Independent System Operator Integration June 24, 2016 1 - - PowerPoint PPT Presentation

PacifiCorp Stakeholder Meeting on Regional Independent System Operator Integration

June 24, 2016

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Housekeeping matters

 Welcome  Logistics and safety moment  Introductions  Agenda

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Agenda

Time Subject Presenter 10:00 – 10:10 Introduction/Safety/Overview Sarah Edmonds 10:10 – 10:20 Regional ISO Process and SB350 Studies Phil Pettingill 10:20 – 10:30 PacifiCorp Contracts and Framework for the day Sarah Edmonds 10:30 – 11:00 Terminology and Agreements PacifiCorp will continue to administer Deb Le Vine 11:00 – 11:30 Agreements transitioning to ISO tariff service Deb Le Vine 11:30 – 12:30 Lunch Break 12:30 – 1:30 Existing transmission contracts under ISO’s tariff Deb Le Vine 1:45 – 2:00 Break 2:00 – 2:45 Examples Deb Le Vine 2:45 – 3:00 Wrap-up and Next Steps Sarah Edmonds

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Regional ISO Stakeholder Process

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Regional ISO drivers and overview

 PacifiCorp and the California ISO entered into a Memorandum

• f Understanding in April 2015 to explore potential benefits and

costs of creating a regional ISO (“R-ISO”).

 Regional market integration efforts are aimed at:

• Reducing customer costs
• Enhancing coordination and reliability of western electric

networks

• Facilitating renewable energy resource integration
• Reducing emissions
• Enhancing regional planning and expansion

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2015 Gross benefits study overview

 The October 2015 study of integrating PacifiCorp and ISO systems results in

significant benefits for both PacifiCorp and ISO customers over 20-year period of 2020-2039:

Savings in 2015$ Billions and incremental to EIM benefits

 The study quantifies benefits in four areas:

• 1. More efficient dispatch and commitment
• 2. Lower peak capacity savings
• 3. More efficient oversupply management
• 4. Renewable procurement savings

Area Low High PacifiCorp $1.6B $2.3B ISO $1.8B $6.8B Combined Benefit: $3.4B $9.1B

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Regional ISO next steps

 Senate Bill 350 requires the California ISO to conduct studies to determine if

becoming a regional entity is a benefit to California ratepayers.

 The California ISO will conduct stakeholder initiatives over the next two years

to determine policy changes and cost allocation for integration

• Tariff changes developed through stakeholder processes and will require ISO Board

and FERC approval

 PacifiCorp will seek regulatory approvals from all six states where its serves

retail customers, as well as from FERC

 Full integration by combining the balancing authority areas into Regional ISO is

not targeted to occur prior to 2019

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Regional market analysis for California Ratepayers

Annual California Ratepayer Benefits in 2020 & 2030

ISO will conduct studies of the impacts of a regional market, including:

• Overall benefits to California ratepayers
• Emissions of greenhouse gases and other

air pollutants

• Creation or retention of jobs and other

benefits to the California economyy

• Environmental impacts in California and

elsewhere

• Impacts in disadvantaged communities
• Reliability and integration of

renewable energy resources 6

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ISO stakeholder initiatives timeline

• See Stakeholder Initiative Catalog for 2016 and Roadmap
• See also ISO Stakeholder Processes

Initiative Planned start to process

Regional Transmission Access Charge Structure In progress Resource Adequacy Rules In progress Metering Rules Update In progress Regional Integration - CA GHG Compliance August 2016 Grid Management Charge Transitional Principles September 2016

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PacifiCorp contracts

• PacifiCorp Contract Share - Affiliate vs. 3rd Party
• 89% - Total 3rd Party Contracts
• 11% - Total PacifiCorp Affiliate Contracts
• PacifiCorp Affiliate Contracts
• 98% - Service Agreements (SA)
• 2% - Rate Schedules (RS)
• PacifiCorp 3rd Party Contracts
• 69% - OATT Contracts
• 31% - Non OATT Contracts

Contract data based on the PacifiCorp Q4 2015 EQR

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PacifiCorp’s transmission system

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Framework for the day – three agreement categories

 Agreements PacifiCorp will continue to administer

• Construction, engineering, O&M, agreements
• Power purchase and energy exchange agreements

 Transitioning to ISO Service

• OATT agreements with internal and external resources/load
• Generator interconnection agreements
• Qualifying facility agreements

 Existing transmission contracts

• Transmission service legacy agreements with internal and external resources/load
• Operations agreements
• Emergency service
• Wheeling and transfers
• Interconnections
• Joint ownership

3 Contract Paths Forward For R-ISO

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Today’s customer contracts discussion overview

 This is a general discussion and specific discussions with each

customer will need to take place later in the integration process

 Review existing contracts rights - what are they? and how does ISO

treat them?

