FERC Order No. 890
The Next Generation of OATT
Transmission Service
Agenda
9:30 – 9:45
9:45 - 10:00
10:00 – 11:00
11:00 – 11:15
11:15 - 12:00
12:00 - 1:15
1:15 - 2:00
2:00 - 2:45
2:45 - 3:00
3:00 - 3:30
3:30 - 3:45
3:45 – 4:00
Welcome
Cliff Sikora, Co-Chair of the Troutman Sanders Energy Practice
Opening Remarks
Daniel Larcamp
The New Transmission Planning Paradigm
Chris Jones, Troutman Sanders
Break
Calculating ATC
Andrea Chambers, Troutman Sanders
Lunch and Presentation
David Cook, Vice President and General Counsel, NERC
Transmission Pricing Issues
Anne Dailey and Rebecca Roback, Troutman Sanders
Changes Relating to Non-Rate Terms and Conditions
David Rubin, Troutman Sanders
Break
OASIS Transparency, Performance Metrics and Penalties
Amie Colby, Troutman Sanders
Summary of Compliance Dates
Closing Remarks
Transmission Planning
Chris Jones
Basic Premise for Planning Reform
• Order No. 888 basic principle – Build the system to meet
the needs of open access customers.
• Order No. 888-A encouraged joint planning but did not
require that transmission providers coordinate with either
their network or PTP customers in transmission planning
or otherwise publish the criteria, assumptions, or data
underlying their transmission plans.
• Order No. 890 finds that the existing OATT lacks the
specific planning criteria to counter the incentives of a
transmission owner to plan its system in a
discriminatory manner.
– The “lack of coordination, openness, and transparency results in
opportunities for undue discrimination in transmission planning.”
Basic Planning Requirements of Order 890
• Order No. 890 requires a more open, transparent,
inclusive planning process than FERC feels is not
occurring under the current OATT regime.
• Order requires all transmission providers to file a
new attachment to their OATT containing their
transmission planning process.
• The transmission planning process to be
memorialized in the OATT must follow
9 Transmission Planning Principles…
Planning Principles
1. Coordination – The transmission provider must meet with
all of its transmission customers and interconnected
neighbors to develop a transmission plan.
• FERC responded to comments and decided not to dictate
the form of coordination (e.g. the number and structure of
meetings)
• Suggests formation of a permanent planning committee
made up of TP, neighboring transmission providers,
affected state authorities, customers, and other
stakeholders.
• FERC more concerned with substance over form in
complying with this requirement.
Planning Principles
2. Openness – Transmission planning meetings
must be open to all affected parties.
• Some commenters expressed concerns that
meetings must be open to the public. FERC did
not order that requirement.
• Planning meetings must be open to all affected
parties including, but not limited to, all
transmission and interconnection customers, state
commissions and other stakeholders.
• Smaller groups OK on specific issues.
Planning Principles
3. Transparency – The transmission provider is required to
disclose to all customers and other stakeholders the basic
criteria, assumptions, and data that underlie its planning.
This means:
• The basic criteria and data used for transmission planning must be
reduced to writing and posted.
• Outside parties should be able to replicate the results.
• FERC expects non-jurisdictionals to comply as well.
• FERC deems Forms 714 and 715 to be insufficient, primarily because
TP’s have discretion in what they report.
• Encourages simultaneous disclosure to alleviate Standards of
Conduct concerns but pledges to address those issues in the SoC
NOPR.
Planning Principles
4 Information Exchange – Transmission customers are
required to submit information on their projected loads and
resources, and the transmission provider must allow
market participants the opportunity to review and comment
on draft transmission plans.
•
•
•
Network customers will need to submit information on their projected
loads and resources on a comparable basis (e.g., planning horizon
and format) as used by transmission providers in planning for their
native load
PTP customers will be required to submit any projections they have
of a need for service over that planning horizon and at what receipt
and delivery points.
TPs must develop a format and schedule for these submittals.
Planning Principles
5. Comparability – The transmission system plan should
meet the specific service requests of transmission
customers and otherwise treat similarly situated customers
comparably.
• Restatement of existing OATT rule?
• FERC included this principle to address comments that
“transmission providers continue to plan their transmission
systems such that their own interests are addressed
without regard to, or ahead of, the interests of their
customers.”
• Does not require all customers to be treated the same –
only similarly-situated customers.
Planning Principles
6. Dispute Resolution – FERC adopts the NOPR’s proposal
to require transmission providers to develop a dispute
resolution process.
• Opens the door to prove up existing dispute resolution
process as sufficient, but such a showing is required.
• Dispute resolution process should be available to address
both substantive and procedural planning disputes.
• Will not cover any issues over which the Commission does
not have jurisdiction (e.g. state siting issues).
