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Congestion Hedging Process

Congestion Hedging Process. Transmission Planning Summit September 21-22, 2011. Agenda Topics. Integrated Marketplace Overview Congestion Hedging Process Impact of TCR/IM on Engineering Processes TCR Time line- Next Steps. Day Ahead Market. Day Ahead Reliability Unit Commitment.

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Congestion Hedging Process

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  1. Congestion Hedging Process Transmission Planning Summit September 21-22, 2011

  2. Agenda Topics • Integrated Marketplace Overview • Congestion Hedging Process • Impact of TCR/IM on Engineering Processes • TCR Time line- Next Steps

  3. Day Ahead Market Day Ahead Reliability Unit Commitment Intra-Day RUC Settlement Real-Time Balancing Market Overview of Integrated Marketplace Functions T- 12 monthsT- 1 dayT T+ 7 days ARR/TCR Auction Makes sure enough capacity committed for next operating time frame Real-Time dispatch much like today’s EIS Market (5 min) • Performs unit commitment • Sets DA prices • TCRs cleared

  4. Why hedging is needed in Integrated Marketplace? • In the DA Market, price separation of MP’s resource to load may occur due to congestion leaving the MP exposed to high prices • TCRs allow for an efficient market • The TCR can be used as hedge against congestion that allows MPs to reduce their exposure to high market prices

  5. ARR-TCR Process Overview Auction Revenue Rights ARRs Allocated (MWs) Participate in TCR Auction TCR Auction (MWs w/ Price) Auction Revenue ARR Holders SPP Transmission System Capability Congestion rights TCR Holders

  6. Annual vs. Monthly TCR Auctions

  7. Modeling & Steady State Planning CBA Market Implementation • Under IM, SPP will have centralized generation dispatch for the entire SPP footprint (vs. individual BA dispatch) • SPP is using a centralized balancing approach to long term planning

  8. Transmission Service and TCR • SPP is conducting Transmission Service Studies as described in SPP OATT • Studied on aggregate basis • Relationship between TCR and TSS • Firm Transmission Service (NITS, PTP) will provide ARR Entitlement to Eligible Entities • The value of TCR (Sink LMP- Source LMP) would depend on the transmission improvements committed through TSS studies

  9. GI and TCR/Integrated Marketplace • SPP is conducting GI studies according to SPP OATT • Grant Energy Resource Interconnection Service (ERIS) and Network Resource Interconnection Service (NRIS) • Relationship between GI and TCR/ Integrated Marketplace • No hedging rights (ARR/TCR) associated with ERIS and NRIS

  10. Compliance, Seams and IM/TCR • Compliance • Compliance studies need to be performed in support of NERC/ Regulatory Standards • Seams and Inter-Regional Coordination • Various Trading Hubs will be defined as a part of TCR and Day Ahead market Process • Loop flows (Parallel flows) and outage coordination will be critical for revenue adequacy in TCR market

  11. TCR Work in Progress! • System design and customization is underway • Nexant is our vendor • Plan to use offline module (Hedge) to perform test runs, MP training • Overall “Congestion Hedging” Implementation Timeline

  12. Upcoming Key Dates for Mock TCR Auction • October 5th 2011: TCR Mock Auction Kickoff meeting • November 9, 2011 : Preparing for Mock TCR auction* • December 12, 2011: Preparing for Mock TCR auction* • January 11, 2012: Preparing for Mock TCR auction* • January 16th 2012: TCR Mock Auction Phase I- Start • February 22nd , 2012: Preparing for Mock TCR auction* • March 12, 2012: Preparing for Mock TCR auction* • April 2nd , 2012: TCR Mock Auction Phase I- Start * Offered through Learning Management Service (LMS)

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