PACIFICORP S ENERGY IMBALANCE MARKET ENTITY PROPOSAL. September 13, 2013 Revised October 18, 2013

Transcription

1 PACIFICORP S ENERGY IMBALANCE MARKET ENTITY PROPOSAL September 13, 2013 Revised October 18, 2013 This document outlines PacifiCorp s Energy Imbalance Market ( EIM ) Entity proposal ( EIM Entity Proposal ), revised to reflect stakeholder comments submitted on or around September 30, 2013, and is intended for further stakeholder review and comment, due November 18, Table of Contents I. Before and After EIM... 5 II. EIM Roles EIM Entity EIM Entity Scheduling Coordinator EIM Participating Resources EIM Participating Resource Scheduling Coordinator EIM Transmission Service Provider... 9 III. EIM Processes IV. Requirements for Non-Participating Resources and Loads V. Requirements for EIM Participating Resources VI. EIM Relationships: EIM Operational Information Exchange and Requirements Market Operator Load Forecast Forecast Data Bid Data Outage Data VII. EIM Market Design Page 1

2 1. Unit Commitment Decision Resource Sufficiency Local Market Power Mitigation GHG VIII. Transmission Service Requirements Introduction/Key Principles i. How PacifiCorp s Proposal Compares to Other Energy Imbalance Frameworks ii. Summary of PacifiCorp s Transmission Proposal Proposed Elements of PacifiCorp s Transmission Proposals i. Transmission Service between EIM Entities/ISO and EIM Entities EIM Interchange Reciprocity Framework Facilitation of EIM Interchange ii. Participation in EIM by External Resources minute Market at PacifiCorp s Interties iii. Transmission Service within PacifiCorp s BAAs Long-Term Firm Transmission Service Transmission Access Charge Alternative IX. EIM Operations Operations Prior to Real Time Operations During Real Time Scheduling Curtailments Use of Designated Network Resources for EIM X. EIM Settlement and Cost Allocation Approach Development of Load Aggregation Points Methodology for Sub-allocating Charges/Revenues Assessed by the Market Operator to PacifiCorp s EIM Entities i. General Approach ii. Real Time Uninstructed Imbalance Energy Settlement (6475) iii. Real Time Instructed Imbalance Energy Settlement (6470) Page 2

3 iv. Real Time Unaccounted For Energy Settlement (6474) v. Neutrality and Uplift Allocations Real-Time Market BAA Neutrality Settlement (6477) Real-Time Market System Neutrality Settlement (New Charge Code) BAA Real-Time Congestion Balancing Account (6774) Real-Time Bid Cost Recovery Allocation (6678) Flexible Ramping Constraint Allocation (7056) Financial Adjustments (2999, 3999, 5024, 5025, 5900, 5901, 5910, 5912) Initial EIM Fee GMC EIM Administrative Charge (4560) XI. EIM Regulatory Framework PacifiCorp Tariff and Contract Revisions General OATT Revisions Large Generator Interconnection Procedures/Agreement Small Generator Interconnection Procedures Schedules 4 and 9: Imbalance Provisions New Attachment T for EIM XII. Attachment A: Non-Binding Notices of Interest by Third Parties XIII. Attachment B: Summary of Potential Notices of Interest Introduction In February 2013, PacifiCorp announced a memorandum of understanding with the California Independent System Operator Corporation ( ISO ) to participate in an EIM. On April 30, 2013, PacifiCorp and the ISO entered into an implementation agreement for an EIM to be implemented effective October 1, On June 28, 2013, the Federal Energy Regulatory Commission ( FERC ) approved the implementation agreement between PacifiCorp and the ISO effective July 1, The EIM will be administered by the ISO as the Market Operator. PacifiCorp currently operates two Balancing Authority Areas ( BAAs ), PacifiCorp east (PACE) and PacifiCorp west (PACW). Because PacifiCorp has two BAAs, it will be required to establish two EIM Entities, one for each BAA. However, PacifiCorp will serve as a single EIM Entity Scheduling Coordinator for both EIM Entities. For purposes of the EIM, PacifiCorp s Page 3

