[Federal Register: March 8, 2005 (Volume 70, Number 44)]
[Notices]
[Page 11232-11238]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08mr05-77]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
[Docket Nos. RM05-7-000, AD04-13-000]
Potential New Wholesale Transmission Services; Assessing the
State of Wind Energy in Wholesale Electricity Markets; Notice of Draft
Agenda for Technical Workshop
March 2, 2005.
As announced in the Notice of Technical Workshop issued on February
1, 2005, the staffs of Bonneville Power Administration (BPA) and the
Western Electricity Coordinating Council (WECC) will participate with
the staff of the Federal Energy Regulatory Commission (FERC) at a
workshop on March 16-17, 2005. The workshop will be held at the
Doubletree Hotel & Executive Meeting Center Portland-Lloyd Center, 1000
NE. Multnomah, Portland, Oregon 97232. The workshop
[[Page 11233]]
is scheduled to begin at 9 a.m. and end at approximately 5 p.m. (PST)
each day.
The goal of the workshop is to work with market participants to
develop clear definitions for additional wholesale electric
transmission services, e.g., conditional firm transmission service,
develop applicable pro forma tariff language that could be included in
public utilities' open access transmission tariffs and address
attendant issues.
Attachment A of this Notice contains the draft agenda for the
workshop. Attachment B contains a table prepared by Commission staff
that identifies and briefly describes the new transmission services
proposed by other entities. Attachment C contains a proposal for a BPA
``Conditional-Firm Product.'' Panelists are strongly encouraged to
coordinate among themselves prior to the workshop to minimize overlap
in the information presented at the workshop by using the information
attached to this Notice.
The Commission will solicit comments related to the workshop to be
filed in the captioned docket by April 13, 2005. The comments will be
available for review in the Commission's e-Library. The public will
have the opportunity to file reply comments in response to these
comments by April 29, 2005.
The conference workshop is open for the public to attend, and
preregistration is not required; on-site attendees may simply register
on the day of the event.
Capitol Connection offers the opportunity for remote listening of
the conference via the Internet or a Phone Bridge Connection for a fee.
Interested persons should make arrangements as soon as possible by
visiting the Capitol Connection Web site at http://www.capitolconnection.gmu.edu
and clicking on ``FERC.'' If you have any
questions contact David Reininger or Julia Morelli at the Capitol
Connection (703-993-3100).
For more information about the conference, please contact Jignasa
Gadani at 202-502-8608, jignasa.gadani@ferc.gov.
Linda Mitry,
Deputy Secretary.
Attachment A
Technical Workshop on Additional Wholesale Electric Transmission
Services Under the Order No. 888 Open Access Pro Forma Tariff
Day One
9 a.m.-9:30 a.m.: Opening Session.
Stephen J. Wright, Administrator, Bonneville Power
Administration.
Senior Staff Member, Federal Energy Regulatory
Commission.
Note: While the agenda often references the conditional
transmission services contained in Attachment B, this is not meant
to preclude discussion of the other similar transmission services.
9:30 a.m.-10:30 a.m.: Identifying and Addressing Customer Needs.
Panelists will discuss the need for transmission service options
that are different from those available in the Order 888 pro forma
open access transmission tariff (OATT). Questions intended to be
addressed include:
Are there provisions of the current pro forma OATT that
are inadequate in terms of service and rate flexibility? If so,
elaborate.
Do current tariff provisions limit the potential (or
practicality) of certain business models?
How can new tariff services balance the needs and
rights of existing and new customers, without introducing cross
subsidies?
How can conditional firm transmission service
facilitate the financing of new generation?
What are the elements of a new transmission service
option that would be critical to facilitating reasonable debt or
project financing?
10:30 a.m.-12 p.m.: Preview of the New Services.
Using Attachment B of this Notice, Table of Existing/Proposed
Transmission Services and Attachment C as a reference, panelists
will describe the transmission services they propose to offer as
part of a pro forma OATT and any other services they have developed
to meet customer needs. Panelists should address the conceptual
aspects of the services. Questions to be addressed include:
Explain the elements of the proposed transmission
services.
Can the different proposals be reconciled to create one
standard service?
How do these services address customer needs as stated
in the first panel? Are additional services needed?
What other characteristics should be included in the
services?
12 p.m.-1 p.m.: Lunch.
1 p.m.-2:30 p.m.: Arranging for Service.
Panelists will describe and discuss the process in which a
customer will arrange for service. Questions intended to be
addressed include:
Should Conditional Firm service be offered to all
customers on a non-discriminatory basis?
