PIRP Initiative. Conference Call July 12, Keith Johnson Dave Hawkins Jim Blatchford. Presented by 7/10/06 1

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1 PIRP Initiative Conference Call July 12, 2006 Presented by Keith Johnson Dave Hawkins Jim Blatchford 7/10/06 1

2 Objective of Call Report on status of efforts to possibly improve the PIRP forecast, and associated schedule Discuss exports of PIRP energy, possible need for amendment to CAISO Tariff to restrict and/or establish conditions on exports of PIRP energy, and schedule for stakeholder input 7/10/06 2

3 Agenda Introductions and purpose of call Report on progress to improve forecast accuracy Discuss issues with exports of PIRP energy Next steps 7/10/06 3

4 Forecast Accuracy Activities CAISO in process of analyzing: How adjustments during the month (applying a bias) helps or hurts the PIRP forecast: Doing a back cast with actual data from 2005, including summer data (what would have happened without the bias?) Analyzing costs with and without the bias, including costs to PIRP participants ( PIRs ) and costs shifted to non-pirs Studying at both the geographic area and the facility level Correlating the forecast accuracy to the power curve Breaking down in detail the observed 11% error rate by (1) no data, (2) locked data, and (3) bad data 7/10/06 4

5 Forecast Basics PIRs have requested data on the performance of the forecast for their individual facility PIRs would like ability for bias to be selectively turned off by facility, if requested CAISO to be prepared to send out monthly reports before bias would be turned off CAISO needs to know if PIRs want to have bias turned off for some period of time (will poll each) 7/10/06 5

6 Forecast Study Plan Look at individual PIR facilities Forecast without bias Forecast with bias Data received at AWS TrueWind Data metered at CAISO Hours with no data Delta between with and without bias Use data from Jan 2005 through June /10/06 6

7 Forecast Study Plan (continued) Analyze forecast accuracy over power curve Hold individual meetings with PIRs to go through results of analysis Are PIRs willing to have CAISO share their data with others (it could be scaled)? Will provide periodic cost reports by PIRP Charge Type 7/10/06 7

8 Data Quality CAISO has asked PIRs, What additional data could CAISO post that would help PIRs improve their data quality? What do you want? CAISO question: What actions do the PIRs plan to take since the June 27 conference call to improve the quality of their data? CAISO will look at best practices from among the PIRs and share it with the PIRs Develop an architecture questionnaire 7/10/06 8

9 Schedule for Forecast Topic July 20 ISO posts information on the PIRP Initiative web site July 26 PIRP conference call - forecast accuracy will be discussed 7/10/06 9

10 Export of PIRP Energy Issue CAISO Tariff does not preclude PIRP energy from being exported out of CAISO control area PIRP energy is subsidized, with costs paid by Scheduling Coordinators in CAISO control area with Net Negative Deviations A Scheduling Coordinator has requested that CAISO take action to eliminate this practice 7/10/06 10

11 CAISO Response to Export Issue In response to Scheduling Coordinator s request, CAISO has stated that: Subsidies to exporters are an unintended consequence in the design of PIRP CAISO will work with stakeholders to develop modifications to PIRP that address this subsidy issue and minimize overall cost of subsidies 7/10/06 11

12 Threshold Considerations Need to reach consensus on intent of PIRP Some argue that PIRP was developed with intent that PIRP energy output would be used to serve load in CAISO control area This argument is supported by method chosen to allocate costs of break given to PIRs on energy (spread through Charge Type 721), which is Net Negative Deviations in CAISO control area 7/10/06 12

13 Additional Considerations PIRP was established to provide benefits to facilitate the development of generation However, PIRP energy output creates benefits to load serving entities in form of credit toward meeting a Renewable Portfolio Standard or similar requirement Current cost allocation billing determinant for Charge Type 721 may not be optimal cost-tocausation mechanism 7/10/06 13

14 White Paper Preliminary Options Do not allow, going forward, exports of PIRP energy, and, to be in PIRP, PIR must show it has contract to serve load in CAISO control area Could also change billing determinant for Charge Type 721 to be load serving entities that benefit from these contracts Allow exports of PIRP energy, require that all exports be reported, and apply a control area service charge 7/10/06 14

15 Preliminary Options (continued) Change current allocation of Charge Type 721 to different billing determinant: All Scheduling Coordinators with loads & exports Other? Establish an administrative charge that would be assessed against all in-state load to offset costs Allow PIRP energy to be exported, but PIR must dynamically schedule or use pseudo-tie arrangement 7/10/06 15

16 Stakeholder Input CAISO interested in stakeholders views and ideas on other options to consider Additional options and/or written comments from stakeholders on preliminary white paper options requested by July 18 CAISO will explicitly poll each stakeholder to understand their position on exports (both PIRs and non-pirs) 7/10/06 16

17 Board Briefings CAISO will brief Board of Governors on Aug 3 on status of effort and preliminary positions of stakeholders CAISO will hold additional conference calls with stakeholders on July 26 and August 9 to further discuss this topic CAISO will seek a decision from Board of Governors on Sept 7 7/10/06 17

18 Schedule for Export Topic July 12 July 14 July 20 July 26 Aug 2 Aug 3 Aug 9 Aug 15 Sep 7 Sep 30 PIRP conference call (exports) Written stakeholders position on exports due ISO posts materials for July 26 PIRP call PIRP conference call (forecast and exports) ISO posts materials for Aug 9 PIRP call ISO Board of Governors meeting (briefing) PIRP conference call (exports) Final written stakeholders position on exports due ISO Board of Governors meeting (decision) File ISO Tariff amendment if needed 7/10/06 18

19 Next Steps Do these conference calls work for you (do we need a meeting at CAISO?) Preliminary stakeholder position on exports due July 14 Additional options and/or written comments on preliminary white paper options requested by July 18 Next PIRP conference call on July 26, 2006 from 10:00 a.m. 12:00 p.m. PST, focused on both the forecast and export topics Send input to pirp@caiso.com 7/10/06 19

PIRP: Participating Intermittent Resource Program

PIRP: Participating Intermittent Resource Program Topics of Discussion: Brief Summary of the PIRP Program Process Flow Terms of Participation ISO Forecasting Performance Review Corrective Measures Expected