements: (1) The duration and frequency of metering and moni toring shall be sufficient to ensure an accurate representation of the amount of electrical demand used or generated during periods in which baseline conditions are measured a nd during Demand Resource OnPeak Hours, Demand Resource Seasonal Peak Hours, Re al-Time Demand Response Event Hours, and Real-Time Emergency Generation Eve nt Hours. (2) All measurements shall be taken at typical syst em conditions within the time periods and frequency that shall demonstrate coincidence wi th the Demand Resource On-Peak Hours, Demand Resource Seasonal Peak Hours, Real-Ti me Demand Response Event Hours, and Real-Time Emergency Generation Event Hou rs. (3) If independent parameters, such as but not limi ted to: temperature, humidity, or heating degree days are used in the calculation of Demand R eduction Values, the Measurement and Verification Plan shall specify methods to ensu re the measurement is performed over a duration and frequency sufficient to accurat ely represent the amount of electrical demand used or generated during periods in which ba seline conditions are measured and during Demand Resource On-Peak Hours and Demand Resource Seasonal Peak Hours. (4) The Project Sponsor may propose alternative met hods for monitoring frequency and duration for each monitoring parameter and variable indicated in the Project Sponsor’s Measurement and Verification Plan pursuant to Secti on 9 of this manual providing the proposed methodology meets all the minimum requirem ents specified in Market Rule 1 and Section 11 of this manual.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 11: Monitoring Frequency and Duration

ISO New England Inc. 11-3 Revision 5, Effective Date: November 8, 2013 

### 11.3 ReservedISO New England Inc. 12-1

Revision 5, Effective Date: November 8, 2013 

## Section 12: Data Validation, Retention and Manageme nt 12.1 Description The Project Sponsor shall specify in its Measuremen t and Verification Plan compliance with the requirements for systems, processes and methods for validation, estimation of missing, and maintenance of all data used in the calculation of Demand Reduction Values for Demand Resource On-Peak Hours, Demand Resource Seas onal Peak Hours, Real-Time Demand Response Event Hours, and Real-Time Emergenc y Generation Event Hours.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 12: Data Validation, Retention and Manageme nt

ISO New England Inc. 12-2 Revision 5, Effective Date: November 8, 2013 

### 12.2 Requirements The Project Sponsor shall specify in its Measuremen t and Verification Plan compliance with the following requirements: (1) For Demand Resource Projects targeting customer facilities with greater than or equal to 10 kW of Demand Reduction Value per facility, th e Project Sponsor shall maintain the following: (a) Retail customer’s address, (b) The retail customer’s utility distribution comp any, (c) Utility distribution company account identifier such as account number or meter number, (d) Measures installed, and (e) The corresponding monthly Demand Reduction Valu es until the end of the Measure Life, the Demand Asset is retired, or until the Demand Resource is permanently De-Listed or retired from the FCM. (2) For Demand Resource Projects targeting customer facilities with less than 10 kW of Demand Reduction Value per facility, the Project Sp onsor shall have the option of maintaining records as described above for customer facilities with greater than or equal to 10 kW of Demand Reduction Value per facility, or maintaining records of aggregated Demand Reduction Values and measures installed by L oad Zone, Dispatch Zone and Meter Domain for each Demand Resource type. (3) The Project Sponsor shall validate all measured data used in the Demand Reduction Value calculations. Data that has failed validatio n may not be used in any Demand Reduction Value calculation. (4) For Projects involving an individual facility, generator or energy consuming equipment, the Project Sponsor shall conduct the following val idation checks on any interval data from an individual facility: (a) Time Check: The Project Sponsor shall validate that the measurement devices time clock is within ± two minutes of the true time as d efined by the National Institute of Standards and Technology. (b) Sum Check: The Project Sponsor shall validate t hat the difference between the sum of the values recorded over the intervals and the v alue recorded by the meter over the same time period is within plus or minus two pe rcent. This check may be done on either usage or pulse data, provided the data sc aling is consistent throughout the period.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 12: Data Validation, Retention and Manageme nt