Planning Principles
7. Regional Participation – The transmission provider is
required to coordinate with interconnected systems to
share system plans and ensure that they are
simultaneously feasible and identify system
enhancements that could relieve significant and recurring
transmission congestion.
• Proper venue? RTOs, NERC sub-regions, something new?
• FERC encourages projects with regional benefits.
• FERC declines to dictate the vehicle for regional planning
and further does not dictate the appropriate geographic
scope.
• Compliance filings must explain each TP’s choice.
Planning Principles
8. Economic Planning Studies – The transmission provider is
required to annually prepare studies identifying “significant
and recurring” congestion and to post such studies on
OASIS. FERC disagrees that economic upgrades should
be considered only in the context of individual requests for
service under the OATT.
• Planning – it’s not just reliability any more.
• FERC clarifies no obligation to build.
• Does this concept apply easily outside of RTO markets?
If it’s not reliability-driven, and its not related to requested
service, WHO PAYS FOR IT?
Planning Principles
9. Cost Allocation for New Projects – For a planning process
to comply with the Rule, it must address cost allocation
for new projects. Rather than imposing a particular
allocation method, FERC permits transmission providers
and stakeholders to determine their own criteria.
FERC provides several cost allocation principles:
(1) costs should be fairly assigned among participants, including those
who cause them to be incurred and those who otherwise benefit from
them;
(2) cost allocation proposals should provide adequate incentives to
construct new transmission; and
(3) the allocation proposal should be generally supported by state
authorities and participants across the region.
Other Planning Issues
• Independent Third Party Coordinator
• State Commission Participation
• Flexibility in Implementation
• Recovery of Planning Costs
• Open Season for Joint Ownership
• Specific Study Processes Beyond Reliability and Congestion
• Level of Detail in the OATT
Jurisdictional Issues
Comments on the NOPR contained several
challenges to FERC’s jurisdiction over transmission
planning and warnings not to extend into realm of
traditional state regulation.
•FERC relies on new Section 217 of the FPA. “Congress
further directed the Commission to “exercise its authority”
under EPAct 2005 “in a manner that facilitates the planning
and expansion of transmission facilities to meet the
reasonable needs of load-serving entities.”
•Contends this jurisdiction enhances authority it already had
over planning.
Compliance Requirements
Each transmission provider is required to submit in a
compliance filing 210 days after publication of the Rule:
(1) A proposal for a coordinated and regional
planning process that complies with the
planning principles and other requirements in
the Final Rule. OR
(2) a compliance filing describing how its existing
planning process is consistent with or superior to the
requirements of the Final Rule.
Under either of these approaches, the process must be
documented as an attachment to the transmission provider’s
OATT.
Compliance Requirements
Each transmission provider is also required to construct
and post on OASIS a “strawman” proposal for its
compliance with the Rule within 75 days of publication the
rule
• FERC “strongly encourages” consulting with
stakeholders in developing the strawman.
• Strawman should include designation of planning
region
FERC plans on scheduling several regional Technical
Conferences in the period from 90 to 120 days after the
publication of the Rule.
Calculating and Posting
Available Transfer Capability - ATC
Andrea Chambers
Basic Premise for ATC Reform
• Under Order Nos. 888 and 889, FERC did not prescribe a
specific methodology for calculating ATC, but encouraged
the industry to develop a consistent, industry-wide
approach.
• Order No. 890 finds that this process has been
unsuccessful and that inconsistencies are apparent across
the industry.
CONSISTENCY AND TRANSPARENCY FOR ATC
• Order 890 does not provide a formula for ATC.
Enter NERC…
•
INDUSTY STANDARDS PROCESS:
• Public utilities, working through NERC and NAESB processes
must improve the consistency and transparency of ATC
calculation methods (including, components, data inputs,
modeling assumptions, and data exchange).
•
•
•
NERC to modify its ATC-related reliability standards within 270 days.
Utilities and NAESB develop business practices within 360 days.
NERC/NAESB file a workplan within 90 days.
OATT AND OASIS REQUIREMENTS
FERC also increases transparency of ATC
calculations by requiring each transmission
provider’s OATT to include its specific ATC
calculation methodology, and to post relevant
data and models on each transmission provider’s
OASIS.
OATT Attachment C- Minimum Requirements
• Specify NERC-approved ATC methodology (e.g.
contract path, network ATC, or network AFC)
• Provide Detailed Description of the Algorithm for
firm and non-firm ATC for scheduling (same day
and real-time), operating (day ahead and preschedule), and planning (beyond operating day).
• Provide Flow Diagram of ATC calculation
OATT Attachment C- Minimum Requirements
• Define each ATC component (i.e. TTC, ETC, TRM and
CBM) and provide detailed explanation of derivation for
both operating and planning horizons.
