PacifiCorp Proposal for Reserve Obligation and
Billing Procedures – for Discussion Purposes
Summary of Issue and Interests
With recent revisions to several PacifiCorp’s Open Access Transmission Tariff regarding Operating
Reserves1 pursuant to OATT Schedule 5 for Spinning and OATT Schedule 6 for Non Spinning, there is a
need to clarify reserve obligations and appropriate billing for reserves. In addition, customers have
requested additional tariff revisions or business practices clarifying their responsibilities. Specifically,
customers have asked for a clear rules defining their obligations and that they be allowed to self-supply
reserves without being unduly penalized for any failure to self-supply. Additionally, Grid operations
must ensure that it meets its responsibilities as a Balancing Authority (“BA”), including having a reliable
and accurate calculation of its Contingency Reserve Obligation (“CRO”), and that it can effectively and
efficiently call upon any reserves when needed. Finally, back office must be able to invoice customers
for reserve charges in a manner which is consistent with each customer’s obligation and which is not
inconsistent with how reserve obligations are being handled in real time operations.
Objective
The company desires a consensus-driven position on reserve obligations and self-supply responsibilities
which satisfies the interests described above and which is consistently adhered to by customers, grid
operations and back office. In order to achieve this objective, PacifiCorp has organized a workshop to
facilitate transmission customer input into the development of relevant procedures, with potential
revisions or adjustments resulting from that stakeholder review process.
Scope of Document
This document outlines Operating Reserve obligations within the context of different scenario
transactions and is designed to solicit input and feedback for each category, including subset issues.
Section 1: Customer Operating Reserve Obligations
In order to understand reserve obligations and develop consensus positions, a multitude of potential
transaction scenarios were identified. For each combination, the following descriptions and explanation
are provided:
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Scenario Description
CRO Calculation
Customer Reserve Obligation, and
Customer Reserve Purchase Obligation (non-self-supply)
1
The Open Access Transmission Tariff (“OATT”) refers to reserves as “Operating Reserves” which may also be
referred to as “Contingency Reserves.”
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All the examples below use the PACE control area, but this can be equally applied to PACW.
1: Transfer by Customer 1 from Generation to Load
Scenario Description: In this scenario, Customer 1 is performing an internal BA transfer, moving their
own generation to their own load.
CRO Calculation: The CRO is calculated pursuant to the currently-effective version of WECC Standard
BAL-STD-002-0, which requires that the obligation be set based upon 5% (non-thermal) or 7% (thermal)
of generation in the BA. In this scenario, the CRO will be based upon the hourly generation in the BA
according to the applicable percent obligation.
Customer Reserve Obligation: The customer’s obligation is equal to the customer’s metered average
hourly generation in the BA.
Customer Reserve Purchase Obligation (non-self-supply): Customer 1 will be billed for reserves based
upon its monthly coincident peak demand multiplied by the applicable rate.
2: Export by Customer 1 from its own Generator
Scenario Description: In this scenario, Customer 1 is performing an export, moving its own generation
off-system.
CRO Calculation: The CRO is calculated pursuant to the currently-effective version of WECC Standard
BAL-STD-002-0, which requires that the obligation be set based upon 5% (non-thermal) or 7% (thermal)
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of generation in the BA. In this scenario, there is generation in the BA, which is leaving the BA as an
export. The CRO will include this export.
Customer Reserve Obligation: The customer’s obligation is equal to the customer’s metered average
hourly generation in the BA, provided that the customer uses a firm transmission service product to
effectuate the export. Pursuant to the Open Access Transmission Tariff, PacifiCorp may not charge
reserves on non-firm transmission. Note: TSOA customers may export on NT transmission during noncoincident peak hours and not incur any reserves charges consistent with contractual obligations.
Customer Reserve Purchase Obligation (non-self-supply): Customer 1 will be billed for reserves based
upon its monthly coincident peak demand multiplied by the applicable rate provided that the customer
uses a firm transmission service product to effectuate the export.
3: Import by Customer 1 to its own Load
Scenario Description: In this scenario, Customer 1 is bringing in off-system energy as an import to serve
its load. Imports can either be on firm (“not interruptible) or non-firm (“interruptible”) transmission.