ISO New England Inc. 12-3 Revision 5, Effective Date: November 8, 2013 (c) High/Low Check: The Project Sponsor shall estab lish minimum and maximum expected values for each Demand Asset, facility, or measure. The minimum and maximum values shall be based on equipment ratings or historical equipment and/or facility usage data. The Project Sponsor sha ll identify any and all interval data that is greater than the maximum expected valu e or less than the minimum expected value. Any such interval data shall be dee med to fail validation. (d) Zero Value Check: The Project Sponsor shall ide ntify any and all interval data with a value equal to zero. The Project Sponsor shall v erify whether or not the zero value is the correct value for that interval. If t he Project Sponsor determines that the zero value is incorrect, the Project Sponsor sh all substitute a corrected or estimated non zero value for the zero value, or sha ll indicate that the data is incorrect and will be excluded from performance cal culations. Under no circumstances shall the Project Sponsor substitute a zero value for missing interval data. (e) The Project Sponsor shall identify all estimate d data used in the Demand Reduction Value calculations, as well as the methodology used to develop the estimate. Any such estimates must be communicated to the ISO alon g with the methodology for developing them. (f) The Project Sponsor shall classify all data tha t has passed validation and is used in the Demand Reduction Value calculations as either: (i) actual data, (ii) estimated data or (iii) missing data. The data classificatio n shall be stored along with the data values in the Project Sponsor’s data retention and management system described in Section 12.1. (g) If meter data is found to be inaccurate, the Pr oject Sponsor shall promptly notify the ISO.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 12: Data Validation, Retention and Manageme nt

ISO New England Inc. 12-4 Revision 5, Effective Date: November 8, 2013 

### 12.3 ReservedISO New England Inc. 13-1

Revision 5, Effective Date: November 8, 2013 

## Section 13: Performance Reporting 13.1 Description The Project Sponsor shall specify in its Measuremen t and Verification Plan compliance with the requirements for monthly data performance repor ting.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 13: Performance Reporting

ISO New England Inc. 13-2 Revision 5, Effective Date: November 8, 2013 

### 13.2 Requirements The Project Sponsor shall specify in its Measuremen t and Verification Plan compliance with the following requirements: (1) On a monthly basis, the Project Sponsor shall r eport for each of its Demand Assets registered with the ISO the total Demand Reduction Value (MWh) during the Demand Resource On-Peak Hours, Demand Resource Seasonal Pe ak Hours, Real-Time Demand Response Event Hours, and Real-Time Emergency Gener ation Event Hours applicable to the Demand Resource in the Obligation Month. (2) The Project Sponsor shall report the Demand Red uction Values (MWh) for each Demand Assets according to the submission and timin g requirements defined in ISO New England Manual for Market Rule 1 Accounting, M- 28

. (3) The Project Sponsor may report revised Demand R eduction Values (MWh) for each Demand Assets according to the submission and timin g requirements defined in ISO New England Manual for Market Rule 1 Accounting, M- 28

. (4) The Project Sponsor shall report the Demand Red uction Values (MWh) for each of its Demand Assets in a format defined by the ISO
. (5) The Project Sponsor shall report the Demand Red uction Values (MWh) for each of its Demand Assets using a software application and elec tronic interface defined by the ISO. Performance data for On-Peak and Seasonal Pea k assets that are not Distributed Generation shall be submitted through the CAMS. Pe rformance data for On-Peak and Seasonal Peak assets that are Distributed Generatio n shall be submitted through the Settlement Market System metering interface. (6) The Project Sponsor shall provide to the ISO on a monthly basis work sheets, engineering calculations, reference materials, mete r readings, and any other data necessary to support the Demand Reduction Values fo r each of its Demand Assets. The ISO may update the reported Demand Reduction Values (MWh) based on its review of the supporting documentation provided with the subm ittals or through an audit as defined in Market Rule 1 Section III.13.6.1.5.4 and the ISO New England Manual for Registration and Performance Auditing, M-RPA

. (7) For Demand Resources using Statistical Sampling , the Project Sponsor shall provide to the ISO, as part of its Annual Certification of Acc uracy of Measurement and Verification Documents as specified in Section 14.2 , a statement that the Demand Reduction Value complies with the minimum statistic al significance requirements described in Section 7.2.2 of this manual. The Pro ject Sponsor shall specify any deviations from minimum statistical significance re quirements and any and all actions taken to correct deviations. (8) For Demand Resources other than Real-Time Deman d Response Resources or RealTime Emergency Generation Resources where Demand Re duction Values (MWh) areMeasurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 13: Performance Reporting

ISO New England Inc. 13-3 Revision 5, Effective Date: November 8, 2013 derived using baseline conditions, the Project Spon sor shall provide to the ISO on a monthly basis a description of any and all adjustme nts made to baseline conditions used in the Demand Reduction Value calculations. (9) For Distributed Generation, Project Sponsors s hall report the Facility Metered Load at the metering point in accordance with Market Rule 1 for purposes of calculating the Demand Reduction value and pushback to the grid dur ing Demand Resource On-Peak Hours, Demand Resource Seasonal Peak Hours, Real-Ti me Demand Response Event Hours, or Real-Time Emergency Generation Event Hour s (as appropriate) subject to metering requirements as specified in Section 5 of this manual and ISO New England Manual M-28.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 13: Performance Reporting

