Transcript Slide 1

Providing Reactive Power
from
Generating Resources:
Schedule 2 of the MISO
OATT
by the
OMS Resource Adequacy Working Group
OMS Board Meeting at MARC
June 16, 2004
INTRODUCTION
This presentation will cover the following:
•
FERC Order 888 requirements for unbundling costs of ancillary services,
•
Reactive Power Rates in MISO paid by transmission customers but not collected by MISO,
•
A discussion of the importance of Reactive Power,
•
FERC’s PJM Order regarding allowing non-transmission-owning independent power producers
to seek compensation for supplying Reactive Power,
•
Recent events that have focused on need for more sources of Reactive Power,
•
FERC ALJ’s Decision in the Troy case,
•
MISO’s response with a Schedule 21 companion to Schedule 2,
•
Will the new Schedule 21 end the controversy over Reactive Power compensation?
•
MISO’s responses during the frequent debates in the Tariff Working Group,
•
Some of the detail MISO can design to avoid abuse and misrepresentation by Reactive Power
Providers.
1
.
FERC ORDER 888 REQUIREMENTS
Starting in 1996, Transmission Providers
across the country began filing Open Access
Transmission Tariffs at the FERC to unbundle
the costs for Wholesale Transmission
Services.*
* FERC, Promoting Wholesale Competition Through Open Access Non-discriminatory Transmission Service by Public Utilities; Recovery
of Stranded Costs by Public Utilities and Transmitting Utilities, Order 888, FERC Stats .& Regs. [Regs. Preambles 1991-1996] ¶31.036 at
31,705 (1996), on reh’g, Order No. 888-A, FERC Stats. & Regs. [Regs. Preambles 1996-2000] ¶31.048 (1997), on reh’g, Order No. 888-B,
81 FERC, ¶ 61,248 (1997), on reh’g, Order No. 888-C, 82 FERC, ¶ 61,046 (1998) (hereinafter “Order 888”).
2
SEPARATING OPEN ACCESS
TRANSMISSION FROM
GENERATION SERVICES:
1) Companies had to identify assets
that were booked in Generation
Production (G) accounts that
perform primarily a Transmission
(T) Ancillary Service function.
2) They had to add the incremental
rate to recover the cost of these
assets to the Transmission tariff.
3
Separating T from G (cont’d)
3) Companies also had to identify assets
booked in Transmission (T) accounts
that primarily serve a generation
production Generation (G) function and
subtract the incremental rate for these
assets from the transmission tariff.
In essence: The unbundled transmission
tariff should avoid cross-subsidization
among Generation Production (G) and
Transmission (T) Customers.
4
THE REVENUE REQUIREMENTS
FOR UNBUNDLED TRANSMISSION
SERVICES MUST BE FILED AT
FERC; UNRESOLVED ISSUES MAY
BE SET FOR HEARING.
The Reactive Power envisioned by FERC in Order
888 as one of six “ancillary services” addresses only
reactive power from generation resources.
5
REACTIVE POWER RATES IN MISO
REACTIVE POWER RATES FOR UTILITIES IN
THE MISO FOOTPRINT-- RESULTING FROM
CALCULATIONS OF UNBUNDLED COSTS AS
FILED IN EACH UTILITY’S INDIVIDUAL OATT AT
FERC, CAN BE FOUND ON THE MISO OASIS AS
“Ancillary Service Schedule 2.”
These rates for Reactive Power are paid by Transmission
Customers to the utilities today. They are not collected by
MISO.