• Update 60 days after NERC/NAESB process to include
any revised/standards regarding ATC.
• May protect confidential or CEII material, but may not
merely refer to NERC/NAESB/WECC business practices.
• Requires annual CBM studies and narrative of CBM
practices.
ATC COMPONENTS – STANDARDIZATION
Total Transfer Capacity /Total Flowgate Capacity
(“TTC/TFC”)
Set by NERC Reliability Standards- any requests for
regional differences to be resolved through NERC
processes
ATC Components
Existing Transmission Commitments (“ETC”)
(1) Native Load (including Network)
(2) Grandfathered Transmission Agreements
(3) Appropriate Point to Point
(4) Rollover rights with Long-Term Firm
(5) Other uses identified by NERC
•
•
NOT FOR PLANNING OR CONTINGENCY RESERVES
(use TRM or CBM)
All Reserved, but Unused Capacity (nonscheduled) to be
released as Non-Firm ATC
ATC COMPONENTS
ETC (cont.)
• POR/POD - May not model a firm reservation with
a single generator source (point of receipt) and
multiple load sinks (points of delivery) if the
combined reservations exceed the generator’s
nameplate rating.
• Utilities to work through NERC to develop
requirements in MOD-001 regarding these
reservations; work through NAESB for business
practices to implement MOD-001.
ATC Components
Capacity Benefit Margin (“CBM”)
Despite concerns that Transmission Provider’s have
preferential access to interface capacity,
Commission decides that Load Serving Entities are
allowed to set aside transfer capability to maintain
their generation reliability requirement as CBM;
But…..the Transmission Provider must remove the
costs of CBM from Point to Point Rates (limited 205
due within 120 days, no cost of service data
required, no change to revenue)
ATC Components
Capacity Benefit Margin (“CBM”)
Implementation Issues…
• How does removing the costs of CBM work?
• Is there a CBM rate?
• Is CBM still path-specific?
• If so, how will it be pulled out of transmission rates?
ATC Components
CBM (cont.)
(1) Utilities/NERC/NAESB- to develop standards regarding
(a) how CBM value to be determined;
(b) how CBM should be allocated across paths, and
(c) how CBM to be used.
(2) Utilities/NERC- to specify standard for generation
deficiency conditions when LSE allowed to use CBM
(3) Transmission set aside as CBM to be zero in non-firm
ATC
(4) Utilities/NAESB- to develop OASIS mechanism to Audit
CBM usage
ATC Components
Transmission Reliability Margin (“TRM”)
• Utilities/NERC to modify standards in MOD-008
and MOD-009 using guidance below:
TP can set aside TRM for: (i) load forecast and
load distribution error, (ii) facility loading variation,
(iii) uncertain transmission system topology, (iv)
loop flow impact, (v) variations in generator
dispatch, (vi) automatic reserve sharing, (vii)
NERC identified uncertainties.
• Unused TRM is not required to be sold non-firm.
ATC Components
TRM (cont.)
• Utilities/NERC- to establish MAXIMUM TRM
• Each Transmission Provider to calculate, and
allocate on each path/flowgate the aggregate
TRM for all LSEs in the area
• Upon request by any Transmission Customer or
LSE within its Control Area, Transmission
Provider must make available all underlying data,
including load flow base cases, used to determine
TRM (subject to confidentiality if needed).
Posting on OASIS
ATC/TTC POSTINGS/DATA/STUDIES - FERC continues to
require ATC/TTC posting on OASIS including all data used to
calculate ATC and TTC for any constrained paths and any
system planning studies or specific network impact studies, and
a list of studies.
CBM-Requires posting of CBM data per path.
TRM - Requires posting of TRM data for paths for which ATC,
TTC, and CBM are already posted.
Posting on OASIS
CHANGES IN ATC/TTC -Requires posting of narrative
explanation of changes in ATC on constrained paths monthly or
annually if TTC changes more than 10% or if ATC remains
unchanged at a value of zero for more than 6 month.
•
Can each change in ATC be explained in narrative?
•
What if loop flows from two systems over cause the
change?
•
What are the liability implications of these statements?
OASIS
• Metrics - for processing TSRs
• Posting of Unused Transfer Capacity- Transfer
Capacity associated with reservations not
scheduled in real time are to be made available
as non-firm on OASIS
Posting on OASIS
•
Denials of Service - Extends from 3 to 5 years the data retention
requirement for denials of service and expands access to this
information.
•
Affiliate Requests - Requires posting the number of affiliate & nonaffiliate requests for transmission service that have been made and
how many have been rejected.
•
Forecast Data - Post all underlying load forecasts, including load
forecasts and actual daily peak load for both system-wide load
(including native load) and native load. (Orders NAESB to standardize.)