ISO New England Inc. 13-4 Revision 5, Effective Date: November 8, 2013 

### 13.3 ReservedISO New England Inc. 14-1

Revision 5, Effective Date: November 8, 2013 

## Section 14: Independence and Auditing 14.1 Description The Project Sponsor shall specify in its Measuremen t and Verification Plan compliance with requirements for measurement and verification proce sses that will be conducted by independent third-parties. An independent third-pa rty is a party that is not an Affiliate of the Project Sponsor, that has no financial interest in the outcome of the certification, and that is qualified in the measurement and verification of De mand Resource measures. The Project Sponsor shall specify in its Measuremen t and Verification Plan that the Project Sponsor shall provide an Annual Certification to th e ISO that the Demand Resource projects continue to perform in accordance with the submitted Measurement and Verification Plan and with the Measurement and Veri fication Documents reviewed and approved by the ISO for the applicable Capacity Com mitment Period.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 14: Independence and Auditing

ISO New England Inc. 14-2 Revision 5, Effective Date: November 8, 2013 

### 14.2 Requirements The Project Sponsor shall indicate in its Measureme nt and Verification Plan compliance with the following requirements: (1) The Project Sponsor shall provide to the ISO an Annual Certification of Accuracy of Measurement and Verification Documents, with a stat ement certifying that the Projects for which the Project Sponsor is requesting compens ation continue to perform in accordance with the submitted Measurement and Verif ication Documents approved by the ISO. Acceptable methods for satisfying the Ann ual Certification of Accuracy of Measurement and Verification Documents include, but are not limited to, certification by a state public utility commission with jurisdict ion over the Project, or an auditor that is not an Affiliate of the Project Sponsor, that ha s no financial interest in the outcome of the certification, and that is qualified in the mea surement and verification of Demand Resource measures. (2) The Project Sponsor shall cooperate in any unan nounced audits or tests of a Demand Resource conducted by the ISO. Audits may be condu cted on a periodic basis, or at the ISO’s discretion should the ISO have a reason to su spect a deficiency in the Project Sponsor’s compliance with any requirement. On site audits will be coordinated with the Project Sponsor and scheduled during normal busines s hours. (3) The Project Sponsor shall allow the ISO to audi t testing and calibration records, and order and witness the testing of metering and measu rement equipment installed pursuant to the Demand Resource’s approved Measurem ent and Verification Plan (4) The Project Sponsor shall be responsible for al l expenses associated with installing, maintaining, calibrating and testing the metering, data recording and measurement equipment installed pursuant to the Demand Resource ’s approved Measurement and Verification Plan. (5) The Project Sponsor shall also comply with the requirements in Market Rule 1, Section III.13.6.1.5.4 and ISO New England Manual for Registration and Perform ance Auditing, M-RPA for registration, audit, and testing.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 14: Independence and Auditing

ISO New England Inc. 14-3 Revision 5, Effective Date: November 8, 2013 

### 14.3 ReservedISO New England Inc. 15-1

Revision 5, Effective Date: November 8, 2013 

## Section 15: Measurement and Verification Supporting Documents 15.1 Description The Project Sponsor shall provide a list in its Mea surement and Verification Plan of all reports, studies, specifications and other document s referenced in its Measurement and Verification Plan. Such documents shall be submitt ed as Measurement and Verification Documents.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 15: Measurement and Verification Supporting Documents

ISO New England Inc. 15-2 Revision 5, Effective Date: November 8, 2013 

### 15.2 Requirements The Project Sponsor shall indicate in its Measureme nt and Verification Plan compliance with the following requirements: (1) All reports, studies, specifications and other documents referenced in the Project Sponsor’s Measurement and Verification Plan shall h ave been prepared and published within five years of the Measurement and Verificati on Plan’s submission date to the ISO. (2) The Project Sponsor shall specify in its Measur ement and Verification Plan adequate justification for use and relevance of reports, stu dies, specifications and other documents referenced in the Project Sponsor’s Measurement and Verification Plan published more than five years from the time of the Measurement an d Verification Plan’s submission. Additional justification for use of out of date doc uments shall be submitted in addendums to the Measurement and Verification Docum ents by the New Capacity Qualification deadline or Existing Capacity Qualifi cation deadline for the applicable Forward Capacity Auction for reports, studies, spec ifications and other documents referenced in the Project Sponsor’s Measurement and Verification Plan that become out of date during after a Capacity Commitment Period a nd shall be subject to ISO approval. (3) The Project Sponsor shall provide to the ISO el ectronic copies (and upon request hardcopies) of any and all reports, studies, specif ications and other documents referenced in its Measurement and Verification Plan

