Presentation Materials

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1 Att K Customer Meeting Formula Rate / FERC Activity EIM / SCED Joint and Network OC Presentation Materials click on westtrans.net click on Puget Sound Energy symbol GENERAL INFORMATION June 2015 NOC and Attach K Mtg 2 1

2 Afternoon Agenda Transmission Planning FERC Activity and Updates Formula Rate Annual Update EIM / SCED Update Joint Operating Committee: Interconnection Customers Network Operating Committee Update Q&A and Stakeholder Input 3 PSE Attachment K Customer Meeting Transmission Planning Pete Jones, Consulting Engineer Transmission Policy and Contracts 2

3 Agenda Attachment K Review Economic Studies Process PSE Planning Process and Assumptions ColumbiaGrid (Regional Planning) PSE Significant Projects Update Order 1000 Update 5 Attachment K: Transmission Planning Process Attachment K required as part of pro forma OATT - outlines PSE s local and regional transmission planning process Annual update of PSE s local and regional planning 2 Annual Meetings plus posted PSE Plan 6 3

4 Economic Studies Process Intended to address generation integration and transmission congestion Requests for studies should be submitted to Transmission Provider: All requests/results will be posted on OASIS Requests received by Oct. 31 st will be responded to in the following calendar year Will be evaluated by public meeting within 3 months of receipt for input and investigation Non-local requests will be forwarded to ColumbiaGrid or WECC Transmission Expansion Planning Policy Committee for consideration 7 PSE Transmission Plan Development Today s Meeting 8 4

5 Planning Assumptions Base Cases Northwest Loads Utilize peak load forecasts for 10 years out, updated annually Load forecasts for both winter and summer seasons Rely on input from customers for accurate forecasts Resources Model existing generating resources and projects with interconnection agreements Resources or demand response programs provided in annual customer data submittal Cases assembled through the WECC Annual Study Program through ColumbiaGrid for 55 kv and above facilities. 9 PSE Load Growth 2014/15 Winter Peak: F All-time Winter Peak: F in 2008/ Summer Peak: F All-time Summer Peak: F in 2009 MW PSE Historical Peak Load BA Winter Peak 5500 BA Summer Peak Year PSE s Electric Customer Count: More than 1 million 10 5

6 PSE 2014/15 Planning Considerations Near and Far-term Heavy Winter, 2016 Heavy Summer, 2017 Light Spring, Heavy Winter, 2020 Heavy Summer, Heavy Winter, 2024 Heavy Summer Interconnection and Transmission Service Requests Generation dispatch variations All Puget Sound area generation ON All Puget Sound area generation OFF Regional flowgates/cutplanes Northern Intertie import and export flow conditions NERC-credible Outage Scenarios 11 ColumbiaGrid Areas of Focus for PSE Planning Expansion Functional Agreement ( PEFA ) Biennial Planning Area screening studies to address load growth and transmission path ratings Annual System Assessment Single Utility Regional Planning Approach Incorporated as Part III to PSE s Att K For upcoming ColumbiaGrid Meetings, check out the calendar on their website at

7 Current PSE Planning Activities Planning Complete PSE Specific Areas Transformers North Puget Sound Area Central Puget Sound Area South Puget Sound Area Other Significant Projects 13 North Puget Sound Area Proposed Transmission Project Whatcom County 2 nd Transformer Service requests on PSE and BPA systems Changing generation and industrial loads Operational constraints (N-1) Need for 230/115 kv transformer capacity June 25, increase

8 Central Puget Sound Area Proposed Transmission Project Eastside 230 kv Line And Eastside 230/115 kv Transformer Need for 230/115 kv transformer capacity for growing load service and operational needs South Puget Sound Area Proposed Transmission Project Alderton Transformer Local load growth Need for 230/115 kv transformer capacity 16 8

9 Additional Proposed Significant Single System Transmission Projects Bellingham 115 kv Substation Rebuild Sedro Woolley Bellingham #4 115 kv Line Reconductor Talbot 230 kv Bus Improvements White River 115 kv 2 nd Bus Section Breaker Woodland-St. 17 Clair 115 kv Order 1000 Update Targets transmission planning and cost allocation requirements Regional compliance coordinated through ColumbiaGrid in two phases intraregional and interregional planning Interregional efforts completed on common planning and cost allocation tariff language among four planning regions ColumbiaGrid, Cal ISO, Northern Tier, WestConnect Existing ColumbiaGrid PEFA to work in conjunction with Order 1000 FA as one overall planning process 18 9

