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Customer Information Session OATT Requirements & Business Practices Martin Huang VP Grid Operations March 2011. - 1 -. Overview. Recent revisions to OATT Transfer Pricing Agreement Corporate Governance. Recent Revisions to OATT. Changes due to integration

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1 3380454

Customer Information Session

OATT Requirements & Business Practices

Martin Huang

VP Grid Operations

March 2011

- 1 -


Overview

Overview

Recent revisions to OATT

Transfer Pricing Agreement

Corporate Governance


Recent revisions to oatt

Recent Revisions to OATT

  • Changes due to integration

  • most recent amendments do not introduce significant changes

  • BC Hydro has adopted the OATT from BCTC, with some minor modifications such as inclusion of vertically integrated utility language from pro forma OATT

  • OATT continues to be consistent with pro forma OATT established by FERC Orders 890 et al

  • BCUC Order No. G-192-10 (Dec 2010)

  • Changes we are now seeing due to 2008 OATT amendments

  • revised OATT brought forward by BCTC in order to continue to be aligned with the FERC pro forma

  • amendments to OATT approved through BCUC regulatory process

  • BCUC Order No. G-102-09 (Sept 2009)


1 3380454

Recent Revisions to OATT

  • Certain provisions and practices just now coming into effect due to timing of MODS implementation and compliance requirement of 2009 BCUC order

  • Examples:

  • Simultaneous Submission Window (SSW)

  • Conditional Firm Service

  • Curtailment methodologies


Transfer pricing agreement tpa

Transfer Pricing Agreement (TPA)

  • What the TPA is not.

  • TPA is not a transmission service agreement

  • This means that the TPA:

    • does not grant transmission access

    • does not provide transmission services

    • does not set a transmission rate for BC Hydro and/or Powerex

  • What is the TPA?

  • TPA is an agreement between Powerex and BC Hydro

  • covers how energy transactions are dealt with

  • existing TPA has been in place since 2003 and has not been amended since then

  • publicly available and was filed in 2003 Heritage Contract proceeding

  • What transmission terms, conditions and rates apply to BC Hydro and Powerex?

  • BC Hydro and Powerex pay the applicable approved transmission rates and are subject to the same terms and conditions for accessing ATC via TSR submissions on OASIS

  • Same terms, conditions and rates applicable to all other customers

  • Approved OATT, including rates, subject to BCUC regulatory process

5


Corporate governance

Corporate Governance

BC Hydro transmission policy decisions

“One Hydro”

Continue to be aligned with industry standards and FERC pro forma OATT

Commitment to non-discriminatory open access, including adherence to Standards of Conduct

Internal policy discussions, including issues related to disputes, subject to the SOC rules

6


Corporate governance continued

Corporate Governance continued……

  • Standards of Conduct (SOC)

    • SOC define the rules related to functional separation for an integrated utility providing open access transmission services

    • BC Hydro’s SOC and organizational structure are fully consistent with pro formaOATT

    • FERC Orders 717 et al substantively revised the pro forma SOC


Corporate governance continued1

Corporate Governance continued……

  • SOC General Principles:

  • 1. Non-discriminatory requirements

    • transmission provider to treat all transmission customers on a not unduly discriminatory manner

  • 2. Independent functioning rule

    • TFEs must function independently of MFEs

  • 3. No conduit rule

    • non-public transmission function information not to be disclosed to MFEs

  • 4. Transparency rule

    • certain information must be posted on BC Hydro’s website to allow interested persons to detect the potential for acts of undue preference


Corporate governance continued2

Corporate Governance continued……

  • SOC recent changes

  • Driven by industry and adoption by FERC as industry standard

  • Key Changes:

    • Reinstatement of employee functional approach

      • Employees designated astransmission function employees (TFEs) and market function employees (MFEs)

      • If not a TFE or MFE, then undesignated employee

    • “transmission function information” (TFI) is narrowly defined

      -TFI is only that information relating to day-to-day transmission operations, including granting or denying transmission service requests

  • Implementation of SOC

  • Non-public TFI cannot be communicated to MFEs

  • Non-public TFI can be communicated to undesignated employees

  • All employees, including undesignated employees subject to the “no conduit” rule

  • TFEs and MFEs function independently, and any discussions are conducted pursuant to SOC

    • Granting/denying of transmission service requests only done by TFEs within T&D Market Policy & Operations

  • Legal and regulatory support employees generally not considered TFEs or MFEs. Can provide legal support to either group so long as employees do not provide non public TFI to MFEs.

9


Implementation of soc

Implementation of SOC

What is not prohibited by the SOC

  • Transmission policy and planning information does not fall within definition of TFI; engaging in transmission policy or planning does not make an employee a TFE

  • OATT decision-making as an integrated utility

    • Pro forma OATT and SOC were designed for vertically integrated utilities

    • Undesignated employees (which can include Powerex officers/employees not engaged in marketing functions on a day-to-day basis) not prohibited from being involved with OATT policy, provided that there is adherence to SOC rules


Open access and regulation

Open Access and Regulation

  • BC Hydro provides open access consistent with industry standards

  • Ultimately the BCUC determines what is just and reasonable

    • BC Hydro conducts consultation with respect to significant OATT amendments and significant new/amended business practices

    • New transmission policies or changes to transmission terms/conditions subject to a BCUC process and approval

    • Customers can always bring issues forward to the BCUC in relation to any type of OATT decision


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