MIC update and FERC Order 764 with 15 Minute Taskforce Review

1. MIC update and FERC Order 764 with 15 Minute Taskforce Review JJ Jamieson ISAS August 2012 Salt Lake City, UT

2. MIC Update • WIEB provided a presentation on Gas and Electric Coordination • Market and production is rapidly growing • “Fracking” is a significantly increasing production • High storage levels • Record low prices • Electricity is becoming a major consumer • .

3. MIC update continued • MIC considering how Order 764 will affect the market • MIC will participate in a join MIC / OC taskforce on Order 764 • Some MIC members have raised concerns about Unscheduled flow impacts • MIC will bring the question to the JGC

4. MIC Focus • MIC continues to focus on market related issues and particularly educational opportunities on market issues for its members

5. MIS and SIS • MIS is primarily focused on: • energy product codes • Commercial impacts of reliability based decisions • SIS is primarily focused on: • seams issues that may arise with an EIM • Discussing Sept 8th outage and whether or not seams issue co-ordination could have helped

6. Upcoming Meetings • MIC will be meeting: • October 11 and 12 in SLC • No further MIS and SIS meetings have been scheduled for 2012

7. JJ JamiesonAndy Meyers, BPACraig Williams, WECC Discussion of FERC Order 764 ISAS August 2012 Salt Lake City, UT

8. Order 764 Facts • 12 months to implement • Sept 2013 • Allows for both new and adjustment to schedules • Maintains hourly settlement • Submittal deadline 20 minutes prior to start • Optional for customers • Mandatory for jurisdictional providers

9. Intra Hour Transmission Scheduling • FERC stated that hourly schedules expose transmission customers to excessive or unduly discriminatory GI charges. They intend to remove barriers to integrating variable resources through the following: • Amends section 13.8 & 14.6 of pro forma OATT to require jurisdictional transmission providers to offer scheduling increments of 15 minutes, or to offer something “consistent with or superior” to this requirement. • Change the pro forma LGIA for customer’s with VERs to provide meteorological and forced outage data to the applicable BA.

10. Intra Hour Transmission Scheduling • FERC believes that shifting the responsibility for managing certain variations in generation output to the purchasing entity will provide purchasing entities greater incentive to manage scheduled deliveries and lower the cost of resources utilized to manage VER variability • VERs will continue to be exempt from third-tier generator imbalance penalties • Non-jurisdictional transmission providers are encouraged to voluntarily implement 15-minute transmission scheduling and to coordinate and collaborate with jurisdictional transmission providers to within their region

11. Intra Hour Transmission Scheduling • Transmission customers can modify existing schedules as well as create new schedules, provided the transmission customer has a reservation in place • Submission of Transmission Schedules/Schedule changes will remain up to 20 minutes (or a reasonable time generally accepted in the region) before the start of the next schedule change

12. LGIA • FERC amended article 8.4 of the pro forma LGIA to require new interconnection customers to provide meteorological and forced outage data • TP’s may use this data to develop a power production forecast for VER • FERC declined to modify existing LGIA’s to include article 8.4 • Material modifications to existing LGIA’s would result in customers needing to follow new data reporting requirement • Minimum meteorological data submitted • Wind: temperature, wind speed, wind direction, atmospheric pressure • Solar: temperature, atmospheric presssure, irradiance

13. LGIA • Specifics of exact data needed by TP’s maybe negotiated but TP’s may not unduly discriminate among interconnection customers • FERC did not prescribe one cost recovery method for implementing the development of a power production forecast. • Cost recovery proposals will be evaluated on a case-by-case basis

14. Capacity Regulation Service • FERC choose not to adopt a generic Schedule 10 as part of the Pro Forma OATT • Rate mechanisms for recovering costs incurred in supplying GI under schedule 9 may be insufficient to recover these capacity costs. • TP’s proposals to recover capacity costs associated with providing GI under schedule 9 will be evaluated on a case by case basis.

15. Capacity Regulation Service • If it is not physically feasible for a transmission provider to offer generator imbalance service using its own resources, it must attempt to procure alternatives to provide that service • TP must take appropriate steps to offer customers an option to acquire generator imbalance service as a condition of taking transmission service.  • Each transmission provider may state on its OASIS the maximum amount of generator imbalance service it can offer, or it may consider requests for generator imbalance service on a case-by-case basis

16. Capacity Regulation Service • If there are no alternative resources available to the transmission provider to satisfy its generation regulation service obligation, the transmission provider must accept the use of dynamic scheduling with a neighboring BA

17. 15 Minute Task Force findings • Wide variety of responses • Current intra-hour entities are restricted by business practices / markets varying from no restriction to 30 minutes • FERC has simplified this for us • Support for common practices across affected entities

18. Volume of Transactions • Responses range from support for no transaction restrictions to restrictions as necessary to ensure market security • Volume has steadily increased with the implementation of new Business Practices and Scheduling Programs

19. Common Timelines • Overall support for common timelines on: • Validation actions • Ramping (across multiple BAAs) • Submittals

20. Coordinated Checkouts and Accounting • Coordinated Checkouts • Majority of respondents indicated that coordinated checkouts are not performed • WIT may be able to assist with this in the future • Do we have to do this on a 15 minute basis? • Accounting • Currently based on hourly if applicable • no change was necessary • This appears to still be the case • Changes could be required if sub-hourly transmission products are created

21. Transmission Rights • Currently only hourly rights are available • does not apply in all cases (market specific) • Order 764 does not change this • Differing opinions on whether or not intra-hour rights would be beneficial • Differing opinions on whether or not common use practices would be beneficial • Do we need to work on this? • General support for the use of existing transmission rights prior to being required to acquire additional rights • Some concern that intra-hour transmission rights would require tariff changes

22. Staffing and Automation • Entities currently offering intra-hour scheduling are doing so with existing staff • Automation ranges from strictly manual processes to fully automated • Westtrans group has contracted for a common automated solution • General feeling that 15 minute scheduling would require additional staffing • Some entities were specific with number of additional staff and training required • General support for common automation solutions with concerns that this may not be possible due to differing systems

23. Reliability Standards and Criteria • A number of current standards were noted as requiring modification to accommodate intra-hour scheduling • e.g.: INT-005-3 Timing Requirements • Additional standards / criteria* will have to be considered to reflect changes in assessment window, handling of curtailments, etc • Order 764 doesn’t directly address this * NERC, WECC,NAESB

24. Ramping • Ramping varies based on entities current requirements • Acknowledgement that ramp timing may need to be modified • General belief that ramping magnitude will be based on the individual BAAs requirements

25. 15 Minute Task Force • Final report is posted on the MIS and ISAS webpages • High level findings: • WECC is not currently able to move to 15 minute scheduling as the primary real-time scheduling interval • Intra-hour scheduling should be used as a supplement to hourly scheduling • Current scheduling practices in the majority of the WECC restrict the ability to successfully implement some intra-hour scheduling intervals • More work on intra-hour scheduling needs to be done to best understand the cost and risk of moving to increased intra-hour scheduling intervals • We now have to do the work to respond to Order 764 • The 15 Minute Task Force asks that the ISAS retire the task force and accept the final report

26. Possible Interface/Commercial Issues • Preemption – bumping up to 20 minutes prior • Submission in preschedule • Default ramps – one 20 and three 10 minute

27. Possible Reliability Issues • webSAS – currently “hourly”-based • BA-to-BA “check out” • Default ramps – one 20 and three 10 minute

28. JJ Jamieson MIC Vice Chair Portland General Electric 503 464 7399 Discussion/Questions?