4 transmission grid operations function, which is part of the Pacific Power business unit of PacifiCorp, will serve as the EIM Entity Scheduling Coordinator. PacifiCorp Energy, a business unit of PacifiCorp, will participate in EIM with its EIM Participating Resources and as a transmission customer of PacifiCorp transmission, a department within Pacific Power. As an EIM Entity, 1 PacifiCorp must make decisions relating to how the EIM will be implemented within PacifiCorp s BAAs. This includes decisions relating to EIM participation requirements and conditions, interactions and processes between the EIM Entity, EIM Participating Resources, scheduling coordinators, and non-participating resources and loads, as well as cost allocations. PacifiCorp has prepared this document setting forth PacifiCorp s EIM Entity Proposal in order to inform stakeholders about PacifiCorp s plans for EIM implementation and to provide opportunities for stakeholders to provide input in the development of PacifiCorp s EIM Entity Proposal. 2 PacifiCorp s EIM Entity Proposal also provides PacifiCorp with an opportunity to respond to stakeholder comments and questions which have been submitted as part of PacifiCorp s EIM stakeholder process. After posting its initial EIM Entity Proposal on September 13, 2013, PacifiCorp received several sets of comments on or near the September 30, 2013, comment due date. 3 This revised EIM Entity Proposal responds to those comments. In addition, PacifiCorp has included Attachment A (section XII) to this EIM Entity Proposal which provides information for transmission customers interested in becoming EIM Entity Participating Resources within PacifiCorp s BAAs and Attachment B (section XIII) which provides a summary of potential interest received from third-party transmission customers as of the initial August 30, 2013 deadline, and updated with additional information about potential interest received to date. 4 1 For ease of reference, PacifiCorp will refer to the EIM Entity as a singular concept throughout this EIM Entity Proposal because the requirements set forth will be the same for both EIM Entities under PacifiCorp s Open Access Transmission Tariff. 2 PacifiCorp encourages all stakeholders to review ISO s most recent EIM proposal for EIM, which includes a complete description of the EIM market design. PacifiCorp s EIM Entity Proposal is not intended to summarize or review all aspects of ISO s EIM design. Rather, this document is focused on those elements of EIM design for which the EIM Entity is provided discretion. This document will review ISO s EIM design elements which are necessary to explain or provide background to PacifiCorp s EIM Entity Proposal. 3 Specifically, PacifiCorp received written comments on its EIM Entity Proposal from Bonneville Power Administration ( BPA ), Powerex, Southern California Edison ( SCE ), Tri-State, Western Power Trading Forum ( WPTF ), and Xcel Energy. 4 This information is also posted on PacifiCorp s OASIS at Page 4

5 I. Before and After EIM The following table provides at a high level summary of current compared to post-eim implementation. In general, EIM will not change how PacifiCorp and ISO presently manage system reliability in compliance with North American Electric Reliability Corporation ( NERC ), Western Electricity Coordinating Council ( WECC ), Northwest Power Pool ( NWPP ), and North American Energy Standards Board ( NAESB ) standards. TODAY EIM ISO and PacifiCorp own/operate respective transmission assets, independently schedule for load and resource balance hour-ahead and dayahead, maintain required contingency and regulating reserves (for PacifiCorp, consistent with reserve sharing agreement), and manage to Area Control Error No change PacifiCorp manually dispatches resources internal to its balancing authority to balance intra-hour load and resource changes ISO will optimize the combined PacifiCorp and ISO EIM footprint with automated redispatch every five minutes of all generation resources that are voluntarily bid into the EIM. There will be no must-offer requirements. Diversity benefits are primarily restricted internal to each respective balancing authority Diversity benefits are captured across a much larger footprint, including: - Load fluctuations - Wind fluctuations - Natural gas prices Page 5

6 - Heat rates During its stakeholder process, PacifiCorp was requested to provide additional detail regarding how PacifiCorp will provide reserve service for loads and generation after EIM implementation. As it does today in the performance of BAA system-balancing, PacifiCorp Energy will set aside resource capacity at specific generators for contingency reserve, upregulation and down-regulation for system balancing service for PacifiCorp s BAAs, with any remaining capacity available for the EIM, should PacifiCorp Energy choose to bid its resources into the EIM. PacifiCorp was also asked to provide additional detail relating to what occurs in EIM when contingency reserves are required. If PacifiCorp is directed to provide NWPP reserves or receives NWPP reserves, this event is treated as an EIM Exceptional Dispatch (see ISO s Draft Final Proposal, section 3.3.9). For any Exceptional Dispatch in PacifiCorp s BAAs, including a NWPP contingency reserves event, the EIM will treat it as instructed imbalance energy. This Exceptional Dispatch communication will be electronic and shall be communicated to ISO as soon as possible, however, pursuant to section of the Draft Final Proposal, the BAA base schedule may be updated up to seven days after the operating hour when there has been a contingency response event, including e-tag updates if it is reserve-sharing between BAAs. NWPP reserves shall not be used to assist the ISO, and ISO resources shall not be used to assist recovery of any NWPP member s generation loss. II. EIM Roles The following section provides a description of the various roles in the EIM: 1. EIM Entity An EIM Entity is a balancing authority that enables the EIM to occur in its BAA. By enabling the EIM, real-time load and generation imbalances within its BAA will be settled through the EIM. PacifiCorp will establish the first two EIM Entities in the EIM. 2. EIM Entity Scheduling Coordinator The EIM Entity Scheduling Coordinator will coordinate and facilitate the EIM for the EIM Entity. The EIM Entity Scheduling Coordinator will compile generation and interchange Page 6