CRO Calculation: The CRO is calculated pursuant to the currently-effective version of WECC Standard
BAL-STD-002-0, which requires that the obligation be set based upon 5% (non-thermal) or 7% (thermal)
of generation in the BA. In this scenario, there is no generation in the BA associated with this
transaction, therefore, the CRO will not include the import, absent additional steps which must be taken
to facilitate unit contingent sales, as outlined and described in Business Practice #34.
Customer Reserve Obligation: The customer is not responsible for reserves on imports.
Customer Reserve Purchase Obligation (non-self-supply): Customer 1 will not be billed for reserves in
this scenario. Firm transmission imports may be subtracted from a customer’s reserve obligation. Only
firm imports will be used to reduce the customer’s reserve obligation. “Firm-ness” is identified by the
first leg of the tag as it enters the BA and by the underlying reservation(s) to see whether a firm or nonfirm reservation was used. For stacked tags, any reservation number (AREF) listed on the tag associated
with a firm transmission product is also included as firm.
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4: Sale by Customer 1 from its Generator to Customer 2's Load within the
Control Area
Scenario Description: In this scenario, Customer 1 is selling generation to Customer 2, who then moves
it to its Load. The transaction stays within the BA.
CRO Calculation: The CRO is calculated pursuant to the currently-effective version of WECC Standard
BAL-STD-002-0, which requires that the obligation be set based upon 5% (non-thermal) or 7% (thermal)
of generation in the BA. In this scenario, the CRO will be based upon the hourly generation in the BA
according to the applicable percent obligation.
Customer Reserve Obligation: The customer obligation will fall on Customer 2 because Customer 2 is
serving load in the BA and the CRO is including the generation load amount. If Customer 2 has made a
separate arrangement with Customer 1 for Customer 1 to assume the reserve obligation, Customer 2
will be responsible for paying PacifiCorp for reserves billed- Customer 2 is responsible for collecting that
same charge from Customer 1. Customer 2’s obligation is equal to the customer’s metered average
hourly generation in the BA.
Customer Reserve Purchase Obligation (non-self-supply): Customer 2 will be billed for reserves based
upon its monthly coincident peak demand multiplied by the applicable rate.
5: Sale at Generator bus by Customer 1 to Customer 2 who exports out of the
Control Area
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Scenario Description: In this scenario, Customer 1 sells part of its generation at the bus to Customer 2,
who then exports it off-system.
CRO Calculation: The CRO is calculated pursuant to the currently-effective version of WECC Standard
BAL-STD-002-0, which requires that the obligation be set based upon 5% (non-thermal) or 7% (thermal)
of generation in the BA. In this scenario, there is generation in the BA, which is leaving the BA as an
export. The CRO will include this export.
Customer Reserve Obligation: Customer 2’s obligation is equal to the metered average hourly
generation in the BA for the export, provided that the customer uses a firm transmission service product
to effectuate the export. Pursuant to the Open Access Transmission Tariff, PacifiCorp may not charge
reserves on non-firm transmission. Note: TSOA customers may export on NT transmission during noncoincident peak hours and not incur any reserves charges consistent with contractual obligations.
Customer Reserve Purchase Obligation (non-self-supply): Customer 2 will be billed for reserves based
upon its monthly coincident peak demand multiplied by the applicable rate provided that the customer
uses a firm transmission service product to effectuate the export.
6: Customer 1 sells its own generation at Hub to Customer 2, who exports it
(one tag transaction)
Scenario Description: In this scenario, Customer 1 moves part of their generation to a Hub, where they
sell it to Customer 2, who then exports it from the Hub off-system. All of this is documented on one eTag.
CRO Calculation: The CRO is calculated pursuant to the currently-effective version of WECC Standard
BAL-STD-002-0, which requires that the obligation be set based upon 5% (non-thermal) or 7% (thermal)
of generation in the BA. In this scenario, there is generation in the BA, which is leaving the BA as an
export. The CRO will include this export.
Customer Reserve Obligation: Customer 2’s obligation is equal to the metered average hourly
generation in the BA for the export, provided that the customer uses a firm transmission service product
to effectuate the export. Pursuant to the Open Access Transmission Tariff, PacifiCorp may not charge
reserves on non-firm transmission. Note: TSOA customers may export on NT transmission during noncoincident peak hours and not incur any reserves charges consistent with contractual obligations.
