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Conditional Firm Service Business Practice

Conditional Firm Service Business Practice. February 4, 2011. Agenda. Introduction – Al Woodruff 9:00 AM Conditional Firm Service (CFS) – Stephen Tran 9:15 AM Lunch 12:00 PM NERC TTC/ATC Methodologies – Stephen Tran 1:00 PM Refreshment 2:15 PM

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Conditional Firm Service Business Practice

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  1. Conditional Firm Service Business Practice February 4, 2011

  2. Agenda • Introduction – Al Woodruff 9:00 AM • Conditional Firm Service (CFS) – Stephen Tran 9:15 AM • Lunch 12:00 PM • NERC TTC/ATC Methodologies – Stephen Tran 1:00 PM • Refreshment 2:15 PM • TTC Calculator Project – Ebrahim Vaahedi 2:30 PM • Wrap Up 3:30 PM

  3. Introduction Al Woodruff Manager, Market Policy and Operations • Updates on consultation regarding Re-integration

  4. Conditional Firm Service Presenting By Stephen Tran

  5. Conditional Firm Service • Background (FERC CFS) • BC Hydro Conditional Firm Service • Monthly Posted Firm ATC & CFS ATC Methodology • CFS Service Offer Process • Common Practices • Option 1 • Option 2 • Q & A • Next Steps

  6. Conditional Firm Service • FERC Conditional Firm Service (CFS) • A long-term service • Intended for bridge service or substitute service • Conditional period and unconditional period • During conditional Period: Service priority = 6NN • Higher priority than non-firm • Same priority as Network Secondary Service • During unconditional Period: Service priority = 7F • Same service priority as other firm services

  7. Conditional Firm Service • FERC Conditional Firm Service (CFS) • CFS can be based on either: • System conditions: may be curtailed for • Pre-defined system contingencies • System load levels • Number of hours: may be curtailed for • Pre-specified number of hours per year • Biennial Assessment

  8. Conditional Firm Service • BC Hydro Conditional Firm Service • Has same terms and conditions • Based on posted monthly Firm ATC • Consists of firm service and conditional service • Firm service has priority 7F • Conditional service has priority 6NN • Higher priority than non-firm • Same priority as Type 1 Network Economy • Service Agreement specifies: • 24 monthly ATC profile (firm service amount and conditional service amount)

  9. Conditional Firm Service • Short-Term Firm ATC (i.e. hourly, daily, weekly or monthly) will be awarded to CFS Transmission Customers prior to being offered to the market. • When short Term Firm ATC is posted for a given period: • The condition service of the CFS for that period: • Becomes firm service • Will be curtailed pro-rata with other firm transmission services.

  10. Conditional Firm Service • CFS will be charged the same price as LTFPTP transmission service as defined in Rate Schedule 01.

  11. Definitions: • Forecasted Period: means a 24-month period. • Current Forecasted Period: means a Forecasted Period starting from the month following. • Initial Forecasted Period: means the first Forecasted Period from the Start-date of a CFS Service Agreement Conditional Firm Service

  12. CFS ATC Methodology • Use Posted monthly Firm ATC as first year’s monthly Firm ATC. • Use the values obtained in #1 above as estimates for the second year’s monthly Firm ATC. • Using the calculated monthly Firm ATC, offer CFS as follows: • Monthly firm service amount equal to monthly Firm ATC • If the monthly Firm ATC is less than the capacity requested, offer monthly conditional service for the balance of requested capacity. Conditional Firm Service

  13. Conditional Firm Service • Total Firm Service and CFS commitments cannot exceed (TTC – TRM) • TTC ≥ TRM + Firm Commitments + CFS

  14. Conditional Firm Service • Example: • A 5-year request for 200 MW • TTC = 560 MW; TRM = 50 MW; F Commitment = 300 MW • Assumed posted monthly Firm ATC is 150 MW • Then offer a CFS with: • Monthly firm service amount = 150 MW; and • Monthly conditional service amount = 50 MW • TTC ≥ 50 + 300 + 150 + 50 = 550 • If TTC = 520 MW • Then offer a CFS with: • Monthly firm service amount = 150 MW; and • Monthly conditional service amount = 20 MW • TTC = 50 + 300 + 150 + 20 = 520

  15. Conditional Firm Service • Short-term Firm ATC • For US-BC, US-AB, BC-AB, AB-BC & paths • ST Firm ATC is mostly unaffected by system load • For examples: • AB-BC Path • Posted monthly Firm ATC is a constant 136 MW (except for months with scheduled maintenance) • BC-AB Path • Posted monthly Firm ATC is a constant 0 MW

