BUSINESS PRACTICE OVERVIEW

1. BUSINESS PRACTICE OVERVIEW BRENDA AMBROSI March 11, 2011

2. OVERVIEW • Principles • Development • Processes • Business Practices • Entity Codes • Firm-to-Firm Redirects • Simultaneous Submission Window (SSW) • Wheelthrough Charges • Transmission Refunds

3. PRINCIPLES • Business Practices provide detail with respect to the implementation of the Open Access Transmission Tariff (OATT). • Terms and Conditions of OATT govern • Business Practices support the OATT • To the extent that it makes sense in BC, industry standards are followed (NAESB WEQ Business Practice Standards, WECC Regional Criteria, NERC Standards adopted in BC)

4. INDUSTRY REFERENCES • NAESB – Serves as an industry forum for the development and promotion of standards, which will lead to a seamless marketplace. • Produces Business Practices that streamline transactional processes. • Responsible for OASIS Standards & Communication Protocols • Responsible for Electronic Tagging (eTag) specifications. • WECC – Regional entity responsible for coordinating and promoting bulk electric system reliability in the Western Interconnection. • Pre-schedule Calendar. • Regional Criteria (formerly Business Practices) for transmission and energy transactions. • Adjacency registry. • NERC – Develops reliability standards that the BCUC adopts in BC. • NERC Holidays. • Transmission System Information Network (TSIN). • BCUC - Regulatory agency of the Provincial Government, operating under and administering the Utilities Commission Act (UCA) • Approves OATT rates, Terms and Conditions. • Enforces reliability standards in BC.

5. DEVELOPMENT • BC Hydro may create new Business Practices or amend existing Business Practices as needed. • Drivers generally include: • OATT amendments and new services. • Alignment with industry standards. • Changes to ETS / OASIS specifications. • New scheduling practices. • All new or amended Business Practices get posted. • Direct Posting: Minor changes are effective upon posting. • Customer Consultation: New or significantly amended Business Practices will be presented to customers for comment.

6. Direct Posting Business Practices that have minor amendments are posted e.g. to rectify inaccuracies. Subscribed customers are automatically notified. Changes to the Business Practices are highlighted. Reasons for, and date of, changes are also documented. Customer Consultation BC Hydro consults on all significant changes to Business Practices. Event is posted. New and/or amended draft Business Practices are posted. Workshop may be held or process may be limited to written feedback. Customers review and comment on the draft changes. BC Hydro posts customer comments and its responses. BC Hydro posts the final new/amended Business Practices. PROCESSES

7. SUBSCRIBEhttp://transmission.bchydro.com/_utilities/subscriptions/SUBSCRIBEhttp://transmission.bchydro.com/_utilities/subscriptions/

8. BUSINESS PRACTICES • The Business Practices commented upon hereafter were created by BCTC, prior to the integration of BCTC and BC Hydro, and consultation occurred at that time. • Entity Codes • Firm-to-Firm Redirects • Simultaneous Submission Window (SSW) • Wheelthrough Charges • Transmission Refunds

9. ENTITY CODES Issue • Should multiple entity codes be permitted? Response • Any customer is entitled to have multiple entity codes provided that it is willing to go through BC Hydro’s registration process multiple times including signing multiple Umbrella Agreements and posting any necessary security. • Becoming a BC Hydro Transmission Customer http://transmission.bchydro.com/transmission_scheduling/business_practices/ • Currently, there are three OATT customers that have multiple entity codes, which may be used for purchasing transmission service. • BC Hydro’s practice aligns with the general practices of other utilities.

10. FIRM-to-FIRM REDIRECTS Overview • Transmission Customer can request to modify the Point of Receipt (POR) and/or Point of Delivery (POD) of a Firm Point-to-Point (PTP) Transmission Reservation on a Firm basis. • Transmission Service Request (TSR) for a Redirect must be submitted on OASIS with request type REDIRECT. • Redirect TSR on a Firm basis is treated the same as a new TSR. • Conditions: • Can Redirect only the unused (unallocated) capacity of a CONFIRMED Firm TSR provided ATC exists on the redirected path. • Redirects must be for the same or lower service increment as the Parent Reservation. • Redirect can be from a Discounted Path to a Non-Discounted path but the Transmission Customer will pay the higher price. • Redirect TSR is processed in queue priority. • BC Hydro will Counteroffer if there is insufficient ATC on the redirected path. • Once Redirect TSR is CONFIRMED, that portion of ATC on the Parent Reservation will be released and offered for sale to the market. • Transmission Customer cannot Relinquish the capacity of a CONFIRMED Redirect on a Firm basis back to the Parent Reservation.