 Translating existing contracts into instructions – PacifiCorp has some

different types of agreement versus the California utilities, but we believe all agreements can be transitioned and we just need to work through the details

 Examples

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Existing transmission contract terminology

Encumbrance - A legal restriction or covenant binding on a Participating TO that affects the operation of any transmission lines or associated facilities and which the ISO needs to take into account in exercising Operational Control over such transmission lines or associated facilities if the Participating TO is not to risk incurring significant liability. Entitlement - The right of a Participating TO obtained through contract or other means to use another entity’s transmission facilities for the transmission of Energy. Existing Contracts (ETC)- The contracts which grant transmission service rights (including any contracts entered into pursuant to such contracts) as may be amended in accordance with their terms or by agreement between the parties thereto from time to time. Existing Rights - The transmission service rights and obligations of non-Participating TOs under Existing Contracts, including all terms, conditions, and rates of the Existing Contracts, as they may change from time to time under the terms of the Existing Contracts. Non-Participating TO – A transmission owner in the ISO balancing area that does not turn over operational control of their transmission to the ISO.

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Non-Participating Transmission Owner



PacifiCorp and the ISO anticipate that some transmission owners within the expanded balancing area will not become a Participating Transmission Owner



The Non-PTO will continue to operate their transmission system as they do today, however the operation will need to be coordinated with the balancing area operator



Transaction at the interface of the Non-PTO’s service area would be in accordance with the ISO market absent existing contract rights

Non-PTO Service Area

Transmission Interconnection Transmission Interconnection

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ISO tariff requirements for existing contracts

 Existing Contracts will continue to be honored for the duration of those

contracts

• scheduling, curtailment, assignment and other aspects of transmission system

usage

 PacifiCorp is required to attempt to negotiate changes to Existing Contracts to

align the contract’s scheduling and operating provisions with the ISO’s scheduling and operational procedures, rules and protocols, and minimize costs of administering the contract while preserving their financial rights and

• bligations

 PacifiCorp is required to ensure that Existing Contracts do not pay twice for

transmission services

• All revenue received from Existing Contracts is a credit to the ISO transmission

access charge

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ISO tariff requirements for existing contracts (continued)



PacifiCorp shall provide valid ETC Self-Schedules for holders of Existing Rights, or a holder of Existing Rights may obtain their own Scheduling Coordinator



Non-Participating TO right to use and ownership of its facilities shall remain unchanged



ETC Self-Schedules need to meet the scheduling and operational requirements to received special payment provisions



The ISO will have no role in interpreting Existing Contracts. Disputes are resolved in accordance with the existing contract



Existing Contracts will terminate on the first available date in accordance with the agreement and transition to ISO service

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PAC/ISO OATT contract correlation

PacifiCorp ISO Provided OATT Service Network / Point-to-Point Scheduling Coordinator Agreement (SCA)

• All service is firm / network

Provided Non-OATT Service (e.g., TSOA) Encumbrance until agreement terminated Taken OATT Service in another BA Entitlement – provides scheduling rights for ISO market transactions Taken Non-OATT Service in another BA – includes resource specific lines (i.e. Colstrip) and stranded load service needed from other BA Entitlement – provides scheduling rights for ISO market transactions

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PAC/ISO contract correlation (continued)

PacifiCorp ISO Interconnection agreement - BA Adjacent Balancing Authority Operating Agreement (ABAOA) – PTO transmission interconnection agreements continue Interconnection agreement – Generator Generator Interconnection Agreement (LGIA or SGIA) – PTO does not have another agreement Interconnection agreement – load NA – PTO responsibility Exchange agreement NA Boundary Meter Meter Service Agreement for ISO Metered Entity (MSAISOME) Construction; O&M NA Remedial Action Scheme Operating procedure Emergency service – including stranded load PAC serves ABAOA