7 forecasts for each of the EIM Entity BAAs and submit balanced base schedules to the Market Operator. A balanced base schedule consists of hourly forecasts of load, generation, and interchange, which net to zero. The EIM Entity Scheduling Coordinator compiles the balanced base schedule by collecting hourly forecasts of load, generation, and interchange from loads and resources within the EIM Entity. PacifiCorp s EIM Entities will utilize load forecasts prepared by the Market Operator in the compilation of its balanced base schedule. 5 The EIM Entity Scheduling Coordinator will allocate costs and revenues in the EIM that are not directly allocated to EIM Participating Resource Scheduling Coordinators. Examples include settling uninstructed imbalance energy to loads and non-participating resources as well as allocations of uplift and neutrality charges. See section X for a detailed discussion on PacifiCorp s proposals relating to allocations of uplift and neutrality charges. PacifiCorp will be the EIM Entity Scheduling Coordinator for the two PacifiCorp EIM Entities and will be responsible for submitting balanced base schedules for each BAA. 3. EIM Participating Resources An EIM Participating Resource is a resource located within an EIM Entity BAA that is eligible and elects to participate in the EIM by voluntarily bidding its resource(s) into the EIM. An EIM Participating Resource must obtain scheduling coordinator services, either by becoming certified by ISO as a scheduling coordinator or by contracting an ISO-certified provider. PacifiCorp will not serve as a scheduling coordinator for EIM Participating Resources that participate in the EIM that are not owned or contracted by PacifiCorp. The decision for an EIM Participating Resource to bid resources is entirely voluntary; however, as discussed further in section V, an EIM Participating Resource must make a threshold decision whether to take the steps necessary to become an EIM Participating Resource. Participation will require obtaining scheduling coordinator services and may include telemetry, metering or automatic generator set-point control ( AGC ) upgrades to its resources. In addition, an EIM Participating Resource will be required to meet the ISO s requirements in Tariff Section 29 and enter into a pro forma EIM Participating Resource Agreement. See section 5 An EIM Entity has the option to elect to use load forecasts prepared by the Market Operator. See section VI.1 for a detailed discussion on PacifiCorp s election for load forecasts. Page 7

8 VIII for a discussion on PacifiCorp s proposals relating to transmission service requirements, which impact whether a resource is eligible to participate in the EIM. During its stakeholder process, PacifiCorp was requested to provide additional detail relating to the ability of coal resources to participate in the EIM. PacifiCorp s understanding confirmed by ISO is that a coal resource may be classified as a multi-stage generator ( MSG ) in the EIM as a way to address the ramp issues associated with the fact that coal resources operate within mill points. (Note: A mill point is the MW operating point of a coal unit where one of several coal mills needs to be taken out of service if the generation level is decreasing, or placed back into service if the generation level is increasing, thus impacting AGC response time and ramp rates.) However, MSG was designed for natural gas combined cycle combustion turbines and treating a coal resource as an MSG is untested. PacifiCorp intends to pursue using MSG for coal resources to decide whether the existing MSG is sufficient or if the ISO dispatch model would need to be modified to accommodate coal resource mill points. PacifiCorp was requested to provide additional detail relating to the ability of jointowned resources to participate in EIM. It was observed that it may not be commercially feasible for jointly-owned resource to nominate the resource operator to coordinate bids where the operator is also a joint-owner. Submitting bids for jointly-owned units where the owners are all within the EIM Entity may require a solution through creation of virtual units (e.g., Resource1- A, Resource1-B, Resource1-C) using an allocator as a way to segregate unit/owner bids. In any event, PacifiCorp recommends that any resource that is jointly-owned communicate and coordinate with the other joint owners if interested in becoming an EIM Participating Resource. Joint owners will need to coordinate and agree on a number of issues, including sharing meter upgrade costs and the need and cost sharing for allocator installations or upgrades, particularly where multiple owners wish to participate in EIM. PacifiCorp was also requested to answer whether Designated Network Resources 6 will be required to participate in the EIM. The EIM does not include any must offer requirements. Whether or not a Network Customer chooses to use its resources to participate in EIM is a voluntary decision entirely at the discretion of the Network Customer. A Designated Network 6 Capitalized terms not otherwise defined in PacifiCorp s EIM Entity Proposal shall have the same meanings and definitions as set forth in PacifiCorp s Open Access Transmission Tariff. Page 8

9 Resource is eligible to participate as an EIM Participating Resource if it meets the requirements as discussed in sections V and VIII. See section IX.5 for further discussion on the use of Designated Network Resources in EIM. 4. EIM Participating Resource Scheduling Coordinator The EIM Participating Resource Scheduling Coordinator is the interface between the Market Operator and a resource that voluntarily elects to economically participate in the EIM, as well as between the resource and the EIM Entity Scheduling Coordinator. The EIM Participating Resource Scheduling Coordinator submits energy bids to the Market Operator and also informs the EIM Entity Scheduling Coordinator of the amount of resource capacity that it has bid into the EIM (the EIM Participating Resource bid range). The EIM Participating Resource Scheduling Coordinator is also responsible for the financial settlement of its EIM Participating Resources in the EIM. During its stakeholder process, PacifiCorp was requested to provide additional detail relating to bids submitted by the EIM Participating Resource Scheduling Coordinator. A bid is a set of price/energy data pairs which create a bid curve used for both incrementing and decrementing within the EIM Participating Resource bid range. The EIM does not accommodate separate prices for incrementing and decrementing bids. A bid curve can consist of up to 10 segments (with monotonically-increasing bid prices), which allows for accommodating a heat rate curve of a thermal resource. The bid process allows for a limited range of a resource capacity to be bid. Specifically, the minimum and maximum for the resource is specified along with capacity withheld for contingency reserve, up-regulation and down-regulation, to the extent the resource is also holding operating reserves. 5. EIM Transmission Service Provider In the Draft Final Proposal, the ISO adds the following definition: EIM Transmission Service Provider is a transmission owner or customer (may be a 3 rd party separate from the EIM Entity) that controls transmission in the EIM Entity balancing authority area. Such a provider can voluntarily inform the EIM Entity that it is making its transmission available for EIM use. PacifiCorp s understanding is that the definition has been added to clarify circumstances when transmission rights may voluntarily be made available for use in the EIM, either by a Page 9

