Transcript NW IIBA Initiative Agenda 12/7/07

NIPPC’s IIBA Initiative
Agenda
7 December 2007
• Introduction – independent, integrated Balancing Authority (IIBA)
• Overview
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Why?
What?
How?
When?
Who?
• Costs/Benefits
– Tangible Assessment
– Intangible Assessment
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Operations (user interface)
Optimal Generation Mix
Contractual Structure
Procedural Next Steps
Timeline
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Introduction
• Pacific Northwest Independent Integrated Balancing Authority (IIBA)
• Meeting Protocol
• Project Participants:
– Project Lead:
• CECD - Constellation Energy Control & Dispatch
– Technical, Operational and Policy Support
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Energy Expert Services
NIPPC
Opatrny Consulting
The Energy Group
Versify Solutions
– Legal and Contracting Support
• K&L Gates
• Van Ness Feldman
– Generators
• NIPPC generators
• Potentially other generators
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Overview
Why is the IIBA a good idea?
• It will enable generators to:
– Get paid for what they provide now for free, e.g., frequency and voltage
support, reactive supply
– Reduce operating expenses, e.g., operating reserves, generation
imbalance, integration charges
• It will allow money-making opportunities and add value to
competitive markets:
– Redispatch around transmission constraints
– Support the integration of wind (indirectly or directly)
– Pool transmission
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It will allow generators:
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Greater autonomy
To play by market rules, not just BPA’s rules
New opportunities as well as new responsibilities
Last chance to operate as merchants
• These opportunities need to be prioritized and sequenced
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Overview
What is the IIBA?
• CECD sets-up/implements/certifies the BA
– The BA is a reliability function
– The BA function requires communications links and AGC
• The participating generators separately contract with
CECD in order to:
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Integrates resources
Maintains interchange-generation balance
Supports interconnection frequency
Manages transmission for these purposes
• As a BA, the participating generators will be enabled to:
– Sell regulation to support the integration of wind
– Participate in operating reserve sharing (through the NWPP)
– Self-providing or contracting with third-parties for operating
reserves
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Overview
How is a BA Established?
– Certification Decision
• Prepare Questionnaire for NERC and WECC
• On-site Visit
– Address Minimum Operating Reliability Criteria
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Generation Control Performance
Transmission
Interchange
System Coordination
Emergency Operations
Operations Planning
Telecommunications
Operating Personnel and Training
– This Process Takes About Six Months; there is a Six
Month Probation
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Overview
When does this make sense to do?
• Why not now?
• There is a recognize lack of business opportunities in the
region
• There are no plans to aggregate BAs in the PNW
• The region is hamstrung by hourly block markets
• Transmission constraints are being operated through BPA
federal resource redispatch and curtailment
• BPA is projecting significant wind integration through 2010
(i.e., 6,000 MW)
• The region is now “capacity” constrained
– Light-load hours
– Heavy-load hours
• There is a need for within hour regulation
• Renewable portfolio standards are drivers
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Overview
Who could participate?
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Operating Resources
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Calpine
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EPCOR
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Mint Farm Energy Center LLC
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NESCO
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Sierra Pacific
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Suez Energy America
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TransAlta
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Fredrickson/Tacoma, WA
Longview, WA
Sumas, WA
Mt. Vernon, WA
Chehalis, WA
Centralia, WA
630 MW
gas CCCT
125 MW
gas CCCT
286 MW
gas CCCT
N/A
gas CCCT
28 MW
biomass/cogen
520 MW
gas CCCT
1404 MW
248 MW
coal
gas CCCT
650 MW
125 MW
gas CCCT
wind
125 MW
125 MW
wind
wind
Resources Under Construction
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Hermiston, OR
Grays Harbor Energy Center LLC
NW Energy Partners (enXco)
Resources Permitted but Not Constructed
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Horizon
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Ellensburg, WA
Arlington, OR
Source: Robert Kahn
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Costs/Benefits
What will this Arrangement Cost?
