Reserves…Where are Reserves…Where are we???we???

Service Schedule CService Schedule C C-3.10 Seller shall be responsible for ensuring that C-3.10 Seller shall be responsible for ensuring that

Service Schedule C transactions are scheduled as firm Service Schedule C transactions are scheduled as firm power consistent with the most recent rules adopted power consistent with the most recent rules adopted by [WECC].by [WECC].

WECC rules, or at least their interpretations, WECC rules, or at least their interpretations, have changed. have changed.

““It is up to Purchasing Selling Entities to It is up to Purchasing Selling Entities to determine their level of acceptable deliverability determine their level of acceptable deliverability risk and determine who has contingency reserve risk and determine who has contingency reserve responsibility.”responsibility.”

Contingency Reserve Responsibility = CRRContingency Reserve Responsibility = CRR

Reserves Task Force Reserves Task Force ReportReport

Identified 6 possible solutions.Identified 6 possible solutions. Passage of Bal 002 was identified as Passage of Bal 002 was identified as

one that would go a long way toward one that would go a long way toward resolution.resolution.

Bal 002 passed WECC OC. Bal 002 passed WECC OC. Must be approved by WECC Board, Must be approved by WECC Board,

NERC, FERC.NERC, FERC. Effective date: Possibly January 2009 Effective date: Possibly January 2009

(early), more likely mid-2009.(early), more likely mid-2009.

What does Bal 002 What does Bal 002 mean?mean?

CRR depends on larger of MSSC or 3% CRR depends on larger of MSSC or 3% generation plus 3% load.generation plus 3% load.

Interchange transactions only affect Interchange transactions only affect CRR to the extent they affect generation CRR to the extent they affect generation or load. No longer a direct link between or load. No longer a direct link between WSPP Schedule C interchange WSPP Schedule C interchange transactions and reserves beginning transactions and reserves beginning with implementation of Bal 002.with implementation of Bal 002.

RTF recommends leaving existing RTF recommends leaving existing language of Schedule C alone.language of Schedule C alone.

Balancing Authorites A and B both have Contingency Reserve Requirements of 30 MW, which is 3% of net generation and 3% of net load.

X

500 MW Gen500 MW load

Y

500 MW Gen 500 MW load

(.03 x 500) + (.03 x 500) = 30 (.03 x 500) + (.03 x 500) = 30

Assume there is a sale from BA x to BA y of 100 MW.

X

600 MW Gen500 MW load

Y

400 MW Gen 500 MW load

100 MW G-F

Assume there is a sale from BA x to BA y of 100 MW. If BA x increases its generation to supply the sale, its CRR will increase to 33 MW.

X

600 MW Gen500 MW load

Y

400 MW Gen 500 MW load

(.03 x 600) + (.03 x 500) = 33

100 MW G-F

Assume there is a sale from BA x to BA y of 100 MW. If BA x increases its generation to supply the sale, its CRR will increase to 33 MW. If BA y reduces its generation because of the import, its CRR will decrease to 27 MW.

X

600 MW Gen500 MW load

Y

400 MW Gen 500 MW load

(.03 x 600) + (.03 x 500) = 33 (.03 x 400) + (.03 x 500) = 27

100 MW G-F

Assume there is a sale from BA x to BA y of 100 MW. If BA x imports power to supply the sale, its CRR will not change since its generation will not change.

X

500 MW Gen500 MW load

Y

400 MW Gen 500 MW load

(.03 x 500) + (.03 x 500) = 30 (.03 x 400) + (.03 x 500) = 27

100 MW G-F

100 MW import

Notice that the transaction was Notice that the transaction was tagged as G-F.tagged as G-F.

Does not imply “schedule C Firm with Does not imply “schedule C Firm with reserves”reserves”

Schedule C defers to WECC, WECC Schedule C defers to WECC, WECC definition of firm power exists in definition of firm power exists in product codes.product codes.

More than one product considered More than one product considered “firm.”“firm.”

EnergyEnergyG-F: Firm EnergyG-F: Firm EnergyG-FC: Firm Contingent. G-FC: Firm Contingent. G-FP: Firm Provisional Energy.G-FP: Firm Provisional Energy.

G-F1: Hourly firm energy. G-F1: Hourly firm energy. G-EX: Exchange of Firm Energy.G-EX: Exchange of Firm Energy.G-NF: Non-firm energyG-NF: Non-firm energy

ReservesReservesC-SP: Capacity for spinning reserve.C-SP: Capacity for spinning reserve.

C-NS: Capacity for non-spinning reserve. C-NS: Capacity for non-spinning reserve. C-RE: Capacity associated with energy C-RE: Capacity associated with energy

recallable for reserves. recallable for reserves.

WECC Product CodesWECC Product Codes

WECC Definition of Firm WECC Definition of Firm EnergyEnergy

G-F: Firm Energy G-F: Firm Energy

This product may be curtailed only in the event of a This product may be curtailed only in the event of a reliability condition or to meet Seller’s public utility or reliability condition or to meet Seller’s public utility or statutory obligations for reliability of service to native statutory obligations for reliability of service to native load. A G-F product cannot be interrupted for economic load. A G-F product cannot be interrupted for economic reasonsreasons.

EnergyEnergy

G-FC: Firm ContingentG-FC: Firm Contingent. . Tied to specific unit or source. Interruptible only Tied to specific unit or source. Interruptible only if source is de-rated or down. Cannot be interrupted for economic reasons. if source is de-rated or down. Cannot be interrupted for economic reasons.

G-FP: Firm Provisional Energy. G-FP: Firm Provisional Energy. Buyer and seller determine allowable Buyer and seller determine allowable conditions for interruption. A G-FP product cannot be interrupted for conditions for interruption. A G-FP product cannot be interrupted for economic reasons.economic reasons.