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Customer Reserve Purchase Obligation (non-self-supply): Customer 2 will be billed for reserves based
upon its monthly coincident peak demand multiplied by the applicable rate provided that the customer
uses a firm transmission service product to effectuate the export.
Note: Customer 2 should buy a PTP reservation away from the Hub. If they buy PTP Firm, they may also
be charged a reserve obligation if the Hub is designated as “IS GENERATOR” within OASIS. The Customer
can buy PTP Non Firm to avoid reserve charges, but if they buy PTP Firm there is no way to prevent this
double-billing due to the Hub’s characteristics.
7: Customer 1 sells its own generation at Hub to Customer 2 who exports it
(two separate tag transactions)
Scenario Description: In this scenario, Customer 1 moves part of their generation to a Hub, where they
sell it to Customer 2, who then exports it from the Hub off-system. This transaction is completed using 2
separate e-Tags. The first e-Tag will look like a Transfer from a Generator to a Hub. The second e-Tag will
be an off-system Export from the Hub.
CRO Calculation: The CRO is calculated pursuant to the currently-effective version of WECC Standard
BAL-STD-002-0, which requires that the obligation be set based upon 5% (non-thermal) or 7% (thermal)
of generation in the BA. In this scenario, there is generation in the BA, which is leaving the BA as an
export. The CRO will include this export.
Customer Reserve Obligation: Customer 2’s obligation is equal to the metered average hourly
generation in the BA for the export, provided that the customer uses a firm transmission service product
to effectuate the export. Pursuant to the Open Access Transmission Tariff, PacifiCorp may not charge
reserves on non-firm transmission. Note: TSOA customers may export on NT transmission during noncoincident peak hours and not incur any reserves charges consistent with contractual obligations.
Customer Reserve Purchase Obligation (non-self-supply): Customer 2 will be billed for reserves based
upon its monthly coincident peak demand multiplied by the applicable rate provided that the customer
uses a firm transmission service product to effectuate the export.
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Note: Customer 2 should buy a PTP reservation away from the Hub. If they buy PTP Firm, they may also
be charged a reserve obligation if the Hub is designated as “IS GENERATOR” within OASIS. The Customer
can buy PTP Non Firm to avoid reserve charges, but if they buy PTP Firm there is no way to prevent this
double-billing due to the Hub’s characteristics.
8: Customer 1 sells its own generation at Hub to Customer 2, who takes it to
their own load within the Control Area (two separate tag transactions)
Scenario Description: In this scenario, Customer 1 transfers some of its generation to a Hub which is
subsequently sold at the Hub to Customer 2, who then moves it to its Load. This transaction is
documented on two separate e-Tags. The transaction stays within the Control Area.
CRO Calculation: The CRO is calculated pursuant to the currently-effective version of WECC Standard
BAL-STD-002-0, which requires that the obligation be set based upon 5% (non-thermal) or 7% (thermal)
of generation in the BA. In this scenario, the CRO will be based upon the hourly generation in the BA
according to the applicable percent obligation.
Customer Reserve Obligation: The customer obligation will fall on Customer 2 because Customer 2 is
serving load in the BA and the CRO is including the generation load amount. If Customer 2 has made a
separate arrangement with Customer 1 for Customer 1 to assume the reserve obligation, Customer 2
will be responsible for paying PacifiCorp for reserves billed- Customer 2 is responsible for collecting that
same charge from Customer 1. Customer 2’s obligation is equal to the customer’s metered average
hourly generation in the BA.
Customer Reserve Purchase Obligation (non-self-supply): Customer 2 will be billed for reserves based
upon its monthly coincident peak demand multiplied by the applicable rate.
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9: Customer 1 imports through Hub to its own Load (one tag transaction)
Scenario Description: In this scenario, Customer 2 imports energy from off-system to a Hub, sells it to
Customer 1, who then takes it to its load. This transaction all occurs on one e-Tag.
CRO Calculation: The CRO is calculated pursuant to the currently-effective version of WECC Standard
BAL-STD-002-0, which requires that the obligation be set based upon 5% (non-thermal) or 7% (thermal)
of generation in the BA. In this scenario, there is no generation in the BA associated with this
transaction, therefore, the CRO will not include the import, absent additional steps which must be taken
to facilitate unit contingent sales, as outlined and described in Business Practice #34.