  16. For BC-US Path • The monthly Firm ATC for Current Forecasted Period is determined as follows: • Using BC Hydro’s: • Forecast monthly loads • Forecast monthly generation dispatching pattern, and • Transmission system configuration. • Determining monthly firm transfer capabilities after allowing for the requirement of BC Hydro’s domestic customers • Determining month Firm ATC by subtracting existing firm commitments for the next 12 months. Conditional Firm Service

  17. For BC-US Path • To mitigate uncertainty risk in forecasting BC Hydro’s requirements for domestic customers, BC Hydro will adjust the monthly Firm ATC for CFS for the BC to US path as follows: • Set the monthly Firm ATC for CFS for the months of November, December, January and February to zero to account for the uncertain timing of the weather dependent system peak. • Reduce the monthly Firm ATC for CFS in the second year based on BC Hydro’s projected growth rate for integrated system demand. • Applicable to AB-US Path as well Conditional Firm Service

  18. Sample of Current Forecasted Period Monthly Firm ATC and CFS Conditional Firm Service Set to 0 3% below previous year level

  19. Sample of Monthly Firm ATC and CFS beyond Current Forecasted Period Conditional Firm Service

  20. CFS Service Offer Process • The approaches for option 1 and option 2 are the same for most part • The differences are related to BC-US and AB-US paths • Both paths include Interior to Lower Mainland system • ATC for these paths are dependent on load forecast Conditional Firm Service

  21. In response to a Completed Application, BC Hydro will tender to the Transmission Customer: • A Service Agreement for Partial Service and/or CFS as applicable; and • An applicable study agreement • Customer’s choices are: • Partial Service; or • CFS ( substitute service); or • Partial Service and study; or • CFS and study (*bridge service) • CFS serves as bridge service until: • NU are completed - if Customer commits to NU; or • All applicable studies are completed – if Customer doesn’t commit to NU Conditional Firm Service (Common Practices)

  22. BC-AB Path • Service queue and LT process are suspended • Service requests are in queue for LT firm service • Service requests stay in queue until End-date • If and when LT firm sale limit increases: • Firm ATC will be offered first-come first-served • CFS will be available only to the first 305 MW requests • For example: Conditional Firm Service (Common Practices)

  23. Biennial Assessment: • Provide assessment every 2 years • Provide results 90 days before effective date • If curtailment conditions are more stringent, Customer may terminate service • If curtailment conditions are less stringent or same, service is contractually bound • Additional assessment will be provided 30 days before roll-over deadline Conditional Firm Service (Common Practices)

  24. BC-US Path and AB-US Path (Example 2) • A Completed Application submitted on 2 April 2011 for Transmission Service on BC to US Path for 200 MW with service Start-date of 1 June 2011. In accordance with OATT timelines, BC Hydro must tender a study agreement or Service Agreement by 2 May 2011. At this time: • The Current Forecasted Period is from 1 June 2011 to 1 June 2013 • The Initial Forecasted Period for this request is from 1 June 2011 to 1 June 2013 • There is sufficient information for determining monthly firm service amount and monthly conditional service amount for all months within the Initial Forecasted Period • Assuming the projected growth for integrated system demand is 3% Conditional Firm Service (Option 1)

  25. Conditional Firm Service (Option 1) Example 2

  26. BC-US Path and AB-US Path (Example 3) • A Completed Application submitted on 2 April 2011 for Transmission Service on BC to US Path for 200 MW with service Start-date of 1 August 2011. In accordance with OATT timelines, BC Hydro must tender a study agreement or Service Agreement by 2 May 2011. At this time: • The Current Forecasted Period is from 1 June 2011 to 1 June 2013 • The Initial Forecasted Period for this request is from 1 August 2011 to 1 August 2013 • There is insufficient information for determining monthly firm service amount and monthly conditional service amount for all months within the Initial Forecasted Period • Assuming the projected growth for integrated system demand is 3% Conditional Firm Service (Option 1)

  27. Conditional Firm Service (Option 1) Example 3

  28. BC-US Path and AB-US Path • To provide certainty for firm service for months in the Initial Forecasted Period • Customers must specify in the Completed Application if they wish to have CFS as substitute service only • If not specify, follow LTPTP process and tender CFS as bridge service as required • Tender the CFS Service Agreement when the Current Forecasted Period coincides with the Initial Forecasted Period • Tender the CFS Service Agreement no earlier than one month prior to service Start-date except the Start-date is: • December, January, February or March Conditional Firm Service (Option 2)