10 Order 1000 Update (cont.) ColumbiaGrid submitted Restated Functional Agreement Nov. 17, 2014 FERC has accepted interregional planning process (6/1/2015) FERC asked for changes on handful of points for intraregional planning process ColumbiaGrid made further compliance filing on June 15, 2015 signed by PSE, Avista, MATL Second Amended and Restated Order 1000 Functional Agreement (CG) PSE - Attachment K filing w/order 1000 changes 19 Questions? Contacts George Marshall, Manager Trans Policy and Contracts george.marshall@pse.com Pete Jones, Engineer Trans Policy and Contracts peter.jones@pse.com Kebede Jimma, Lead Engineer Trans Planning kebede.jimma@pse.com Don Yuen, Electric Dist Planning Supervisor don.yuen@pse.com 20 10

11 FERC Update George Marshall, Manager Nate Moore, Regulatory Compliance Consultant Transmission Policy and Contracts FERC Update PSE FERC Activity Tariff Revisions PSE FERC Audit FERC Commissioners 22 11

12 Tariff Revisions FERC Order 1000 Issued July 31, 2011 Relates to intra- and interregional planning FERC Order 676-H Issued September 2014 Improve and standardize certain utility business practices and OASIS procedures. PSE made compliance filing in December, 2014 Compliance obligation deadline was May 15, 2015 Energy Imbalance Market driven changes 23 PSE FERC Audit Update FERC Division of Audits and Accounting (DAA) notified PSE in November 2012 of audit Evaluated PSE s compliance with the requirements in its Open Access Transmission Tariff (OATT) Audit concluded August 13, 2014 The final audit report made 12 recommendations; PSE addressed all of them FERC did not assess any penalties as a result of the audit Audit closed June 4,

13 FERC Commissioner Updates Norman Bay was sworn in as FERC Chairman on August 4, Formerly head of FERC s Office of Enforcement Former US Attorney from New Mexico Commissioner Cheryl LaFleur was sworn in for a second term on July 29, FERC Commissioner Updates On May 13, Commissioner Philip Moeller announced that he would not seek reappointment to a third term on the Commission Commissioner Moeller joined FERC in 2006 and his current term expires June 30, 2015 FERC Commissioners are partisan appointments and Moeller s seat will be a Republican fill 26 13

14 Questions? FERC Update 27 Formula Rate Annual Update Customer Open Meeting Lynn Dillender, Sr Regulatory Compliance Consultant Transmission Policy and Contracts 14

15 Formula Rate Annual Update Introduction In May 2013 FERC approved a settlement between PSE and its customers that implements changes to the PSE Open Access Transmission Tariff (OATT) Schedules 1, 7, 8, and 10. Schedules 1, 7, 8 and 10 changed from Stated Rates to Formula Rates. Full details regarding the rate formula, implementation protocols, etc. are located in PSE s OATT - Attachment H, H-1, and H-2 PSE OATT is available on PSE OASIS ( 29 Formula Rate Annual Update Every Year PSE conducts an Annual Update which updates the inputs to the agreed upon formula to calculate new rates Generally a Formula Rate = calendar year actual costs + projected capital costs + true up adjustment Each year PSE is required to post on its OASIS and file with FERC (for informational purposes) the following: Actual Annual Transmission Revenue Requirement (ATRR) for previous calendar year Projected Annual Transmission Revenue Requirement (ATRR) for current year True up adjustment 30 15

16 Formula Rate Annual Update Formula Rate Protocols Definitions Rate Year is defined as June 1 through May 31 Annual Transmission Revenue Requirement (ATRR) annual transmission revenue requirement calculated in accordance with the Formula Rate True-Up Adjustment difference between the transmission charges based on the Projected ATRR for a given calendar year and such charges based on the Actual ATRR for that Calendar Year, plus interest Calculated on Attachments 6, 6A, and 6B of the Formula Annual Update Calculation and publication of Actual ATRR for the prior calendar year Projected ATRR (including True-Up adjustment) Ancillary Service Schedule 1: Scheduling, System Control and Dispatch Service 31 Formula Rate Annual Update Annual Update Process April - PSE files FERC Form 1 May - PSE calculates its transmission rates based on FERC Form 1 and year-ahead projected capital additions. PSE also calculates true-up from previous year June PSE posts the Annual Update on OASIS; new formula rates go into effect based on Form 1 data and capital projections June to October Discovery Period where customers may issue reasonable data requests to PSE. June to November Review Period for customers during which customers may raise preliminary challenges with PSE. December to January - If PSE and the customers are unable to reach resolution after a good faith effort to resolve a preliminary challenge, the process allows for parties to file formal challenges with FERC