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ANCILLARY SERVICES - SCHEDULE 2
Reactive Supply & Voltage Control - Existing Customer Charges under Current OATTs
A LTE
A LTW
A MRN
A TSI
CILC
CIN
CW LP
EKPC
HE
IPL
ITC ***
LES
LGEE
MDU
METC
MGE
MHEB
MISO **
MP
MPS
NIPS
NSP
OTP
SIGE
SIPC
UPPC
W EC
W PEK
W PS
Residential
ON-PEAK
OFF-PEAK
Monthly Bill*
HOURLY
HOURLY
ON-PEAK
OFF-PEAK
ON-PEAK
OFF-PEAK
(On-peak x
$/kW-HR
$/kW-HR
HOURLY
HOURLY
DAILY
DAILY
WEEKLY
MONTHLY
YEARLY
800 kWhrs)
(Col.E/1000) (Col.F/1000) $/MW-HR
$/MW-HR
$/MW-DY
$/MW-DY
$/MW-WK
$/MW-MO
$/MW-YR
$0.18
$0.30
$0.10
$0.22
$0.06
$0.28
$0.40
$0.00
$0.52
$0.25
$0.35
$0.00
$0.24
$0.09
$0.53
$0.06
$0.50
$0.30
$0.08
$0.10
$0.12
$0.18
$0.12
$0.22
$0.22
$0.13
$0.17
$0.29
$0.18
$ 0 .0 0 0 2
$ 0 .0 0 0 4
$ 0 .0 0 0 1
$ 0 .0 0 0 3
$ 0 .0 0 0 1
$ 0 .0 0 0 4
$ 0 .0 0 0 5
$ 0 .0 0 0 0
$ 0 .0 0 0 6
$ 0 .0 0 0 3
$ 0 .0 0 0 4
$ 0 .0 0 0 0
$ 0 .0 0 0 3
$ 0 .0 0 0 1
$ 0 .0 0 0 7
$ 0 .0 0 0 1
$ 0 .0 0 0 6
$ 0 .0 0 0 4
$ 0 .0 0 0 1
$ 0 .0 0 0 1
$ 0 .0 0 0 2
$ 0 .0 0 0 2
$ 0 .0 0 0 2
$ 0 .0 0 0 3
$ 0 .0 0 0 3
$ 0 .0 0 0 2
$ 0 .0 0 0 2
$ 0 .0 0 0 4
$ 0 .0 0 0 2
$ 0 .0 0 0 1
$ 0 .0 0 0 2
$ 0 .0 0 0 1
$ 0 .0 0 0 1
$ 0 .0 0 0 0
$ 0 .0 0 0 4
$ 0 .0 0 0 3
$ 0 .0 0 0 0
$ 0 .0 0 0 6
$ 0 .0 0 0 3
$ 0 .0 0 0 2
$ 0 .0 0 0 0
$ 0 .0 0 0 2
$ 0 .0 0 0 1
$ 0 .0 0 0 7
$ 0 .0 0 0 1
$ 0 .0 0 0 3
$ 0 .0 0 0 2
$ 0 .0 0 0 1
$ 0 .0 0 0 1
$ 0 .0 0 0 2
$ 0 .0 0 0 1
$ 0 .0 0 0 2
$ 0 .0 0 0 1
$ 0 .0 0 0 3
$ 0 .0 0 0 1
$ 0 .0 0 0 1
$ 0 .0 0 0 2
$ 0 .0 0 0 1
$ 0 .2 3 0 0
$ 0 .3 8 0 0
$ 0 .1 2 0 0
$ 0 .2 8 0 0
$ 0 .0 6 8 8
$ 0 .3 5 0 0
$ 0 .4 9 4 5
$ 0 .1 1 0 0 $ 3 .7 0 0 0
$ 0 .1 8 0 0 $ 6 .0 0 0 0
$ 0 .1 2 0 0 $ 2 .8 5 0 0
$ 0 .1 3 0 0 $ 4 .4 7 0 0
$ 0 .0 3 3 3 $ 1 .1 0 0 0
$ 0 .3 5 0 0 $ 8 .0 0 0 0
$ 0 .3 2 9 7 $ 1 1 .0 7 6 9
$ 2 .6 0 0 0
$ 4 .3 0 0 0
$ 2 .8 5 0 0
$ 3 .1 8 0 0
$ 0 .8 0 0 0
$ 8 .0 0 0 0
$ 7 .9 1 2 1
$ 1 8 .5 0 0 0 $ 8 0 .0 0 0 0 $ 9 6 0 .0 0 0 0
$ 3 0 .0 0 0 0 $ 1 3 0 .0 0 0 0 $ 1 ,5 6 0 .0 0 0 0
$ 2 0 .0 1 0 0 $ 8 6 .7 0 0 0 $ 1 ,0 4 0 .4 0 0 0
$ 2 2 .3 4 0 0 $ 9 6 .8 0 0 0 $ 1 ,1 6 1 .6 0 0 0
$ 5 .4 0 0 0 $ 2 3 .4 0 0 0 $ 2 8 0 .8 0 0 0
$ 5 0 .0 0 0 0 $ 2 1 6 .0 0 0 0 $ 2 ,5 9 2 .0 0 0 0