•
CEII - Requires standard disclosure process for CEII.
•
Network Resource designation requests/terminations – must be
requested over OASIS posted on OASIS for 90 days and available for
audit for 5 years.
Models, Assumptions, Input Data
•
•
•
•
Periodic Update of Models-Utilities/NERC must modify reliability
standards MOD-10 thru MOD-25 to incorporate period review of
models (e.g., load flow base cases with contingency, short circuit data,
transient and dynamic stability simulation data)
ATC Models Consistent with Planning Models – includes load
levels, gen. dispatch, maintenance schedules, etc.
Consistent Models of Base Generation Dispatch – Utilities/NERC
to develop standards regarding which generators to mode (Base
generation will model DNRs and others that have legal obligation to
run, uncommitted resources that can be delivered to the control area,
economically dispatched, as needed, for balancing.
Models of Transmission Reservations – Utilities and NERC to
develop reliability standards regarding reflecting approaches for
simulating reservations
Transmission Pricing
Rebecca Roback and Anne Dailey
Energy Imbalance
• Definition: Energy Imbalance Service is provided
when the transmission provider makes up for any
difference that occurs over a single hour between
the scheduled and actual delivery of energy to a
load located within its control area.
Energy Imbalance
• In Order No. 888, the Commission included
energy imbalance as one of the six ancillary
services that must be provided in the OATT.
• The Commission’s rationale – an energy deviation
band would be appropriate for load variations and
a price for exceeding that deviation band would
be appropriate for excessive load variations. It
also encourages good scheduling practices.
Energy Imbalance
• Application since Order No. 888 - Commission
only required inclusion of imbalance penalties in
an OATT for excessive load variations, but has
allowed in certain cases the inclusion of generator
imbalance provisions in an OATT or individual
interconnection agreement.
Energy Imbalance
Changes in Order No. 890:
• New Schedule 9, adding standardized charges for
generator imbalance
• Standardized three tiered pricing methodology for both
energy imbalance and generator imbalance charges
• Exemption from certain penalties for intermittent resources
Energy Imbalance
• Order No. 890 criteria for imbalance charges:
(1) The charges must be based on incremental cost
or some multiple thereof;
(2) The charges must provide an incentive for
accurate scheduling;
(3) The provisions must account for the special
circumstances of intermittent generators
Energy Imbalance
• Three-tiered approach to imbalance charges:
• Tier 1 – Imbalances of less than or equal to 1.5% of the
scheduled energy (or 2 MW, whichever is larger) are
netted monthly and settled at 100% of the incremental or
decremental cost – Only tier where netting is allowed
• Tier 2 – Imbalances between 1.5% and 7.5% of the
scheduled energy (or between 2-10 MW, whichever is
larger) are settled at 90% of the decremental cost for
overscheduling or 110% of the incremental cost for
underscheduling;
Energy Imbalance
• Tier 3 – Imbalances greater than 7.5% (or 10MW,
whichever is larger) are settled at 75% of the
decremental cost for overscheduling or 125% of
the incremental cost for underscheduling.
Energy Imbalance
• Incremental and Decremental Costs are defined
in the Schedules as the Transmission Provider’s
actual average hourly cost of the last 10 MW
dispatched to supply the Transmission Provider’s
native load, based on the replacement cost of
fuel, unit heat rates, start-up costs, incremental
operation and maintenance costs, and purchased
and interchange power costs and taxes, as
applicable.
Energy Imbalance
• Intermittent Resources get exemption from third tier
charges and will pay second tier charges for all deviations
greater than the larger of 1.5% or 2 MW.
• Exemption because intermittent resources cannot always
follow schedules accurately.
• Intermittent Resource defined as electric generator that is
not dispatchable and cannot store its fuel source and
therefore cannot respond to changes in system demand or
respond to transmission security constraints
Energy Imbalance
• Tiered approach applies to:
(1) Schedule 4 – Energy Imbalance Service; and
(2) Schedule 9 – Generator Imbalance Service
• A transmission customer can be assessed
penalties for one or the other, but not both
Energy Imbalance
• To the extent a transmission provider wants to
deviate from the Schedule 4 and Schedule 9
provisions, it may file an FPA Section 205 filing to
show its provisions are consistent with or superior
to the pro forma OATT.
• The Commission will not abrogate existing
generator imbalance agreements between
transmission providers and their customers
Energy Imbalance
• Intentional Deviations – FERC has not adopted
intentional schedule deviations, but believes the
three-tiered approach should be sufficient to
discourage intentional power dumps or leans on
other generation.
Energy Imbalance
• Inadvertent Energy, which is the difference between a
control area’s net actual interchange and the net
scheduled interchange, will be treated differently from
imbalances.