.ISO New England Inc. 16-1

Revision 5, Effective Date: November 8, 2013 

## Section 16: Responsible Parties 16.1 Description The Project Sponsor shall specify in its Measuremen t and Verification Plan the parties involved in various aspects of the Project.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 16: Responsible Parties

ISO New England Inc. 16-2 Revision 5, Effective Date: November 8, 2013 

### 16.2 Requirements The Project Sponsor shall specify in its Measuremen t and Verification Plan the parties involved in various aspects of the Project, includi ng but not limited to the names or titles of the parties, professional qualifications, and typic al responsibilities in the following area: (1) Project Management (2) Measure Implementation (3) Measure Operation and Maintenance (4) Measurement Equipment Calibration and Testing (5) Monthly Demand Reduction Value Calculations (6) Data Validation, Retention and Management (7) Monthly Performance Reporting (8) Independent Project Auditing (9) Quality AssuranceISO New England Inc. 17-1

Revision 5, Effective Date: November 8, 2013 

## Section 17: Measurement and Verification Plan Forma t 17.1 Description The Project Sponsor shall prepare and submit its Me asurement and Verification Plan in a format and manner as specified by ISO New England.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Section 17: Measurement and Verification Plan Forma t

ISO New England Inc. 17-2 Revision 5, Effective Date: November 8, 2013 

### 17.2 Requirements The Project Sponsor’s Measurement and Verification Plan shall contain all information as specified in this manual in a format specified by t he ISO 6 . In each Section, Project Sponsor shall specify required elements of its proposed pla n and indicate compliance with all the applicable requirements specified in this manual: (1) Project Information (2) Equipment, Measure, and Practice Description (3) Project General Assumptions (4) Measurement and Verification Approach (5) Establishing Baseline Conditions / Metering Sch eme (6) Statistical Significance (7) Demand Reduction Value Calculations (8) Monitoring Parameters and Variables (9) Measurement Equipment Specifications (10)Monitoring Frequency and Duration (11) Data Validation, Retention and Management (12) Performance Reporting (13) Independence and Auditing (14) Measurement and Verification Documents (15) Responsible Parties

6 The Measurement and Verification Plan form for Dem and Resources is available on the ISO website. http://www.iso-ne.com

.ISO New England Inc. REV-1

Revision 5, Effective Date: November 8, 2013 

## Revision History
Approval Approval Date: April 13, 2007 Effective Date: April 13, 2007 Revision History Revision: 1 - Approval Date: August 2, 2007 Section No. Revision Summary List of Figures and Tables..... Added “ISO New England Business Proce dures” to the Table 1.1 title. Introduction... Added “ISO New England Business Procedures” to thi s section. Table 1.1...... Added “ISO New England Business Procedures” to the title and adds “Ancillary

Service Schedule No. 2 Business Procedure” to the T ransmission column. A2.4(7) & A4.4............ Replaced “90 days following the dispatch day” with “the 101 day Data

Reconciliation Process deadline”.

Revision: 2 - Approval Date: May 7, 2010 Section No. Revision Summary Entire Manual revised to reflect the Forward Capaci ty Market as contained in Section III.13 of Market Rule 1.

Revision: 3 - Approval Date: May 6, 2011 Section No. Revision Summary 6.4.1.............. Added a reference to Section 6.4.1.1(4)(a) for the location of the Customer

Baseline adjustment description to the first senten ce and deleted the second and third sentences. 6.4.1.1(4)(a)(i).. Added reference to dispatch results from a Demand R esponse audit, deleted

reference to a Real-Time Price Response event being initiated, and clarified that the actual usage would occur before the first Reduc tion Deadline in the dispatch day. 6.4.1.1(4)(a)(ii). Clarified that the actual usage would occur before the first Reduction Deadline in

the dispatch day. 6.4.1.1(4)(a)(iii) Deleted the reference to a Real-Time Price Response Asset and clarified that the

actual usage would occur for the two hours commenci ng two and a half hours before the first Reduction Deadline in the dispatch day. 6.4.1.1(4)(a)(iv) Added a new subsection (iv) describing the Customer Baseline adjustment for a Real-Time Price Response Asset participating in the Day-Ahead Load Response Program or a Real-Time Price Response event occurri ng in the dispatch day. 6.4.1.1(4)(a)(v). Previous subsection (iv) becomes the new subsection (v). 6.4.1.1(4)(a)(vi) Previous subsection (v) becomes the new subsection (vi) and the previous content

is replaced with a new sentence detailing the appli cation of the Customer BaselineMeasurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Revision History

ISO New England Inc. REV-2 Revision 5, Effective Date: November 8, 2013

adjustment for the second and subsequent consecutiv e event days when there are multiple consecutive dispatch days for an asset.