  29. BC-US Path and AB-US Path (substitute service) • Example 5 • A Completed Application submitted on 2 April 2011 for Transmission Service on BC to US Path for 200 MW with service Start-date of 1 August 2011. The Transmission Customer has indicated in its Completed Application that it doesn’t want to commit to Network Upgrades In accordance with OATT timelines, BC Hydro must tender a study agreement or Service Agreement by 2 May 2011. At this time: • The Current Forecasted Period is from 1 June 2011 to 1 June 2013 • The Initial Forecasted Period for this request is from 1 August 2011 to 1 August 2013 • There is insufficient information for determining monthly firm service amount and monthly conditional service amount for all months within the Initial Forecasted Period Conditional Firm Service (Option 2)

  30. BC-US Path and AB-US Path (substitute service) • Example 5 • On May 2, 2011: • Tender a System Impact Study agreement • Projected study completion date is July 1, 2011 • On July 1, 2011: • Tender a Service Agreement for CFS as substitute • LTPTP process completed by July 16, 2011 Conditional Firm Service (Option 2)

  31. BC-US Path and AB-US Path • Example 6 • A Completed Application submitted on 2 April 2011 for Transmission Service on BC to US Path for 200 MW with service Start-date of 1 June 2011. The Transmission Customer does not indicate in its Completed Application that it doesn’t want to commit to Network Upgrades. In accordance with OATT timelines, BC Hydro must tender a Service Agreement by 2 May 2011. At this time: • The Current Forecasted Period is from 1 June 2011 to 1 June 2013 • The Initial Forecasted Period for this request is from 1 June 2011 to 1 June 2013 • There is sufficient information for determining monthly firm service amount and monthly conditional service amount for all months within the Initial Forecasted Period Conditional Firm Service (Option 2)

  32. BC-US Path and AB-US Path • Example 6 • On May 2, 2011: • Tender a System Impact Study agreement • Tender a Service Agreement for CFS • If only Service Agreement is executed, CFS is substitute service • If both agreements are executed: • CFS serves as bridge service • Studies will be performed Conditional Firm Service (Option 2)

  33. BC-US Path and AB-US Path • Example 6 • Tender a SA at the completion of all applicable studies • If SA is executed: • CFS continues as bridge service until NU are completed • Full service replaces CFS if NU are not required • If SA is not executed, CFS continues as substitute service Conditional Firm Service (Option 2)

  34. BC-US Path and AB-US Path • Example 7 • A Completed Application submitted on 2 April 2011 for Transmission Service on BC to US Path for 200 MW with service Start-date of 1 August 2012. The Transmission Customer does not indicate in its Completed Application that it doesn’t want to commit to Network Upgrades. In accordance with OATT timelines, BC Hydro must tender a Service Agreement by 2 May 2011. At this time: • The Current Forecasted Period is from 1 June 2011 to 1 June 2013 • The Initial Forecasted Period for this request is from 1 August 2012 to 1 August 2014 • There is insufficient information for determining monthly firm service amount and monthly conditional service amount for all months within the Initial Forecasted Period Conditional Firm Service (Option 2)

  35. BC-US Path and AB-US Path • Example 7 • On May 2, 2011: • Tender a System Impact Study agreement • No CFS is not offered at this time • If SIS is executed, studies will be performed • Tender a SA at the completion of all applicable studies • If SA is executed and NU completion is after Start-date: • Tender CFS as bridge service 30 days prior to Start-date Conditional Firm Service (Option 2)

  36. BC-US Path and AB-US Path • Biennial Assessment will be the same as option 1 • Completed 90 days before effective date • Will have zero firm service amount for month 23rd and 24th Conditional Firm Service (Option 2)

  37. BC-US Path and AB-US Path Conditional Firm Service (Option 1 vs. Option 2)

  38. BC-US Path and AB-US Path Conditional Firm Service (Option 1 vs. Option 2)

  39. Conditional Firm Service (Option 1 vs. Option 2)

  40. BC-US Path and AB-US Path • Competition with short-term service • Monthly ST service request can be for up to 11 months • 60 days prior to Start-date • Conditionally confirmed up to 30 days • 30 days prior to Start-date, ST request • Unconditionally confirmed • Cannot be displaced by Long-term • Less Firm ATC will be available for Long-term Conditional Firm Service (Option 2)

  41. Conditional Firm Service (Option 2)

  42. Conditional Firm Service Q & A

  43. Conditional Firm Service • Next Steps • Customers to provide comments to Brenda.Ambrosi@bchydro.com by February 18, 2011 • BC Hydro will post responses along with Customer comments on February 25, 2011 • BC Hydro will post the final CFS BP by March 11, 2011 • CFS BP becomes effective on April 1, 2011

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