G-F1: Hourly firm energy. G-F1: Hourly firm energy. Buyer and seller determine allowable Buyer and seller determine allowable conditions for interruption providedconditions for interruption provided the PSE or LSE receives notification of the PSE or LSE receives notification of the interruption at least 40 minutes prior to start of the operating hour. A G-the interruption at least 40 minutes prior to start of the operating hour. A G-F1 product cannot be interrupted for economic reasons.F1 product cannot be interrupted for economic reasons.

Brief WECC ExplanationsBrief WECC Explanations

Brief Brief WECCWECC Explanations Explanations EnergyEnergy

G-EX: Exchange of Firm Energy. G-EX: Exchange of Firm Energy. An exchange of firm An exchange of firm energy where by one entity delivers energy to another energy where by one entity delivers energy to another entity at one point on the grid and receives an agreed entity at one point on the grid and receives an agreed upon amount of energy from that entity at another point upon amount of energy from that entity at another point on the grid. on the grid.

G-NF: Non-firm energy - G-NF: Non-firm energy - This product may be This product may be interrupted for any reason or no reason, without interrupted for any reason or no reason, without liability on the part of either the buyer or seller. liability on the part of either the buyer or seller.

Brief WECC ExplanationsBrief WECC Explanations

ReservesReserves

C-SP: Capacity for spinning reserve. C-SP: Capacity for spinning reserve. On-Demand On-Demand spinning reserve obligation/resource is a spinning spinning reserve obligation/resource is a spinning reserve product that can be activated through the reserve product that can be activated through the adjustment of a capacity e-tag. adjustment of a capacity e-tag.

C-NS: Capacity for non-spinning reserve. C-NS: Capacity for non-spinning reserve. On-On-Demand non-spinning reserve obligation/resource is Demand non-spinning reserve obligation/resource is a non-spinning reserve product that can be activated a non-spinning reserve product that can be activated through the adjustment of a capacity e-tag. through the adjustment of a capacity e-tag.

C-RE: Capacity associated with energy recallable C-RE: Capacity associated with energy recallable within ten minutes of reserves activation. within ten minutes of reserves activation. Source BA can claim it as a reserve resource. Source BA can claim it as a reserve resource.

WECC/WSPP Cross WECC/WSPP Cross ReferenceReference

WECC Product code

Closest WSPP Product

Brief description

G-F Schedule C Firm Energy

G-NF Schedule A Non-firm Energy

G-FC Schedule B Unit contingent Energy

C-SP  Schedule C  Spinning Reserves

C-NS  Schedule C  Non-spinning Reserves

C-RE  Schedule A  Recallable Energy

Assume there is an IPP inside BA x that is making a sale to BA y of 50 MW. Depending on the relationship between IPP and BA x, the IPP generation may affect the CRR.

X

600 MW Gen500 MW load

Y

350 MW Gen 500 MW load

(.03 x 650) + (.03 x 500) = 34.5 (.03 x 350) + (.03 x 500) = 25.5

100 MW G-F

50 MW G-FCIPP

WECC Product Code G-WECC Product Code G-FCFC

Neither Source nor Sink BA’s Neither Source nor Sink BA’s Contingency Reserve obligation Contingency Reserve obligation depends on the type of transaction.depends on the type of transaction.

Seller may or may not call upon own Seller may or may not call upon own reserve group to cover lost reserve group to cover lost generation for the period of the generation for the period of the reserve group response.reserve group response.

Seller is not obligated to re-establish Seller is not obligated to re-establish the schedule until the unit returnsthe schedule until the unit returns

Sale of source specific Sale of source specific powerpower

A sale of power from a single source is A sale of power from a single source is allowable under Schedule C.allowable under Schedule C.

Loss of the source unit does not remove the Loss of the source unit does not remove the obligation to provide the power.obligation to provide the power.

It is up to the parties to determine the level It is up to the parties to determine the level of performance risk they are willing to take.of performance risk they are willing to take.

Probability of performance may depend on Probability of performance may depend on the relationship between the generator and the relationship between the generator and its Balancing Authority or Reserve Sharing its Balancing Authority or Reserve Sharing Group.Group.

Tagging issue associated with FC under Tagging issue associated with FC under WSPP Schedule C.WSPP Schedule C.

UpshotUpshot

Task Force believes Bal 002 will not Task Force believes Bal 002 will not require a change to Schedule C require a change to Schedule C language.language.

Bal 002 provides clarity that energy is Bal 002 provides clarity that energy is uncoupled from reserves.uncoupled from reserves.

WECC reserves products can be WECC reserves products can be traded under WSPP Schedule C.traded under WSPP Schedule C.

There continues to be concerns over There continues to be concerns over within-hour interruptions, and within-hour interruptions, and damages associated with them.damages associated with them.

Next StepsNext Steps

WECC to revisit eTag 1.8WECC to revisit eTag 1.8 Reserves MarketReserves Market Educational effort continuesEducational effort continues

WECC ISASWECC ISAS NWPP ATFNWPP ATF WSPP Workshop?WSPP Workshop?

Reserves MarketReserves Market(Different Models)(Different Models)

Merchants buy and sell capacity used to Merchants buy and sell capacity used to satisfy reserve criteria under Schedule satisfy reserve criteria under Schedule C, using WECC product codes.C, using WECC product codes.

WSPP develops ancillary service product WSPP develops ancillary service product approved by FERC. Like other products, approved by FERC. Like other products, market-based rate tariff specifically for market-based rate tariff specifically for ancillary services likely to be required.ancillary services likely to be required.

WSPP develops standard language to be WSPP develops standard language to be included in utilities OATTs.included in utilities OATTs.