**Establishing A Funding Mechanism For**

**SSG-WI Transmission Database Management and Administration\
**

To my knowledge, legal council for the 3 RTOs (Sarah Dennison-Leonard
for RTOW, Antoine Cobb for WC, and John Anders for CAISO) have discussed
two main approaches for funding SSG-WI's Transmission Database
management and administration:

1.  one representative from each RTO be counterparty for any contract
    that is signed, with multiple options for administering

2.  SSG-WI, after forming itself as an unincorporated association,
    acting as the counterparty for any contract, with multiple options
    for administering

**Option 1:** One party from each RTO or SSG-WI region (Cal ISO, RTO
West, WestConnect) sign the consulting contract as a counter-party.  As
an example, the counter-parties could be the California ISO, PacifiCorp,
and Arizona Public Service (so these three entities would be on one side
of the contract and the winning bidder would be on the other side of the
contact). \
 

-   In each RTOW and WC, there are multiples who could be that
    counterparty (for example, for RTOW, one of the filing utilities or
    perhaps the RTO West itself -- a limited purpose non-member
    non-profit -- might assume that responsibility). The region would
    select its counter-party.

-   There would be no joint and several liability among the
    counter-parties.  So, if one counter-party paid and the other two
    did not, the winning bidder would not have the option to try to
    recover for non-payment from the one party that did pay (etc.). 

-   All three counter-parties would have concurrent rights to fully
    enforce the winning bidder\'s performance under the contract.

-   Each regional counter party would be responsible for collecting
    funds from other RTO participants within their region; The winning
    bidder (or party on the other side of the contract) would not be
    involved in that secondary process.

-   The signing parties and the party(ies) responsible for administering
    the contract may be different. For example, the 3 signing parties
    could assign (within the contract) some or all administration
    responsibilities to the SSG-WI Steering Group or the TPWG.

-   Option 1 Advantages?

-   Option 1 Disadvantages?\
     \
    **Option 2:** SSG-WI, after forming itself as an unincorporated
    association, is the counterparty for any contract, with multiple
    options for administering.

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-   The Pacific Northwest has used this approach when a coalition of
    utilities needs to purchase services together;

-   This viability of option must be further explored by legal council
    for all 3 RTOs.

-   Option 2 Advantages?

-   Option 2 Disadvantages?\
    \
     **General Questions Relevant to either approach:**

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-   Duration of spending commitments (e.g. contract terms)?

-   What is allocation of expense among parties (1/3 each?)?

-   What are estimated costs of contracting for database management and
    for administering the contract?

**Applicability Of Either Option To General Funding Mechanism For
SSG-WI**

In addition to the TX Database management funding needs at hand, SSG-WI
currently has expenses and has contemplated additional expenditures for
its congestion management work and perhaps for market monitoring. An
approach or perhaps a collection of approaches should be developed for
funding current and future expenditures. The type of funding mechanism
often depends on the type of expenditure (e.g. by size, degree of
recurrence, duration, purpose). For example, contracts over a certain
amount via Option 1 and under a certain amount is paid for by one RTO
who then seeks reimbursement from the other two (the approach currently
used). A review of current or anticipated activities and associated
expenditures seems necessary in the context of evaluating potential
funding mechanisms for SSG-WI. I would expect revisions to the MOU based
on the outcome of these questions.

-   Can either of these approaches be adapted as a general approach for
    funding SSG-WI activities?. A typology of expenses may be helpful

-   Will SSG-WI fund activities item by item or through a pool to cover
    a certain time period, e.g. an annual funding cycle?

-   What processes will SSG-WI use to develop proposals for activities
    with associated budgets that can be used by the RTOs to make funding
    decisions?

-   What is the process and timeline for obtaining project/expenditure
    approval from RTOs?