Open Stakeholder Meeting

1
Open Stakeholder Meeting May 23, 2007 Salt Lake
City, Utah
To ensure efficient, effective, coordinated use
expansion of the members transmission systems
in the Western Interconnection to best meet the
needs of customers stakeholders.
2
Agenda

3
Standards of Conduct

• It is the policy of the Northern Tier
  Transmission Group (Northern Tier) not to
  facilitate the improper distribution of
  non-public transmission information.
• In furtherance of this policy, no participant in
  any Northern Tier meeting shall discuss
  non-public transmission information unless
  Northern Tiers Standards of Conduct Safeguards
  are satisfied."

4
NTTG Standards of Conduct

• Advance notice of a public meeting at which
  transmission information will be disclosed must
  be posted on the transmission providers OASIS at
  least 10 business days prior to the meeting.
• All Eligible Customers, as that term is defined
  in the pro forma OATT, must be invited to attend
  the public meeting.
• Telephone participation must be provided.
• If handouts are going to be provided during the
  meeting, the handouts must be posted on OASIS
  prior to the start of the meeting, and a contact
  person must be identified to assist with problems
  downloading the materials.

5
NTTG Standards of Conduct

• Meeting notes must be taken during the meeting by
  an individual approved as the note-taker by the
  transmission providers Chief Compliance Officer
  (CCO).
• Meeting notes must be promptly posted on OASIS
  following the conclusion of the meeting.
• If the meeting is attended by employees of the
  transmission providers Marketing Affiliate or
  Energy Affiliate, then a representative of at
  least one additional Eligible Customer must be in
  attendance at the meeting during the entire
  period that the Marketing Affiliate or Energy
  Affiliate employees are in attendance.

6
NTTG Standards of Conduct

• Without prior approval by the transmission
  providers CCO, meetings may not occur more than
  twice per month.
• Even if all the above standards are satisfied,
  the transmission providers CCO retains the
  discretion to (a) prohibit the transmission
  providers Transmission Function employees from
  distributing transmission information at the
  meeting, (b) prohibit the transmission providers
  Transmission Function employees from presenting
  transmission information during the meeting, and
  (c) place any other conditions on its
  transmission function employees as the CCO
  believes are necessary.

7
NTTG Anti-Trust Policy

• It is the policy of the Northern Tier
  Transmission Group to fully comply with federal
  and state antitrust laws. Participants shall be
  mindful that an essential objective of NTTG is
  promoting or enhancing competition. Discussions
  in the following areas in particular can be very
  problematic and in some cases prohibited, and
  require careful attention for antitrust
  compliance
• your companys prices for products or services
• prices charged by your competitors
• allocating markets, customers, or products
• limiting production and
• excluding dealings with other companies.

8
Planning Straw Proposal
To ensure efficient, effective, coordinated use
expansion of the members transmission systems
in the Western Interconnection to best meet the
needs of customers stakeholders.
9
Northern Tier Transmission Group Member
Transmission System

• NTTG - Similarly situated, like minded members
  stakeholders (geography, demographics,
  characteristics, institutions) combining systems
  to provide commercial benefits of larger single
  integrated system
• Virtual Control Area Consolidation
• Transmission Use Uniform Products
• Combined Planning
• Multi-State Cost Allocation Committee

Major Western Transmission Black
ColumbiaGrid BPA, Tacoma, Seattle, Grant,
Chelan, Douglas, PSE, AVA Red Northern
Tier NWC, PAC, IPC, DSGT, UAMPS Blue Other
Western US and Canada EHV Grid Transmission
10
Planning Order 890 Requires

• Each TP must
• Perform coordinated, open, transparent
  transmission planning on both Local Regional
  level
• Draft, Post File Straw Planning Proposal
• To be filed May 29, 2007
• Facilitates FERC Technical Conference in Park
  City June 13
• Assist the participants in developing the
  appropriate regional planning groups to the
  extend they do not already exist
• Prepare an Attachment K for Pro Forma OATT
  describing planning process that complies with
  the nine principles, concepts, requirements in
  Order 890
• Planning process must be developed with
  customers, neighboring TPs, state authorities,
  stakeholders such that processes and resulting
  plans are not unduly discriminatory.

