Western UGPR OATTRATE REVISION PROCESS

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Western UGPROATT/RATE REVISION PROCESS

• ADVANCED NOTICE MEETING
• (Introduction)
• Lloyd A. Linke
• Operations Manager
• Upper Great Plains Region
• Western Area Power Administration
• June 10, 2008
• Sioux Falls, South Dakota

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Today's Meeting

• No formal proposals at this time
• Inform parties of what we plan to do later this
  year
• The Tariff and Rates are two separate processes
  and we will have two presentations today
• Tariff
• Rates
• Proposing a separate Western Tariff for the Upper
  Great Plains Region to incorporate Market
  Integration Transmission Service (MITS)

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Western UGPROATT REVISION PROCESS

• ADVANCED NOTICE MEETING
• Presented by
• Steve Sanders
• Operations and Transmission Advisor
• Upper Great Plains Region
• Western Area Power Administration
• June 10, 2008
• Sioux Falls, South Dakota

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Agenda

• Meeting Objectives
• Background
• Midwest ISO (MISO) Module F Background
• Transmission Issues
• Proposed Development of Separate UGPR Open Access
  Transmission Tariff (OATT)
• Potential OATT Timeline
• Questions Comments

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Meeting Objectives

• Informal meeting with UGPRs Transmission
  Customers and other Interested Parties
• Provide initial information regarding the
  proposed development of separate OATT for UGPR to
  accommodate participation by Westerns UGPR in
  the Midwest ISO (MISO) filed Module F, Part III,
  if Western so chooses
• Outline next steps
• Solicit initial comments and feedback

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Background

• Current Operations Environment
• MAPP/MISO Seams Operating Agreement (SOA)
  provides for coordination of transmission
  services and operations between MAPP members and
  MISO and other neighboring Transmission Providers
• MISO has tendered its termination notice for the
  SOA
• Congestion Management for Westerns UGPR
  east-side region currently occurs under standard
  NERC Transmission Loading Relief (TLR)
• MISO currently provides Reliability Coordination
  (RC) services to UGPR under a bilateral agreement

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Background

• UGPR Concerns With Current Operations Environment
  
• UGPRs Merchant and other MAPP members have found
  it increasingly difficult to get transmission
  service
• UGPRs Merchant and other MAPP members have
  encountered an increasing number of TLR
  curtailments of transactions
• The non-Market neighbors of UGPR are shrinking
  making it more difficult for UGPRs Merchant to
  obtain necessary power supply during UGPRs
  current drought conditions
• It is difficult for non-Market entities to
  maintain power purchases from MISO during TLR

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Background

• Westerns UGPR is Evaluating Participation in the
  MISO Market
• UGPRs Merchant is currently evaluating a
  proposal by MISO to allow participation in the
  MISO Markets for entities outside their
  Transmission Tariff footprint as an option to
  address some of the current operating concerns
• The Merchants evaluation is being done via a
  separate informal public process
• Details at the following URL www.wapa.gov/ugp/Pow
  erMarketing/MISOSeams/Default.htm

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Background

• Westerns UGPR is Evaluating Various Potential
  Options
• UGPRs Merchant has noted it is evaluating the
  following Alternatives identified to date
• MISO Part II - Interconnected Operations and
  Congestion Management Service
• MISO Part III - Market Coordination Service
• Other - such as joining the Southwest
• Power Pool (SPP).
• UGPRs Transmission is evaluating replacement
  options for SOAs with neighboring Transmission
  Providers (TPs)

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MISO Module F Background

• MISO Western Markets Proposal (Module F)
• MISOs Western Markets Proposal was filed with
  FERC on 3/4/08 as a proposed addition to the MISO
  Tariff (Module F). Links to MISOs postings are
  available on UGPRs OASIS (MISO Seams Proposals
  Folder) at URL www.oatioasis.com/wapa/index.html
• MISO has indicated that non-RTO entities wanting
  to have a Seams Operating Agreement with MISO
  will need to sign up under Module F (Part II or
  Part III), as the SOA is now imbedded in those
  MISO service offerings
• Intended to promote MAPP members joining MISOs
  Energy and Ancillary Services Markets by not
  requiring entities to place their transmission
  facilities in MISO to participate in the Markets

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MISO Module F Background

• MISO Module F Three New MISO Service Offerings
• Part I - Reliability Coordination Service
• Part II - Interconnected Operations and
  Congestion Management Service
• Part III - Market Coordination Service

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MISO Module F Background

• Part I MISO Reliability Coordination Service
• Basically almost identical replacement of the
  existing MAPP/MISO Bilateral Agreement for RC
  Services
• Included in Module F because MISO requires Part I
  service to be taken if an entity wants Part III
  service