What is the minimum term of the services: is it one
hour with no maximum term, similar to point-to-point?
Will customers designate receipt and delivery points
and ``reserve'' capacity over specified periods?
Should Conditional Firm service be required to be
offered as a standard service under the OATT, or should Conditional
Firm offerings be at the discretion of the Transmission Owner?
Should Conditional Firm service only be offered when a
customer's request for long-term firm point-to-point service cannot
be met?
How would the transmission queue be affected with the
addition of the new service?
Should deposits be identical to those for firm point-
to-point service?
Should a potential Conditional Firm Customer fund
incremental studies to determine what Conditional Firm capacity may
be available?
How would a transmission customer arrange and schedule
for this service through OASIS?
2:30 p.m.-2:45 p.m.: Break.
2:45 p.m.-4:30 p.m.: Service Availability.
Panelists will describe and discuss how a transmission provider
will determine the amount of capacity available for Conditional Firm
service in an open and transparent manner. Questions to be addressed
include:
What system studies must be performed to determine the
availability of Conditional Firm service?
How is the level of expected curtailment determined?
Should the level of expected curtailment be fixed or
should it grow, for example, with demand growth?
Should there be a limit on the availability of
Conditional Firm service when expected curtailment reaches some
threshold (e.g., 5 percent, 10 percent, 50 percent?).
Should Conditional Firm service be offered in tranches
(e.g. 98 percent firm, 95 percent firm, etc.) or should all
Conditional Firm service be subject to the same curtailment
exposure?
How will transmission planners alter the modeling of
their systems, if at all, to account for Conditional Firm service?
4:30 p.m.-5 p.m.: Re-cap Consensus Items and Highlight Action Items
for Day 2 of Workshop.
Day Two
9 a.m.-9:30 a.m.: Recap of Workshop Day 1.
9:30 a.m.-11 a.m.: Curtailment Priority.
Panelists will describe and discuss the specific details that
characterize the new services. Questions intended to be addressed
include:
Presently, under the OATT, all firm service is
curtailed on a pro rata basis. Should Conditional Firm service be
curtailed after non-firm point-to-point and short-term firm, but
before long-term firm point-to-point?
Does this service require distinct rules for
curtailment that can only be addressed through individual contracts?
If so, why?
How will curtailment beyond the level specified in the
contract be addressed?
How are curtailments implemented over multiple paths
where the hours of availability are different for each path?
Do all Conditional Firm service customers have the same
curtailment priority? If not, explain the need for differing
priorities.
What is the effect of Conditional Firm service on the
availability of short-term firm service? Would the Commission need
to revise the provisions for short-term firm service to accommodate
Conditional Firm?
Should Conditional Firm service be required to be
offered as a standard service
[[Page 11234]]
under the OATT, or should Conditional Firm offerings be at the
discretion of the Transmission Owner?
Should there be a requirement that a Conditional Firm
customer must take firm service if it becomes available after it has
arranged for Conditional Firm service?
If transmission upgrades are installed as part of new
firm service requests, would Conditional Firm customers be required
to step up to firm and participate in funding those upgrades?
In the case of transmission upgrades, would a
Conditional Firm customer be subject to the same ``higher of''
standard of the FERC's transmission pricing policy?
How will system growth affect the integrity of the
Conditional Firm service?
11 a.m.-12:30 p.m.: Impact on Existing Customers and Reliability.
Panelists will describe and discuss the potential impact that
implementation of Conditional Firm service will have on existing
customers. Panelists will also address potential reliability impacts
associated with the implementation of Conditional Firm service.
Questions intended to be addressed include:
What should a transmission provider do to ensure that
current firm customers retain the same level of service?
Will a Conditional Firm service customer ever be
curtailed on a pro rata basis with long-term firm customers?
What is the curtailment priority of the new service
with respect to secondary network service and short-term firm
service?
Are there any potential reliability impacts due to this
new service?
12:30 p.m.-1:30 p.m.: Lunch.
1:30 p.m.-2:30 p.m.: What Should a Customer Pay?
Panelists will discuss how the rates for Conditional Firm
service should be determined. Questions intended to be addressed
include:
Should the rates for Conditional Firm service be lower
than that of firm service to reflect the lower quality of service?
Will the implementation of Conditional Firm impact how
the rates are presently calculated? Will they result in deriving new
billing determinants? Should the revenue from Conditional Firm
service be credited against the transmission revenue requirement?
What are the potential revenue effects of these new
services?
How do we design the rates for Conditional Firm service
that would prevent subsidization by traditional transmission
customers?