$ 5 5 .3 8 4 6 $ 2 4 0 .0 0 0 0 $ 2 ,8 8 0 .0 0 0 0
$ 0 .6 4 3 8
$ 0 .3 1 0 0
$ 0 .4 4 0 0
$ 0 .6 4 3 8 $ 1 0 .3 0 0 0 $ 1 0 .3 0 0 0 $ 5 1 .4 0 0 0 $ 2 2 2 .9 0 0 0 $ 2 ,6 7 5 .3 0 0 0
$ 0 .3 1 0 0 $ 5 .0 0 0 0 $ 5 .0 0 0 0 $ 2 5 .0 0 0 0 $ 1 1 0 .0 0 0 0 $ 1 ,3 0 0 .0 0 0 0
$ 0 .2 1 0 0 $ 6 .9 9 0 0 $ 5 .0 2 0 0 $ 3 4 .9 3 0 0 $ 1 5 2 .6 2 0 0 $ 1 ,8 3 1 .4 4 0 0
$ 0 .3 0 0 0
$ 0 .1 1 6 8
$ 0 .6 6 0 0
$ 0 .0 8 0 0
$ 0 .6 1 8 8
$ 0 .3 7 6 6
$ 0 .0 9 5 9
$ 0 .1 2 0 0
$ 0 .1 5 1 1
$ 0 .2 2 6 0
$ 0 .1 5 0 0
$ 0 .2 7 1 2
$ 0 .2 7 5 0
$ 0 .1 6 6 0
$ 0 .2 1 0 0
$ 0 .3 6 5 0
$ 0 .2 3 0 0
$ 0 .1 5 0 0 $ 5 .0 0 0 0 $ 3 .6 0 0 0 $ 2 5 .0 0 0 0
$ 0 .1 1 6 8 $ 2 .8 0 2 2 $ 2 .8 0 2 2 $ 1 9 .6 1 5 4
$ 0 .6 6 0 0 $ 1 0 .6 0 0 0 $ 1 0 .6 0 0 0 $ 5 3 .0 0 0 0
$ 0 .0 8 0 0 $ 1 .9 2 0 0 $ 1 .9 2 0 0 $ 1 3 .4 8 0 0
$ 0 .2 9 3 8 $ 9 .9 0 0 0 $ 7 .0 5 2 1 $ 4 9 .5 0 0 0
$ 0 .1 7 8 8 $ 6 .0 2 5 4 $ 4 .2 9 2 1 $ 3 0 .1 2 7 0
$ 0 .0 9 5 9 $ 2 .3 0 1 4 $ 2 .3 0 1 4 $ 1 6 .1 5 3 8
$ 0 .1 2 0 0 $ 1 .8 8 0 0 $ 1 .8 8 0 0 $ 9 .3 8 0 0
$ 0 .1 5 1 1 $ 3 .6 2 6 4 $ 3 .6 2 6 4 $ 2 5 .3 8 4 6
$ 0 .1 2 7 0 $ 4 .0 0 0 0 $ 3 .0 0 0 0 $ 1 2 .1 0 0 0
$ 0 .1 5 0 0 $ 3 .5 3 0 0 $ 3 .5 3 0 0 $ 2 4 .7 4 0 0
$ 0 .1 2 8 8 $ 4 .3 0 0 0 $ 3 .1 0 0 0 $ 2 1 .7 0 0 0
$ 0 .2 7 5 0 $ 4 .4 0 0 0 $ 4 .4 0 0 0 $ 2 2 .0 0 0 0
$ 0 .0 7 9 0 $ 2 .7 0 0 0 $ 1 .9 0 0 0 $ 1 3 .3 0 0 0
$ 0 .1 0 0 0 $ 3 .3 2 0 0 $ 2 .3 7 0 0 $ 1 6 .6 2 0 0
$ 0 .1 7 4 0 $ 5 .8 4 6 0 $ 4 .1 6 4 0 $ 2 9 .2 3 0 0
$ 0 .1 1 0 0 $ 3 .7 0 0 0 $ 2 .6 0 0 0 $ 1 8 .6 0 0 0
* Estimates based on On-Peak rate billed for an average 800 kWh/month
** MISO Rate charged for Sinks external to MISO (non-MISO members)
*** ITC (DECO) charges apply for ITC Schedule 2
$ 1 0 8 .0 0 0 0 $ 1 ,3 0 0 .0 0 0 0
$ 8 5 .0 0 0 0 $ 1 ,0 2 0 .0 0 0 0
$ 2 3 0 .0 0 0 0 $ 2 ,7 6 0 .0 0 0 0
$ 5 8 .4 0 0 0 $ 7 0 0 .8 0 0 0
$ 2 1 4 .5 0 0 0 $ 2 ,5 7 4 .0 0 0 0
$ 1 3 0 .5 5 0 5 $ 1 ,5 6 6 .6 0 5 9
$ 7 0 .0 0 0 0 $ 8 4 0 .0 0 0 0
$ 4 1 .0 0 0 0 $ 4 9 2 .0 0 0 0
$ 1 1 0 .0 0 0 0 $ 1 ,3 2 0 .0 0 0 0
$ 9 3 .0 0 0 0 $ 1 ,1 1 6 .0 0 0 0
$ 1 0 7 .2 2 0 0 $ 1 ,2 8 7 .0 0 0 0
$ 9 4 .0 0 0 0 $ 1 ,1 2 8 .0 0 0 0
$ 9 5 .3 0 0 0 $ 1 ,1 4 3 .0 0 0 0
$ 5 7 .6 0 0 0 $ 6 9 1 .6 0 0 0
