September 30, Louisville Gas & Electric Company, et al., Docket No. ER The ITO s Semi-Annual Report

Transcription

1 September 30, 2011 The Honorable Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street, N.E. Washington, D.C Re: Louisville Gas & Electric Company, et al., Docket No. ER The ITO s Semi-Annual Report Dear Secretary Bose: The Southwest Power Pool, Inc. ( SPP ), as the Independent Transmission Organization ( ITO ) for the Louisville Gas & Electric Company s ( LG&E ) and Kentucky Utilities Company s ( KU ) systems, hereby submits the ITO s Semi-Annual Report, in accordance with the Federal Energy Regulatory Commission s orders approving the establishment of the ITO and section of the ITO Agreement in LG&E/KU s Open Access Transmission Tariff ( OATT ). 1 The ITO will serve a copy of this report to all Interested Government Agencies and will make the report publicly available by posting it electronically on LG&E/KU s OASIS. If there are any questions related to this matter, please contact the undersigned at the number listed above. Respectfully submitted, Attachment /s/ David S. Shaffer_ David S. Shaffer Counsel for the ITO 1 See Louisville Gas & Electric Co., et al., 114 FERC 61,282, order on reh g, 116 FERC 61,020, order on compliance, 116 FERC 61,019 (2006), reh g denied, 118 FERC 61,158 (2007).

2 Independent Transmission Organization (ITO) for LG&E/KU Semi-Annual Report

3 Table of Contents 1. OVERVIEW ITO REPORTING ITO PERFORMANCE TRANSMISSION HOARDING...17

4 1. Overview 1.1 E.ON U.S. Louisville Gas & Electric Company (LG&E) and the Kentucky Utilities Company (KU), formerly operating subsidiaries of E.ON U.S. own an integrated electric transmission system which provides open access transmission service within the LG&E/KU footprint in accordance with LG&E/KU s FERC Open Access Transmission Tariff (OATT or Tariff). On October 26, 2010, in Docket No. EC10-77, the Commission approved a proposed transaction between E.ON U.S. and PPL Corporation (PPL), whereby PPL would acquire all of the issued and outstanding limited liability company interests of E.ON U.S. PPL notified the Commission on November 8, 2010, that the transaction was completed on November 1, 2010, and that E.ON U.S. and LG&E/KU were now wholly owned subsidiaries of PPL. 1.2 Duties Pursuant to the ITO Agreement Southwest Power Pool, Inc. (SPP), in its role as the Independent Transmission Organization (ITO) for LG&E/KU under the ITO Agreement and LG&E/KU OATT, is responsible for processing and evaluating transmission service requests (TSR); performing System Impact Studies (SIS); granting or denying TSRs; evaluating and implementing electronic tags; overseeing the generator interconnection process and the expansion planning function; and conducting a stakeholder process. SPP has been deemed by the Commission to be an independent and appropriate entity to perform these functions. SPP is physically removed from the LG&E/KU footprint; however, due diligence by LG&E/KU established that core competencies such as experience, personnel, and infrastructure, along with SPP computer software, allow SPP to perform these functions in a highly effective manner. While LG&E/KU maintains ownership of its transmission system and is ultimately responsible for providing adequate transmission service to its customers, SPP oversees the provision of non-discriminatory, open access transmission service on the LG&E/KU transmission system. 1.3 ITO Semi-Annual Report Requirements Pursuant to Attachment P of LG&E/KU s OATT, [t]he ITO shall report in writing to FERC every six (6) months (commencing on the six-month anniversary of the effective date of the Tariff and every six (6) months thereafter) to address (i) any concerns expressed by stakeholders and the ITO s response to same and (ii) any issues or Tariff provisions that hinder the ITO from performing its functions and responsibilities under this Attachment P and the other provisions of the Tariff. In addition, the ITO is also required to document instances of possible transmission hoarding. 1