10 transmission service provider or by a transmission customer. PacifiCorp submitted comments to ISO requesting that the definition be broken into two separate definitions: EIM Transmission Service Provider is a transmission owner (may be a 3 rd party separate from the EIM Entity) that controls transmission in the EIM Entity balancing authority area. Such a provider can voluntarily inform the EIM Entity that it is making its transmission available for EIM use. This may occur in one of two situations: 1) the transmission owner controls transmission internal to the EIM Entity and will allow EIM to occur over its facilities on an actual-flow basis up to the thermal limits of the transmission facilities, or 2) the transmission owner controls transmission over an intertie between EIM Entities or between the ISO and an EIM Entity and will facilitate the ability of an EIM Transmission Customer to make the customer s intertie rights available for EIM use or will allow any unsubscribed portion of the EIM Transmission Service Provider s own rights to be available for EIM use. EIM Transmission Service Customer is a transmission customer (may be a 3 rd party separate from the EIM Entity) that has rights to transmission in the EIM Entity balancing authority area over an intertie between EIM Entities or between the ISO and an EIM Entity. Such a customer can voluntarily inform the EIM Entity that it is making its transmission available for EIM use. PacifiCorp believes this will improve clarity for the following reasons: 1) transmission service providers and transmission customers are two very different entities under the open access transmission tariff framework with differently defined rights and responsibilities; and 2) the term transmission service provider may cause confusion when made in reference to a transmission customer as transmission service providers are typically understood to consist of entities that must offer transmission service pursuant to the terms of a tariff. In addition, while PacifiCorp supports the ISO s efforts to add clarity to potential ways in which transmission could be made available within an EIM Entity, PacifiCorp affirms that the ultimate manner in which transmission rights are made available for EIM within an EIM Entity is to be determined by the EIM Entity in consultation with its stakeholders in the development of the EIM Entity s tariff rules and processes (see section VIII for a discussion on this proposal). PacifiCorp agrees that both a transmission owner that controls transmission in the EIM Entity BAA or a transmission customer that has rights to transmission in the EIM Entity BAA over an intertie between EIM Entities or between the ISO and an EIM Entity must voluntary determine whether to make transmission available for EIM use. Page 10

11 III. EIM Processes Please refer to the ISO Draft Final Proposal or subsequent revisions for detailed explanation of EIM processes and design. For purposes of providing background necessary to understand PacifiCorp s EIM Entity proposals the following is a high-level summary of EIM process as it will be implemented in PacifiCorp s BAAs: Day-ahead advisories on feasibility/congestion: Although not part of the ISO s dayahead market, EIM Entity Scheduling Coordinators will submit forecast base schedules to the Market Operator in the day-ahead timeframe. The Market Operator will use this information to inform EIM Entity Scheduling Coordinators of potential infeasible schedules. PacifiCorp s understanding is all forecasts will be submitted to the ISO by 10 a.m. on the day before delivery. Real-time advisories on feasibility/congestion: Market Operator evaluates base schedules for feasibility and provides the EIM Entity Scheduling Coordinator with advisory information on congestion, giving the EIM Entity Scheduling Coordinator multiple opportunities to resolve the identified issues prior to the start of the EIM dispatch interval. During the stakeholder process, BPA requested that PacifiCorp explain how it would act on such advisory schedules. PacifiCorp grid operations would take action to resolve balance or congestion/infeasibility in both the day-ahead and real-time in a manner similar to what it does today; through reliability redispatch of PacifiCorp-owned resources to achieve balance or to alleviate path constraints. Balanced base schedule and bid submission: By 75 minutes prior to each operating hour, the EIM Entity Scheduling Coordinator will update its hourly base schedule for each resource and inter-tie in its BAAs. In the hour-ahead process, schedules are submitted by 75 minutes prior to the hour, and then may be updated at 55 minutes prior to the hour. A final update is permitted at 40 minutes prior to the hour, but only by the EIM Entity Scheduling Coordinator in order to ensure the schedules are balanced. Also by 75 minutes prior to each operating hour, EIM Participating Resource Scheduling Coordinators will submit hourly energy bids for resources participating in the EIM. Page 11

12 Flexible ramping capacity sufficiency test: The Market Operator will evaluate the base schedules to ensure they contain sufficient energy bids to meet flexible ramping requirements in the BAA and notify the EIM Entity Scheduling Coordinators if the base schedules fail the test. This provides the EIM Entity Scheduling Coordinator with the opportunity to resolve the identified issues prior to the start of the EIM interval. 7 Local market power mitigation process: The local power mitigation process will run 37.5 minutes prior to each 15-minute operating interval for the hourly energy bids. This process tests for uncompetitive conditions for energy and modifies EIM Participating Resources bids under uncompetitive conditions to the EIM Participating Resources actual costs, or Default Energy Bids ( DEBs ). 15-minute market: The 15-minute real-time unit commitment ( RTUC ) market will run 37.5 minutes prior to each 15-minute interval, producing resource schedules and Locational Marginal Prices ( LMPs ). The 15-minute market will start-up and shutdown resources bid into the EIM (see section VII.1 for a detailed discussion relating to unit commitment). PacifiCorp will not extend the ISO s tie-line 15-minute market to its intertie boundaries (see section VIII.2.ii.1 for a detailed discussion relating to this EIM Entity Proposal). 5-minute market: The 5-minute real-time dispatch ( RTD ) market will run 7.5 minutes prior to each 5-minute interval and produce dispatch instructions for resources and produce LMPs. The EIM Entity will remain responsible for ancillary services and operating reserve management for its BAA. The EIM Entity will retain the ability to dispatch resources out-of-market in its BAA as required to fulfill its responsibilities as balancing authority functional entities under the reliability standards. Dispatch: From the perspective of the EIM Participating Resource plant operator that is receiving dispatch instructions, it will see an instruction to commit or decommit up to every 15 minutes, and an instruction to dispatch to a new set point every 5 minutes. 7 To prevent leaning on ramping capacity between balancing areas, the ISO will limit energy transfers into the EIM Entity in the event the EIM Entity has insufficient ramping capability. Page 12

