Draft Tariff Language to Address Transmission System Emergencies 1.365b Local Transmission Emergency: Conditions on transmission facilities that would exceed System Operating Limits, actual or on a projected post-contingent basis, and the Reliability Coordinator expects to not be able to mitigate the System Operating Limit (SOL) using normal procedures in timely fashion in coordination with the Transmission Operator. 1.679 Transmission System Emergency: An Emergency condition that exists when the conditions described in the Transmission Provider’s Emergency procedures are met for transmission lines 100 kV and higher, transformers with at least two windings of 100 kV and higher, or busses 100 kV and higher, except if it is determined that the condition is not an Interconnection Reliability Operating Limit (IROL) violation. 40.2.24 Transmission System Emergency Procedures The Transmission Provider shall implement Transmission System Emergency or Local Transmission Emergency procedures to mitigate loading on facilities. The Transmission Provider may take or may direct mitigating actions, including Load Shedding, in coordination with Transmission Operators or LBAs to respond to such Emergencies. 69.3.1.f Curtailments At its sole discretion, the Transmission Provider may curtail exports sourced at a Capacity Resource during a declared capacity, Transmission System, or Local Transmission Emergency. Procedures for such curtailments shall be specified in the operating procedures. The Transmission Provider may not curtail Generation Resources that deliver energy outside of the -1WAS:175119.2 Transmission Provider Region and that properly respond to reserve activation in accordance with the terms and conditions of a Regional Reserve Sharing Agreement during the time such reserve activation is effective. 69.3.2 Load Modifying Resources As described below, a Demand Resource or a BTMG is eligible to qualify as a Load Modifying Resource if it meets the following requirements. All Demand Resources utilized to net against an LSE’s forecasted Demand or LMRs designated to meet PRMR must be available for use in the event of a capacity, Transmission System, or Local Transmission Emergency as declared by the Transmission Provider, pursuant to the eEmergency operating procedures of the Transmission Provider. Demand Resources can be used to net against an LSE’s forecasted Demand in meeting an LSE’s RAR obligation; however, any Demand Resources that are netted cannot also be used again to meet PRMR. BTMG cannot be netted against an LSE’s forecasted Demand in the Forecast LSE Requirement calculation. 69.3.3 Deployment Procedures for LMR Procedures for deployment of LMR are found in the Business Practices Manual for Resource Adequacy and eEmergency operating procedures. Such procedures shall be consistent with the information provided by the Market Participant and at a minimum will provide for the deployment parameters of the LMR, when available, during a declared capacity, Transmission System, or Local Transmission Emergencyies prior to the use of Operating Reserves to meet the energy balance. The Market Participant shall notify the Transmission Provider, or Local Balancing Authority when the status or availability of the LMR changes, except for de minimis changes that do not need to be reported, according to procedures specified in the Business -2WAS:175119.2 Practices Manual for Resource Adequacy and eEmergency operating procedures. The Transmission Provider, or Local Balancing Authority shall coordinate with the Market Participant that owns or controls such LMR to deploy when necessary. 69.3.5 Demand Resource Eligibility A Market Participant that possesses ownership or equivalent contractual rights in a Demand Resource can request accreditation for a Demand Resource as an LMR by registering such resource with the Transmission Provider as documented in the BPM for Resource Adequacy and by meeting the following requirements: i. The Demand Resource must be equal to or greater than 100 kW (a grouping of smaller resources that can reduce Demand may qualify in meeting this standard). ii. The Demand Resource must be available to be scheduled for a Demand reduction at the targeted Demand reduction level or by moving to a specified firm service level with no more than 12 Hours advance notice from the Transmission Provider. iii. Once Scheduling Instructions are given by the Transmission Provider that require a Demand reduction, the Demand Resource must be capable of ramping down to meet the targeted Demand reduction level or achieve the firm service level by the Hour designated by the Transmission Provider’s Scheduling Instructions. iv. Once the targeted level of Demand reduction or firm service level is achieved, the Demand Resource must be able to maintain the targeted level of Demand reduction or firm service level for at least sixfour (4) (6) continuous Hours. v. The Demand Resource must be capable of being interrupted at least ten five (5)(10) times during the Planning YearSummer Season, (when called upon by the Transmission -3WAS:175119.2 Provider) during any