Customer Reserve Obligation: The customer is not responsible for reserves on imports.
Customer Reserve Purchase Obligation (non-self-supply): Customer 1 will not be billed for reserves in
this scenario. Firm transmission imports may be subtracted from a customer’s reserve obligation. Only
firm imports will be used to reduce the customer’s reserve obligation. “Firm-ness” is identified by the
first leg of the tag as it enters the BA and by the underlying reservation(s) to see whether a firm or nonfirm reservation was used. For stacked tags, any reservation number (AREF) listed on the tag associated
with a firm transmission product is also included as firm.
10: Customer 2 imports to a Hub. Customer 1 purchases at the Hub and takes
it to their Load (two separate tag transactions)
Scenario Description: In this scenario, Customer 2 imports energy from off-system to a Hub, sells it to
Customer 1, who then takes it to their load. This transaction all occurs on two separate e-Tags.
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CRO Calculation: The CRO is calculated pursuant to the currently-effective version of WECC Standard
BAL-STD-002-0, which requires that the obligation be set based upon 5% (non-thermal) or 7% (thermal)
of generation in the BA. In this scenario, there is no generation in the BA associated with this
transaction, therefore, the CRO will not include the import, absent additional steps which must be taken
to facilitate unit contingent sales, as outlined and described in Business Practice #34.
Customer Reserve Obligation: The customer is not responsible for reserves on imports. In this case, as
these are two separate tag transactions, there is no way to denote that the transmission to load came
from an import. Customer 1 will have the reserve obligation equal to the load in the BA.
Customer Reserve Purchase Obligation (non-self-supply): Customer 1 will not be billed for reserves in
this scenario. Firm transmission imports may be subtracted from a customer’s reserve obligation. Only
firm imports will be used to reduce the customer’s reserve obligation. “Firm-ness” is identified by the
first leg of the tag as it enters the BA and by the underlying reservation(s) to see whether a firm or nonfirm reservation was used. For stacked tags, any reservation number (AREF) listed on the tag associated
with a firm transmission product is also included as firm.
11: Customer 1 sells its own generation at to Customer 3 (PTP customer)
which purchases at Generator bus and moves it to Hub, where it is then sold to
Customer 2. Customer 2 takes it to their Load.
Scenario Description: In this scenario, Customer 1 sells generation at the bus to a PTP Customer
(Customer 3). Customer 3 transfers this to a Hub. At the Hub, Customer 3 sells it to Customer 2, who
then moves it to their load. This transaction is documented on one e-Tag. The transaction stays within
the Control Area.
CRO and Customer Obligation: The CRO includes the load in the BA. Customer 2 will assume the reserve
obligation for this transaction because they are serving load in the BA. If Customer 2 has made a
separate arrangement with Customer 1 or 3 to assume the reserve obligation, Customer 2 will be
responsible for paying PacifiCorp for reserves billed- Customer 2 is responsible for collecting that same
charge from Customer 1 or 3.
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CRO Calculation: The CRO is calculated pursuant to the currently-effective version of WECC Standard
BAL-STD-002-0, which requires that the obligation be set based upon 5% (non-thermal) or 7% (thermal)
of generation in the BA. In this scenario, the CRO will be based upon the hourly generation in the BA
according to the applicable percent obligation.
Customer Reserve Obligation: The customer obligation will fall on Customer 2 because Customer 2 is
serving load in the BA and the CRO is including the generation load amount. If Customer 2 has made a
separate arrangement with Customer 1 or 3 to assume the reserve obligation, Customer 2 will be
responsible for paying PacifiCorp for reserves billed- Customer 2 is responsible for collecting that same
charge from Customer 1 or 3. Customer 2’s obligation is equal to the customer’s metered average hourly
generation in the BA.
Customer Reserve Purchase Obligation (non-self-supply): Customer 2 will be billed for reserves based
upon its monthly coincident peak demand multiplied by the applicable rate.
Note: both Customers 2 and 3 will be charged transmission for this transaction, so potential doublebilling of the reserve charges is possible.
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