$ 7 2 .0 0 0 0 $ 8 6 4 .0 0 0 0
$ 1 2 6 .6 6 3 5 $ 1 ,5 1 9 .9 6 2 5
$ 8 1 .0 0 0 0 $ 9 6 7 .0 0 0 0
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THE IMPORTANCE OF REACTIVE
POWER
In order 888, FERC noted*:
-- Electric power consists of two components.
The first, “Real Power” (watts) is the active force
that causes electrical equipments to work.
-- The second component “Reactive Power ” (Voltamperes reactive or “VARs”) Is necessary to maintain
adequate voltages so that “Real Power” can be
transmitted.
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* Order 888 at 31,707.
TRANSMISSION LINES NEED TO BE ENERGIZED BEFORE
THEY WILL CARRY REAL POWER. REACTIVE POWER
PROVIDES THE ENERGIZATION TO MOVE REAL POWER.
ACCORDING TO NERC, HEAVY POWER TRANSFERS ACROSS
A TRANSMISSION INTERFACE AND HEAVY LOADING ON
TRANSMISSION LINES CAN CAUSE VOLTAGE IN AN AREA TO
BECOME DEPRESSED IF SUFFICIENT REACTIVE SUPPLIES
ARE NOT AVAILABLE TO THE SYSTEM.*
UNLIKE REAL POWER, REACTIVE POWER CANNOT BE
TRANSMITTED EASILY OVER LONG DISTANCES AND IS BEST
SUPPLIED LOCALLY.
*Michael J. Zimmer, “Reactive Power Capability-A Challenge to Grid Reliability” at
[email protected] (Washington, D.C. at 1
9
FERC ALLOWS NON-TRANSMISSION-OWNING
INDEPENDENT POWER PRODUCERS TO SEEK
COMPENSATION AT FERC UNDER SEC. 205 OF THE
FPA FOR REACTIVE POWER PROVIDED BY THEIR
GENERATORS; UNRESOLVED ISSUES MAY BE
SUBJECT TO HEARING.
In a 2000 PJM case, FERC allowed non-transmissionowning independent power producers to “unbundle”
their costs of providing Reactive Power as an ancillary
service from their generating resources for inclusion in
a Transmission Provider’s OATT.*
*
PJM Interconnection L.L.C., Docket No. ER00-3327 (September 25, 2000) (unpublished
letter order), as cited in 105 FERC ¶ 61,250.
1
0
RECENT EVENTS HAVE FOCUSED ON A NEED
FOR MORE SOURCES OF REACTIVE POWER:
•
The Bi-National Task Force Final Report found that
August 14, 2003 Blackout—affecting nearly 10% of the
Eastern Interconnection’s entire load, began with
declining voltages during a warm summer afternoon of
consistently increasing air conditioning demand and
power transfers into FirstEnergy, a member of MISO.
