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WICF WORKSHOP. September 28, 1999 Las Vegas, Nevada. WICF GOALS. Promote Efficient Electric Markets Ensure Reliability of the Western Interconnection Increase Effectiveness of Grid Management Organizations Eliminate Overlap & Duplication of Effort

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wicf workshop

WICF WORKSHOP

September 28, 1999

Las Vegas, Nevada

wicf goals
WICF GOALS
  • Promote Efficient Electric Markets
  • Ensure Reliability of the Western Interconnection
  • Increase Effectiveness of Grid Management Organizations
  • Eliminate Overlap & Duplication of Effort
  • Clear Determination of Authority & Responsibility
wicf principles
WICF PRINCIPLES
  • Commercial & Reliability Interests are Inextricably Linked
  • Full & Equal Participation by Canadian & Mexican Members
  • Provide ADR
  • Identify Authority & Responsibility at Regional and Interconnection Levels
  • Minimize Forum Shopping
more wicf principles
MORE WICF PRINCIPLES
  • Fair & balanced Governance Structure
    • Decision Process Open to All Interested Parties
    • Decision Procedures are Non-Discriminatory
    • Accountability is Clear
    • Minimize Gridlock & Indecision
    • Decisions Made in a Reasonable Time
    • No Industry Segment can Unilaterally Make or Veto a Decision
western interconnection legislative effort structure

NRTA

SWRTA

WRTA

WSCC

CCPG

CREPC

CAISO

NWPP

Ken Peterson - Chair

Vickie VanZandt

Jack Davis

Ron Nunnally

Frank McElvain

Armie Perez

Alan Davis

Scott Waples

Paula Green

Mark Mitchell

Lloyd Greiner

Glen Smyrl

Dennis Eyre

Jim Byrne

Dick Brown

Rich Nassief

Doug Larson

WICFSTEERING COMMITTEE

Sets overall policy and directs drafting and legislative strategy groups

Alan Davis - Chair

Ken Peterson

Paul Barber

Bill Chamberlain

Harlow Peterson

Eric Christensen

Robin Larson

Paula Green

Skip Helm Dennis Eyre

Rich Nassief

Dick Brown

Jim Byrne

Bud Krogh

WICFLEGISLATIVE STRATEGY GROUP

Sets legislative strategy: approves key documents

WICFLEGISLATIVE ACTION COMMITTEE

Clearinghouse for all legislative issues; prepares legislative documents; schedules meetings with D.C. support team; assigns WICF reps to meetings; clears testimony; reports to WICF LSG

Dennis Eyre-Chair

Ken Peterson

Alan Davis

Bud Krogh

Jim Byrne

WICFD.C. LEGISLATIVE SUPPORT TEAM

Advises WICFLAC on Congressional strategy; schedules D.C. meetings; secures legislative documentation from WICFLAC; advises as to participation of WICF membership and industry groups

Ken Williams - MPC

Gary Bachman - PGP

Rich Bechtel - WGA

Joe Hartsoe - Enron

Keith Kennedy - PAC

Marshall Faust -PSNM

Veronica Gutierrez - SCE

Tod Neuenschwander - IPC

Cynthia Sandherr - Enron

Craig Gannet - Avista

Steve Wright - BPA

Frank Frisk - DOPD

WESTERN INTERCONNECTION LEGISLATIVE EFFORT STRUCTURE

WICF

Congressional “Gatekeepers”

House Senate

Rep. Heather Wilson Sen. Slade Gorton

(Luke Rose) (Phil Moeller)

Protects Western Interconnection interests

in delegation and deference.