11
NTTG Straw Proposal Development Process Status

• 890 Order issued Feb. 16, 2007 (Posted in Federal
  register March 14)
• NTTG Planning Committee assigns Straw Proposal
  Work Group to draft straw
• Short Straws Rich Bayless, Chuck Durick, Ray
  Brush
• March 14 Stakeholder Meeting (PDX) NTTG open
  Straw Proposal development process initiated
• March 22 initial coordination meeting of planning
  groups in the Northwest NWPPs NTAC,
  ColumbiaGrid, NTTG,
• Subsequent conference calls,
• Open summit meeting April 6
• CREPC meeting review April 10
• WECC TEPPC Workshop April 12,
• Subsequent conference calls,
• Last meeting May 18
• NTTG draft 1 Straw Proposal posted for comment
  April 16 on www.nttg.biz
• Comments received and new drafts posted
• Present draft is Draft 5 version 2
• Final Comments received today will be
  incorporated into Straw to be filed on Tuesday
  5-29

12
FERC Order 890 Principles NTTG Straw Concepts

• Coordination Three level Local, Sub-regional
  Regional Coordination
• Openness Open architecture and
  stakeholder/customer process, unfettered Board
• Transparency Data, criteria, ATC methods, etc.
  disclosure to all customers/stakeholders
• Information Exchange Planning information
  coordinated and open exchanged with WECC, IRPs,
  Stakeholder/customers, other Planning groups
  native load, NT PTP data exchanged on
  comparable basis
• Comparability All similarly situated
  customers/stakeholders equal in processes
• Dispute Resolution NTTG ADR to use WECC ADR with
  member agreement to use for planning related
  disputes
• Regional Participation Participation in WECC
  TEPPC, NWPPs NTAC, coordination with neighboring
  sub-regional planning groups
• Economic Studies Economic and
  re-dispatch/congestion studies in planning cycle
  that influence plan incorporates direction and
  analysis from Transmission Use committee
• Cost Allocation Multi-state Cost Allocation
  Committee to develop and apply cost allocation
  principles

13
Related Re-Dispatch Conditional Firm
Non-Rate Terms Conditions (PR 901-1164)

• TP is obligated to offer Planning Re-Dispatch
  and/or Conditional Firm
• If Long term Firm ATC is not available
• Planning Re-Dispatch Can be requested by PTP
  customer if less expensive than expansion
• Reliability Re-Dispatch Re-dispatch of
  network resources to avoid curtailment of network
  load
• TP to provide estimates for re-dispatch,
  conditional firm, expansion costs
• Ex-Ante (Latin for beforehand) estimates
  required for
• Planning Re-Dispatch costs (non-binding)
• Hours conditions for firm service for
  Conditional Firm
• TP required to provide Planning Re-Dispatch with
  own generation. However, if Re-dispatch is
  insufficient from owned generation
• Must identify re-dispatch options on others
  generation within outside Control Area
• Must Coordinate between TP, third party generator
  customer
• TP also obligated to offer Conditional Firm
• If Planning Re-Dispatch is insufficient (or
  doesnt meet customer requirements) from TP owned
  resources
• TP is required to post
• Re-dispatch costs offers of re-dispatch from
  others generation
• Issues with Planning
• Planning studies required to include economic
  studies to ID congestion re-dispatch
• Identification of Re-Dispatch options on others
  systems
• Consistency with Economic and Congestion Planning
  studies, especially in Base Case

14
NTTG Planning Straw Proposal- Key Features -

• Two step planning implementation process to
  inform stakeholders and facilitate implementation
  of individual or joint projects
• Open architecture structure with Planning
  Committee open to all interested parties.
• Provides stakeholder/customer input and review
  process to evaluate transmission service and
  upgrade alternatives without formal OATT service
  request process.
• Informs stakeholders on technical performance,
  benefits, costs, and potential cost allocation of
  individual and joint plans
• Provides stakeholders/customers analysis of
  economic benefits (as well as reliability) of
  projects to inform their decisions on formal
  service requests and participation
• Within present OATT responsibilities framework,
  gives practical level of up-front cost certainty
• Provides method to batch or cluster requests for
  economic studies
• Provides estimates of benefits of aggregated
  requests in common areas, re-dispatch costs, and
  congestion

15
NTTG Planning Process Key Features, continued

• Three level integrated process produces
  synchronized, coordinated single system plan with
  local, sub-regional, and regional stakeholders
  and neighboring systems.
• Augments member Transmission Providers OATT
  service request study processes.
• Utilizes WECC WECC TEPPC for congestion and
  economic studies, base cases, other
• Coordinates with neighboring planning groups via
• direct coordination,
• joint study teams,
• and through WECC
• Stakeholder and member triage process to
  determine study priority. Process similar to
  NRTA voting class org.
• Utilizes NWPP TPCs NTAC to
• identify overlapping projects effecting parties
  outside NTTG but within NWPP footprint,
• Identify establish joint study teams
• Help triage NWPP footprint study requests to WECC
  TEPPC.