• Estimated Cost of Arrangement
– Start-up/Implementation/Certification
• $175,000 first entrant
• $35,000 for each additional
– Communications and hardware
– Balancing Authority Service Operations
• $60,000/month first entrant
• $12,000/month for each additional
• The CECD Balancing Authority Services
Agreement is an instrument already in operation
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Cost/Benefits
Experience of Other BAs
• Value of Load-only or Gen-only BA
– Greater control over future commodities
purchasing, risk and price management
– Eliminate exposure to Generation Imbalance
charges
– Become a front runner rather than a follower
– Take active role in Business Management and
Regulatory and Compliance Issues
– Actively involved in managing Transmission
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Cost/Benefits
What will this Arrangement Save?
• The BA will result in direct savings
– Generation Imbalance Charges
– Integration Charges ($3.10 – $4.80/MWh)
– Operating Reserves (BPA’s rate is $7.93/MWh)
• The BA will enable intangible benefits
– Provide needed in-hour services
– Enhance redispatch opportunities
• Reliability
• Planning
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Pool transmission
Avoid/reduce regulatory interface costs
Improve output profile (wind farm diversity)
Enhance Renewable Portfolio Standard Opportunities
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Costs/Benefits
How can benefits be analyzed?
• Evaluate BPA Tariff
– Generation Imbalance
– Avoid Generation Imbalance (BPA)
• Band 1: +2 MW or +1.5% of scheduled energy
– No charge if returned
– Charged, if not returned, at diurnally-differentiated incremental cost
• Band 2: Greater than +2 MW or +1.5% of scheduled energy
– Charged 110% incremental cost
– Credited 90% of incremental cost
• Band 3: Greater than +10 MW or +7.5% of scheduled energy
– Charged 125% incremental cost;
– Credited 75% of incremental cost
– Operating Reserves (quantity and price)
– Integration Charge (if applicable)
• Intangible Benefits
– Identify which benefits need further evaluation
• Case-by-case, e.g., pooled transmission
• Generic analysis using existing data sets
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TM
TM
Company Overview
• Headquartered in Chadds Ford, PA (Philadelphia)
• Focused on software applications and tools in two areas of the power
industry
– Generation asset performance management (V-PerformanceTM)
– Trading – LMP and market data analysis (V-TraderTM)
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Advanced web-based software architecture with robust and secure data
management capabilities and unique user interface
• 15 customers and growing
• Partnership with Constellation Energy Control and Dispatch
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Sample Tariff
Versify Product Overview
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TM
V-Enterprise
Trading
V-Trader
q LMP Price Analysis
q DA/RT ISO Pricing
q ISO Footprint –
Load, Outage
q Chart Analysis
q FTR Analysis
q Lookback Forecasting
Planning
Mgmt - Accounting
V-Performance
V-Planner
q Dash Boards (MW, Avail,
Accounting)
q Real-Time Monitoring
q Unit Performance
q Operational Reporting
q Energy Accounting
q Workflow
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Outage Planning
Generator Forecast
Unit Attributes
Contact Mgmt.
Dispatch - Operations
V-Renew
V-Dispatch
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Dispatch Log
Unit Status
Day Ahead Energy Scheduling
Portfolio Status
Alerts
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Wind Availability
Manages Outage and Derating
Wind Scheduling
Combined Energy Scheduling –
Wind, Reserves, AGC
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Key Functionality
• Real time monitoring and full range of asset performance
dashboard reports
– Operational and performance dashboards
– Unit performance reports
– Daily operational reports
• Key functionality enabled through web-based
architecture
– Integrates data from CECD PI, dispatch and other systems
• Complete visualization of asset performance
• Common view of operational status
– Summary/graphical reporting with drill down capability
– Simplifies data intensive collection and analysis
– Security manager allows user-based report access
V-Enterprise
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Data
Export
Users
Versify Reports and Tools (Numerous)
Senior
Management
ETRM
Performance Reporting
Generation or Dispatch Events
Settlement/Shadow Invoice
Dispatchers
Generation Forecast
Plan Generator Outage
Supply Availability
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Planners
Back Office
Accountants
Versify
text
Database
V-Dispatch
Plant
Personnel
V-Planner
Traders
ISO
Portals
Fuels
System
Excel
EMS
Data
Warehouse
Nerc
eGads
Versify Integration Services
Data Sources and Inputs
PI
Internet
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P
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ISO
Pricing
ISO
Footprint
Unit
Characteristics
Contract
Terms
Versify Hosted Facilities
V-Trader
Others
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Applications
Full range of software applications to analyze,
monitor and report on plant operations
• Dashboard Reports
• Unit Status
• Event Log
• Real-Time Monitor
• SCADA Query Tool
• Daily Reports
• Unit Performance
TM
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Dashboards
The Operations Dashboard summarizes weather, energy, emissions data
and reports KPI type data, such as availability and capacity factor.
