WECC Market Interface Committee Update

1. WECC Market Interface Committee Update WSPP Spring 2008 Meeting April 8, 2008 Robert D. Schwermann MIC Chair

2. TOPICS • What has changed • What is planned • What is the future

3. Impact to WSPP Membership What has changed since last year? • Sanctions for violating Reliability Standards • You must comply with Reliability Standards if you are a “Registered Entity” • Includes Purchase-Selling Entity, Generator Owner, Generator Operator, Load Serving Entity, and many more!

4. Why Do you Care • Violating NERC reliability standards will cost you money • Violating NAESB - FERC approved Business Practices will result in FERC punishment

5. The Hysteria With Standards

6. Impact to WSPP Membership WECC Market Interface Committee and its Subcommittees are YOUR opportunity to help shape the standards, criteria, policies and guidelines of the future including revisions to existing requirements. Membership in WECC is not required to fully participate in many of these activities.

7. The Compliance Bears Will Eat You

8. Market Interface Committee Market Issues Subcommittee Seams Issues Subcommittee

9. Market Issues Subcommittee 2008 MIS Goals • Support the WECC ATC standard drafting team • Evaluate effects of prescheduling timelines • Increase and strengthen the communication of NAESB activities • Monitor and evaluate market implications of a possible Frequency Responsive Reserve standard. • Support developing a WECC-wide merchant reliability communications methodology. • Support the MIC objective of providing the interface between the merchant and reliability communities.

10. Seams Issues Subcommittee 2008 SIS Goals • Congestion Management – Unscheduled Flow Standard and Procedures • Transmission Product is not part of the curtailment priority (no difference Firm vs. Non-Firm) • Disparity between pre-existing and new schedules • Plan only applies to 7 of about 70 Rated Paths • System model for webSAS is “static” – the West-Wide System Model could enable “dynamic”

11. Activities and Issues • Operating Reserves Standard for WECC • Day-Ahead Trading Timelines Guideline • Merchant Communications – Emergencies • Prescheduling Evaluation Task Force • Energy Product Codes for e-Tags in the WECC • Congestion Management • FERC Monitor – Facilitator • NAESB Monitor and Communicate

12. BAL-002-WECC-1 Standard • Changes to the current Contingency/Operating Reserves Regional Standard • Removes routine transactions from altering the reserve requirement • Replaces 5%-7% of Load Responsibility sections with 3% of load plus 3% of generation (or the MSSC whichever is greater). • Allow for transactions specifically identified as reserve transactions. • Removes the requirement to restore reserves within 60 minutes of activation.

13. BAL-002-WECC-1 Standard • MIC approved in March 2008 • Operating Committee approved in March 2008 • Next Steps -- Approval at WECC Board of Directors -- Approval at NERC and then FERC

14. Day-Ahead Trading Timelines Guideline MIC Adopted at meeting in March 2008 • A Guideline is VOLUNTARY • The Guideline states, “The trading of day-ahead energy transactions in the Western Interconnection should begin no earlier than 6:00 a.m. Pacific Time.”

15. Day-Ahead Trading Timelines Guideline What was behind this: • Attempt to re-establish informal agreement in place years ago • West Coast traders and analysts either come in at unreasonable time or miss out on much of the market liquidity • Industry survey and outreach revealed significant support • Success depends on voluntary participation • TO DATE THIS HAS BEEN A FAILURE

16. Day-Ahead Trading Timelines Guideline TO DATE THIS HAS BEEN A FAILURE Next Steps: • Will discuss at the next Market Issues Subcommittee meeting April 29 & 30 • Possible submittal for a NAESB regional Standard

17. Merchant Communication Drafting Team • Provide a mechanism for merchants to broadly communicate when they are in need of resources to avoid an Energy Emergency • Leverage work of the NWPP MC Task Force • Sent out Surveys • Goal is for a process identified for the Summer 2008 season

18. Merchant Communication Drafting Team • Team analyzing survey responses • Discussing whether this should be a WECC Regional Criteria or a Guideline • Goal is to have a process for use by 2008 Summer season • Questions • contact Steve Kerns • skerns@bpa.gov

19. Prescheduling Evaluation Task Force Findings May Affect the Way Energy is Scheduled in the WECC • A comprehensive and objective evaluation of the potential effects of prescheduling business practices on reliability and markets in the Western Interconnection. • PETF expects to issue a report of findings for review of the MIC in June 2008

20. Energy Product Codes • Approved Business Practice – WECC Energy Product Codes • Energy Codes – intent to create enough categories to identify scheduling attributes • Adopted by the NERC IS and are now in the Registry

21. Cal ISO MRTU Seams Evaluation • Seams Issues Subcommittee The Seams Issues Subcommittee (SIS) finds no specific seams issues that are created by MRTU or existing seams issues that are substantially worsened by MRTU implementation. Seams issues exist today, particularly between organized markets such as the CISO and bilateral physical markets that dominate the Western Interconnection. The SIS will continue to monitor, evaluate and propose solutions to all regional seams issues.

22. What’s up at the MIC andWhy you Care • Changes in the way reserves are calculated and held may affect your bottom line • Changes in the way that energy product codes are used affect your scheduling practices and enables markets • Trading timelines will affect when your people go to work • Mitigating seams issues makes for more effective trading opportunities and scheduling practices

23. Join Us!! • The more people involved the more we can do – we need your help! • There are issues we need to address, but don’t have the manpower

24. Questions?

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