5 1.4 The ITO Agreement Prior to the expiration of the initial term of the ITO Agreement (i.e., September 1, 2010), E.ON U.S. and SPP executed the Second Amended and Restated ITO Agreement that, inter alia, proposed an extension of the ITO arrangement for an additional two-year term (i.e., September 1, 2012). By order dated October 5, 2010, the Commission accepted the Second Amended and Restated ITO Agreement without modification effective September 1, 2010, as requested by the parties. In February 2011, LG&E/KU commenced a bidding and selection process seeking proposals from qualified entities to serve as the successor ITO to SPP following the expiration of the Second Amended and Restated ITO Agreement. As a result of this process, on August 31, 2011, LG&E/KU filed an application with the Commission (Docket No. ER ) seeking regulatory approval to transfer ITO responsibilities from SPP to TranServ International, Inc. effective September 1, SPP has intervened in this proceeding. At the time of this report, the Commission had taken no action on the application. 2

6 2. ITO Reporting 2.1 Stakeholder Process Attachment P and the ITO Agreement require the ITO to conduct and oversee the LG&E/KU stakeholder process. The stakeholder process provides a forum for interested parties to raise concerns and discuss with ITO management issues related to the ITO s tariff administration, planning, and other functions. During the current reporting period, the ITO held one stakeholder meeting in Louisville, KY on May 24, This meeting was attended by twenty-one (21) participants. The agenda, meeting presentations, and meeting notes can be found on SPP s website at: SIS, Facilities Study (FS), and Feasibility Analysis Service (FAS) for Transmission Service Overview Pursuant to Attachment P, the ITO is responsible for processing and evaluating all TSRs. In accordance with the procedures contained in the LG&E/KU OATT, the ITO analyzes TSRs and determines on a non-discriminatory basis whether a SIS is needed. If a SIS is required, the ITO informs the customer as soon as practical and tenders a SIS Agreement within 30 days of receipt of the customer s completed application. The customer must execute and return the SIS Agreement to the ITO within 15 days, or the customer s application shall be deemed withdrawn and the customer s deposit returned with interest. Upon receipt of the SIS Agreement, the ITO shall use due diligence to complete the SIS within 60 days. The ITO will notify the customer if it cannot complete the SIS in 60 days and also provide an estimated time of completion and reason for the extended time frame. Where applicable, the ITO has 30 days from the SIS completion date to tender to the customer a FS Agreement, under which the customer agrees to reimburse the ITO and LG&E/KU for actual FS costs. The customer must execute and return the FS Agreement to the ITO within 15 days, or the customer s application shall be deemed withdrawn and the customer s deposit returned with interest. Upon receipt of the FS Agreement, and subject to the ITO s oversight, LG&E/KU shall use due diligence to complete the FS within 60 days. The ITO will notify the customer if LG&E/KU cannot complete the FS in 60 days and also provide an estimated time of completion and reason for the extended time frame. Within 30 days of the completion of the FS, the customer must 3

7 execute a Service Agreement or request filing of an unexecuted Service Agreement provided that the required resources are acceptable to LG&E/KU and are equivalent to the cost of the new facilities. Pursuant to section 2.3 of the LG&E/KU Tariff and Attachment R, a customer requesting new Point-to-Point (PTP) or Network Integration Transmission Service (NITS) may request that the ITO or its designee (LG&E/KU or another third party) perform a feasibility analysis. The FAS is a high-level preliminary study of the costs and time required to construct any upgrades or new facilities related to the new service request. A customer wanting a feasibility analysis must pay a flat rate fee and will receive the results within 30 days of executing a Feasibility Analysis Agreement. Due to the preliminary nature of the study, the FAS is not binding on the customer, LG&E/KU, or the ITO SIS, FS, and FAS Statistics Table 1 lists the number of SIS requested during the current reporting period. Table 1 SIS REQUESTED (DATE IN QUEUE) Reporting Period Ending August 31, 2011 Ma Ap Ma Jun Jul Aug

