Deliverability for Distributed Generation. Proposal for Complying with 11/16/12 FERC Order

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1 Deliverability for Distributed Generation Proposal for Complying with 11/16/12 FERC Order Lorenzo Kristov, Market & Infrastructure Policy Stakeholder Call, April 3, 2013

2 Schedule for remaining activities Date March 22 March 25 April 2 April 3 April 10 April 12 April 15 Event ISO posted results of DG Deliverability study ISO posted compliance proposal ISO posted draft tariff Stakeholder call on compliance proposal Written comments due on proposal and draft tariff Stakeholder call on draft tariff ISO to file compliance tariff provisions with FERC Page 2

3 ISO s proposed DG Deliverability process, filed on 9/18/12, had two sequential parts. Annual DG Deliverability study performed by ISO to determine nodal MW quantities of DG resources that can be deliverable for Resource Adequacy purposes Without requiring delivery network upgrades to ISO grid Without degrading deliverability status of existing or queued generation projects Apportionment of Potential DG Deliverability to local regulatory authorities (LRAs) who oversee procurement LRAs and their LSEs use their apportioned shares to assign deliverability status to specific DG projects Page 3

4 FERC s 11/16/12 Order accepted the proposal but required two changes. 1. ISO must apportion Potential DG Deliverability to LSEs directly, rather than to LRAs 2. FERC-jurisdictional LSEs must assign deliverability status to DG resources on a first-come-first-served (FCFS) basis, subject only to interconnection clustering and operational considerations Order cites open access interconnection principles as basis for FCFS requirement Deliverability status (DS) as a generator attribute is derived from capacity on the ISO grid Page 4

5 ISO requested and FERC granted extensions until 4/15/13 to comply. Allow time for stakeholder consultation to consider best way to incorporate required changes ISO proposal will remain within the guidelines of compliance (without including new 205 provisions, as was considered earlier) ISO will file required changes in time to implement the process in 2013 for LSEs to use results to meet 2014 RA requirements FERC order did not require changes to filed DGD study methodology ISO completed the DG deliverability study and posted results on March 22 Page 5

6 Preliminary elements The entity to assign deliverability status (DS) to DG resources should be entity that manages interconnection to the distribution system = UDC IOU PTO required to follow FCFS order per ISO tariff Muni UDC and MSS not required to follow FCFS Apportionment of Potential DGD to LSEs the 3-stage process in original filing is moot when UDCs assign DS to DG resources, and will be eliminated Energy-only DG resources already in operation at time of DS assignment will be eligible under this process Small LSE issue raised by Six Cities on original filing is no longer an issue under this proposal Page 6

7 Outline of annual DGD process 1. ISO performs annual DGD study (Dec.-Feb.) and posts results Nodal quantities of Potential DGD 2. IOU PTOs develop FCFS order of DG resources Combined Rule 21 + WDAT queues 3. IOU PTOs and muni UDC/MSS assign DS to DG resources and report results to ISO (Apr-May) ISO PTOs assign DS in FCFS order Muni UDC/MSS follow their own interconnection rules DG resources assigned DS under this process that achieve COD by Sept. 1 of upcoming RA year are included in ISO annual NQC assessment 4. Resources assigned DS meet retention requirements Page 7

8 Details of DGD process 1 1. ISO s annual DGD study methodology follows originally filed tariff provisions Nodal quantities of Potential DGD denominated in 0.01 MW Each node is identified by the UDC that manages distribution facilities and interconnections below the node For shared nodes more than one UDC has distribution facilities each UDC will get a PDGD share in proportion to load served from its distribution at the node Page 8

9 Details of DGD process 2 2. First-come, first-served order to be followed by IOU PTOs in assigning DS to DG resources Some resources will need to apply to be eligible, during an open window shortly after study results are posted This year, window will open following 4/15 FERC filing ISO will issue market notice specifying dates Resources submit applications to both relevant PTO and ISO DG active in queue with Full Capacity or Partial Capacity DS requests (FCDS or PCDS) need not apply to be eligible for requested level of DS EO resources already operating or active in queue need to apply to be eligible PCDS resources need to apply to be eligible for higher DS level Page 9

10 Details of DGD process 3 FCFS order will utilize the following sequence: a) EO resources already in operation, in order of COD If resources have same COD and PDGD amount cannot support DS for all, each gets pro rata share proportional to ISO-modeled NQC or operating level used in deliverability studies b) Projects in an IOU PTO s combined Rule 21 + WDAT queue, in order of queue position If resources have same queue position and PDGD cannot support DS for all, FCFS will reflect COD in current interconnection request or agreement Page 10

11 Details of DGD process 4 3. IOU PTOs assign DS to DG following FCFS order IOU PTOs must assign all available DS to eligible DG resources, unless amount of resources is insufficient Muni UDC/MSS can assign DS in accordance with their own interconnection procedures ISO will preserve unassigned PDGD for one more cycle For all UDCs Amount of available PDGD used up by a particular DG resource s DS reflects ISO-modeled NQC or operating level used in deliverability studies All UDCs report DS assignments in time for resources to be included in ISO s annual NQC assessment Page 11

12 Details of DGD process 5 4. Retention criteria are applied by IOU PTOs and muni UDC/MSS, to minimize inactive resources holding DS DG resource in queue assigned DS prior to COD must achieve its stated COD, with 6 months grace period Extension of COD granted after assignment of DS does not extend period of retention requirement unless extension is required by UDC to complete necessary upgrades Once resource achieves COD, it retains DS as long as it remains in commercial operation UDCs report to ISO any withdrawals of assigned DS and any COD extensions needed to complete upgrades Any loss of DS by resources due to failing retention criteria or retirement will be modeled as available in next cycle Page 12