13 Settlement: Any change in resource output due to instructions from the Market Operator will be settled as instructed imbalance energy. Any change to resource output due to response to a contingency will be settled as instructed imbalance energy once the contingency information is included in the Market Operator s model. Any change to resource output due to regulation, including either manual or automatic response to an area control error ( ACE ), will be settled as uninstructed imbalance energy. Any other change to resource or load output will be settled as uninstructed imbalance energy. Currently, the settlement for uninstructed imbalance energy is virtually the same as for instructed imbalance energy; however, uplift charges are allocated based on uninstructed imbalance energy for loads, resources and interchange. o The invoice provided by the Market Operator to the EIM Participating Resource will show a distinction between the 15-minute pricing and dispatch quantities, and the 5-minute pricing and dispatch quantities. Specifically, the instructed imbalance energy (i.e., the incremental dispatch instruction from the Market Operator) resulting from the RTUC will be valued at the 15- minute LMP. The instructed imbalance energy (i.e., the incremental dispatch instruction from the Market Operator) resulting from the RTD will be valued at the 5-minute LMP. The uninstructed imbalance energy (i.e., the difference between the dispatch instruction and the metered quantity) will be valued at the 5-minute LMP. IV. Requirements for Non-Participating Resources and Loads Transmission customers within PacifiCorp s BAAs with resources and/or load will be subject to EIM requirements and changes to current practices, even if they choose not to participate in the EIM as an EIM Participating Resource. These include the following primary impacts: Transmission customers will be required to submit day-ahead and hour-ahead forecasts for resources and interchange. As noted above, load forecasts will be prepared by the Market Operator. As proposed in this revised EIM Entity Proposal, PacifiCorp will also require customers with load in the BAA, to submit Page 13

14 forecasts for intrachange, which consist of internal-baa purchases or sales (see section VI.1 for additional discussion on this proposal); Transmission customers will be subject to changes to energy and resource imbalance assessment and pricing and addition of other EIM charges; 8 and Transmission customers will be required to provide planned and unplanned outage information for their resources. For resources located in PacifiCorp s BAAs, PacifiCorp proposes to require forecast data from any resource greater than or equal to three megawatts ( MW ). This threshold is based upon PacifiCorp s existing interconnection standards for small generators, which are required by FERC and PacifiCorp s Open Access Transmission Tariff ( OATT ) and include SCADA, telemetry and metering requirements. For revenue meters, PacifiCorp is not requiring transmission customers to upgrade their meters to allow for 5-minute meter data. If customers do not have 5-minute meter data, to assess imbalance, 15-minute meter data will be synthesized into 5-minute intervals. Transmission customers that wish to improve the interval granularity of their revenue meters may choose to upgrade their meters at their own expense. During the stakeholder process, BPA requested additional information relating to how behind-the-meter resources will be treated under EIM. Behind-the-meter generation is defined as generation that is netted with load before the energy is seen by the network model. PacifiCorp, through specific contractual arrangements with transmission customers, also has some behindthe-meter generation located in its BAAs which is separately metered and included in transmission demand and is therefore included in the network model. In either case, only metered behind-the-meter generation which is contained in the network model will be required to submit EIM forecasts. PacifiCorp has recently issued notices to the majority of customers with generation contained in the network model to apprise them of proposed EIM requirements. Customers with questions about the inclusion of specific generators are encouraged to contact PacifiCorp for further information. During its stakeholder process, PacifiCorp was requested to provide additional detail relating to allocation of upgrade costs for revenue meters installed by PacifiCorp Energy. PacifiCorp Energy has indicated it intends to participate in the EIM with EIM Participating 8 See section X for detailed discussion on EIM charges. Page 14

15 Resources. PacifiCorp Energy intends to upgrade its revenue meters to provide 5-minute interval data at most of its resources, including all resources it anticipates will participate in the EIM. These costs will not be included in transmission rates and shall be treated as direct-assigned charges to PacifiCorp Energy, unless there are specific contract provisions governing a different manner of cost allocation. For loads located in PacifiCorp s BAAs, PacifiCorp has elected to use load forecasts prepared by the Market Operator. See section VI.1 for a detailed discussion on PacifiCorp s election to use the Market Operator s load forecasts. To assess imbalance, meter data will be synthesized into 5-minute intervals. Transmission customers that wish to improve the interval granularity of their revenue meters may choose to upgrade their meters at their own expense. During the stakeholder process, WPTF commented that it supports synthesis of 15-minute data which takes into account assumed ramps across the 15-minute period. While PacifiCorp appreciates this comment, at this time ISO is not proposing an alternative to straight averaging. PacifiCorp will provide EIM Entity Scheduling Coordinator services for transmission customers whose resources and/or load are required to submit forecasts and who are not EIM Participating Resources. V. Requirements for EIM Participating Resources For transmission customers in PacifiCorp s BAAs that wish to be EIM Participating Resources, the requirements are as follows: EIM Participating Resources must obtain EIM Participating Resources Scheduling Coordinator service; EIM Participating Resources are responsible for submitting all bids, resource characteristics, outages (planned and unplanned) and other data to the Market Operator through their EIM Participating Resource Scheduling Coordinators; All EIM Participating Resources will be required to provide resource forecast data (on both a day-ahead and hour-ahead basis); All EIM Participating Resources will be required to provide the EIM Entity Scheduling Coordinator with MW bid range (with no prices). PacifiCorp will be using this data to ensure the transmission system can reliably and feasibly meet ramping needs; Page 15