8 Table 2 illustrates the status of all SIS that were remaining in the queue or were received during the current reporting period. Table 2 SIS AND OASIS STATUS Reporting Period Ending August 31, 2011 SIS Number Oasis Number Point of Receipt Point of Delivery MW Requested Oasis Status LGE LGEE LGEE 765 Withdrawn LGE OMU PJM 52 Confirmed LGE OMU PJM 52 Confirmed LGE MISO LGEE 4 Confirmed LGE LGEE LGEE 690 Withdrawn LGE LGEE LGEE 4-5 Confirmed LGE LGEE LGEE FS LGE LGEE LGEE 690 FS LGE LGEE PJM 501 SIS LGE LGEE LGEE 3 Accepted LGE LGEE LGEE 58 SIS LGE LGEE LGEE 58 SIS LGE MISO OMU 220 Withdrawn LGE LGEE LGEE 192 SIS LGE LGEE LGEE 192 SIS LGE LGEE LGEE 192 SIS Table 3 shows that the ITO completed six (6) SIS during the current reporting period. Table 3 SIS COMPLETED Reporting Period Ending August 31, 2011 SIS Number Oasis Number Point of Receipt Point of Delivery MW Requested Oasis Status LGE OMU PJM 52 Confirmed LGE OMU PJM 52 Confirmed LGE MISO LGEE 4 Confirmed LGE LGEE LGEE 4-5 Confirmed LGE LGEE LGEE FS LGE LGEE LGEE 690 FS 5

9 Table 4 shows that the ITO had three (3) SIS withdrawn or retracted during the current reporting period. Table 4 RETRACTED/WITHDRAWN SIS FOR REPORTING PERIOD Reporting Period Ending August 31, 2011 SIS Number Oasis Number Point of Receipt Point of Delivery MW Requested Oasis Status LGE LGEE LGEE 765 Withdrawn LGE LGEE LGEE 690 Withdrawn LGE MISO OMU 220 Withdrawn Table 5 shows that there was one (1) FS completed during the current reporting period. Table 5 SUMMARY OF COMPLETED FS Reporting Period Ending August 31, 2011 Oasis Point of Point of MW Start Date Stop Date Number Receipt Delivery Requested EKPC LGEE /1/ /1/2033 There were no FAS requested during the current reporting period. 6

10 2.2.3 Stakeholder Concerns DNR Task Force - After the DNR Task Force resolved the issue related to submitting load addition TSRs through OASIS, the group agreed it will meet as needed to discuss with stakeholders any questions regarding designated network resources and load additions Interpretation of week - At the November 2010 stakeholder meeting, the ITO reported that the Business Practices and various TSR software both used a consistent Sunday - Sunday definition of week. However, due to the confusion surrounding this issue, the ITO stated it would further investigate the issue and present and explain their findings regarding the consistencies between the Business Practices and TSR software at the spring 2011 stakeholder meeting. Accordingly, at the May 24, 2011 stakeholder meeting the ITO presented its findings, confirming that the definition of a week as Sunday through Sunday was consistent across the Business Practices and the software. 2.3 Expansion Planning Overview Pursuant to Attachment P, the ITO is responsible for reviewing and approving all planning activities for the LG&E/KU transmission system. Accordingly, the ITO completes a multi-faceted review of all activities, policies, and inputs impacting LG&E/KU s yearly Transmission Expansion Plan (TEP). During this reporting period, the ITO continued its assessment of LG&E/KU s 2010 TEP. The ITO s assessment of LG&E/KU s TEP is based on summer and winter peak models for the years 2011, 2015, and 2020 and includes an ITO review of all planning guidelines, model validation, powerflow analysis, operating guidelines used by LG&E/KU to develop the plan, as well as an assessment of the planned projects that are proposed by LG&E/KU. The ITO is on target to complete its review and present its final assessment prior to the Fall 2011 stakeholder meeting scheduled for November 17, At the May 24, 2011 stakeholder meeting, Tom Seeley, of LG&E/KU, gave a presentation on the 2010 TEP showing a downturn in projected load growth for 2011 and an associated decline in anticipated transmission expansion. Thus, the 2010 TEP contains only 96 projects for the timeframe, which are 27 fewer projects than the 2009 TEP. 7