• Currently, under NAESB standards, inadvertent energy is
handled adequately through a return-in-kind approach.
The Commission notes that if such an approach is no
longer sufficient to maintain reliability, FERC may adopt
new standard.
Energy Imbalance
Treatment of revenues received above
incremental costs
• For revenues received above incremental costs,
transmission providers must develop and file in a
compliance filing mechanisms to credit penalty
revenues above incremental costs to all nonoffending transmission customers, including
affiliated transmission customers.
Transmission Credits for Network Customers
• Under Order No. 888, new transmission facilities
constructed by a network customer were eligible for
transmission credits if they were jointly planned with the
transmission provider.
• In Order No. 890, the link between joint planning and
credits has been severed. A network customer shall
receive credits if its facilities are integrated into the
operations of the transmission provider’s facilities.
– Only applies to facilities added after the effective date of the final
rule.
– Costs are not automatically recovered in the transmission
provider’s cost of service.
Capacity Reassignment
• The Commission determined that the capacity
reassignment market has failed to develop into a
robust secondary market. In order to facilitate
market development, the Commission removed
the price cap on capacity reassignment.
Capacity Reassignment
• FERC will monitor the capacity reassignment market to
ensure that it is developing properly. This includes:
– All sales or assignments of capacity are to be posted on OASIS
before the reassigned service commences;
– Assignees of transmission capacity must execute a service
agreement before the reassigned service commences;
– Transmission providers are required to provide quarterly reports
summarizing the service agreements; and
– FERC staff will monitor the reassignment data to identify any
problems, including market power.
Operational Penalties
• If a transmission customer uses transmission
service in excess of the capacity it has reserved,
or uses unreserved transmission service, it will
incur transmission use penalties.
– No class of customer is exempt from such penalties.
– Applies to transmission provider when taking service
under the OATT.
– Network customers incur penalties if they use network
service to support off system sales.
Operational Penalties
• Transmission Providers have discretion in setting penalty
rates, as long as the penalty rates are based on the period
of unreserved use. Rates must meet the following criteria:
– The penalty for a single hour of unreserved use is based on the
rate for daily firm point-to-point service.
– More than one penalty assessment for a given duration will lead to
an increase in the penalty assessment to the next given duration;
i.e., more than one daily penalty will lead to the incurrance of a
weekly penalty.
– The penalty rates must be stated explicitly in the OATT.
• Transmission Providers are required to distribute all
collected unreserved use penalties, and provide an annual
report detailing the penalties received and distributed.
Other Ancillary Services
• Reactive Supply and Voltage Control, Regulation
and Frequency Response, Energy Imbalance,
Spinning Reserves, Supplemental Reserves, and
Generator Imbalance may be provided by
generating units or non-generating resources.
Changes to Non-Rate Terms and
Conditions of Service
David Rubin
RECIPROCITY
•
The Commission retains the reciprocity language in the Order No. 888 pro
forma OATT, but updates it to include references to ISOs and RTOs. If an
ISO or RTO is the transmission provider, the reciprocity obligation is owed to
all members of that ISO or RTO.
•
Retain Order No. 888’s three alternative provisions for satisfying the
reciprocity condition, (1) a bilateral agreement, (2) waiver from the public
utility, or (3) file a safe harbor tariff with the Commission.
•
The safe harbor tariff, its provisions must be substantially conforming or
superior to the revised pro forma OATT in this Final Rule.
•
Will not adopt a generic rule to implement the new FPA section 211A.
•
Existing waivers of the obligation to file an OATT or otherwise offer open
access transmission service remain in place.
PLANNING REDISPATCH AND
CONDITIONAL FIRM SERVICE
Under the current OATT
-
Planning (or economic) Redispatch
-
Reliability Redispatch
Planning Redispatch
Provider must expand or upgrade system or, if it
is more economical, plan to redispatch its
resources to provide requested firm point-to-point
service, provided redispatch does not:
– Degrade or impair the reliability of service to native load
customers, network customers and other transmission
customers taking firm point-to-point service or
– Interfere with the transmission provider’s ability to meet
prior firm contractual commitments to others.
Reliability Redispatch
Required, when feasible, to relieve system constraints that
would otherwise cause curtailment of the network
customer or transmission provider loads.
To provide reliability redispatch, the transmission provider
redispatches all network resources and transmission
provider resources on a least-cost basis. The
transmission provider and network customers each pay a
load ratio share of these redispatch costs.
Order No. 890 Changes
Modifies the current planning redispatch
requirement.
Creates a new conditional firm service option.
Eligibility
Planning redispatch and conditional firm options
need only be made available to customers who
request firm point-to-point service of more than a
year in duration and the requested service is not
available.