Linda Stuntz - DC Coordinator

Coordinator - Linda Stuntz - Powerex / BCH

governance options
GOVERNANCE OPTIONS

1. 9 Member Board - Proportional Voting

2. 17 Member Stakeholder Board - 4 Member Classes

3. 21 Member Stakeholder Board - 4 Member Classes with Regional Diversity

4. 9 Member Non-Affiliated Board

5. 15 Member Stakeholder Board - 5 Member Classes

6. 21 Member Hybrid Board

general governance concepts
GENERAL GOVERNANCE CONCEPTS
  • Functions and Duties
  • Conduct of Business
  • Alternative Election Process
board functions and duties
BOARD FUNCTIONS AND DUTIES
  • Electing Officers
  • Hiring and Firing Key Staff
  • Adopting WIO Standards and Policies
  • Assigning Issues to Appropriate Committees
  • Budget and Accounting Oversight
more board functions and duties
MORE BOARD FUNCTIONS AND DUTIES
  • Set Record Date for Director Elections
  • Amend WIO Charter Documents
  • Refer Disputes to Appropriate Dispute Resolution Processes
conduct of business
CONDUCT OF BUSINESS
  • Normal Actions Require Simple Majority Vote
  • Some Actions Require Higher Standard; e.g. Change to Governance Documents
  • May desire Member Ratification of Change to Governance Documents
stakeholder board

STAKEHOLDER BOARD

GWG OPTION 2

stakeholder board1
STAKEHOLDER BOARD
  • 17 Directors
    • 4 Each from 4 Membership Categories
    • Chief Executive Officer (President) of WIO
  • Chair and Vice-Chair Selected from Elected Directors
  • President Votes only to Break Tie
  • Term of Office: 2 Years
stakeholder board2
STAKEHOLDER BOARD
  • Membership Categories
    • Major Transmission Utilities (MTU)
    • Non-Utility Suppliers (NUS)
    • Transmission Dependent Utilities (TDU)
    • Consumers, Commissioners & Public Interest Groups (CCP)
stakeholder board3
STAKEHOLDER BOARD
  • Director Qualifications
    • Qualified to Serve the Public Interest
    • Represent Reliability Concerns of WI
    • Reflect the Business and Geographic Diversity of WI
    • Consumers, Commissioners & Public Interest Groups (CCP)
    • Sign Qualification Statement
stakeholder board4
STAKEHOLDER BOARD
  • Director Qualification Statement

1. Consent to be Nominated

2. Availability & Willingness to Serve if Elected

3. Willingness & Ability to Abide by a Duty of Loyalty to WIO and Its Members

4. Willingness & Ability to a Duty of Care in Carrying Out the Director’s Responsibilities

stakeholder board5
STAKEHOLDER BOARD
  • Nomination Process
    • Nominating Committee Headed by Vice-Chair
    • Select One Candidate for Each Vacancy
    • Slate of Candidates To Reflect the Business, Geographic, and International Diversity of WIO
  • Additional Nominations
    • From Member Category - 20% Support
stakeholder board6
STAKEHOLDER BOARD
  • Election Process
    • Members Vote within Member Categories
    • Highest Number of Votes Wins
    • Ties Broken By Drawing Lots
  • International Representation
    • If Election Does not Provide International Representation, Board Size Increased By One Seat for A Nation’s Representative
stakeholder board7
PRO

Assures Functional Balance

Resembles Currently Acceptable Structures

Larger Board Offers More Opportunity for Representation

CON

View That Board May Be Too Large to Manage Effectively

Depends on Legal Duty to Assure Independent Action

Possible to Not Have Regional Diversity

STAKEHOLDER BOARD
stakeholder board8
PRO

No One Group Can Dominate

Assures International Membership on Board

CON

Reflects Existing Functional Categories

Minorities Within Groups Might Not Be Represented

STAKEHOLDER BOARD
stakeholder board9
PRO

Nominating Process Has Both a Committee Process and Nominations From The Membership

