Market Issues Subcommittee

1. Market Issues Subcommittee Report to the Market Interface Committee Robert D. Schwermann October 26, 2006 Western Electricity Coordinating Council

2. Issues MIS is Addressing • RC Generator Redispatch Compensation • WECC ATC Methodology • WECC Etag Energy Product codes • Coordination of NAESB Issues • Market implications of Standards under development • Business Practice revision efforts • Best Practices review Western Electricity Coordinating Council

3. MIS Taskforces Generator Redispatch Compensation Task Force (GRDC) Western Electricity Coordinating Council

4. GRDC – Statement of Intent • When generators are asked to re-dispatch as a result of a directive from a Reliability Coordinator • the owners of the generation should not be unduly harmed for complying with the directive Western Electricity Coordinating Council

5. Reliability Re-Dispatch Definition • The intentional incrementing or decrementing, of generation, at the direction of a Reliability Coordinator, within the WECC electric system, in order to accomplish balance in the interconnection and avoid reliability violations. Western Electricity Coordinating Council

6. What we will NOT address • RC’s authority to request re-dispatch • The obligation of entities to re-dispatch under an RC directive • Right of the RC to develop criteria and determine implementation of re-dispatch protocols • Existing market protocols or tariff issues • Curtailments of schedules prior to re-dispatch Western Electricity Coordinating Council

7. What we WILL address • The creation of a WECC procedure to compensate generators for re-dispatch • Whether WECC can adopt an existing industry model • Keep solution simple IF possible • Sources of Compensation Western Electricity Coordinating Council

8. Concerns MIS should consider • Create a process that is simple and does not take years to implement • Methodology should assure that rules are adequate to prevent inappropriate behavior • Process should be written as a Business Practice Western Electricity Coordinating Council

9. MIS Taskforces RC Generator Redispatch – Next Steps • Developed a white paper • The Paper was posted last week • Requesting input from a broad base of the industry • Industry response will dictate further action Western Electricity Coordinating Council

10. MIS Taskforces Generator Redispatch Compensation Task Force WECC ATC methodology review Western Electricity Coordinating Council

11. MIS Taskforces ATC TF established to review and make recommendations on the WECC ATC policy. WECC TF Membership is active in NERC and NAESB ATC drafting teams. Reviewed the existing WECC methodology in light of the others development. The ATC TF recommended to the MIS that the WECC review and revise the existing WECC methodology. Western Electricity Coordinating Council

12. What Are We Trying To Fix? • Available Transfer Capability (NERC Glossary) • A measure of the transfer capability remaining in the physical transmission network for further commercial activity over and above already committed uses. • This is a NERC definition and not necessary what is the norm in the west – this gives an idea of what the TF is trying to fix. Western Electricity Coordinating Council

13. Generally Restated NERC • ATC = TTC – TRM – Existing Transmission Commitments (including CBM) WECC • ATC = TTC – Committed Uses Western Electricity Coordinating Council

14. FERC Wants Consistency and Transparency • NERC Drafting Team • Imported 888 NOPR requirements • Drafted MOD-01 • Not yet approved; Posted for comment • MOD-01 through MOD-09 need review • NAESB Drafting Team • Reviewing the NERC efforts • To propose Business Standards Western Electricity Coordinating Council

15. FERC Wants Consistency and Transparency • WECC MIS ATC Task Force • Imported all requirements from MOD-01 • PLUS • Requirements from a variety of NERC / WECC / FERC papers. (List available upon request.) • Drafted a “First Cut” WECC ATC Standard Western Electricity Coordinating Council

16. ATC Task Force Recommendation Submitted Business Practice Request to : • Form a drafting team to act as “advisory” to NERC and NAESB efforts • OC/MIC/PCC personnel on drafting team • Per FERC, this cuts across “reliability” and “commercial” • Draft (if necessary) WECC-Specific ATC Practice • Keep touch / keep pace with NERC/ NAESB ATC Joint Drafting Team Western Electricity Coordinating Council

17. MIS Taskforces Generator Redispatch Compensation Task Force WECC ATC methodology review Product Code Methodology Western Electricity Coordinating Council

18. MIS Taskforces Product Code Methodology • At request of NERC Interchange Subcommittee • Developed a methodology to make changes to the Electric Industry Registry and the Electronic Tagging tool specification. • Adopted in a revised version by the NERC IS • MIS has reviewed existing WECC Energy product codes historical usage and definitions • Concluded codes should be reviewed • Submitted a BP request form to triage to review and revise as needed WECC product codes • Need help on this effort from the MIC membership Western Electricity Coordinating Council

19. MIS Taskforces Generator Redispatch Compensation Task Force WECC ATC methodology review Product Code Methodology Review of Industry Standards Western Electricity Coordinating Council

20. MIS Taskforces Review of Industry Standards • Regional Standards Task Force (RSTF) - The MIS has been working with the OC RSTF to review and identify any commercial aspects of the NERC/NAESB standards. • The MIS will require assistance with this item. • MIS requests MIC form a task force, to review all industry proposed standards and identify commercial issues that may need action. • Suggest that TF reports to the MIC chair Western Electricity Coordinating Council

21. MIS Taskforces Generator Redispatch Compensation Task Force WECC ATC methodology review Product Code Methodology Review of Industry Standards NAESB Coordination Western Electricity Coordinating Council

22. MIS Taskforces NAESB Coordination • MIS has developed a tracking mechanism to inform the WECC membership of current and planned NAESB Business Practices. • NAESB Annual plan has been reviewed with a short narrative of each proposed BP being posted on the WECC website. • MIS membership is active on NAESB ATC BP drafting team. Western Electricity Coordinating Council

23. R05009 Modify the NAESB Version 0 TLR business practices to remain consistent with the NERC Version 0 TLR reliability standards. Requested By: NAESB Office April 22, 2005 Modify the NAESB Version 0 TLR business practices to remain consistent with the NERC Version 0 TLR reliability standards. NERC is undertaking an urgent action to modify its version 0 TLR reliability standards, and as such, NAESB must consider the same modifications to keep the TLR standards identical until the business practices have been separated from the reliability standards in version 1 of the TLR standards. Assignment: MIC Ed Beck, MIS – Bob Schwermann Status: August 15, 2006

24. MIS meetings • MIS met primarily by conference calls in 2006 with one or two attended meetings • Will coordinate 2007 meeting dates with ISAS to allow for ISAS work group interface • Allows for cross pollination of groups • MIS = Market issues • ISAS = Reliability issues Western Electricity Coordinating Council

25. Market Issues Subcommittee QUESTIONS???? Western Electricity Coordinating Council