Process
As part of the System Impact Study, customers
will have the choice of whether to request a study
of the planning redispatch option, the conditional
firm option or both.
Transmission providers may recover the costs of
studying these options through the system impact
study agreement.
Limitations
Providers do not have to offer planning redispatch or
conditional firm service if doing so:
(1) would degrade or impair the reliability of service to
native load customers, network customers, and other
customers taking firm point-to-point service or
(2) interfere with the transmission provider’s ability to
meet prior firm contractual commitments to others.
No excuse due to the need to manage multiple planning
redispatch or conditional curtailment obligations.
Planning Redispatch Studies
The System Impact Study must identify:
(1) the system constraints, identified by transmission facility or
flowgate, causing the need for the System Impact Study;
(2) additional direct assignment facilities or network upgrades required
to provide the requested service; and
(3) redispatch options, including a non-binding estimate of the
incremental costs of redispatch and the relevant congested
transmission facilities for which redispatch will be provided.
Transmission providers will not be required to estimate the number of
hours of redispatch that may be required to accommodate the
requested service as proposed in the NOPR.
Conditional Firm Studies
Study must specify: (1) the number of conditional
curtailment hours and (2) the specific system conditions
during which conditional curtailment may occur.
FERC does not propose a standardized method of
modeling the conditional curtailment hours and will allow
transmission providers to add a risk factor to their
calculation of annual curtailment hours to account for
forecasting risks.
FERC requires annual caps on the number of hours and
encourages the provider to offer monthly or seasonal
caps.
Service Agreement
•
Specify the relevant congested transmission facilities and whether the
transmission provider will provide planning redispatch, a mix of
planning redispatch and conditional firm, or conditional firm in order to
provide the point-to-point transmission service.
•
For conditional firm option, customers must choose either (1) specific
system condition(s) during which conditional curtailment may occur or
(2) annual number of conditional curtailment hours during which
conditional curtailment may occur.
•
Service agreements are considered to be “non-conforming
agreements” and must be filed.
Modifications to Service Agreement
•
If the service is for more than two years, but the customer does not
commit to a facilities study or the payment of network upgrade costs,
the transmission provider has a periodic right to reassess the service
every two years.
•
The transmission provider may not implement reassessments during
intervening periods nor may it reassess the conditions in order to
amend the service agreement in an intervening year should it forego
any biennial reassessment.
•
If the customer commits to paying the costs associated with upgrades,
the conditions or hours identified by the transmission provider shall
remain in effect until such time as the upgrades have been completed.
Redispatch, Conditional Firm and
RTOs and ISOs
FERC does not require RTOs and ISOs with real-time energy markets
to adopt the provisions for conditional firm point-to-point service.
RTOs and ISOs need not amend their tariffs if the Commission has
previously found that these tariffs were just and reasonable without the
inclusion of pro forma section 13.5 planning redispatch provisions.
However, RTOs and ISOs that already provide planning redispatch
pursuant to section 13.5 of the pro forma OATT must modify the
relevant provisions of their tariffs consistent with the directives in the
Final Rule, including the obligation to post monthly redispatch costs for
each transmission facility over which planning and reliability
redispatch are provided.
Redispatch from Third Party Resources
•
Transmission providers must identify: (1) generation resources located within
the control area, including its own resources, that can relieve the congested
transmission facility at issue, and (2) the impact of each identified resource on
the congested facilities, e.g., the generator shift factor.
•
In addition to identifying generation resources within the control area, the
provider must identify resources outside the control area that may be able to
relieve congested transmission facilities.
•
No obligation to solicit third party resources in order to provide planning
redispatch.
•
No requirement to use network customer resources or other third party
resources in the provision of planning redispatch.
•
Must work with customers to facilitate the use of third party generation, where
available. This entails review of redispatch plans.
OASIS REQUIREMENTS FOR REDISPATCH
•
Post monthly average cost of redispatch for each internal congested transmission
facility or interface over which it provides redispatch service using planning redispatch
or reliability redispatch under the pro forma OATT.
•
Also post a high and low redispatch cost for the month for these same constraints.
•
Calculate the monthly average cost in $/MWh for each congested transmission facility
by dividing monthly total redispatch costs (at the facility) by the total MWhs that would
otherwise be curtailed (at the facility) in the month absent the redispatch.
•
Must post regardless of whether customer is required to pay these exact costs.
•
Post at the end of each month - no later than when invoices are sent.
•
Direct transmission providers to work in conjunction with NAESB to develop this new
OASIS functionality and any necessary business practice standards.
OASIS Requirements for Redispatch
• FERC directs transmission providers to modify
their OASIS sites to allow for posting of third party
offers.