16
NTTG Planning Process Key Features, continued

• Informed customers can individually or jointly on
  aggregated basis submit OATT service requests
• Via aligned and open season service request
  process on NTTG member systems
• Multiple party and multiple system requests that
  would be individually uneconomic
• Balanced Steering Committee
• Composed of member transmission provider execs
  footprint State regulatory and consumer agency
  representatives.
• CREPC type decision process with NTTG dispute
  resolution utilizing WECC ADR
• Cost Allocation Committee in Planning Step
  (Following)
• Comprised of State regulatory consumer staff,
  member representatives
• Develops and applies cost allocation principles,
  determines cost allocation for projects included
  in the Plan approved by the Steering Committee
• Planning Process meets 9 principles and
  philosophy of FERC Order 890

17
NTTG Planning Process Key Features, continued

• Transmission Planning Use Committee
  coordination
• Consistent definitions of products
• Service types, margins, POD PORs, ATC
  definitions
• Among NTTG Companies
• Between NTTG Planning Use analysis
• ATC Coordination
• analysis generated study requests study request
  aggregation
• Frequency of ATC determination and coordination
  with planning cycles
• Website posting of re-dispatch costs generation
  re-dispatch availability
• Compilation validation of re-dispatch costs for
  NTTG resources modeling for TEPPC/SRPG database
• Coordination and Development of
• Data submittal processes and standards for use
  with WECC and TPs
• Subregional TP Re-dispatch Conditional Firm
  system impact studies with Regional congestion
  studies
• Pooling of re-dispatch CF studies

18
Step 2
19
Two Step Planning and Implementation Process -
continued
Step 2 Individual Transmission Provider Project
Implementation Process
20
Three Level Planning Process in the West
Individual TP Local Planning Process IRP, NT LR,
OATT Requests, Reliability Plan
Individual TP Local Planning Process IRP, NT LR,
OATT Requests, Reliability Plan
Individual TP Local Planning Process IRP, NT LR,
OATT Requests, Reliability Plan
Individual TP Local Planning Process IRP, NT LR,
OATT Requests, Reliability Plan
Individual TP Local Planning Process IRP, NT LR,
OATT Requests, Reliability Plan
Level 1 Local
NWPP NTAC Overlapping Project Coordination
in NWPP footprint
NTTG Sub-Regional Planning Process Aggregated
Planning Requests, Cost Allocation
Estimates, Coordination with other Subs and
Regional
Other Sub-Regional Planning Processes Aggregated
Planning Requests, Cost Allocation
Estimates, Coordination with other Subs and
Regional
Level 2 Sub-Regional
WECC TEPPC PCC, CREPC, WGA Coordination,
Reliability Economic Data, Base Cases, Annual
Study Plan Economic and Congestion Studies,
Policies, Standards
Level 3 Regional
21
(No Transcript)
22
WECC Wide Stakeholders
Regional Western WECC CREPC
WECC/TEPPC System Data Bank Coord
WECC PCC Ann Studies Reg Plan Proc
WECC LR Compilation
CREPC/WECC Res Adeq
WECC/PCC TEPPC Ann Comb Study Plan Triage
PCC Ann Reports
Stakeholders
TEPPC Ann Economic Congestion Studies
TEPPC Ann Report
LR Adeq Report
CREPC IRP Coord
Sub-Regional Northern Tier Transmission Group
Other Xmssn Customers Input
NTTG wide Stakeholder Meeting
NTTG wide Stakeholder Meeting
NTTG wide Stakeholder Meeting
NTTG Plan Report Steering Committee Approval
NTTG Study Plan Development
NTTG Studies
NTTG Cost Alloc Committee
Cost Alloc Recommends
NTTG LR Need Planning
Joint Study Teams
Network Stakeholder Input
Transmission Provider - Local
Indiv State IRP
TP Ann LR, SR Inputs
TP OATT SIS FS
TP Staff does studies
TP PRD Cond Firm
TP Ann Plan Update
12
11
10
9
8
7
6
5
4
3
2
1
Month
Annual Combined Synchronized Planning Cycle
23
Western TEPPC Synchronized Study Cycle
24
Compliance Tasks Required by Oct. 11, 2007

• Attachment K tariff detail and filing
• Develop mechanism to address confidentiality of
  planning related information
• Put transmission planning methodology in writing
  and disclose data (criteria, assumptions,
  planning standards, etc.)
• Implement mechanism to make upgrade status
  available
• Develop guidelines for planning submittals
• Develop ADR for planning disputes
• Coordinate planning with interconnected systems
• Develop method for requesting economic upgrade
  studies
• Develop a planning method that considers
  reliability and economics
• Develop a means to allow for clustering of
  economic studies and posting of such studies
• Define the information sharing requirements for
  planning
• Identify the type of projects to be covered by
  cost allocation principles that are to be
  developed
• Coordinate planning with state regulators
• Develop cost recovery proposal for costs of
  participation in the planning process.