16 For revenue-quality meters, EIM Participating Resources must upgrade or reprogram meters for 5-minute intervals; and All EIM Participating Resources will be required to provide planned and unplanned outage information for their resources. In general, the decision to be an EIM Participating Resource is a business decision of the resource, provided that the resource meets eligibility criteria. See section VIII for a discussion on PacifiCorp s proposal relating to transmission service requirements, which impact whether a resource is eligible to participate in the EIM. During its stakeholder process, PacifiCorp was requested to provide additional detail relating to the kind of considerations that should be taken into account when deciding to be an EIM Participating Resource. These include whether the resource is capable of responding to 5-minute dispatch instructions, either through manual instruction or through AGC. Telemetry is required for EIM Participating Resources, but AGC capability is not required for EIM participation. The EIM Participating Resource Scheduling Coordinator submits energy bids to the Market Operator and also informs the EIM Entity Scheduling Coordinator of the amount of resource capacity that it has bid into the EIM. The Market Operator will communicate financially binding 5-minute dispatch instructions to the EIM Participating Resource Scheduling Coordinator s business systems through an interface to the Market Operator s Automated Dispatch System. The EIM Participating Resource Scheduling Coordinator is responsible for providing outage and meter data, and for financial settlement of its EIM Participating Resources in the EIM. Small generating units can participate as an aggregate market resource (such as wind plants), in which case metering is required for the aggregated resource. During its stakeholder process, PacifiCorp was requested to provide additional detail relating to PacifiCorp s proposal to disaggregate 15-minute meter data into 5-minute intervals. Stakeholder comment noted that this approach could result in inaccurate or inappropriate settlements for resources that comply with 5-minute dispatch instructions from the ISO. PacifiCorp clarifies, as noted above, that EIM Participating Resources must upgrade or reprogram meters for 5-minute intervals. During the stakeholder process, WPTF requested that PacifiCorp monitor whether this requirement has an impact on the quantity of resources (in both MW capacity and number) Page 16

17 interested in becoming EIM Participating Resources. WPTF requested that if PacifiCorp finds this requirement is causing interested parties to forego EIM participation, that PacifiCorp provide this information to stakeholders so that the implications can be further discussed. PacifiCorp will provide this information to stakeholders, but will not release any specific resource or owner names. VI. EIM Relationships: EIM Operational Information Exchange and Requirements As discussed above, the EIM will necessitate the exchange of day-ahead and hour-ahead forecast data between the EIM Entity and resources located within its BAAs as well as the exchange of a resource plan consisting of a balanced base schedule between each EIM Entity and the Market Operator. In addition to forecast data, resources will need to provide planned and unplanned resource outage data and EIM Participating Resources will need to provide the EIM Entity Scheduling Coordinator with its bid range schedule. Transmission providers will need to provide the EIM Entity with planned and unplanned transmission outage data by contacting PacifiCorp grid operations and PacifiCorp will create an outage in its Compass system. This is currently only for lines modeled in PacifiCorp s network model. The following diagram outlines the operational information exchanges required for EIM as well as the Market Operator outputs of EIM, including dispatch instructions and settlements. Settlements will also be administered by the EIM Entity to the loads and resources in its BAAs. This diagram incorporates the ISO s proposal to implement functionality to facilitate the submission of hourly base schedules, compilation of the hourly resource plan, and final approval of the resource plan by the EIM Entity Scheduling Coordinator (shown as the Pac EIM Portal in the diagram). PacifiCorp supports the ISO s proposal; without this facilitation by the ISO, which is able to leverage its existing systems, PacifiCorp would need to build new interfaces with resources in its BAAs as well as create new applications to check the balance and feasibility of base schedules. Utilizing existing systems and applications has a number of benefits, including: 1) reduction in risks associated with new systems and interfaces; 2) lower ongoing maintenance and operation costs to submit and validate base schedules; and 3) lower potential for base schedule infeasibilities and attendant reduction in uplift costs and over- or underscheduling penalties. In addition, a requirement to build new systems and applications could Page 17