•
With the loss of just one generating unit in a high
demand load pocket, FirstEnergy had no additional
generation to provide the needed Reactive Power
Support.*
*
U.S.-Canada Power System Outage Task Force, Final Report on the August 14, 2003
Blackout in the United States and Canada: Causes and Recommendations (April 2004)
at 31,.
11
More recent events have focused on a need for
more sources of Reactive Power (cont’d)
•
The Bi-National Task Force Final
Report also recommended that NERC
require the utility to confirm that all nonutility generators in its area enter into
contracts …committing them to
producing increased or maximum
reactive power when called upon by
FirstEnergy or MISO to do so.*
* Id., at 151.
12
The FERC ALJ’s Decision in the Troy LLC
Complaint Case (Docket ER03-1396-000):
• On April 21, 2004, FERC ALJ Cintron certified an
uncontested Agreement and Settlement BETWEEN
Troy L.L.C. (an affiliate of Dominion Power in Virginia)
and FirstEnergy, MISO, the Midwest Standalone
Transmission Companies and Calpine.
• Article 2.3 of the Settlement states that MISO shall
tender revisions to its OATT Schedule 2 providing
terms and conditions under which a generator is
eligible for compensation for its reactive power
capability
13
IN RESPONSE, MISO HAS MODIFIED ITS SCHEDULE 2 FOR
REACTIVE SUPPLY AND VOLTAGE CONTROL FROM
GENERATION RESOURCE SERVICES
• MISO intends to preserve existing zonal rate design for
transmission service and “grandfather” existing Schedule
2 revenue requirements of generators within the MISO
footprint.
• Consistent with FERC’s intentions in its earlier PJM ruling,
MISO will seek to preserve the filing rights of nontransmission owning independent generators seeking
compensation for reactive power and voltage control from
their generation service* For this purpose, MISO
introduces a separate schedule: Schedule 21.*
* Holsclaw e-mail to [email protected] (April 23, 2004)
14
THE NEW MISO SCHEDULE 21 WILL
PROVIDE COMPENSATION FOR FERCFILED REVENUE REQUIREMENTS FOR
SUPPLYING REACTIVE POWER
• The new Schedule 21 companion to the
existing Schedule 2 is specifically
designed to capture the terms and
conditions for compensating nontransmission-owning generators,
including those generating utilities
separated from their former transmission
assets by corporate restructuring.
15
Will the introduction of the new
Schedule 21 end the ongoing
controversy over Reactive Power
compensation?
The Vertically-integrated transmissionowning companies insist that MISO –
 Institute a “needs” test to determine if and when reactive
power is needed by non-transmission-owning companies,
and
• Institute an additional ‘testing procedure” to determine the
VAR capability of a generator.
16
DURING THE FREQUENT DEBATES IN THE
TARIFF WORKING GROUP, MISO HAS
RESPONDED:
• No MISO “needs” test will be included in the Schedule 2
modification (now known as companion Schedule 21),
• Under Sections 205(b) and 203 of the FPA, rates,
charges, and services of transmission and wholesale
generation sales are to be nondiscriminatory.
• Non-transmission-owning generators must file their
revenue requirements at FERC. Parties may (and do)
intervene in these cases to argue for hearing of contested
issues.
17
During the frequent debates in the Tariff Working
Group, MISO responded (cont’d):
• Additional testing will not be required.
Interconnection of new generators, under
MISO’s compliance with FERC Order 2003, will
include feasibility, system impact and facilities
studies.
• Under an Order 2003 Interconnection
Agreement, the interconnecting generator must
be willing to supply VAR support.
18
MISO can design the details of the Tariff terms
and conditions in order to avoid abuse and
misrepresentation by Reactive Power providers:
• State regulators may want to review the “response time”
requirements in the new Schedule 21 to assure there is
no unwarranted delay or lag in a generator’s response to
MISO’s call for reactive power and voltage control,
• State regulators may want to review the terms and
conditions of any penalties imposed by MISO for a nonresponse by a generator to MISO’s call for reactive power
and voltage control.
19
Any Questions?