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MISO Module F Background

• Part II - MISO Interconnected Operations and
  Congestion Management Service
• Entity taking service is a Congestion Management
  Customer (CMC)
• Primarily a replacement for the MAPP/MISO Seams
  Operating Agreement to address coordination
  between the MISO Market and the non-market areas
• Includes Reciprocal Coordination of flowgates
• Includes limited Generation Redispatch option
  between MISO and CMC to address specific
  flowgates where the entities have difficulty
  achieving their assigned TLR relief obligations

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MISO Module F Background

• Part III - MISO Market Coordination Service
• Entity taking service is a Market Coordination
  Customer (MCC)
• Allow participation in the MISO Market for
  entities outside the MISO Transmission Tariff
  footprint
• MCC retains its own OATT, and continues to
  provide transmission service on its own
  transmission facilities
• MCC includes its generation and load into the
  MISO Energy and Ancillary Services Markets, and
  its generation and load are dispatched by MISO in
  the same manner as other generation in Market
• MISO assumes Balancing Area (BA) responsibilities
  for the MCCs BA

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MISO Module F Background

• Part III - MISO Market Coordination Service
  (Contd)
• The MCC is eligible to receive Auction Revenue
  Rights (ARR) and Financial Transmission Rights
  (FTR) and fully participate in the Market
• MISO dispatches the MCCs generation on a 5
  minute basis, and the energy deliveries between
  the MCC and MISO footprints are provided via a
  newly proposed Market Integration Transmission
  Service (MITS)
• The MCC is required to take Part I (Reliability
  Coordination Services) from MISO
• Part III also includes the Seams Operating
  Agreement provisions between MISO and the MCC

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MISO Module F Background

• Market Integration Transmission Service (MITS)
• Designed to accommodate transactions within a
  single energy market over separate transmission
  footprints
• Existing OATT transmission service products will
  not accommodate the 5 minute dispatch and
  transactions between the MCC and MISO
• A new product is needed, that is..
• An Hourly Firm product so MCCs dispatch is Firm
• Charged on After-the-Fact, hourly integrated
  basis
• Not scheduled nor tagged
• MITS will provide the necessary vehicle for
  market flows to/from MISOs transmission system
  to the MCCs transmission system. MITS will be
  needed in both the MISO and MCC Transmission
  Tariffs

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UGPR Transmission Issues

• Transmission Related Impacts if Westerns UGPR
  Chooses to Take MISO Part III - Market
  Coordination Service
• What doesnt change
• UGPR still retains its own OATT, and will
  continue to provide transmission service on the
  Integrated System (IS) under the UGPR OATT
• UGPRs existing transmission service customers
  will continue to take UGPR OATT service
• Network Customers will still take UGPR Network
  Service
• UGPR will still evaluate and grant service under
  its OATT. For example, for NITS customers, UGPR
  will evaluate and grant new Designated Network
  Resources (DNRs) based upon UGPR OATT
  requirements and procedures

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UGPR Transmission Issues

• Transmission Related Impacts if Westerns UGPR
  Chooses to Take MISO Part III - Market
  Coordination Service (Contd)
• What does change
• ALL generation and load inside the UGPR WAUE BA
  will be placed inside the MISO Market unless it
  is moved to its own BA
• MISO will assume BA responsibility for WAUE
• Ancillary Services (Regulation, Spin and Non-Spin
  Operating Reserves) will be provided by the MISO
  Ancillary Services Market (ASM) for UGPRs WAUE
  BA footprint

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UGPR Transmission Issues

• Transmission Related Impacts if Westerns UGPR
  Chooses to Take MISO Part III - Market
  Coordination Service (Contd)
• UGPRs Tariff will need to change
• UGPRs existing OATT will have to be revised to
  include MITS
• Many existing tariff provisions of Point-to-Point
  (PTP) and Network Integration Transmission
  Service (NITS) would need to be revised to be
  compatible with the MISO Market operation
  requirements
• However, Transmission and Ancillary services
  tariff provisions in the UGPR WAUW BA will likely
  be unchanged west system cannot be included in
  the MISO Market as Module F doesnt allow it

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UGPR Transmission Issues

• A revision of the UGPR OATT will be Necessary to
  Allow Westerns UGPR to Take MISO Part III -
  Market Coordination Service, if it so chooses
• UGPRs Transmission is still evaluating whether
  any OATT revisions are necessary to allow Western
  to take MISO Part II service
• UGPRs Transmission has been active in reviewing
  the MISO filing, and submitted comments to FERC
  on the filing and also in identifying impacts
  that will have to be addressed if UGPR chooses to
  take MISO Part III service

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Proposed OATT Revision Approach

• Creation of Separate Western UGPR OATT to be
  Utilized to Provide Service Over the UGPR/ Basin
  Electric/ Heartland Integrated System (IS), based
  upon Westerns general OATT
• Reasons
• Need to incorporate significant new provisions to
  accommodate UGPRs participation as an MCC under
  MISOs Module F, Part III
• Provide necessary flexibility for UGPR to
  implement OATT changes required to maintain
  coordination and consistency with MISO Module F
  provisions, and the numerous expected MISO FERC
  future filings

