Parties convene in Portland to discuss the creation of an Energy Imbalance Market
A group of western utility executives, transmission officials, and regulatory analysts are convening in Portland, Oregon next week to discuss the creation of a western Energy Imbalance Market (“EIM”). The EIM is part of an Efficient Dispatch Toolkit (“EDT”) proposed by a WECC subcommittee and the Western Interstate Energy Board (“WIEB”) that would include: (1) the EIM to supply energy imbalance service and congestion management, and (2) an Enhanced Curtailment Calculator (“ECC”) to manage power flow impacts across Balancing Authority (“BA”) seams. As a point of reference, the Southwestern Power Pool launched a similar “Energy Imbalance Service” in 2007.
Why: Renewable energy capacity in the West is expected to grow from roughly 13,000 MW today to 70,000 MW by 2020 as the result of state renewable energy requirements. Current energy balancing practices are insufficient to meet the challenges of the anticipated variable generation increases in the Western Interconnection, according to a white paper prepared by WIEB staff. Current bilateral transmission and scheduling practices do not, for instance, make use of remote balancing resources in the Western Interconnection and the EIM could help make more efficient use of generating resources located throughout its footprint.
What: The proposed EIM would be a “sub-hourly, real-time energy market tool that dispatches balanced energy.” It would not include unit commitment or ancillary services. Energy imbalance is currently settled exclusively within BAs; by contrast the EIM would allow the “West to settle energy imbalance and re-dispatch transactions across BA borders.” Contingency reserves will remain the responsibility of the BA.
How: The EIM would be designed similar to imbalance markets administered by Independent System Operators (“ISOs”) and Regional Transmission Organizations (“RTOs”), but would not require the creation of an entirely new RTO and would not include a consolidated regional tariff for wholesale transmission service (although it would require an umbrella tariff). The participating transmission providers would retain their own Open Access Transmission Tariffs (“OATTs”) for ongoing traditional activity, but Schedule 4 (Load Imbalance) and Schedule 9 (Generator Imbalance) would be replaced with a market-based settlement for balancing energy.
Who (would run it): An additional yet-to-be-determined aspect of the EIM is what agent would operate it. Options being assessed for the Market Operator role include:
- Creation of a new division within WECC that could take advantage of a “seamless flow of information” because the EIM operator is expected to rely on WECC Reliability Centers data, but there is concern that WECC has no institutional experience operating a market.
- Reconstitution of one or more Subregional Entities (such as western transmission planning groups) given existing familiarity and communication among companies within each Subregional Entity. There is similar concern that the Subregional Entities do not have experience operating markets and, if each were to implement its own EIM, it could lead to complicated coordination and duplicative efforts.
- Creation of New Third-Party Market Operator that would focus on market operation, but this option comes with the disadvantages of creating an organization from the ground up and associated higher start-up costs.
- Creation of a new division in an Existing Third-Party Market Operator (e.g. California ISO or Midwest ISO) that could take advantage of existing institutional infrastructure, adapted to a Western EIM design, and provide for lower start-up costs.
What Else: Other issues still to be resolved include the footprint, governance and corporate structure, start-up financing and exit provisions. You can read more about the options under consideration by clicking here.
Colorado Public Utilities Commission Proposes New Rules Governing Transmission Planning
On July 28, 2010, the Colorado Public Utilities Commission (the "Commission") issued a Notice of Proposed Rulemaking ("NOPR") regarding rules related to electric transmission facilities planning (the "Proposed Rules"). The Proposed Rules are based, in large part, on the input provided by all interested parties in the workshops and written comments in connection with Docket Nos. 08I-227E and 09M-616E and in response to certain legislative and policy changes impacting transmission planning significantly. In response to these legislative and policy changes, some of the key issues that need to be addressed in transmission planning include transmission-related challenges to satisfying State of Colorado's renewable energy portfolio standard for electricity generation, distributed generation set-asides, and requirements that the Commission give the fullest possible consideration to cost-effective implementation of new clean energy and energy efficient technologies. In implementing the Proposed Rules, the Commission recognizes that "both state-wide coordinated transmission planning and a meaningful involvement in such planning by stakeholders and the Commission are essential." NOPR at 2-3. In addition, the Commission concluded that "an effective transmission planning approach needs to be long-term and pro-active rather than just-in-time and reactive."
Under the Proposed Rules, the Commission will rely on the Colorado Coordinated Planning Group ("CCPG") as the primary means by which jurisdictional electric utilities will develop the ten-year transmission plans and the twenty-year conceptual plans contemplated under the rules, in consultation with other CCPG members and stakeholders. Overall, the Proposed Rules set forth the general objectives associated with the biennial filing of the following:
- ten-year transmission plans;
- twenty-year conceptual plans;
- associated economic studies that jurisdictional electric utilities will develop through CCPG.
At its core, a ten-year transmission plan is required to be:
- consistent with the single-system planning concept, defined as a collective use of the existing transmission system and making the appropriate additions, upgrades and enhancements to the system as if the transmission system were owned by a single entity;
- coordinated with all transmission providers in Colorado; and
- developed in conjunction with the CCPG, a formal subregional transmission planning organization recognized by the Western Electricity Coordinating Council ("WECC"), in a manner consistent with its charter and with the Federal Energy Regulatory Commission ("FERC") regulations regarding transmission planning.
Under the Proposed Rules, it is expected that the jurisdictional utilities will file their first transmission plan in February 2011. In addition, it is anticipated that there will be an interaction between the biennial tranmission planning process, the "Certificate of Public Convenience and Necessity" ("CPCN") proceedings, electric resource planning and the Senate Bill 100 processes. One specific intent of the Proposed Rules is to provide useful information to stakeholders and the Commission in CPCN proceedings in terms of identifying how a proposed transmission facility fits into a larger state-wide transmission plan -- this is particularly important in facilitating the integration of location-constrained renewable energy resources.
Finally, the Commission found that the state-wide coordinated transmission planning must be open to all stakeholders and address both reliability and economic considerations in order for the process to be effective. The Commission noted that while the CCPG charter provides that CCPG meetings and membership are open to all interested stakeholders, the Proposed Rules also provide that in connection with the biennial filings, the utilities are required to demonstrate the outreach to interested stakeholders that occurred in the development of the ten and twenty year transmission plans.
For those interested in commenting on the Proposed Rules, here is an overview of dates/deadlines set forth in the NOPR:
- Pre-filed comments must be submitted by August 25, 2010
- Reply comments must be submitted by September 1, 2010
- A hearing on the Proposed Rules will be held before Hearing Commissioner James Tarpey on Thursday, September 9, 2010 at 9:00 a.m. in Commission Hearing Room A, 1560 Broadway, Suite 250, Denver, Colorado.