What are the cost obligations of Conditional Firm
customers if the transmission provider builds new facilities to
alleviate congestion across a path?
What should be the rules for allocating costs to the
Conditional Firm service category?
2:30 p.m.-4 p.m.: How it All Fits Together, Including What Other
Parts of the Tariff Must be Revised.
Panelists will discuss how the Conditional Firm service will
function in relation to the existing terms and conditions of the
OATT. In addition, panelists will discuss potential modifications to
existing tariff provisions that must be made to implement
Conditional Firm service. Questions to be addressed include:
What other sections of the OATT must be modified to
accommodate Conditional Firm service?
Do transmission providers consider Conditional Firm
transmission service a new tariff provision or a variant of point-
to-point service?
Where will the proposed service fit into the existing
tariff, i.e., will a new service section be needed?
Should Conditional Firm service be regional,
transmission operator specific, or generally applicable under FERC's
pro forma tariff?
4 p.m.-5 p.m.: Recap Consensus Items/Tasks Accomplished and Listing
Outstanding Issues/Questions.
During this part of the workshop participants and moderators
will:
Recap solutions/tasks accomplished.
Develop lists of questions and issues requiring further
work.
Agree on roles and responsibilities to develop possible
solutions on questions and issues that requiring further work at the
end of the Workshop as well as the filing of these in the proceeding
for the Workshop.
Attachment B
[[Page 11235]]
Table of Existing/Proposed Transmission Services \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
BPA--conditional firm PacifiCorp--partial firm RMATS--conditional firm RMATS--priority non-firm
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nature of Service................. Conditional Firm--The Partial Interim Service--The Conditional Firm--Offered Non-Firm PTP--Right of First
service is Firm for a service is Firm but Firm during defined period Refusal to any service that
number of years but available only a portion of of year and Conditional may become available.
limited during certain a day, week, month, or Firm for balance of year.
months, weeks, days, and year. Determined during Determined during
hours. Determined during application procedures. application process.
application procedures. Curtailment hours during
Guarantee certain levels month will be designated in
of service. an Appendix.
Eligible Customer................. Available to customers Available to customers when Available to LTF PTP Available to any party.
when TP determines TP determines insufficient customers when TP
insufficient ATC exists ATC exists to meet determines insufficient ATC
to meet customer's full customer's full request. exists to meet full request
request. Must be in of traditional LTF PTP.
existing queue.
Completed Application............. Customer must first submit Customer must submit an Offered to customers who Not Stated.
an application for LTF. application for Partial submit a LTF application.
Interim Service.
Type of Service................... PTP only.................. PTP only.................... PTP only.................... PTP only.
Service Availability.............. Not a standard OATT Not a standard OATT product. Available when ATC is Offered when there is
product. Limited number A customer cannot come in insufficient for full insufficient ATC in most
of offers based on and specifically request amount of request of hours of the year.
historic usage data and this service. Service is traditional Firm PTP.
studies of proposed only available if a
conditions. customer comes in
requesting Firm PTP
Transmission Service and
the full amount is not
available.
Determination of Available Periods Not yet resolved, but will Not Stated.................. Not Stated.................. Not Stated.
likely be based on a
level of probability to
be determined.
Curtailment....................... Not stated................ Not Stated.................. Curtailed after all Non-Firm Curtailed after redirects
but prior to traditional from secondary points; hour/
Firm Service. daily/weekly/monthly, Firm,
but prior to network
service from secondary non-
network resources, and Firm
Service. Subject to
curtailment for reasons of
reliability or to relieve a
constraint.
Rates............................. OATT rate or the OATT rate Percentage of OATT rate..... Priced relative to LTF to Based on proportionate use
reduced by the same reflect higher potential of system.
percentage as the for curtailment.
reduction in capacity.
Term.............................. Same as LTF............... Not Stated.................. Same as LTF................. 1-10 years.
Impact on existing LTF PTP None...................... Not Stated.................. None........................ None.
Customers.
Queue............................. Customers will remain in Not Stated.................. Customer would retain Customers would retain
queue for capacity to original queue status. original queue status.
meet full capacity
requests.
Impact of STF on CF............... Sale of STF will not ............................ Not Stated.................. None.
degrade CF. CF upgraded
to Firm prior to offering
to STF.
Impact on ATC..................... Same as LTF. Affects the Not Explicitly Stated....... Not Explicitly Stated....... Not Explicitly Stated.
amount of available ATC
for LTF, STF and NF.
Reduction to Capacity............. Can be made to pre- Not Stated.................. Not Stated.................. Not Stated.
schedule. In real time
treated same as LTF PTP.