Promotes Stability: Compartmentalizes Governance Disagreements

CON

STAKEHOLDER BOARD
non affiliated board1
NON-AFFILIATED BOARD
  • 9 Directors
    • 8 Elected by Membership
    • Chief Executive Officer (President) of WIO
  • Chair Selected from Elected Directors
  • Chair Votes only to Break Tie
  • Term of Office: 3 Years
non affiliated board2
NON-AFFILIATED BOARD
  • Membership Categories
    • System Operator Organizations
    • Transmission Owners
    • Transmission Dependent Utilities
    • Load Serving Entities
    • Generators
    • Power Marketers/Brokers/Power Exchanges
non affiliated board3
NON-AFFILIATED BOARD
  • Membership Categories, cont.
    • Large Retail Customers
    • Small Retail Customers
    • Government Regulators/State/Provinces
    • Public Interest Groups
non affiliated board4
NON-AFFILIATED BOARD
  • Advisory Committee
    • Two Members from Each Membership Class
    • Action by Enhanced Majority Vote
    • Advisory Committee Members Attend Board Meetings
non affiliated board5
NON-AFFILIATED BOARD
  • Advisory Committee Duties
    • Select Slate of Director Candidates
    • Determine Board Compensation
    • Input on WIO Annual Budget (Approve Advisory Committee Portion)
    • Advise Board on Technical, Legal and Oversight Matters Relating to WIO Responsibilities
non affiliated board6
NON-AFFILIATED BOARD
  • Director Qualifications
    • No Affiliation With Existing WI Market Participants
    • Qualified to Serve the Public Interest
    • Represent Reliability Concerns of WI
    • Expertise in Technical Electric Reliability and Legal, Market, Financial & Regulatory Matters
    • Representative of Geographical Diversity and International Nature of WIO
non affiliated board7
NON-AFFILIATED BOARD
  • Director Affiliation Rules
    • Written Disclosure
    • Candidate or Household Member May Not Receive Compensation From Entities Associated with WIO
non affiliated board8
NON-AFFILIATED BOARD
  • Director Affiliation Rule Examples
    • Receiving Compensation from WIO Market Participant Disqualifies Candidate
    • Owning Shares in Mutual Fund with Holdings in WIO-Affiliated Organizations Will Not Disqualify
    • Potential Affiliation Will be Disclosed by Candidate and Determined by Other Non-Affiliated Directors
non affiliated board9
NON-AFFILIATED BOARD
  • Nomination Process
    • Advisory Committee Selects Slate of Candidates
  • Election Process
    • Members Vote En Masse - Highest Vote Totals Are Elected
    • Ties Broken By Drawing Lots
  • International Representation
    • No Special Rules to Guarantee Representation
non affiliated board10
PRO

View That Non-Affiliation Will Produce An Unbiased Result

“Non-Affiliation” Screen Could Provide Balance for Both Experience and Objectivity

CON

Possible Lack of Industry Experience by Directors

Candidates Must Be Known to Members and Have Broad Appeal

NON-AFFILIATED BOARD
non affiliated board11
PRO

At-Large Voting Requires Candidates Have Broad Appeal Across Functions and Regions

View That A Small Board Is Easy to Manage

CON

Possible Lack of Protection for Minorities

Will Require Board Member Compensation

NON-AFFILIATED BOARD
hybrid board

HYBRID BOARD

GWG OPTION 6

hybrid board1
HYBRID BOARD
  • Combines Positive Features of Stakeholder and Non-Affiliated Board Structures
  • Technical Expertise
  • Geographic Diversity & Representation
  • Guarantee of National Representation
hybrid board2
HYBRID BOARD
  • 21 Directors
    • 4 Each from 4 Membership Categories
    • 4 Non-Affiliated Directors
    • Chief Executive Officer (President) of WIO
  • Chair and Vice-Chair Selected from Elected Directors
  • Chair Votes only to Break Tie
  • Term of Office: 2 Years
hybrid board3
HYBRID BOARD
  • Member-Class Director Qualifications
    • Qualified to Serve the Public Interest
    • Represent Reliability Concerns of WI
    • Reflect the Business and Geographic Diversity of WI
    • Consumers, Commissioners & Public Interest Groups (CCP)
    • Sign Qualification Statement
hybrid board4
HYBRID BOARD
  • Non-Affiliated Director Qualifications
    • No Affiliation With Existing WI Market Participants
    • Qualified to Serve the Public Interest
    • Represent Reliability Concerns of WI
    • Expertise in Technical Electric Reliability and Legal, Market, Financial & Regulatory Matters
    • Representative of Geographical Diversity and International Nature of WIO
hybrid board5
HYBRID BOARD
  • Director Affiliation Rules
    • Written Disclosure
    • Candidate or Household Member May Not Receive Compensation From Entities Associated with WIO
hybrid board6
HYBRID BOARD
  • Nomination Process
    • Nominating Committee Headed by Vice-Chair
    • Select One Slate of Candidates for Each Stakeholder Vacancy to Reflect the Business, Geographic, and International Diversity of WIO
    • Select Second Slate of Non-Affiliated Candidates
hybrid board7
HYBRID BOARD
  • Additional Nominations
    • From Member Category - 20% Support
hybrid board8
HYBRID BOARD
  • Election Process: Stakeholder Directors
    • Members Vote within Member Classes
    • Highest Number of Votes Wins
    • Ties Broken by Drawing Lots
  • Election Process: Non-Affiliated Directors
    • Stakeholder Directors Elect Non-Affiliated Directors
  • National Representation Guaranteed
hybrid board9
PRO