18 create a potentially significant barrier to entry to the EIM for entities that do not already have this functionality. 1 Base schedule forecasts for all resources and interchange/intrachange to PAC EIM Portal (Market Operator produces load forecast) 2 MW bid range and economic bids 3 MW bid range 4 Resource plan, including balanced base schedule information 5 Planned resource outages and after-the-fact forced outages (including estimated return time); revenue meter data (also applicable to Loads) 6 Approved outages (all resources & transmission, real time and scheduled); revenue meter data 7 Market Operator advisory schedules 8 Dispatch instructions and imbalance settlement for participating resources 9 Imbalance settlement for loads, interchange and non-participating resources, including BAA neutrality & uplift charges 10 EIM Entity sub-allocation settlement for loads, interchange and non-participating resources; including BAA neutrality & uplift charges 1. Market Operator Load Forecast The EIM Entity can elect to use a load forecast produced by the Market Operator. If the EIM Entity Scheduling Coordinator chooses to submit base schedules using the Market Operator Page 18

19 load forecast they can minimize exposure to charges for under- or over-scheduling. If an EIM Entity Scheduling Coordinator using the Market Operator load forecast submits base resource and interchange schedules within +/- 1% of the Market Operator load forecast, the EIM Entity Scheduling Coordinator would not be exposed to under- or over-scheduling penalties. The Market Operator s load forecast will be based on historical data, applicable meteorological data, and ISO s State Estimator solution. It will be produced separately for each load aggregation point and then aggregated for each BAA. PacifiCorp is proposing one load aggregation point for each of its BAAs, which will result in one load forecast for each of its BAAs. The costs associated with the gathering and processing of required information to establish the load forecast will be recovered by the Market Operator through the EIM administrative rate. During the stakeholder process, BPA requested additional information relating to the development of the load forecast, specifically, the Draft Final Proposal states that the Market Operator will use historical data but does not indicate the source of this data, how it will be compiled, or how its accuracy will be verified. While the ISO is implementing EIM for new EIM Entities, ISO will obtain a history of load data from the EIM Entity and also from WECC data for BAAs through WECC s information sharing policy. Once the BAA is operational as a new EIM Entity, ISO will have additional data from settlements. The ISO stores available data and the data is subject to validation through audits or other mechanisms if needed. PacifiCorp has elected to use the Market Operator load forecast for both of its EIM Entities. PacifiCorp understands that once an EIM Entity elects to use the Market Operator load forecast, such forecast shall apply to all loads in the EIM Entity BAA for purposes of compiling the EIM Entity s balanced base schedule upon which uninstructed imbalance will be assessed. PacifiCorp believes that electing to use the Market Operator load forecast is the preferred option because of the mitigation against exposure to over- and under-scheduling penalties, and the incremental cost to PacifiCorp is zero. PacifiCorp has reviewed potential impacts this election will have on the operational information exchange with loads within PacifiCorp s BAAs that is required for EIM processes (see section X for discussion relating to LAPs). Page 19

20 In light of this proposal and during its stakeholder process, BPA asked PacifiCorp to explain whether the decision to use the Market Operator load forecast will result in loads or nonparticipating resources being required to schedule energy in accordance with the Market Operator s forecast and, if so, whether loads or non-participating resources would have an opportunity to adjust the Market Operator s forecast. If not, BPA requested more information relating to what recourse will loads or non-participating resources have if the Market Operator s forecast is dramatically off and whether loads or non-participating resources will have the ability to opt out of the Market Operator s forecast. Loads will not have the ability to opt out of the Market Operator s forecast and are not required to submit an explicit load forecast for EIM operational information exchange. However, for transmission customers with loads, resources, interchange and intrachange (internal purchases or sales), PacifiCorp proposes to require transmission customers to submit forecasts for resources, interchange and intrachange which balance to the customer s anticipated load, even though an explicit load forecast is not required. As discussed in more detail in section X, PacifiCorp believes it is necessary to require this information so that it has a cost-causation basis for allocating uninstructed imbalance energy to individual transmission customers and to ensure that the forecast information being supplied by load customers takes into account the customer s plan to balance its own resources to its loads. PacifiCorp was requested to provide additional detail relating to the availability of the Market Operator s forecast for loads in the EIM Entity, which for PacifiCorp will be on a BAA level. Following Market Operator-produced forecasts that are available prior to the operating day, load forecasts are updated up to the start of the market optimization for the binding EIM interval (T-37.5 for the 15-minute market and T-7.5 for 5-minute dispatch). Hourly base schedules may be updated up to 40 minutes before the operating hour (T-40) for load as well as supply, when the base schedule passes the Resource Sufficiency Evaluation. The ISO provides Market Operator load forecasts, LMPs, and a variety of other data through its Open Access Same-Time Information System ( OASIS ) website portal at Hourly load forecasts are currently available for the ISO s day-ahead market timeframe and at least one additional day, and 5-minute load forecasts are available for the real-time market horizon. The additional data to be available for 15-minute and 5-minute intervals through EIM implementation are discussed in section of the Draft Final Proposal. Page 20

