Transcript Slide 1

Customer Information Session
OATT Requirements & Business
Practices
Martin Huang
VP Grid Operations
March 2011
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Overview
• Recent revisions to OATT
• Transfer Pricing Agreement
• Corporate Governance
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Recent Revisions to OATT
Changes due to integration
• most recent amendments do not introduce significant changes
•
•
BC Hydro has adopted the OATT from BCTC, with some minor modifications
such as inclusion of vertically integrated utility language from pro forma
OATT
OATT continues to be consistent with pro forma OATT established by FERC
Orders 890 et al
• BCUC Order No. G-192-10 (Dec 2010)
Changes we are now seeing due to 2008 OATT amendments
• revised OATT brought forward by BCTC in order to continue to be aligned
with the FERC pro forma
• amendments to OATT approved through BCUC regulatory process
•
BCUC Order No. G-102-09 (Sept 2009)
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Recent Revisions to OATT
Certain provisions and practices just now coming into effect due to
timing of MODS implementation and compliance requirement of
2009 BCUC order
Examples:
• Simultaneous Submission Window (SSW)
• Conditional Firm Service
• Curtailment methodologies
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Transfer Pricing Agreement (TPA)
What the TPA is not.
TPA is not a transmission service
agreement
This means that the TPA:
– does not grant transmission
access
– does not provide transmission
services
– does not set a transmission rate
for BC Hydro and/or Powerex
What is the TPA?
•TPA is an agreement between Powerex
and BC Hydro
•covers how energy transactions are dealt
with
•existing TPA has been in place since 2003
and has not been amended since then
•publicly available and was filed in 2003
Heritage Contract proceeding
What transmission terms, conditions and rates apply to BC Hydro and Powerex?
• BC Hydro and Powerex pay the applicable approved transmission rates and are subject
to the same terms and conditions for accessing ATC via TSR submissions on OASIS
• Same terms, conditions and rates applicable to all other customers
• Approved OATT, including rates, subject to BCUC regulatory process
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Corporate Governance
BC Hydro transmission policy decisions
– “One Hydro”
– Continue to be aligned with industry standards and FERC pro
forma OATT
– Commitment to non-discriminatory open access, including
adherence to Standards of Conduct
– Internal policy discussions, including issues related to
disputes, subject to the SOC rules
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Corporate Governance continued……
Standards of Conduct (SOC)
– SOC define the rules related to functional separation for an
integrated utility providing open access transmission services
– BC Hydro’s SOC and organizational structure are fully consistent
with pro forma OATT
– FERC Orders 717 et al substantively revised the pro forma SOC
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Corporate Governance continued……
SOC General Principles:
1. Non-discriminatory requirements
– transmission provider to treat all transmission customers on a not
unduly discriminatory manner
2. Independent functioning rule
– TFEs must function independently of MFEs
3. No conduit rule
– non-public transmission function information not to be disclosed to
MFEs
4. Transparency rule
– certain information must be posted on BC Hydro’s website to allow
interested persons to detect the potential for acts of undue preference
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Corporate Governance continued……
SOC recent changes
Implementation of SOC
• Driven by industry and adoption by FERC
as industry standard
• Key Changes:
– Reinstatement of employee functional
approach
•Employees designated as
transmission function employees
(TFEs) and market function
employees (MFEs)
 If not a TFE or MFE, then
undesignated employee
– “transmission function information”
(TFI) is narrowly defined
- TFI is only that information relating to
day-to-day transmission operations,
including granting or denying
transmission service requests
• Non-public TFI cannot be communicated
to MFEs
• Non-public TFI can be communicated to
undesignated employees
• All employees, including undesignated
employees subject to the “no conduit” rule
• TFEs and MFEs function independently,
and any discussions are conducted
pursuant to SOC
– Granting/denying of transmission
service requests only done by TFEs
within T&D Market Policy & Operations
• Legal and regulatory support employees
generally not considered TFEs or MFEs. Can
provide legal support to either group so
long as employees do not provide non
public TFI to MFEs.
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Implementation of SOC
What is not prohibited by the SOC
 Transmission policy and planning information does not fall within
definition of TFI; engaging in transmission policy or planning does not
make an employee a TFE
 OATT decision-making as an integrated utility
 Pro forma OATT and SOC were designed for vertically integrated utilities
 Undesignated employees (which can include Powerex
officers/employees not engaged in marketing functions on a day-to-day
basis) not prohibited from being involved with OATT policy, provided that
there is adherence to SOC rules
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Open Access and Regulation
• BC Hydro provides open access consistent with industry standards
• Ultimately the BCUC determines what is just and reasonable
– BC Hydro conducts consultation with respect to significant OATT
amendments and significant new/amended business practices
– New transmission policies or changes to transmission
terms/conditions subject to a BCUC process and approval
– Customers can always bring issues forward to the BCUC in
relation to any type of OATT decision
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