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Agreements PacifiCorp will continue to administer



Non-transmission service agreements



Examples of typical non-transmission service agreements

• Construction agreements
• Engineering services agreements
• Operation and maintenance agreements that do not include transmission service
• Energy exchange agreements that do not provide specific transmission service
• Operating agreements that deliver power and energy to customers without providing

specific transmission service

• Interconnection agreements for existing generators until the generator is modified (as

discussed further in Section 5.2 of the paper)

• Asset exchange agreements that do not provide transmission service
• Tie point metering agreements
• Load interconnection agreements
• Agreements providing for the installation of or modifications to equipment (SCADA,

RTUs, relays, etc.)

• It should be noted that the ISO considers the interconnection of battery storage to be a

negative generator and not subject to the firm load interconnection process of its PTOs

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Agreements transitioning to ISO Tariff Service

 OATT transmission service agreements executed on or after July 9, 1996

• Firm, non-firm, network and point-to-point will transition to ISO OATT service

upon commencement of integration

 New generator interconnection agreements

• Existing generator interconnection agreements will remain two party agreement

(PacifiCorp and the developer) until an amendment is needed to the agreement

• Once an amendment is needed, including extension of term, the LGIA or SGIA

will be converted to a three-party agreement that includes the ISO

• After PacifiCorp integration, all new LGIA or SGIAs will be three party

agreements

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Agreements transitioning to ISO Tariff Service (continued)



New qualifying facility (QF) agreements for interconnection

• Existing QF agreements will remain two party agreement (PacifiCorp and the off taker)

until an amendment is needed to the agreement

• Once an amendment is need, including extension of term,

– The QF will execute a three party LGIA or SGIA that includes the ISO – The QF will execute a separate power purchase agreement for the energy sale

• After PacifiCorp integration, all new QF agreements will be LGIA or SGIAs and will be

three party agreements

• For market purposes, behind-the-meter load and QF projects are set-up as Load Serving

Generators

– SC would schedule gross generation and load so that if the generator trips the system is

aware of the load that it may need to carry

– In after-the-fact settlements, ISO will adjust the gross award based upon the non-market

resource and calculate the expected energy or “Net” value.

– ISO charges are assessed on the Net value – Ancillary services can be self-provided or procured from the market

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OATT Transmission Service

 The ISO’s “OATT” transmission service is governed by terms and conditions

• f the ISO tariff

 A Scheduling Coordinator provides bids or self-schedules in the day-ahead

market

• Awards include transmission service within the ISO balancing area

 Bids can be for:

• Energy from a generator or import
• Energy to a load or export
• Ancillary Services – regulation up, regulation down, spin, non-spin

 Self-schedules are balanced – generation/import with load/export

• Ancillary services can be procured in the market or self-provided

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Generator interconnection process



ISO queue open April 1 – 30, annually



Study is in two phases Phase I and II (~ 2 years)



Deliverability Assessment

• n-peak deliverability assessment for projects requesting full or partial capacity

deliverability status

• ff-peak deliverability assessment for information Only



Reliability Assessment Scope

• power flow study (thermal loading)
• voltage assessment (steady state and transient) and reactive power deficiency assessment
• post transient stability study
• transient stability study
• short circuit duty study



Study results include

• project impacts to the transmission systems
• facilities required to interconnect the project
• upgrades required to mitigate adverse impacts and deliver power to the grid
• estimated costs and construction time for IFs and NUs
• potential affected system impacts and coordination

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Generator interconnection process (continued)

 Generator interconnection agreement

• Tender - no later than the sum of (i) 180 CD plus (ii) estimated time to

construct Interconnection Facilities and Network Upgrades by this project and any other dependent project prior to the In-Service Date

• Negotiation – 120 days
• Execution

 Queue Management

• Reports – quarterly, then monthly 12 months prior to sync
• Modifications
• Suspensions
• Contract issues
• Testing options
• Limited operation studies

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Legacy contracts become Existing Transmission Contracts

 Legacy Transmission service agreements (non-OATT)  Operating agreements that include transmission service  Storage and interchange agreements that include transmission service  Wheeling and transfer agreements that provide transmission service  Legacy transmission service and operating agreements  Emergency service agreements  Joint ownership transmission and operating agreements

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Legacy Transmission Service Agreements



Customer has a legacy agreement with PacifiCorp for transmission service (network

• r point-to-point)



Customer given Contract Reference Number (CRN) to ensure R-ISO’s transmission access charge and congestion charges do not accrue to the customer.