11 2.3.2 Stakeholder Planning Committee (SPC) In accordance with Attachment K, the SPC was formed as a stakeholder-managed committee to provide a forum for stakeholder input into the LG&E/KU planning process. During this reporting period, the SPC held teleconferences on March 7, 2011, and March 25, 2011, and LG&E/KU hosted a SPC meeting on May 23, At the May 23 meeting, the Economic Expansion Planning Subcommittee (EPC) approved the following five (5) Economic Planning Study projects submitted by the stakeholders: KMPA-MISO Export 200 MW OMU-PJM Export 200 MW OMU-KMPA Export 200 MW & 100 MW to TVA PJM-LGEE Import 600 MW TVA-LGEE Import 600 MW The study results for these projects will be presented at the Fall 2011 SPC meeting scheduled for November 16, The SPC will continue to look at the improvements and agreements being considered by the stakeholders Planning and Construction Update At the May 24, 2011 stakeholder meeting, LG&E/KU reported that it is considering ways to perform load benchmarking and other types of benchmarking. 2.4 Generator Interconnection Process Large Generator Interconnection Procedures (LGIP) Overview An interconnection customer shall submit to the ITO an interconnection request in the form of Attachment M, Appendix 1 of the LGIP. Requests for interconnection shall be subject to an Interconnection Feasibility Study, an Interconnection SIS, and an Interconnection FS. Under the LGIP, the ITO is to use reasonable efforts to complete the Interconnection Feasibility Study within forty-five (45) days; the Interconnection SIS within ninety (90) days; and the Interconnection FS within ninety (90) or one hundred eighty (180) days depending on the cost estimate. For all studies, the ITO is to notify the interconnection customer if the study will not be completed within the time required and provide an estimated completion date and an explanation of the reasons why additional time is required. 8

12 2.4.2 Small Generator Interconnection Procedures (SGIP) Overview An interconnection customer shall submit to the ITO an interconnection request in the form of Attachment N, Appendix 2 of the SGIP. Requests for interconnection shall be subject to an Interconnection Feasibility Study, an Interconnection SIS, and an Interconnection FS. Under the SGIP, the ITO is to use reasonable efforts to complete the Interconnection Feasibility Study within thirty (30) days; the Interconnection SIS within thirty (30) days or forty-five (45) days depending on whether it involves distribution or transmission, respectively; and the Interconnection FS within thirty (30) or forty-five (45) days depending on whether or not upgrades are required, respectively. For all studies, the ITO is to notify the interconnection customer if the study will not be completed within the time required and provide an estimated completion date and an explanation of the reasons why additional time is required Interconnection Statistics Table 6 shows the status of the interconnection service requests processed during the current reporting period. Table 6 SUMMARY OF INTERCONNECTION REQUESTS Reporting Period Ending August 31, 2011 Generation Interconnecti on Number LGE-GIS Nearest Town or County State CA Henderson County In-Service Date Capacity Type Status Combined Cycle FS To Post 9/2011 KY LGEE 3/31/ LGE-GIS LGE-GIS LGE-GIS LGE-GIS LGE-GIS Wise County VA LGEE 12/1/ Wind Paducah KY LGEE 5/1/ Bedford KY LGEE 5/1/ Cane Run KY LGEE 1/1/ Louisville KY LGEE 6/1/ Pratt & Whitney FT-8 Swift Pacs Steam Turbine Combined Cycle Combined Cycle Ad-Hoc SIS Restudy Posted 5/10/2011 Ad-Hoc SIS Posted 11/19/2010 Ad-Hoc SIS Posted 12/22/2010 Feasibility Study REQUESTED study delayed due to prior studies in the queue Feasibility Study REQUESTED study