• Work with NAESB to develop this functionality
and need not implement this new OASIS
functionality and any related business practices
until NAESB develops appropriate standards.
Pricing of Planning Redispatch
•
No longer cap redispatch costs over the term of the service at the costs of expansion.
•
Customers will have the option of paying (1) the higher of (a) actual incremental costs of
redispatch or (b) the applicable embedded cost transmission rate on file with the
Commission or (2) a fixed rate for redispatch to be negotiated by the transmission
provider and customer and subject to a cap representing the total fixed and variable
costs of the resources expected to provide the service.
•
If the customer selects the higher of incremental cost or the embedded-cost rate, the
transmission provider shall calculate the costs of redispatch monthly and charge the
higher of redispatch or the embedded cost rate each month.
•
For purposes of calculating planning redispatch charges, incremental costs shall include
fuel or purchase power costs caused by ramping up generator(s) at the point of delivery
and ramping down generator(s) at the point of receipt.
•
Additionally, where applicable, transmission providers may specify in customer service
agreements other incremental costs for inclusion in the monthly actual incremental
costs, including opportunity costs.
Curtailment Priority for Conditional Firm Service
•
Conditional firm service, when the conditions are in operation, will
share the same priority as secondary network service. (Since the
customer is paying the long-term firm point-to-point rate, it receives
the highest non-firm curtailment priority during the conditional
curtailment hours).
•
Short-term firm service reserved prior to the reservation of conditional
firm service should maintain priority over conditional firm service in the
periods when conditional firm service is conditional.
•
During non-conditional periods, conditional firm service is subject to
pro rata curtailment consistent with curtailment of other long-term firm
service.
Hourly Firm Service
• Proposed in the NOPR
• Not included in the Final Rule
• Can be included in a 205 Filing as “equal or
superior to”
ROLLOVER RIGHTS
Section 2.2 of the current pro forma OATT allows existing customers
with contracts of one year or more, the right to continue to take
transmission service from the transmission provider when the
customer’s contract expires.
A transmission customer must give notice of whether it will exercise its
right of first refusal 60 days before the expiration of its service
agreement.
The transmission provider may restrict a right of first refusal based on
projections of load growth or pre-existing contracts that commence in
the future if the transmission provider knows at the time of the
execution of the original service agreement that ATC used to serve a
customer will be available for only a particular time period.
Changes to Rollover Rights Under Order No. 890
•
Adopts a five-year minimum contract term to be eligible for a rollover
right.
•
At the end of its initial five-year contract term, a transmission customer
must, within the one-year notice period agree to another five-year
contract term or match any longer-term competing request as to term
and rate.
•
No change to rollover restrictions based on reasonable forecasts of
native load growth or preexisting contracts that commence in the
future to be included in the initial transmission service agreement.
•
Rollover reform is to be effective at the time of acceptance by the
Commission of a transmission provider’s coordinated and regional
planning process.
PROCESSING OF REQUESTS FOR SERVICE CLUSTERING
• FERC does not require transmission providers to study
transmission requests in a cluster, unless the customers
involved request the cluster and the transmission provider
can reasonably accommodate the request.
• FERC does require each transmission provider to include
tariff language in its compliance filing that describes how it
will process a request to cluster and how it will structure
the transmission customers’ obligations when they have
joined a cluster.
PROCESSING OF SERVICE REQUESTS –
MULTIPLE SYSTEMS
FERC requires transmission providers working
through NAESB to develop business practice
standards related to coordination of requests
across multiple transmission systems and to allow
a transmission customer to rebid a counteroffer of
partial service so the transmission customer is
allowed to take the same quantity of service
across all linked transmission service requests.
RESERVATION PRIORITY
Gives priority to pre-confirmed non-firm point-to-point transmission service
requests and short-term firm point-to-point transmission service requests. A
pre-confirmed request for transmission service will not pre-empt an equal
duration request that has already been confirmed.
Longer duration requests for transmission service will continue to have priority
over shorter duration requests for transmission service, with pre-confirmation
serving as a tie-breaker for requests of equal duration.
Prohibit transmission customers from withdrawing pre-confirmed non-firm and
short-term firm point-to-point transmission service requests prior to when the
transmission customer is offered service or a system impact study.
Price will be a tie-breaker when the transmission provider is willing to discount
transmission service.
Window for Submission
•
FERC allows but not mandate that transmission providers can
propose a window within which all transmission service requests the
transmission provider receives will be deemed to have been submitted
simultaneously.
•
Such a policy is particularly appropriate in circumstances when a tariff
or business practice calls for requests to be submitted no earlier than
a specific deadline.
•
Requests submitted within the window should not be publicly available
until the window has closed.
•
Require transmission providers to propose a method for allocating
transmission capacity if sufficient capacity is not available to meet all
requests submitted within the specified time period.
