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Western Area Power Administration

Western Area Power Administration . Public Process to Propose a Final Resource Adequacy Plan. Summary. Conducting a public process pursuant to the Administrative Procedure Act to propose a Final Resource Adequacy Plan

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Western Area Power Administration

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  1. Western Area Power Administration Public Process to Propose a Final Resource Adequacy Plan

  2. Summary • Conducting a public process pursuant to the Administrative Procedure Act to propose a Final Resource Adequacy Plan • Consistent with Section 40 of the California Independent System Operator’s (CAISO) Tariff • Western’s Current RA Plan can be found at: http://www.wapa.gov/sn/marketing/racapacity.asp

  3. Dates • Federal Register Notice published on April 25, 2007 • Public Information Forum held May 2, 2007 • Public Comment Forum will be May 9, 2007 • Comment Period will close May 25, 2007 • Final RA Plan will be effective July 23, 2007 • Western’s final RA Plan must be in place to meet the CAISO’s CY ’08 annual showing

  4. Comments • Comments may be sent by May 25, 2007 to: Ms. Sonja A. Anderson Acting Power Marketing Manager Western Area Power Administration 114 Parkshore Drive Folsom, CA 95630 Email: sanderso@wapa.gov Fax: (916) 985-1931

  5. Background • February 9, 2006 – CAISO filed its comprehensive market redesign and technology upgrade (MRTU) tariff • Includes provision where California Public Utilities Commission (CPUC) and other Local Regulatory Authorities (LRA) establish procurement requirements for Load Serving Entities (LSE)

  6. Background • March 13, 2006 – CAISO filed its Interim Reliability Requirements Program (IRRP) • Section 40 provides guidelines for Resource Adequacy • May 12, 2006 – Federal Energy Regulatory Commission (FERC) accepts the CAISO’s IRRP

  7. Background • September 21, 2006 - FERC accepted, in part, CAISO’s proposed MRTU tariff • LSEs under CPUC jurisdiction are required to maintain a level of capacity of 15% to 17% above LSE’s forecasted customer needs • Other LSEs must comply with planning reserve margin set by their LRA • Default margin will be 15%

  8. Background • Western is an LRA and submitted two RA Plans to the CAISO • Initial RA Plan (in response to FERC’s May 12, 2006 Order) • 5% by October 1, 2006 • 10% by February 1, 2007 • 15% by June 1, 2007 • Current RA Plan (in response to FERC’s September 21, 2006 Order) • 10% June through September • 5% all other months

  9. Background • Western has procured RA Capacity for calendar year 2007 for: • Full Load Service Customers • First Preference Customers • NASA Ames • Project Use Customers • Western plans to continue providing RA Capacity for these customers

  10. Western’s RA Plans • Western’s Initial RA Plan • Section 40 of IRRP and MRTU filings set guidelines • FERC May 12, 2006 Order: • Accepted CPUC default criteria of 15-17% RA Capacity for CPUC jurisdictional entities • Acknowledged other LRAs can develop their own RA Plans

  11. Western’s RA Plans • Western’s Initial RA Plan (cont.) • Phase in its Planning Reserve Margin requirements for RA Capacity as follows: • October 1, 2006 – 5% • February 1, 2007 – 10% • June 1, 2007 – 15%

  12. Western’s RA Plans • Western’s Current RA Plan • FERC’s September 21, 2006 Order allowed for LRAs to set their own criteria for Planning Reserve Margin • Western revised its Initial RA Plan to modify its Planning Reserve Margin • June through September – 10% • All other months – 5%

  13. Western’s RA Plans • Western’s Current RA Plan (cont.) • Designated Central Valley Project hydroelectric facilities in SMUD’s Balancing Authority Area as a system resource with 100% of forecasted capacity considered to be Qualifying Capacity (defined as the maximum capacity of an RA Resource) • Designated 100% of its contract deliveries (existing and future Liquidated Damages (LD) Contracts) as Qualifying Capacity

  14. Western’s RA Plans • Western’s Proposed Final RA Plan • Contains all procedures and standards in Western’s Current RA Plan • Proposed modifications • Western will procure RA Capacity from qualifying resources either inside or outside of the CAISO Control Area • Western may opt to designate some of its existing and future LD Contracts as RA Capacity

  15. Western’s RA Plans • Types of Resources for RA Capacity • The LRA has discretion on the type of resources to use to provide RA Capacity • Section 40 of the CAISO Tariff allows LRA to determine qualifying resource types and the Qualifying Capacity from such resources

  16. Western’s RA Plans • Types of Resources for RA Capacity (cont.) • Section 40 of the MRTU Tariff states that LSEs must also consider Local Capacity Area Resources (Local RAR) to be made available to the CAISO • Given the size of Western’s CAISO loads and limited exposure to Local RAR costs, Western is not anticipating the need to procure local RA Capacity associated with this requirement

  17. Western’s RA Plans • Types of Resources for RA Capacity (cont.) • FERC’s May 12, 2006 Order stated “WAPA, as an LRA can determine the extent to which liquidated damages contracts count toward its resource adequacy requirements.” • Both Western’s Initial RA Plan and its Current RA Plan were prepared using Western’s own standards for meeting its Qualifying Capacity requirements, including RA Capacity standards

  18. Western’s RA Plans • Types of Resources for RA Capacity (cont.) • Western’s proposed resources to meet RA Capacity • LD Contracts • RA Capacity procured from qualifying resources either inside or outside the CAISO Balancing Authority Area

  19. Western’s RA Plans • Amount of RA Capacity to be Procured • Section 40 of both the CAISO’s IRRP and the MRTU tariff allow a non-CPUC jurisdictional LRA to establish its own criteria for establishment of planning reserve margins • Western’s loads on the CAISO grid are less than 1% of the overall demand of the CAISO transmission grid

  20. Western’s RA Plans • Amount of RA Capacity to be Procured (cont.) • Western’s current procurements: • 10% in June through September • 5% in all other months • Western’s future procurements: • Continue with the 5% and 10%

  21. Western’s RA Plans • Allocation of Costs for RA Capacity • Costs are allocated on a load ratio share basis to the affected customers based on their projected load levels: • Full Load Service Customers • First Preference Customers • NASA Ames • Project Use • Western is proposing to continue to allocate costs in this manner

  22. Western’s RA Plans • Allocation of Costs for RA Capacity (cont.) • Example • Customer A projected load 10 MW • Customer B projected load 15 MW • Customer C projected load 20 MW • Monthly RA Capacity cost $12,000 • Customer A’s share of RA Capacity costs is $2,667 • Customer B’s share of RA Capacity costs is $4,000 • Customer C’s share of RA Capacity costs is $5,333

  23. Dates • Federal Register Notice published on April 25, 2007 • Public Information Forum held May 2, 2007 • Public Comment Forum will be May 9, 2007 • Comment Period will close May 25, 2007 • Final Rule will be effective July 23, 2007 • Western’s final RA Plan must be in place to meet the CAISO’s CY ’08 annual showing

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