11. FIRM-to-FIRM REDIRECTS Issue Should an Affiliate be entitled to perform Firm-to-Firm Redirects? Response • The current practice is non-discriminatory because: • Redirected TSRs are not given a higher queue position. • Transmission is granted based on Available Transfer Capability (ATC) and queue priority. • BC Hydro’s practices are generally aligned with practices in the WECC. • Affiliates are not prohibited from redirecting Firm transmission reservations. • Affiliates are treated like any other customer.

12. SIMULTANEOUS SUBMISSION WINDOW (SSW) Overview • As stated in FERC Order No. 890, the SSW was created to ensure opportunity for equal access to transmission service for those less sophisticated customers with fewer financial resources to invest in infrastructure. • 5 minute SSW is from 00:00:00 to 00:05:00. • Short-Term Firm and Non-Firm TSRs can be submitted at the service increment’s earliest submission time during this timeframe. • TSRs submitted within this window will not be publicly made available until the window has closed. • At the close of the SSW, BC Hydro will allocate ATC to valid submitted TSRs as follows: • TSRs will be sorted into separate and equal priority groupings based on Duration, Pre-confirmation status, and Bid Price. • Randomly assign customer pick order that is used for repeated draws from each grouping, beginning with the highest priority grouping. • Conduct iterative picks from each priority grouping and grant ATC requested until no TSRs remain in that priority grouping or ATC is exhausted. • Proceed to the next highest grouping and repeat iterative picks using the same pick order sequence, from point left off in the prior grouping until no TSRs remain in the priority grouping or ATC is exhausted. • BC Hydro will Counteroffer if any remaining ATC exists and cannot meet the requested capacity of the TSR.

13. SIMULTANEOUS SUBMISSION WINDOW (SSW) Issue Should Affiliates be able to purchase each others unscheduled transmission? Response • All customers unscheduled Firm transmission is released to the market at XX:00 as Non-Firm. • All customers can submit TSRs to secure this Non-Firm ATC. • Only the Network Customer can purchase Network Economy. • The Network Customer can purchase Network Economy in preschedule or as unscheduled Firm at XX:00. • Restricting Affiliates from competing for capacity on a path: • Is discriminatory. • Does not promote utilization of the transmission system. • Does not prevent customers from privately collaborating to increase their presence in the SSW.

14. WHEELTHROUGH CHARGES Overview • ATC is posted as it becomes available, regardless of potential wheelthroughs. • BC Hydro cannot hold back ATC to enable wheelthroughs. • BC Hydro provides two options for wheelthroughs. • (i) Regular wheelthroughs and Mixed Class Wheelthroughs are services that are offered on OASIS and can be purchased by submitting one TSR. • Transmission Customer is charged for one TSR. Each TSR is a contract. • This is the more economic option for wheelthroughs. • (ii) Multiple legs, typically two, can be purchased to make a Wheelthrough transaction. • Transmission Customer is charged for each leg or TSR. Each TSR is a contract and attracts its own charge. • This option is less economic, but provides more opportunity and flexibility to the Transmission Customer.

15. WHEELTHROUGH CHARGES Issue Should a customer be charged for multiple legs of transmission for a wheelthrough? Response • BC Hydro has provided additional opportunity for wheelthroughs than most other jurisdictions by offering Mixed Class Wheelthroughs. • The prevailing industry practice in the WECC region is to offer a wheelthrough service and to allow multiple legs to be purchased for wheelthroughs. Transmission Customers are generally charged for each leg. • If there is an industry shift to change billing practices for wheelthroughs, BC Hydro will consider it then.

16. TRANSMISSION REFUNDS Issue When is an OATT customer entitled to a refund for a transmission reservation? Response • Transmission contracts are “take and pay” under the OATT; the Business Practices contain the exceptions to this rule. • There are different approaches used throughout the WECC region with respect to refunds (if any). • BC Hydro provides refunds for Economic Interruptions. • BC Hydro does not provide refunds due to system constraints.

17. PROCESS IMPROVEMENT • BC Hydro is always open to receiving comments from customers on ways to improve the Business Practice development process. • Send your suggestions to Brenda Ambrosi: • brenda.ambrosi@bchydro.com or 604-455-1858