DESIGNATION OF NETWORK RESOURCES –
QUALIFICATION AS A NETWORK RESOURCE
Supply provided under the new Conditional Firm
Transmission Service can qualify as a network
resource.
LD Contracts
•
FERC finds that a “make whole” LD provision, such as that found in the EEI
Firm LD Product and in the WSPP Schedule C agreement, can qualify for
network designation.
•
Any contract which contains an unacceptable LD provision, but otherwise
qualifies for designation as a network resource and has been properly
designated as a network resource prior to the effective date of this Final Rule,
will be grandfathered only until the earlier of: (1) the expiration of the current
term of the power purchase agreement or (2) an indefinite termination of the
power purchase agreement as a designated network resource pursuant to
section 30.3 of the pro forma OATT.
•
FERC notes that the WSPP Schedule C agreement allows interruptions “to
meet [the] Seller’s obligations to its customers” and thus, appears to allow
interruptions for reasons other than reliability. This needs to be revised.
Documentation of Network Resources
•
Transmission providers continue to be responsible for verifying that third-party
transmission arrangements for external network generation are firm.
•
Transmission providers are not responsible for verifying that the generating
units and power purchase agreements network customers designate as
network resources satisfy the requirements in sections 30.1 and 30.7 of the
pro forma OATT.
•
FERC adopts the requirement for both the transmission provider’s merchant
function and network customers to include a statement with each application
for network service or to designate a new network resource that attests: (1)
the customer owns or has committed to purchase the designated resource
and (2) the network resource comports with the requirements for designated
network resources.
•
The network customer should include this attestation in the customer’s
comment section of the request when it confirms the request on OASIS.
Undesignation of Network Resources
•
Network customers and the transmission provider’s merchant function may
only enter into a third-party power sale from a designated network resource if
the purchase agreement allows the seller to interrupt power sales in order to
serve network load.
•
Alternatively, they may submit a request to undesignate a resource.
•
FERC clarifies that requests to undesignate network resources that are
submitted concurrently with a request to redesignate those network resources
at a specific point in time shall be considered temporary terminations.
•
Direct transmission providers working through NAESB, to modify OASIS allow
network customers to provide all required information for such terminations.
Prior to implementation of this functionality, requests for temporary or
indefinite terminations of network resources may be submitted by telefax or
providing the information by telephone over the transmission provider’s time
recorded telephone line.
PROVISIONS NOT MODIFIED BY ORDER 890
•
•
•
•
Stranded Cost Recovery
Behind the Meter Generation
Force Majeure
Indemnification and Liability
OASIS Transparency, Performance Metrics and
Penalties
Amie Colby
OASIS Transparency
POST IT!
OASIS Performance Metrics
• Parameters
– Post performance metrics for each calendar quarter
within 15 days of the end of the quarter
– Begin tracking upon the effective date of the Final Rule
– Keep the performance metrics on OASIS site for three
years
– Calculate performance metrics separately for affiliates
and non-affiliates
OASIS Performance Metrics
• Quarterly Postings
– Processing time from initial service request to offer of a
system impact study agreement
– System impact study processing time
– Service requests withdrawn from system impact study
queue
– Process time from completed system impact study to
offer of facilities study
– Facilities study processing time
– Service requests withdrawn from the facilities study
queue
OASIS Performance Metrics
• Notification Filings
– Must notify Commission if process more than 20% of
non-affiliates studies outside of the 60 day due
diligence deadline for two consecutive quarters
– Once the notification filing occurs, the transmission
provider must post (1) the average of the employee
hours expended per completed system impact study;
(2) the average of the employee hours expended per
completed facilities study; (3) the number of employees
dedicated to processing studies
OASIS Performance Metrics
• Non-Compliance
– If the transmission provider cannot meet the prescribed
60-day due diligence deadlines, FERC will subject the
transmission provider to penalties if it continues to be
out of compliance for each of the two quarters following
the notification filing
– A transmission provider will be out of compliance if it
completes 10 percent or more of non-affiliates studies
outside the 60-day period
OASIS Performance Metrics
• Penalties
– The penalty for failure to comply with the performance
metrics is $500 a day
– The penalty will be assessed on a quarterly basis,
starting with the quarter following the notification filing
and continuing until the transmision provider completes
at least 90 percent of all studies within 60 days after the
study agreement has been executed
Enforcement
• Strong Audit Program
– Compliance officer
– No “safe harbors”
– Attorney-client privilege
• Market-Based Rates
– FERC will revoke an entity’s market-based rate
authority in response to an OATT violation only upon a
finding of specific factual nexus between the violation
and the entity’s market-based rate authority
• It is FERC’s burden to show the factual nexus