• Customer will continue to pay PacifiCorp for the transmission service provided



Customer will need a Scheduling Coordinator (SC) to perform the R-ISO market functions, or the customer can become a SC



The SC can bid or self-schedule imports, generation, exports, load or ancillary services

• Award of a bid or schedule includes transmission service for the transaction
• Transmission access charges and congestions are not charged
• SC would pay ISO’s administrative fee – Grid Management Charge (GMC)



Once the legacy agreement is terminated, then the CRN is end-dated and the customer would schedule and bid similar to other market participants

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Operating Agreements



Not joint ownership or joint operating agreements



Customer has a legacy operating agreement with PacifiCorp to deliver electric power

• r energy using PacifiCorp’s transmission system (network or point-to-point)



Customer given Contract Reference Number (CRN) to ensure R-ISO’s transmission access charge and congestion charges do not accrue to the customer

• Customer will continue to pay PacifiCorp for the transmission service provided



Customer will need a Scheduling Coordinator (SC) to perform the R-ISO market functions, or the customer can become a SC



The SC can bid or self-schedule imports, generation, exports, load or ancillary services

• Award of a bid or schedule includes transmission service for the transaction
• Transmission access charges and congestions are not charged
• SC would pay ISO’s administrative fee – Grid Management Charge (GMC)

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Wheeling and Transfer Agreements



Customer has a legacy wheeling agreement with PacifiCorp that allows the customer to wheel through PacifiCorp’s balancing area and serves the customer’s load outside the PacifiCorp balancing area or customer has legacy transfer agreement that provides for the interconnection and use of facilities by PacifiCorp or others for delivery of electric power or energy to their customers



Customer given Contract Reference Number (CRN) to ensure R-ISO’s transmission access charge and congestion charges do not accrue to the customer.

• Customer will continue to pay PacifiCorp for the transmission service provided



Customer will need a Scheduling Coordinator (SC) to perform the R-ISO market functions, or the customer can become a SC



The SC can bid or self-schedule imports, generation, exports, load or ancillary services

• Award of a bid or schedule includes transmission service for the transaction
• Transmission access charges and congestions are not charged
• SC would pay ISO’s administrative fee – Grid Management Charge (GMC)

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Emergency Service Agreements



Customer has a legacy agreement with PacifiCorp that provides emergency service to serve customer load when such load becomes stranded due to an outage of the customer’s transmission line



Transmission service is typically point-to-point



If the transmission line outage is a forced outage, then the market will automatically serve the load as an uninstructed deviation based on the LMP for the scheduling point



If the transmission line outage is a planned outage, then the customers SC can bid or self-schedule in the market to serve the load.



Customer will need a Scheduling Coordinator (SC) to perform the R-ISO market functions, or the customer can become a SC



For planned outages, the SC can bid or self-schedule imports, generation, exports, load or ancillary services

• Award of a bid or schedule includes transmission service for the transaction
• Transmission access charges and congestions charges will be accrued
• SC would pay ISO’s administrative fee – Grid Management Charge (GMC)



Adjacent balancing authority areas will receive assistance through the Adjacent Balancing Authority Operating Agreement consistent with EOP-001-0

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Joint Ownership



Customer has executed a joint ownership agreement with PacifiCorp for transmission service

• Entitlement – if the joint ownership line is in another BA
• Encumbrance – if the joint ownership line is in PacifiCorp
• Entitlement and Encumbrance – if the joint ownership line allows the partners to use each
• thers transmission rights



Customer given Contract Reference Number (CRN) to ensure R-ISO’s transmission access charge and congestion charges do not accrue to the customer

• Customer will continue to pay operating entity for the transmission service provided



Customer will need a Scheduling Coordinator (SC) to perform the R-ISO market functions, or the customer can become a SC



The SC can bid or self-schedule imports, or exports,

• Award of a bid or schedule includes transmission service for the transaction
• Transmission access charges and congestions are not charged
• SC would pay ISO’s administrative fee – Grid Management Charge (GMC)



Ancillary services are assumed to be the host BA responsibility

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Transmission right and transmission curtailment (TRTC)