Planning Year for which the Demand Resource receives credit as a Planning Resource. vi. Unless the Demand Resource is unavailable as a result of maintenance requirements or for reasons of Force Majeure, when a Demand reduction is requested by the Transmission Provider, the resultant reduction must be a reduction that would not have otherwise occurred within the next twenty four (24) hour period. There shall be no penalties assessed to a Market Participant representing the entity that has designated the PRCs from the LMR if the Demand Resource is unavailable for interruption as a result of maintenance requirements or for reasons of Force Majeure, or in the event the specified Demand reduction had already been accomplished for other reasons (e.g., economic considerations, self-scheduling at or above the credited level of Demand Resource, or local reliability concerns in accordance with instructions from the LBA). vii. A Demand Resource for which curtailment is not an obligation during capacity, Transmission System, or Local Transmission Emergency events declared by the Transmission Provider pursuant to the Transmission Provider eEmergency operating procedures will not qualify as an LMR. viii. The Transmission Provider will use the MECT to ensure that there can be only one LSE using PRCs from a Demand Resource or netting the MW associated with the Demand Resource from its forecasted Demand. ix. Demand Resources that are offered into the Day-Ahead and/or Real-Time Energy and Operating Reserve Markets as price sensitive Bids are obligated to be interrupted during an capacity, Transmission System, or Local Transmission Emergency pursuant to the -4WAS:175119.2 Transmission Provider eEmergency operating procedures regardless of the projected or actual Real-Time Energy Market LMP. 69.3.6 Behind the Meter Generation Eligibility A Market Participant that possesses ownership or equivalent contractual rights in a BTMG can request accreditation for such BTMG by: a. registering such resource(s) with the Transmission Provider as documented in the BPM for Resource Adequacy; b. demonstrating GVTC capability for each Planning Year on an annual basis as established in the BPM for Resource Adequacy, by conducting a real power test or operational data, and by submitting the GVTC results to the Transmission Provider no later than October 31 prior to such Planning Year for existing accredited BTMG. All new BTMGs or an existing accredited BTMG that has an increased installed capacity shall submit their GVTC to the Transmission Provider prior to qualification as established in the BPM for Resource Adequacy. c. submitting generator availability data (including, but not limited to, NERC GADS information) into a database provided by the Transmission Provider and as established in the Business Practices Manual for Resource Adequacy beginning on June 1, 2010. A BTMG greater than 10 MW based on GVTC shall provide the Transmission Provider with generator availability data. A Market Participant is not required to report generator availability data for a BTMG less than 10 MW based on GVTC if the Market Participant has never provided such data for such BTMG. A Market Participant that begins -5WAS:175119.2 reporting generator availability data for a BTMG that is less than 10 MW based on GVTC must continue to report such data; and d. confirming such BTMG can be available to provide energy with no more than 12 Hours advance notice from the Transmission Provider;. e. demonstrating that the BTMG is able to sustain energy production at the accredited MW level for at least six (6) continuous Hours; and f. demonstrating that the BTMG is capable of being deployed at the accredited MW level at least ten (10) times requested by the Transmission Provider during the Planning Year (when called upon by the Transmission Provider during a capacity, Transmission System, or Local Transmission Emergency) during any Planning Year for which the BTMG receives credit as a Planning Resource. 69.3.7 Deliverability of LMRs Until long-term procedures are incorporated into the Tariff, a Market Participant with PRCs from Load Modifying Resources (“LMR MP”) will be able to submit an APRC Offer for such APRCs into the voluntary capacity auction (“VCA”) if all of the requirements of Section 69.3.5 are satisfied for Demand Resources (or Section 69.3.6 requirements are satisfied for BTMG) and the LMR MP demonstrates that the APRCs that the LMR MP is seeking to submit in the VCA meet all of the following criteria: a. The LMR MP representing the LMR must certify using the MECT that the laws or regulations of the relevant electric retail regulatory authorities where the LMR is located do not preclude the customer represented by the LMR from directly providing demand reduction to the Transmission Provider; and -6WAS:175119.2 b. The LMR MP that participates in the VCA must agree to be responsible for and to indemnify and hold harmless any LSE that acquires APRCs through the VCA in accordance with Section 69.3.7 from such APRCs for any and all penalties or other charges that the Transmission Provider would assess if the LMR from which the APRCs originated does not perform during a capacity, Transmission System, or Local Transmission an Emergency, in contravention to the provisions that would otherwise apply to the LMR penalties or charges pursuant to Section 69.3.9. 