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Proposed OATT Revision Approach

• Maintain Coordination with Westerns general OATT
• Closely tied to Westerns general OATT terms due
  to Westerns statutory and other regulatory
  requirements
• UGPR will continue to coordinate closely with
  other Western Regions regarding OATT changes and
  OATT policies and business practices
• UGPR OATT will be updated with FERC Order 890
  provisions, implemented by Western, at same time
  as Westerns general OATT is updated
• Other Western required changes will be made to
  UGPR OATT coincident with revisions to the
  Westerns general OATT

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UGPR OATT Development Overview

• Proposed UGPR OATT Requires Revisions to the
  Existing Western General OATT in Three Primary
  Areas
• Revisions to Westerns general OATT so it applies
  only to UGPR
• Addition of a new MITS, and revisions to existing
  provisions to allow UGPR to utilize MISOs Part
  III - Market Coordination Service over the IS
  footprint in the east-system
• Revisions, as necessary, to Rate Schedules (Rate
  changes described in separate presentation)

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UGPR OATT Revisions (Slide 1)

• Expected Revisions Necessary to Convert Westerns
  General OATT to a Separate UGPR OATT
• Revise OATT Title
• Define Transmission Provider as UGPR
• Remove other Western Region references (e.g.
  Attach K)
• Remove any non-UGPR Region-specific tariff
  provisions
• Revise and tailor tariff service agreements and
  request submission provisions to apply to UGPR

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UGPR OATT Revisions (Slide 2)

• Additions to accommodate MISOs Part III - Market
  Coordination Service
• Inclusion of new transmission service called
  Market Integration Transmission Service (MITS)
  to allow generation and load in the WAUE BA
  served under the UGPR OATT to be dispatched in
  the MISO Markets

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UGPR OATT Revisions (Slide 3)

• UGPR Proposed Market Integration Transmission
  Service (MITS)
• UGPR MITS needs to be compatible with the MISO
  MITS and address MCCs requirements outlined in
  MISOs Module F filing
• UGPR Transmission has posted its latest
  conceptual MITS Principles and issues list on
  its OASIS at URL
• www.oatioasis.com/WAPA/WAPAdocs/MITS-Principles-2
  007-1126.pdf
• (Portions of document to be presented)
• More work is required to finalize the MITS
  provisions, comments appreciated

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UGPR OATT Revisions (Slide 4)

• Other OATT Revisions
• MISOs Part III - Market Coordination Service is
  NOT compatible with all the existing UGPR OATT
  Transmission Service provisions of Part II
  (Point-to-Point) and Part III (Network
  Integration) for the portion of the IS in the
  MISO Market
• Changes likely required to
• Restrictions on use of service, Operations of
  Network Resources, Redispatch provisions,
  Transmission Constraints, Curtailment provisions,
  Cost of Redispatch, Losses, etc.
• Ancillary Services Schedules 3, 5, and 6 need to
  be reviewed

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UGPR OATT Revisions (Slide 5)

• Next Steps
• UGPRs Transmission is developing, in
  coordination with its Integrated System
  transmission partners, a proposed UGPR OATT,
  redlined from Westerns existing general OATT
• Redline may be impacted by FERC ordered
  modifications to MISOs Module F filing
• Existing transmission service tariff provisions
  for the west-side system will be maintained
• The proposed UGPR OATT and redlined comparison to
  Westerns existing general OATT will be made
  available for review with the Federal Register
  Notice (FRN)

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UGPR OATT Revisions (Slide 6)

• Sources of Information
• Information related to UGPRs OATT revision
  process will be posted on UGPRs OASIS under the
  Folder named
• UGPR 2008 OATT Revision/Rate Adjustment
• at the following URL www.oatioasis.com/wapa/inde
  x.html

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Potential OATT Revision TimeLine
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Points of Contact (For Questions)
Lloyd A. Linke Operations Manager Upper Great
Plains Region P.O. Box 790 Watertown, SD
57201-0790 Telephone [phone] Email
lloyd_at_wapa.gov Steve Sanders Operations and
Transmission Advisor Upper Great Plains
Region P.O. Box 35800 Billings, MT
59107-5800 Telephone [phone] Email
sanders_at_wapa.gov
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Questions
Any Questions or Comments Today?
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Written Comments

• Please send written comments to
• By Email UGPOATT_at_wapa.gov
• By Correspondence
• Steve Sanders
• Operations and Transmission Advisor
• Western Area Power Administration
• Upper Great Plains Region
• P.O. Box 35800
• Billings, MT 59107-5800

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• Thank you for your participation in this process!!