13 LGE-GIS LGE-GIS LGE-GIS LGE-GIS LGE-GIS Central City KY LGEE 1/1/ Buckner KY LGEE 1/1/ Louisville KY LGEE 1/1/ Combined Cycle Combined Cycle Combined Cycle Louisville KY LGEE 1/1/ Hydro Harrodsburg KY LGEE 1/1/ Combined Cycle delayed due to prior studies in the queue IN PROGRESS study delayed due to prior studies in the queue IN PROGRESS study delayed due to prior studies in the queue IN PROGRESS study delayed due to prior studies in the queue IN PROGRESS study delayed due to prior studies in the queue IN PROGRESS study delayed due to prior studies in the queue Stakeholder Concerns Generator Interconnect (GI) Studies - There was discussion at the May 2010 stakeholder meeting about how small generator (i.e., <1 MW) interconnection requests can be interconnected, LG&E/KU reported that there were three interconnection options: (i) to a distribution line currently being used for wholesale; (ii) into the 69 kv or higher transmission system; and (iii) at the retail levels. Options 1 and 3 cannot be studied by the ITO because the models do not contain the distribution level system. Option 2 can be accommodated under the current study procedures GI Queue Reform - At the May 24, 2011 stakeholder meeting, LG&E/KU outlined the process for GI queue reform. The goals of the process are to provide preliminary results to the customer in the queue prior to reaching the top of the queue and to provide a mechanism that could potentially assist in moving customers through the queue in a timelier manner. LG&E/KU customers will have a 30-day comment period to raise any concerns they have about the proposed 10

14 structure of the GI queue reform and any necessary modifications to LG&E/KU s Business Practices to reflect this new process. The Generator Interconnect Working Group (GIWG) will be reviewing meeting results and comments. 11

15 3. ITO Performance In this section of the report, the ITO will address how its ability to perform its functions and responsibilities during the current reporting period has been impacted by issues under the LG&E/KU OATT. In addition, this section will contain operational results of the ITO s processing of TSRs to assess the ITO s performance of its tariff administration function. 3.1 TSRs Transmission customers that want to submit TSRs on the LG&E/KU system must access the LG&E/KU OASIS node at Requests may be submitted by completing the electronic form in accordance with the provisions in the Standards and Communication Protocols of LG&E/KU s OATT. The following four figures provide pertinent data on the processing of TSRs for the LG&E/KU transmission system during the current reporting period. 12

16 Figure 1 provides a comparison of confirmed TSRs versus total TSRs on the LG&E/KU transmission system for the period of March 1, 2011 through August 31, Collected data illustrates an 81 percent overall confirmation rate during this time period. Figure 1 13

17 Figure 2 shows TSRs by service class (Firm, Non-Firm, and Secondary) that were submitted and confirmed by the ITO for the current reporting period. Figure 2 14

18 Figures 3 and 4 illustrate confirmed versus total requests for each particular path for both Firm and Non-Firm TSRs for the current reporting period. Figure 3 15

19 Figure 4 16

20 4. Transmission Hoarding The ITO is charged with identifying activities by Market Participants that could potentially result in transmission capacity hoarding on the LG&E/KU system. Pursuant to section 4.1 of Appendix 1 to Attachment P of LG&E/KU s OATT, the ITO compiles monthly data on unscheduled reservations and redirected capacity to identify recurring instances that could have a potentially detrimental market impact. In addition, the ITO tracks and reports potentially detrimental scheduling practices under the following criteria: redirected firm reservations, withdrawn firm reservations, unconfirmed reservations, retracted reservations, and annulled reservations. Paths that had no data involving the identified criteria are not listed in the respective tables below. Further, there was no Firm service annulled during this reporting period; therefore, a table was not included for annulled Firm service. Table 7 shows in MWh s the amount of unscheduled Firm service by month and by path. 17

21 Table 7 UNSCHEDULED FIRM CAPACITY (MWH'S) BY MONTH BY PATH Reporting Period ending August 31, 2011 ( All values presented in MWh) 18

22 Table 8 shows the amount in MW s of retracted Firm service by month and by path. Table 8 RETRACTED FIRM CAPACITY (MW S) BY MONTH BY PATH Reporting Period Ending August 31, 2011 Table 9 shows the amount in MW s of withdrawn Firm service by month and by path. Table 9 WITHDRAWN FIRM CAPACITY (MW'S) BY MONTH BY PATH Reporting Period Ending August 31,

23 Table 10 shows the amount in MW s of redirected Firm service by month and by path. Table 10 REDIRECTED FIRM CAPACITY (MW'S) BY MONTH BY PATH Reporting Period Ending August 31,