21 PacifiCorp was also asked to clarify whether and to what extent PacifiCorp s average system loss factor would be used in measuring load demand. PacifiCorp s OATT Schedule 10 includes a stated loss factor for transmission facilities 34.5 kv and above of 4.26% and a distribution factor of 3.56%. PacifiCorp clarifies that it is working with the ISO to explore aligning the network model as much as possible to include generators in a manner consistent with the loss factors that are being used for PacifiCorp settlement purposes, depending on the transmission or distribution voltages at which the generators are interconnected. This will help ensure that the load forecasts being produced by the Market Operator and any resulting settlements are as consistent as possible in terms of applicable loss factors. 2. Forecast Data In light of PacifiCorp s election to use the Market Operator s load forecast, transmission customers with load will not be required to produce an explicit load forecast to the PacifiCorp portal. Instead (as discussed above) PacifiCorp proposes that for transmission customers with loads, resources (including both participating and non-participating resources), interchange and intrachange (internal purchases or sales), PacifiCorp will require transmission customers to submit forecasts for resources, interchange and intrachange which balance to the customer s expected load. See section X for further discussion related to how this information will be used to allocate uninstructed imbalance energy costs. During its stakeholder process, PacifiCorp was requested to provide additional detail relating to how system sales that are Designated Network Resources will be treated in the EIM. System sales that export out of the EIM Entity will be included in the forecasts for interchange, as noted above. See section IX.5 for further discussion on utilization of Designated Network Resources for EIM. PacifiCorp has expressed its support for ISO s proposal that EIM utilize hourly base schedules, rather than 15-minute base schedules. PacifiCorp was requested to clarify how this proposed change would interact with PacifiCorp s compliance with FERC Order No To better accommodate changes in loads and resources that occur after the start of the operating hour, as part of Order No. 764 compliance plan PacifiCorp will allow transmission customers to 9 PacifiCorp plans to offer 15-minute scheduling consistent with Order No. 764 on November 12, Page 21

22 submit a new transmission schedule or to make an adjustment to an existing transmission schedule within the current operating hour for any of the four 15-minute periods within such operating hour. In other words, transmission reservations will continue to be sold on an hourly basis, but schedules may be submitted or adjusted for any of the four 15-minute periods within the operating hour. This proposal applies to bilateral transactions in PacifiCorp s BAAs and does not include 15-minute market economic bidding at PacifiCorp s intertie boundaries. The EIM impacts of making any such changes are discussed further below. For purposes of EIM forecasts, PacifiCorp was also asked to clarify the ability to update forecasts every 15-minutes subsequent to FERC Order No. 764 implementation. In EIM, there is limited ability to make such updates and in any event the EIM Entity s base schedule will become financially binding at 40 minutes prior to the operating hour. Load forecast base schedules are updated hourly and do not have the option of updating every 15 minutes. The 15- minute market will clear based upon the Market Operator s hourly load forecast, as it is in ISO s BAA. Resources within PacifiCorp s BAAs will have hourly forecasts as their base schedules. For VERs, the Market Operator allows the EIM Entity to have the option of providing a VER forecast to the Market Operator or paying the Market Operator to produce a VER forecast. 10 For EIM Participating Resources, the Market Operator will use the economic bids submitted at T-75 for both the 15-minute schedule and 5-minute dispatch. Interchange forecasts are also hourly and are updated every 60 minutes for EIM, although schedule adjustments changes can be made consistent with scheduling practices pursuant to the OATT. During the stakeholder process, with respect to the above discussion, WPTF commented that it understands that the ISO s 15-minute market will be operational in the spring of 2014 and the EIM will be operational in October 2014; therefore, WPTF suggests the changes to the Market Operator s model should be in place prior to the operation of the EIM. PacifiCorp responds that WPTF has misunderstood the nature of the discussion; the above discussion pertains to what happens when interchange is adjusted after 40 minutes prior to the operating hour, the point at which the EIM Entity base schedule becomes financially binding. On this same 10 The VER forecast base schedule will be updated hourly, but in addition, the VER forecast must include a forecast to set the 15-minute schedule and 5-minute dispatch. If the EIM Entity provides the VER forecast, the Market Operator requires the EIM Entity to supply forecast input data (wind speed, wind direction, etc.) in order to verify the VER forecast. Page 22

23 topic, BPA noted the proposal language that schedules may be submitted or adjusted for any of the four 15- minute periods within the operating hour, but also that load forecasts do not have the option of updating every 15 minutes and asked for additional information on how the ability to adjust a schedule without being able to adjust a forecast will affect load in PacifiCorp s BAAs. The EIM Entity Scheduling Coordinator will approve final hourly resource plans 40 minutes prior to the operating hour. Under current practice in the WECC region, schedule changes are permitted up until 20 minutes prior to the next clock hour. Therefore, PacifiCorp acknowledges the potential that transmission customers may modify their schedules after the hourly resource plan is finalized for the EIM, in which case the change will be treated as uninstructed imbalance energy until the change is communicated to and implemented in the Market Operator s model, at which point it is treated as instructed imbalance energy. This possibility is not materially different from how the market operates today. In the current market, if a schedule is modified 20 minutes prior to the operating hour, the balancing authority would address any shortfall through the use of its regulating reserves. If the interchange schedule is modified to reflect a change in a load or generation forecast, less regulating reserve would be required. There is a potential for a financial impact if later modification to the schedules causes additional imbalance. Similarly, in the EIM, if modifications are made to schedules after 40 minutes prior to the operating hour, additional uninstructed imbalance could result. However, this issue exists today and is not an issue created by the EIM. For other changes in output and for other non-ver supply resources, updates to the expected output may be submitted for physical reasons, including outages, transmission derates, response to contingencies by resources designated for ancillary services, response to unscheduled flow mitigation directed through WECC procedures, operation of demand response programs that do not bid in EIM, and other exceptional dispatches as directed by the EIM Entity. 3. Bid Data The following table summarizes the bid data requirements for EIM Participating Resources ( EPRs ) in the EIM Entity: Page 23