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Presented by: Charles Yeung on behalf of Electric Power Supply Association (EPSA)

Electric Power Supply Association’s Comments on GISB Strawman II. Presented by: Charles Yeung on behalf of Electric Power Supply Association (EPSA) DOE/GISB Conference Washington, D.C. August 15, 2001. Who We Are.

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Presented by: Charles Yeung on behalf of Electric Power Supply Association (EPSA)

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  1. Electric Power Supply Association’s Comments on GISB Strawman II Presented by: Charles Yeung on behalf of Electric Power Supply Association (EPSA) DOE/GISB Conference Washington, D.C. August 15, 2001

  2. Who We Are • The Electric Power Supply Association represents over 30 electric power suppliers in the wholesale market • Independent members, and • Members affiliated with Investor Owned Utilities • Members in U.S. and Canada • Participate in NERC Stakeholder Committee and various committees and working groups • Many also own and operate wholesale electric trading operations

  3. Electric Industry Sees Value in EISB • Support formation of EISB with a quadrant for Wholesale Electric Standards • We seek for all quadrants in EISB these key principles: • No sector may dominate the standards setting process • Governmental oversight over all quadrants • A powerful consensus building incentive • Governmental authority provides for compliance • We have questions about GISB Strawman II and the proposed Wholesale Electric Quadrant

  4. GISB Strawman II “The activities of the new Organization would not extend to the development of standards for physical safety, physical reliability, facilities construction, equipment manufacture or the operation of natural gas or electrical equipment, such as those established and maintained by the AGA or NERC.”

  5. NERC • NERC Policies inextricably combine reliability and commercial requirements • Physical reliability and business practices to implement market transactions overlap • Today, NERC does the “WHAT” - the core reliability requirement and the “HOW” - the business practice/procedure to satisfy the requirement

  6. NERC/NAERO does the “WHAT” • However, NERC/NAERO’s charters provide for a reliability-only organization • The “HOW”, by default, is now done by NERC because no other organization exists to provide this function. • EISB/GISB has a proven fair and comparable process to develop the “HOW” • NERC has a proven record for maintaining grid reliability but struggled with market issues

  7. NERC/EISB – Concerns on how to proceed • Reliability rules cross over to the commercial side • Difficult to separate • Who should lead the development of market interface standards? • EISB or NERC? • Rules should not conflict with each other

  8. NERC/EISB Transition • Possible solutions • Single organization/single process • Two organization with coordinated processes • NERC develops “What” - core reliability standards • EISB develops the “How” - business practices

  9. Critical Considerations for Development of the Segments • GISB segments do not translate over to the Wholesale Electric Quadrant • Pipelines have been unbundled from the distributors and the producers • Transmission Providers are still bundled with their generation and the local distribution organization within their companies • Electric industry requires more precise definitions

  10. Critical Considerations for Development of the Segments • Functional segments based on the Market/Reliability Interface (example segments only) • Generators • Transmission Providers • Grid-level End Use Customers • Wholesale marketers • Different FERC tariff considerations provide for different access to transmission grid • System Service Providers • Not sure this is a segment -- dynamic changes occurring (OATI, RTOs & NERC) • Overlapping functions

  11. Critical Considerations for Development of the Segments • Limited number of segments • Every industry player “fits” into a segment • No segment dominates

  12. FERC Order No. 2000 • “RTO will ensure the integration of reliability and market interface practices.” • Develop integration practices, or • Cooperating with an independent entity that covers all regions

  13. To Move Forward • Still to be addressed/resolved • Segment Definition • required for balance and fairness • Annual Plan for Wholesale Electric Quadrant • defines scope of issues to be addressed and standards to be developed • requires significant industry participation and we need “Bang for Buck” • TLR and Tagging

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