TM
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SCADA Query Tool
Ad hoc charting and reporting of SCADA/historical data to assist back
office and settlement activities.
Optimal Generation Mix
• Define Optimal Mix of Generators
– Diversity in Fuel Mix
• Anchor tenant resources
• Sequencing additional resources
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Diversity among same Fuel type, e.g., wind
Geographic Diversity in terms of Resource Location
Geographic Diversity in terms of Location of Loads
Various Renewable Portfolio Standards
Transmission Access
• Constraints can further enable redispatch
• Opportunities (e.g., counter-flows)
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IIBA Transmission Area
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Sierra Pacific
28 MW Biomass
EPCOR
125 MW
Grays Harbor
650 MW
Horizon 125
MW
IIBA
Participants
Wind Energy System
Natural Gas
CT/CCCT
TransAlta
1404 MW Coal
248 MW CCCT
Suez Chehalis
520 MW
Mint Farm
286 MW
Baseload Coal
Goodnoe Hills
125 MW
Calpine Hermiston
630 MW
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Load Centers Interties
BC Hydro
Puget Sound Energy
Snohomish PUD
Seattle City Light
Tacoma Power
5,000 MW est.
Avista
Spokane, WA
BPA Public Power
Customers
Idaho
Power
NWE
PacifiCorp
Walla Walla,
WA
PacifiCorp
PGE
Portland, OR
John Day (PACI)
Big Eddy (PDCI)
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BC Hydro
Constrained
Flowgates
Hydroelectric Projects
Wind Energy Systems
Thermal
Powerplants
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Proposed Wind Project
Interconnections
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Wind + CCCT
CCCT Generation Schedule
500
450
400
Output
350
300
250
200
150
100
50
0
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Hour
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Wind Ramp
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Wind Ramp + CCCT shaping
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BPA Creation of Flat Block Product
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Operational Configuration
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Who are the Anchor Tenants?
• Any resource can be the anchor tenant
– Needed to initiate the BA certification process
– Realize cost savings
• Fossil fuel resource can support wind integration
– In-hour shaping
– Between hour shaping
– Back-off generation during off-peak hours
• Wind can provide other opportunities
– Enable RPS opportunities
– Further cost savings through avoidance of integration charges
– Potential wind farm diversity to improve capacity factor
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Contractual Structure
• Contractual Arrangement
– The Balancing Authority
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Execute BA Services Agreement
The BA will not engage in commercial transactions
The BA will offer services to enhance the value of member generators
The BA generators can be “interconnected” through transmission and
dynamic schedules
– The Generators
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Execute the BA Services Agreement (cross contracts)
The Generators will sell to end-users
The Generators will address pooling opportunities
Advise was to not limit participants
– No “Anti-trust” issues identified
• The purpose is to facilitate commerce – enhance competition
• A bid structure will need to be designed for services
• Information sharing as long as such doesn’t impact competition
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Procedural Next Steps
• Simple Start
– Stage this Concept
– Arrange Policy Representation (NIPPC)
– Allow for full Expansion
• NERC certification
– Process requirements
• WECC recognition
– Process requirements
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Procedural Next Steps
• The IIBA would need to
– Become a member of the WECC
– Become a member of the PNSC
– Become a member of the NWPP
• Reserve Sharing Group
– Consider signing the Western Interconnection
Agreement (release of liability)
– Consider joining ACE Diversity Interchange
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Timeline
• Other questions?
• Define policy/PR needs for this effort.
• Execute Balancing Services Agreement
(December 2007)
• Initiate certification process
(January 2008)
• Engage in BPA’s wind integration pilot
(Q1 or Q2 2008)
• Other “next steps”?
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