17 Formula Rate Annual Update Annual Update Process 4 Review Period Discovery Period Rate Year June 2015 May 2016 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC PSE files FERC Form actuals 3 New Rates go into effect: Rate year June May; Annual update posted on OASIS 2 PSE calculates Projected Transmission Rate (subject to true up) based on 2014 actuals budgeted capital additions [including a true-up adjustment] 33 Formula Rate Annual Update Bonneville Power Administration ( BPA ) Rule 206 Filing at FERC April 25, 2015, BPA filed a Rule 206 complaint with FERC (docket no. EL ) regarding the following: BPA claimed the PSE OATT formula had no mechanism to include a prior period adjustment Settlement: PSE inserted a table for prior period adjustments that flows into the annual true up mechanism in Attachment 6 Estimate and Reconciliation Worksheet Amend references in the formula i.e. correct references to Attachment H Change various notes in the formula i.e. including a note that the formula rate is for both point to point and network rates Eliminate various notes that were no longer relevant i.e. notes related to the Wholesale Distribution plant reclassification Insert clarification notes in Attachment 6 Estimate and Reconciliation Worksheet i.e. Included an input to define the specific year in the worksheet instructions 34 17

18 Formula Rate Annual Update Bonneville Power Administration ( BPA ) Rule 206 Filing at FERC May 6, 2015, PSE filed its settlement offer to BPA s 206 filing in May 2015 accepting BPA s amendment proposals to the PSE formula. May 12, 2015, BPA filed comments to FERC supporting the PSE settlement offer. May 19, 2015, PSE/BPA joint motion filed with FERC for expedited approval of the settlement. May 29, 2015, FERC dismissed the BPA complaint stating the settlement agreement resolved all disputed issues in the proceeding and approved effective for the June 1, 2015 Annual Update. June 1, 2015, PSE filed a revised version of the formula to FERC reflecting the Rule 206 settlement amendments. The amended formula was used in the June 1, 2015 Annual Update 35 Updated Rates & Schedules on PSE OASIS WA Area Revenue Requirement Annual Update 2014 Annual Update 2015 effective June 1, 2015 Difference ( ) means decrease Percentage Difference ( ) means decrease $91,602,179 $101,591,226 $9,989, % Monthly Rate ($/kw) $1.61 $1.80 $ % Colstrip Revenue Requirement $6,070,024 $17,670,174 $11,600, % Monthly Rate ($/kw) $0.76 $2.22 $ % Southern Intertie Revenue Requirement $4,297,133 $5,698,022 $1,400, % Monthly Rate ($/kw) $0.80 $0.83 $ % 36 18

19 Questions? Formula Rate Update 37 Energy Imbalance Market Josh Jacobs, Director Load Serving Operations 19

20 Presentation Objectives Provide Energy Imbalance Market (EIM) Overview Work Ahead & Opportunity for customer input 39 PSE Decision Independent analysis informed PSE decision Benefits anticipated for PSE and regional electric grid operations PSE has planned go-live date of October 1,

21 EIM Basics: What an EIM is EIM stands for Energy Imbalance Market An EIM is an automated sub-hourly economic optimization of loads and resources The market is operated by a Market Operator who optimizes resources within the EIM footprint Market Participants voluntarily bid in resources and the Market Operator runs an automated economic dispatch every five minutes Only the most economic resources are dispatched subject to transmission congestion 41 EIM Basics: How an EIM Works 42 21

22 CAISO Energy Imbalance Market Operational on November 1, 2014 FERC Approved PSE-CAISO Implementation Agreement on May 19, 2015 Stakeholder process will occur to allow for customer input on FERC tariff changes. 43 Questions? us at 44 22

23 Joint Operating Committee Laura Hatfield, Contract Manager Transmission Policy and Contracts Content Joint Operating Committee Overview MOD-032 Update Feedback From Generators Questions and Answers 46 23

24 Joint Operating Committee Joint Operating Committee Article 29 of the LGIA Calls for the formation of a Joint Operating Committee Purpose Coordinate operating and technical considerations of Interconnection Service Contacts Interconnection Customer shall appoint a representative and alternate and notify PSE in writing. Contacts also need to be updated for operational and notices under the LGIA 47 MOD Data for Power System Modeling and Analysis North American Electric Reliability Corporation (NERC) Reliability Standard MOD establishes consistent modeling data requirements and reporting procedures for the development of planning models. Requirement R1 (effective July 1 st, 2015): Planning Coordinators (PC) and Transmission Planners (TP) develop data requirements and reporting procedures Requirement R2 (effective July 1, 2016): Data Owners submit data consistent with data requirements and reporting procedures established in R