Balances Preferences for Stakeholder and Non-Affiliated Members on Board

No One Group Can Dominate

Assures International Membership on Board

CON

View That Board May Be Too Large to Manage Effectively

Depends Somewhat on Legal Duty to Assure Independent Action

Possible to Not Have Regional Diversity

HYBRID BOARD
hybrid board10
PRO

“Non-Affiliation” Screen Could Provide Balance for Both Experience and Objectivity

Resembles Currently Acceptable Structures

Visible Stakeholder Representation

CON

Will Require Board Compensation for Non-Affiliated Members

Minorities Within Groups Might Not Be Represented

HYBRID BOARD
hybrid board11
PRO

Larger Board Offers More Opportunity for Stakeholder/Regional Representation

Assures Functional Balance

Relatively Simple Election Procedures

CON

Partially Reflects Existing Functional Categories

HYBRID BOARD
hybrid board12
PRO

Nominating Process Has Both a Committee Process and Nominations From The Membership

Promotes Stability: Compartmentalizes Governance Disagreements

CON

HYBRID BOARD
governance options1
GOVERNANCE OPTIONS

2. 17 Member Stakeholder Board - 4 Member Classes

4. 9 Member Non-Affiliated Board

6. 21 Member Hybrid Board

alternative election process
ALTERNATIVE ELECTION PROCESS
  • Known as the “Hare System”
  • Ensures a Board Reflecting the Proportional Distribution of Members
  • Protects Voting Minorities
  • Could Allow a Small Board With Industry Expertise - No “Independence” Test
  • Complex Voting Process
regional relationships

REGIONAL RELATIONSHIPS

Options for the relationship between the WIO and Regional Entities

WICF Workshop

September 28, 1999

what is a regional entity
Today a Regional Entity is an organization such as an RTA, Power Pool, or an ISO.

The RRWG assumed that, in the future, RTOs, as defined in the FERC NOPR, will be the principal Regional Entities in the WIO.

During the assumed transition to RTOs, the WIO structure must be flexible enough to accommodate a variety of regional entities

What is a Regional Entity?
two options for wio re relationship
Option 1: WIO Max/RE Min

More done at WI level

Similar to today

Easiest to implemented today

Option 2: WIO Min/RE Max

More done at regional level

WIO is focused on seams issues

Assumes the WI is covered by regional entities (i.e., RTOs)