69.3.8 Measuring and Verifying LMR i. Demand Resources: The Transmission Provider will review meter data provided by the Market Participant to verify that the Demand Resource reduced to the targeted Demand reduction level or to a specified firm service level when called upon. Following a declared capacity, Transmission System, or Local Transmission Emergency in which a Demand Resource is deployed, the Market Participant who registered the Demand Resource will collect meter data and perform calculations, consistent with the measurement and verification protocol identified at the time of registration. The Market Participant shall document the metered data and calculations and submit the certified results to the Transmission Provider as documented in the Business Practices Manual for Resource Adequacy. ii. Behind the Meter Generation; The Transmission Provider will review meter data provided by the Market Participant to verify that the BTMG produced energy to the target level requested by the Local Balancing Authority. Following a declared capacity, Transmission System, or Local Transmission Emergency in which a BTMG is deployed, the Market Participant who registered the BTMG will collect meter data and perform calculations, consistent -7WAS:175119.2 with the measurement and verification protocol identified at the time of registration. The Market Participant shall document the metered data and calculations and submit the certified results to the Transmission Provider as documented in the Business Practices Manual for Resource Adequacy. 69.3.9 Penalty Provisions for LMRs Unless an LMR is unavailable as a result of maintenance requirements or for reasons of Force Majeure or because the number of required deployments based upon the registered number has been reached, the Market Participant representing the entity which has designated the PRCs from the LMR will be subject (except as otherwise provided in Section 69.3.7.b) to the following penalties in the event the LMR is called upon during an capacity, Transmission System, or Local Transmission Emergency as declared by the Transmission Provider and the LMR fails to achieve its Scheduling Instructions. The penalties defined below will only apply to the portion of the Scheduling Instruction that is not achieved during the Emergency declaration and will only be assessed by the Transmission Provider after giving the operator of the LMR an opportunity to provide documentation of the specific circumstances that would justify exemption from such penalties. There will not be an LMR penalty assessed for any portion of the Scheduling Instruction which had already been accomplished by an LMR for other reasons (i.e., for economic considerations, self-scheduling at or above the credited amount of BTMG or local reliability concerns in accordance with instructions from the LBA) at the time the request for interruption is made by the Transmission Provider, LBA, or Transmission Operator. Likewise, for certain Demand Resources that are temperature dependent (i.e., a Demand Resource program involving air -8WAS:175119.2 conditioning load), the specified Demand reduction may be adjusted in a manner defined in the measurement and verification procedures developed by the Transmission Provider to reflect the circumstances at the time a Demand Resource is called upon to reduce Demand. a. The Transmission Provider shall assess the responsible Market Participant in Section 69.3.9 the costs that were otherwise incurred to replace the deficient Resource at the time the LMR is called upon by the Transmission Provider, LBA, or Transmission Operator and does not respond in full or in part. These costs will be the product of the amount of specified Demand reduction not achieved and the LMP at the Load CPNode, plus any RSG charges. The Transmission Provider shall allocate any such penalty revenues only to the Market Participants representing the LSEs in the Local Balancing Authority Area(s) that experienced the capacity, Transmission System, or Local Transmission Emergency that required the use of an LMR. Such revenues shall be distributed on a Load Ratio Share basis. For any situation where either an LMR does not respond to an interruption request, including those circumstances where the LMR is claimed to be unavailable as a result of maintenance requirements or for reasons of Force Majeure, the Transmission Provider shall initiate an investigation with the Market Participant which has registered the Demand Resource or BTMG and was qualified as an LMR into the cause of the LMR not being available when called upon to reduce Demand, and may, if deemed appropriate by the Transmission Provider, disqualify the Demand Resource or BTMG from further utilization as an LMR for the remainder of the Planning Year when the LMR was unavailable. -9WAS:175119.2 -10WAS:175119.2