Revision: 4 - Approval Date: June 1, 2012 Section No. Revision Summary 1.3................ Deleted the special provision for Real-Time Demand Response Assets. 2.3(4)............ Added the phrase “at the metering point in accordan ce with Market Rule 1”. 5.1.............. Deleted the first sentence of the second paragraph. 5.2.2............Replaced Distributed Generation with an ex planation of which Assets this section

applies to and added references to Market Rule 1 an d the ISO New England Manuals. Deleted subsection (5). 5.3...............Added a required demonstration of conform ance with Market Rule 1 and that the

alternate methods are subject to approval by the IS O. 5.4.1 & 5.4.2.. Deleted Real-Time Demand Response E vent Hours. 5.6.............. Replaced Customer Baseline with Demand Re sponse Baseline and added a

reference to Section III.E.2.1 of Market Rule 1. D eleted the language on six acceptable metering configurations. 5.6.1............Replaced the formula with a reference to S ection III.E.2.1 of Market Rule 1. 5.6.2............Replaced formula with a reference to Secti on III.E.2.1 for Real-Time DR Assets

but retained formula for RTEG Assets metered at the generator. Added a new formula for Real-Time Demand Response Assets consis ting of Distributed Generation metered at the generator. 5.6.3............Revised section heading and replaced Distr ibuted Generation with Real-Time

Emergency Generation Asset. 5.6.4............Revised Section heading and replaced formu la with references to Sections

III.E.2.1 and III.8 of Market Rule 1. 5.6.5............Revised drawing and replaced formula with references to Sections III.E.2.1 and

III.8 of Market Rule 1. 5.6.6............Replaced “hour” with “interval”. 6.1.............. Deleted references to Real-Time Demand Re sponse Event Hours and RTEG

Event Hours. Added a reference to Section III.8 of Market Rule 1 for baselines. 6.2(10).........Added this new subsection for Real-Time D emand Response Resources, RealTime Demand Response Assets, and Real-Time Emergenc y Generation Resources and application of Section III.8 of Marke t Rule 1 for baselines and Section III.E.2 of Market Rule 1 for metering. 6.4.............. Revised section heading to delete the ref erence to the Real-Time Price Response Program. Added a reference to Section III.8 of Mar ket Rule 1. 8.1................ Deleted Real-Time Demand Response E vent Hours and RTEG Event Hours. 9.3.2............Deleted subsection (1) and revised subsect ion (2) to eliminate advance notice

dispatch. 10.3.1.......... Added references to Market Rule 1 and IS O New England Manuals. Deleted

several subparagraphs. 10.3.2.......... Deleted section.Measurement and Verification of Demand Reduction Va lue from Demand Resources Manual

Revision History

ISO New England Inc. REV-3 Revision 5, Effective Date: November 8, 2013 11.2............ Deleted subsection (2). Revised subsection (4) to delete references to Real-Time

Demand Response Event Hours and RTEG Event Hours. In subsection (5) added a reference to Market Rule 1. 11.3............ Deleted section. 12.2.4.......... Added in subsection (d) an exclusion fro m reporting for incorrect data. In

subsection (e) added a requirement that estimated d ata used in the Demand Reduction Value calculations and the methodology us ed to develop the estimated data are to be communicated to the ISO. In subsect ion (g) added a requirement to notify the ISO of metering inaccuracies found. 12.3............ Deleted section. 13.2............ Deleted in subsection (1) the last sentence. In s ubsection (6) added a reference to

Section III.13.6.1.5 of Market Rule 1. In subsecti on (8) added an exclusion for Real-Time Demand Response Resources and Real-Time E mergency Generation Resources. In subsection (9) added a reference to the metering point and a reference to ISO New England Manual M-28. 13.3............ Deleted section. 14.2(5)......... Added a reference to Market Rule 1. 14.3............ Deleted section.

Revision: 5 - Approval Date: November 8, 2013 Section No. Revision Summary 2.1, 2.2 & 2.3.............. Updated the project description submissio n and timing components to be

consistent with Section III.13.1.4.2(a) of Market R ule 1.