RTO UPDATE FOR Energy Northwest Board Operations

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RTO Updatefor CAE/Legislators Briefing 11/13/2003
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Revived RRG Process

• Restarted Regional Representatives Group Process
  (RRG) in June 2003.
• States, Public Power, IPPs, Interest Groups and
  RTOW Filing Utilities (FUs)
• RTO FUs Goals
• Ensure a solution that is focused on regional
  needs
• Develop broad regional consensus.

3
RRG Process Accomplishments To Date

• Bottoms up approach
• Striving for a Consensus Based approach to
  decision making.
• Dozen all day meetings
• Reached consensus on regional problems and
  opportunities (www.rtowest.com)
• Planning Expansion
• More efficient use of the existing transmission
  system
• Market monitoring and oversight
• Pricing/rate pancaking
• Reliability/Control Area consolidation/Ancillary
  Services

4

• Reached consensus that a status quo (do
  nothing) approach is not a
• realistic solution and that significant
  change is needed.
• Worked on 3 solution options
• Coordination-based
• Independent Administrator
• RTOW Stage 2 reloaded

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Option 1 Coordination -Based

• Independent Transmission Management Committee
• Regional Transmission Plan via NTAC
• One-Stop-Shop via NW OASIS (separate tariffs)
• Flow-based ATC methodology.
• New conditional firm service products offered.
• Voluntary inc/dec market to clear congestion
• Voluntary control area consolidation.
• Independent PNSC able to order changes in
  generation and load to
• maintain reliability.
• Rate Pancaking remains
• State/Federal agreement to establish an
  independent market monitor.
• Existing rights preserved

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Option 2 Independent Administrator

• Independent entity and Governing Board
• IA develops regional transmission plan and has
  backstop
• authority for reliability projects.
• IA provides One-Stop-Shop via single OASIS
• IA administers flow-based ATC methodology.
• New conditional firm service products offered.
• IA runs voluntary inc/dec market to clear
  congestion.
• Voluntary Control Area consolidation
• IA is the independent market monitor
• Existing rights preserved.

7
Option 3 Stage 2 Reloaded

• Independent entity and governing board
• RTO develops regional plan and has backstop
  authority for reliability
• and commercial needs.
• RTOW accepts all schedules, limited by
  feasible dispatch (later)
• RTOW acquires inc/dec to clear congestion and
  charges incremental
• users
• RTOW administers a single tariff
• Rate pancaking is eliminated
• Existing rights preserved

8

• Flow-based ATC calculation
• Independent market monitoring function
• Partial control areas consolidation and RTOW
  is system operator
• RTOW acquires and provides ancillary services
  provider of
• last resort.
• Phased implementation approach

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Common Elements

• Independent decision-making
• Single Regional Transmission Plan with dispute
  resolution
• Being sure transmission plans get built is
  critical (backstop)
• Independent flow-based ATC calculation
• One-stop-shopping
• Preservation of existing rights
• Independent market monitor
• Voluntary inc/dec to clear congestion
• Enhanced short-term reliability
• Phased/staged implementation.

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Differences/Remaining Issues

• Governance/How independence is achieved
• Control area consolidation (cost issue)
• Rate pancaking
• Accept all schedules vs. new quasi-firm
  products/Congestion Management
• Single tariff vs. Individual TO tariffs
• Ancillary Service provider of last resort.

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Next Steps

• Try to find convergence in remaining areas of
  difference
• 3 Workgroups formed at 10/9/2003 RRG
• Convergence
• Governance
• Congestion Management
• New workgroup formed at 10/29-30 RRG to develop
  straw hybrid proposal
• Next RRGs 11/19-20 and 12/10-11
• Goal is to reach a preferred approach by end of
  the year
• It will take 6-12 months to fully develop a
  preferred approach and
• initiate the approval process (BPA, states,
  FERC)
• Implementation will be phased in over several
  years.