May be difficult to implement prior to the WI being covered by RTOs

Two Options for WIO/RE Relationship
similarities wio functions for either option
Similarities: WIO Functions for Either Option
  • Standard Development and Enforcement
    • Member (RRO) of NAERO
    • Develops Interconnection-wide standards
    • Responsible for compliance monitoring and enforcement of NAERO standards
  • Coordination Activities
    • Coordinates planning and operation in the WI
    • Develops WI data bases (new projects, system data, etc.)
  • Commercial Practices
    • Facilitates development of commercial practices (not limited to market interface issues like NAERO)
similarities re functions for either option
Similarities: RE Functions for Either Option
  • Member of WIO
  • Participates in the development of NAERO and WI standards
  • Performs functions as desired by the region.
differences option 1 wio max
Differences: Option 1: WIO Max
  • WIO Max
    • Helps to coordinate planning and operations in the regions as well as across the interconnection.
    • Interacts with RE in the same way as any other WIO member.
  • RE Min
    • Acts as a member of the WIO in the same way as any other entity.
differences option 2 wio min
Differences: Option 2 - WIO Min
  • WIO Min
    • Focuses mainly on the seams between the regions
  • RE Max
    • Primarily responsible for regional compliance with standards
    • Establishes regional policies such as generator interconnection requirements
    • Performs a greater role in the planning and operation of the region
    • Accomplishes functions assigned by WIO
    • May represent the region at the WIO depending on the committee structure
    • May be responsible for RTO responsibilities: operation, scheduling, and ancillary services for the region
    • Performs dispute resolution in region
standards compliance processes option 1 wio max
Standards/Compliance ProcessesOption 1: WIO Max

WIO

Adequacy

Security

Commerce

Compliance

OOEs

RE

PSEs

OOEs

PSEs

Participation in development of standards, policies and procedures

Implementation of Compliance and Enforcement Processes

standards compliance processes option 2 wio min
Standards/Compliance ProcessesOption 2: WIO Min

WIO

Adequacy

Security

Commerce

Compliance

OOEs

PSEs

RE

PSEs

OOEs

RE

Participation in development of standards, policies and procedures

Implementation of Compliance and Enforcement Processes

congestion management option 1 wio max
Congestion ManagementOption 1: WIO Max

PSEs

OOEs

WIO

Adequacy

RE

Security

Commerce

Market Community

Compliance

PSEs

OOEs

Commercial issues raised by the Market

Facilitation of standard commercial practices

congestion management option 2 wio min
Congestion ManagementOption 2: WIO Min

PSEs

OOEs

RE

WIO

Congestion Mgmnt for Seams

Adequacy

Security

Market Community

Commerce

Compliance

OOEs

PSEs

RE

Commercial issues raised by the Market

Facilitation of standard commercial practices

regional study group option 1 wio max
Regional Study GroupOption 1: WIO Max

RE

OOEs

PSEs

WIO

Adequacy

Regional Study Process

Security

Commerce

Regional Study Process

Compliance

OOEs

PSEs

Determination of Regional Study Process and Approval

Provision of Modeling Data

regional study group option 2 wio min
Regional Study GroupOption 2: WIO Min

RE

PSEs

OOEs

Regional Study Process

WIO

Adequacy

Regional Study Process for Seams

Security

Commerce

Regional Study Process

Compliance

OOEs

RE

PSEs

Determination of Regional Study Process and Approval

Provision of Modeling Data

closing comments
Closing Comments
  • WIO could be designed today based on either Option RRWG 1 or Option RRWG 2, however:
    • Some believe that Option 2 would not be feasible until strong Regional Entities (RTOs) are in place.
    • Some believe that transitioning from Option 1 to Option 2 would be difficult due to the tendency for large organizations to resist reducing their scope.
slide64

Option RRWG 1:

WIO Max / RE Min

FERC

ACRA

AMRA

NAERO

Regional Entities (Staff)

W I O

(Staff)

COMMITTEES

SECURITY

COMMITTEE

Regional

District

ADEQUACY

COMMITTEE

ISO (staff)

Regional District

Standing Committee

MARKET

INTERFACE

COMMITTEE

Regional District

Association (Staff)

RTO

SecurityCoordinator

COMMITTEES

slide65

Option RRWG 2:

WIO Min / RE Max

FERC

ACRA

AMRA

NAERO

Incorporated Regional District (Staff)

W I O

(Staff)

COMMITTEES

SECURITY

COMMITTEE

Regional

District

ADEQUACY

COMMITTEE

ISO (staff)

Regional District

Standing Committee

MARKET

INTERFACE

COMMITTEE

SecurityCoordinator(s)