Rollover Rights................... Yes, but if customer Not Stated.................. Not stated.................. Not Stated.
refuses extra capacity at
a later date, removed
from queue and will not
have Rollover Rights.
[[Page 11236]]
Assignment/Deposits/Deferrals/ Same as long term Not Stated.................. Not Stated.................. Not Stated.
Redirect Rights. procedures set forth in
OATT.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ CF--Conditional Firm.
PTP--Point to Point.
LTF--Long Term Firm.
STF--Short Term Firm.
NF--Non-Firm.
[[Page 11237]]
Attachment C
Proposal for a Conditional-Firm Product With Bonneville Power
Administration's Transmission Business Line
Background
BPA's transmission system inventory is nearing zero,
particularly on some constrained flowgates. Posted ATC indicates
that on many flowgates there is limited long-term firm Available
Transfer Capability (ATC) remaining. However, data from planning and
operations shows that congested flowgates are at peak capacity for
only a limited number of hours each year. We propose that the TBL
offer a new transmission product, referred to here as the
``Conditional-Firm'' (CF) product, which could optimize use of the
existing transmission system and the ability to obtain transmission
service as well as provide customers more flexibility.
Rationale
There is a need for additional ATC for generators and utilities
to be able to engage in long-term contracts to serve growing
Northwest loads. The CF product would offer transmission service
that would have more certainty than non-firm service, but would not
be required to be available for the full year assuming all lines in
service. (Current long-term firm service does allow for some outages
throughout the year.) Many generators and utilities feel they could
work with a transmission product with limited risk to transmission
capacity availability. Intermittent generators like wind, do not
always need the full transmission capacity of their contracts and
would be less impacted by small incremental risks to capacity
availability and therefore more likely to purchase CF. Generators
and utilities are not comfortable signing twenty-year contracts for
non-firm transmission for new resources with the risks inherent in
transmitting that power strictly via non-firm transmission service.
It is also difficult to get funding for new generators without
transmission certainty. Since additional transmission lines are
unlikely to be built soon to serve generators in many locations,
customers have requested that BPA offer innovative products like CF
that make more efficient use of the transmission system over
constrained paths and allow new generators to get their power to
market.
A significant number of utilities and generators need to be able
to finalize their contracts in the near future. For renewable
generators this is especially true since their costs depend on the
Federal Production Tax Credit (PTC). The PTC has been extended
through 2005. Further extensions beyond 2005 are anticipated, but
still unclear. A CF product defined by the end of 2005 and
implemented in 2006 could provide a bridge until such time as more
ATC is available from BPA via new transmission line construction or
expiring contracts.
Proposed Conditional-Firm Product
TBL needs to develop a new type of long-term transmission
service that provides for as many months of firm service as possible
during the year, combined with a certain number of hours identified
for potential unavailability of capacity over a set number of
months, weeks, or days.
The amount of capacity that would not be available and may
require reductions to capacity availability is yet to be determined.
The CF product would provide a year round, long-term
transmission product that would guarantee a certain level of
availability of capacity and therefore identified number of
potential hours of reductions to capacity availability. It could be
``less firm than firm'' but ``more firm than non-firm'' in months
that firm ATC is not available.
Elements of the Conditional Firm Product
This CF product would be available for PTP service
using the existing long-term firm transmission service queue.
Customers would have to ask for long-term firm service and be in the
existing queue. If the requested long-term firm service is not
available but there is some CF available over the flowgates
requested, then an offer of CF will be made to the customer.
This product would provide firm service for a number of
identified years within which certain months, weeks, or days would
be identified where capacity may not be available and could be cut
or limited. Within each year, the months where capacity is available
and no additional reductions to capacity availability are needed
beyond those associated with standard long-term firm PTP service is
needed, will be treated identically to any other PTP service
agreement.
A specific number of hours would be identified per year
of service that may not have capacity available and could be
curtailed. This identified limit would not be exceeded. The number
of potential hours that could be potentially curtailed would be
based on a particular level of probability (to be determined) and no
greater than this identified occurrence. This may limit the numbers
of offers for this product based on probability level selected and
based on historic data and future modeling results. Example: If 5%
of the year was the level identified, the number of hours of
capacity not available and that could be curtailed could be as great
as 438 hours per year. There's still the question of how to
calculate the number of curtailable hours over several flow gates.
We propose calculating the given probability level over each
flowgate and adding them together. This will be a conservative
estimate and lessen the risk of impacting other firm PTP contracts.
(We are currently working to determine what this level will be for
the CF Product.)