25
NTTG Member 890 Attachment K Implementation
Plan

• FERC input from Technical Conference on Straw
  Proposals
• Charters, protocols, and agreements for NTTG
  Committees
• Agreement with TEPPC and TEPPC/WECC
• Data and product flow agreements
• Stakeholder triage process and meeting schedules
• Seams and coordination with adjacent sub-regional
  planning groups
• Integration of member local planning process and
  OATT procedures with NTTG Sub-Regional planning
  process
• Development of Open Season and Aggregation
  Process
• Alignment of States on IRP processes
• Agreements with NWPP TPC - NTAC on triage and
  joint study selection process for NWPP footprint
  projects that overlap or effect other outside of
  NTTG within NWPP
• Finalization of NTTG process detail for members
  to reference or incorporate into their OATT
  Attachment K for filing

26
ORDER 890 STRAW PROPOSAL PRINCIPLE 9 - COST
ALLOCATION
To ensure efficient, effective, coordinated use
expansion of the members transmission systems
in the Western Interconnection to best meet the
needs of customers stakeholders.
27
Agenda

• Review Cost Allocation Straw Proposal
• Proposal Development
• Cost Types Principles
• Proposed Process
• Issues/Comments?
• Next Step Finalize for Order 890
  Compliance Filing

28
Proposal Development

• Cost Allocation Principles Work Group
• Created by Steering Committee
• Response to Order 890 Planning Principle 9
• NTTG Planning Framework
• Starting Point CREPC White Paper
• Transmission Regulatory Principles Work Group
• Work Group Products
• Steering Committee discussion draft 4/13
• Revised draft 5/15

29
Cost Types

• Type 1 Provision of retail service to
  transmission owners native load
• 1-A Single LSE/Single State
• 1-B Single LSE/Multi-State
• 1-C Multi LSE/Single State
• 1-D Multi LSE/Multi-State
• 1-E Specific Retail Customer or Customer Group
• Provide Service
• Lower Costs
• Increase Quality of Service

30
Cost Types

• Type 1 Purposes
• Provide capacity to serve load
• Fulfill reliability or technical operating
  requirements
• Lower costs to consumers
• Fulfill Federal or State policy requirements

31
Cost Types

• Type 2 Provision of Wholesale Services (FERC
  Jurisdictional)
• Sales purchases
• Generator request
• Transmission service request
• Mixed purposes Types 1 2
• Potentially mixed jurisdiction

32
Cost Types

• Type 3 Alternatives to/Deferrals of
  Transmission Line Costs
• Usually Type 1 Costs
• Distributed Resources
• Important Distinction between Projects Cost
  Types
• Any given project may have multiple cost types!

33
Principles

• Principle 1 Equity
• Cost causers cost bearers
• Beneficiaries pay
• Principle 2 Efficiency
• Supports federal and/or state resource choice
  policies
• Efficient stable resource planning processes

34
Principles

• Principle 3 Fair Full Cost Allocation
• Reasonable opportunity for full cost
  recovery, but no more
• Order 890 deems this principle critical
• Multi-jurisdictional allocations
• Not an automatic reallocation mechanism in
  the event of less than full cost recovery

35
Principles

• Principle 3A Cost Assignment Follows
  Benefits
• Elaborates on Principle 1
• Direct cost assignment costs to single or
  multiple transmission customers based on
  benefits distribution
• Principle 3B Customer Specific Allocation
• Type 1-E Costs

36
Principles

• Principle 4 Allocation for Wholesale
  Merchant Project Costs
• Type 2 Costs
• Outside Scope of NTTG Cost Allocation
• FERC Jurisdictional

37
Process

• Cost Allocation Committee
• Appointed by state agency and publicly- and
  consumer-owned NTTG members
• Process dovetails with Planning process
• Input from NTTG members stakeholders
  through public process
• Steering Committee Final say dispute
  resolution

38
Process

• Interface with Planning Process
• Study Plan Development Study Phases
  Preliminary Iterative Analysis
• Plan Report Recommendations
• Responsibility for Providing Sufficient
  Information
• Project developers, requestors, other
  interested stakeholders NOT THE COMMITTEE!

39
Process

• Step 1 Application
• Step 2 Review Response
• Step 3 Analysis during Planning Process
• Step 4 Recommendations for Plan Report
• Steps 5 - 7 Steering Committee
• Determination Letter Plan Cost Allocation
• Project Updates/Additional Review
• Dispute Resolution

40
Issues/Comments?
Cost allocation v. cost recovery Risk
analysis Reliability benefits Interface with
future State Federal regulatory
proceedings Negotiated cost allocations Others???
41
Summary

• Next Steps
• 1. Finalize Cost Allocation Portion of Order
  890 Filing
• 2. Formation of Cost Allocation Committee
• 3. Get to Work! (Implementation of Planning
  Process)