PAC and the existing right holder will develop TRTC instructions

• Existing scheduling and curtailment priorities
• Minimal burden to PTO, Existing Right holder and R-ISO operational polices and

procedures

• To the extent possible, imposes no additional financial burden on PTO or Existing Right

holder

• Capacity not used by Existing Right holder will be made available to market participants
• ISO does not interpret or underwrite the economics of the Existing Contract
• Any disputes with TRTC instructions will be resolved using the dispute resolution

provisions of the Existing Contract

• TRTC content includes

– contract reference numbers – timing of the instructions – day-ahead, hour-ahead, etc. – point(s) of receipt / Point(s) of delivery – capacity – curtailment implementation – pro rata, priority, etc. – forecasted annual usage patterns – self-provide ancillary services – other special considerations

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Additional ISO Participation Agreements



Load/Distribution Company Agreements

• A Utility Distribution Company (UDC) is an entity that owns a Distribution System for the

delivery of Energy to and from the ISO Controlled Grid, and that provides regulated retail electric service to Eligible Customers, as well as regulated procurement service to those End-Use Customers who are not yet eligible for direct access, or who choose not to arrange services through another retailer

• The UDC customer will need to execute a Utility Distribution Company Operating

Agreement to allow the R-ISO to understand the customer’s system and provide a mechanism for operational coordination



Metered Subsystem (MSS) Agreements

• A MSS is a geographically contiguous system located within a single zone which has been
• perating as an electric utility for a number of years prior to March 31, 1998 as a municipal

utility, water district, irrigation district, state agency or federal power marketing authority subsumed within the ISO Balancing Authority Area

• Specific metering requirements
• Allows the utility to continue control its vertically integrated utility

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ISO Market Participation Agreements

 Scheduling Coordinator  Participating Generator  Participating Load  Meter Service  Pseudo-Tie Participating Generator  Dynamic Scheduling  Distributed Energy Resource Provider  Demand Response Provider

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Example 1: Wheel-through 200 MW BAA1 to BAA2 Sample Bidding: SC – BAA1 Import 200 MW SC – BAA2 Export 200 MW CRN682 200 MW Receives scheduling priority Settlement: Charged GMC and losses Not charged transmission access charge or congestion

BAA1 BAA2

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Example 2: Serving Load with an Import 50 MW BAA4 to Load3 Sample Bidding: SC – BAA4 Import 50 MW SC – Load3 Load 50 MW CRN725 50 MW Receives scheduling priority Settlement: Charged GMC and losses Not charged transmission access charge or congestion

BAA4

Load3

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Example 3: Serving Load with Multiple Imports 200 MW Load5 served from multiple BAs Sample Bidding: SC – BAA6 Import 100 MW SC – BAA7 Import 75 MW SC – BAA8 Import 25 MW SC – Load5 Load 200 MW ACRN10 200 MW Receives scheduling priority Settlement: Charged GMC and losses Not charged transmission access charge or congestion

BAA6

Load5

BAA7 BAA8

Aggregated Contract Reference Number (ACRN) allows transactions from multiple scheduling points

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Example 4: Internal generation serving internal load

Gen Load

25 MW Internal Generation to Load in Day-Ahead, but unit trips in real-time and PacifiCorp responsible to serve Load Sample Day-Ahead Bidding: SC – Gen 25 MW SC – Load 25 MW CRN125 25 MW Receives scheduling priority Settlement Day-Ahead: Charged GMC and losses Not charged transmission access charge

• r congestion

Real-time Adjustment: Generator is charged what it was paid and pays the uninstructed real-time price

R-ISO

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Next steps



Comments on paper or additional examples requested are due July 22, 2016

• Comments on the paper, please provide a redline or reference the section you have a

question on

• Request for additional examples, please provide information similar to the detail included in

the paper and presentations

• Send comments to Christine.Kirsten@pacificorp.com



ISO needs to receive approval from the California legislature and Governor to become a regional ISO



PacifiCorp needs to file with each of the State Commissions for the ability to transfer control of their assets to join a regional ISO



PacifiCorp and ISO will then work with each customer to address their specific contract terms and conditions and develop the TRTCs

• Estimate this will take approximately 1 year to develop with individual customers



Current target is 2019/2020 implementation