If service is scheduled (in real time), the Customer
will receive the CF product similar to any other firm service.
Reductions to capacity availability can only be made in pre-
schedule. In real time, the CF Agreement will be treated identically
to any other PTP Agreement; there will be no reductions prior to
other firm contracts in real-time. If CF service is not available on
pre-schedule and a CF customer is curtailed, but then firm service
becomes available, the CF Customers service will be restored on a
pro-rata basis after the existing long-term firm PTP customers have
had their transmission rights restored.
This firm product could be the same Tariff rate as the
current long-term firm service product or a new proposed Tariff
rate, to be determined. For example, if the long-term PTP rate is
used, the Customer could be charged on a probability basis, i.e.
would be charged for 98 or 95% of PTP for a 2% or 5% reduction to
capacity availability right. There will be times that Customers may
not be curtailed up to the limit put in the CF contract but
Bonneville is securing the right.
This Product will not degrade existing long-term firm
Customer rights or service.
The number of reductions to capacity availability would
be identified as a limit to everyone receiving this service. This
would be done when the Agreement offered is signed and would not
change for the duration of the Agreement. Any reductions after the
limit is reached would be done on a pro rata basis along with all
other firm Agreements.
Assignments, deposits, deferrals and Redirects would be
the same as existing Tariff provisions allow, but would have to take
into account the reduction to capacity availability associated with
the CF contract.
A Limited number of offers will be available for this
product based on the reduction of capacity availability probability.
The limit would be determined by TBL based on historic usage data
and studies of projected future conditions.
A CF product would be offered only to a customer who has
submitted a request for long-term firm service that cannot be filled
due to lack of ATC on one or more flowgates. Given this requirement,
the CF product that is offered to customers should be as close to
long-term firm as possible. And those offered a CF product should
remain in the queue to be upgraded to year round firm service should
it become available. If a CF contract holder is offered the firm
service they requested at a later date and they refuse the offer,
the CF customer will be removed from the queue. In this case, the CF
contract holder will keep their CF contract for its term and they
will not be given roll over rights for a future CF contract. This
policy is the same as that offered to customers purchasing partial
or Seasonal Partial firm service.
Other ways this product should be treated as firm service are:
Ability to do firm and non-firm redirects in the same
way as firm service.
Similar OATT Section 22 Reservation Priority rights as
currently allowed.
Available for the same length of service term allowed
for long-term firm service.
Same de minimus rule as defined in Bonneville's current
ATC Methodology.
Sale of this product affects amount of ATC available
for LTF, STF, and NT service in the same way as firm. (The product
should be modeled as firm even during months where there is no ATC
available. In this case ATC would look negative on some paths and
should limit availability of STF and non-firm for other parties.)
Same long-term request procedures and deposits required
as identified in the OATT.
Same standards for managing the queue and granting
requests.
Same Extension of Commencement of Service Rights.
And same Deferral of Service Rights.
[[Page 11238]]
Additional Conditions
It is critical that new sales of STF transmission service not
degrade the value of the conditional firm transmission product. All
CF contract amounts will be treated as firm obligations when
determining the amounts of STF and nonfirm transmission available
for future periods. The renewable generators propose that CF
customers be upgraded to firm service during conditional months when
firm service is determined available on a monthly, weekly, daily or
hourly basis. Once CF customers are upgraded to firm, additional STF
could then be sold during the same time frame and without gaining
the reduction in capacity availability priority over CF customers.
If there is more than one conditional-firm customer impacting a
constrained path, and the available STF on that path is less than
the combination of CF customer requests, the available STF must be
allocated among those customers in a fair and reasonable way.
Customers offered new CF Agreements will be provided clear
guidance on the risk of reductions in the capacity availability
based on historic transmission usage data.
Price
Renewable generators and other independent power producers who
have expressed interest in this product believe that the price
should reflect the fact that customers of conditional-firm are more
likely to experience reductions in capacity availability than
customers with firm transmission. Given this increased curtailment
potential, there is an expectation on the renewable generator's part
that the resulting cost would be less than a full year of firm
transmission. In order to avoid the need for a rate case, the
renewable generators propose a pricing structure that uses current
TBL transmission rates. The proposal is that CF customers pay firm
transmission rates for the percentage of the year that they are
guaranteed to receive firm transmission. For example, if a customer
is offered a CF product that will be firm 95% of the year, this
customer will pay 95% of the cost of a year of PTP service. We
invite other opinions and suggestion on this pricing issue.
[FR Doc. E5-963 Filed 3-7-05; 8:45 am]
BILLING CODE 6717-01-P