Regional District

Association (Staff)

RTO / RE

COMMITTEES

open model option 1
OPEN MODEL - Option 1
  • Any WIO Member Can Participate in any Committee
  • Any WIO Member can have One Vote at any Committee Meeting
  • Rules for Balanced Regional and Market Segment Participation?
representative model option 2
REPRESENTATIVE MODELOption 2
  • Only a Fixed Number of Representatives of each Market Segment (and region) can Vote
  • Regional Entities Could Elect Representatives
  • Market Segments Could Elect Representatives
  • Membership Rules Could Assure Balanced Regional & Market Segment Representation
common characteristics of both models
COMMON CHARACTERISTICS OF BOTH MODELS
  • Meetings Open for Anyone to Attend
  • WIO Board Appoints Chair & Vice-Chair
  • Actions Require 2/3 Vote of Committee Members
  • A Quorum is 2/3 of the Voting Members Present
organized by discipline option 3a
ORGANIZED BY DISCIPLINEOption 3A
  • Open or Representative Model
  • Committees Similar to Traditional NERC Model
  • Tightly Controlled and Coordinated Organization Through Procedures and Liaison
organized by function option 3b
ORGANIZED BY FUNCTIONOption 3B
  • Open or Representative Model
  • Grid Management Functions Realigned with Different Committees than NERC Model
  • Assumes Reliability and Commercial Issues are Closely Couples
slide75

OPTIONS

WIO

MIN

Representative

Committees

Committee

by

Discipline

Stakeholder

Board

WIO

MAX

Open

Committees

Hybrid

Board

Committee

by

Function

Non-Affiliated

Board

slide76

Hybrid

Board

WIO

MIN

WIO

MAX

Stakeholder

Board

Non-Affiliated

Board

OPTIONS

Representative

Committees

Committee

by

Discipline

Committee

by

Function

Open

Committees

slide77

Representative

Committees

Stakeholder

Board

Committee

by

Discipline

WIO

MAX

Committee

by

Function

Open

Committees

WIO

MIN

Hybrid

Board

Non-Affiliated

Board

OPTIONS

primary alternatives
Primary Alternatives
  • Stakeholder vs. Non-Affiliated Governance Structure
  • Maximum WIO Functions vs. Maximum Regional Organization Functions

Secondary Considerations

  • Committee Structure and Population
  • Hybrid Governance Structure
example shown stds development compliance enforcement
Example Shown: Stds. DevelopmentCompliance & Enforcement

STAKEHOLDER BOARD - MAX REGIONAL FUNCTIONS

OOEs

RE

WIO

PSEs

Adequacy

Security

OOEs

Commerce

Compliance

PSEs

Participation in development of standards, policies and procedures

Implementation of Compliance and Enforcement Processes

example shown stds development compliance enforcement1
Example Shown: Stds. DevelopmentCompliance & Enforcement

NON-AFFILIATED BOARD - MAX REGIONAL FUNCTIONS

OOEs

RE

WIO

PSEs

Stakeholder Advisory

Committee

Adequacy

Security

OOEs

Commerce

Compliance

PSEs

Participation in development of standards, policies and procedures

Implementation of Compliance and Enforcement Processes

example shown stds development compliance enforcement2
Example Shown: Stds Development,Compliance & Enforcement

WIO

Adequacy

Security

Commerce

Compliance

STAKEHOLDER BOARD - MAX REGIONAL FUNCTIONS

OOEs

PSEs

RE

PSEs

OOEs

RE

Participation in development of standards, policies and procedures

Implementation of Compliance and Enforcement Processes

example shown stds development compliance enforcement3
Example Shown: Stds. Development,Compliance & Enforcement

NON-AFFILIATED BOARD - MAX REGIONAL FUNCTIONS

OOEs

PSEs

RE

WIO

Stakeholder Advisory

Committee

Adequacy

Security

PSEs

OOEs

Commerce

RE

Compliance

Participation in development of standards, policies and procedures

Implementation of Compliance and Enforcement Processes