25 MOD Continued PSE s Methodology New mailbox: planningcoordinator@pse.com Data Submission Requirements for Generator Owners (GO) in Generator Interconnection Requirements Interconnection Requirements NERC Reliability Standard (FAC-001) Responsibilities of PSE Responsibilities of the Generator Operator and Generator Owner function Key Requirements Include: Provide outage and maintenance schedules annually Generator forecast data submittals 50 25

26 Questions? Joint Operating Committee 51 Network Operating Committee Bob Harshbarger, OASIS Manager Transmission Policy and Contracts 26

27 Content Update NAESB s Network Integration Transmission Service (NITS) Capability on OASIS & Order 676-H Electric Industry Registry OATT Based Reminders 10 Year Annual Load Forecast Designation of Network Resources 53 Network Service Capability on OASIS (NAESB) North American Energy Standards Board s OASIS Subcommittee worked on standards for NITS on OASIS for 3 years. Approved by Wholesale Electric Quadrant s Executive Committee May 2012 Membership ratified in June 2012 Filed with FERC FERC issued NOPR July 2013 FERC issued Order 676-H Sept

28 Network Service Capability on OASIS (NAESB) FERC issued Order 676-H Sept 2014 In that order, FERC said standards related to the Network Integration Transmission Service (NITS) Open Access Same-Time Information System (OASIS) template, for which compliance is required by April 25, 2016 Basically, we turn off the Fax machine and go to OASIS for applications for service, attestations of resources, and designations/terminations of both loads and resources. NAESB standards WEQ contains an implementation plan: 55 Network Service Capability on OASIS (westtrans) 7/25/2015 TP deadline to post on OASIS the plan and procedures for transitioning existing NLS & NITS Customers service arrangements to the new NITS on OASIS templates. 10/25/2015 TP deadline to provide to the existing NLS & NITS Transmission Customers the specific information that they intend post on the NITS on OASIS Templates representing the current NLS & NITS arrangements. PSEI will be available to engage in informal communications to resolve any issues with this information. 1/15/2016 Deadline to have NITS customers and their Agents registered in EIR 56 28

29 Network Service Capability on OASIS (westtrans) 1/25/2016 Deadline for TP and its Transmission Customers to have resolved any issues with the information intended to be posted by PSEI for the NITS on OASIS implementation. 2/1/2016 Provider training begins. Begin Provider and Customer information entry in demo OASIS. 3/1/2016 Begin Provider and Customer information entry in production OASIS. 3/24/2016 Data migration complete. 3/25/2016 TP deadline to post the information documenting all existing NITS Customer s arrangements on OASIS using the new OASIS template structures. 57 Network Service Capability on OASIS (westtrans) 4/25/2016 Compliance Date Some customer/agent responsibilities: Register in EIR Appoint agent Designate load Designate and attest resources Provide annual (minimum) load forecasts Terminate loads and resources as necessary Request Secondary Network transmission service for non-designated resources

30 Electric Industry Registry (NAESB) North American Energy Standards Board s Electric Industry Registry (EIR) OATI is the vendor (product name webregistry) Applies to OASIS and e-tagging participants Entity, Code-Role, POR/POD, and Source/Sink Points Annual renewal fee to maintain access and data 59 OATT Based Reminders Annual Load Forecast Submission The Network Customer shall provide the Transmission Provider with: Annual 10 Year updates of Network Load and Network Resource forecasts See Application for Network Integration Transmission Service under Part III of the OATT, specifically section 29.2 Submitted annually by October 31 st The Load Forecast Submittal Form is located at: ption_-_psei.xlsx 60 30

31 OATT Based Reminders Annual Load Forecast Submission Form 61 OATT Based Reminders Timely written notice of material changes (OATT 31.6) Network Load Network Resources Customer-owned transmission system Other aspects of its facilities or operations affecting the Transmission Provider s ability to provide reliable service 62 31

32 OATT Based Reminders Network Customer may designate a Network Resource by providing the Transmission Provider with as much advance notice as practicable (minimum duration 1 day) Designation of a Network Resource can be made through the Transmission Provider s OASIS by a request for modification of service pursuant to an Application under OATT 29 Request must include an attestation that the new network resource satisfies certain conditions 63 OATT Based Reminders Designated Network Resource forms and Attestation forms are located at: 1. Expand the PSEI Business Practices, Waivers, & Exemptions folder, 2. Expand the PSEI Specific Business Practices folder, and 3. Expand the DNR & Attestation Forms folder Firm Network Transmission Service can not be awarded until there is an approved valid DNR application and associated attestation

33 OATT Based Reminders Annual Load Forecast Submission Form 65 Questions? Network Operating Committee 66 33

34 Q & A and Stakeholder Input 67 34