# Attachment B

# to

**Report of the California ISO, the RTO West Filing Utilities,**

**and the WestConnect Applicants Concerning Activities of\
the Seams Steering Group - Western Interconnection**

## Summary of Progress on High-Priority

### SSG-WI Work Group Activities Since January 7, 2003

**THIS ATTACHMENT IS BEING SUBMITTED FOR INFORMATIONAL PURPOSES ONLY AND
NOT FOR APPROVAL OR REJECTION BY THE COMMISSION. ANY RECOMMENDATIONS
CONTAINED HEREIN ARE FOR INTERNAL WORK GROUP PURPOSES ONLY AND HAVE NOT
BEEN CONSIDERED BY THE STEERING GROUP OR APPROVED BY THE CALIFORNIA ISO,
THE RTO WEST FILING UTILITIES OR THE WESTCONNECT APPLICANTS. AS SUCH
THEY ARE SUBJECT TO FURTHER REVIEW AND REVISION.**

## Summary of Progress on High-Priority

### SSG-WI Work Group Activities Since January 7, 2003

*Purpose: The purpose of this document is to provide a high level
summary of the progress made by SSG-WI Work Groups on major SSG-WI
deliverables. Status reports have been inserted to describe progress on
each high-priority objective.*

*To facilitate understanding of this document, the following
abbreviations are used:*

***CMAWG** -- Congestion Management Alignment Work Group*

***PWG** -- Transmission Planning Work Group*

***MMWG** -- Market Monitoring Work Group*

***CSIC** -- Common Systems Interface Coordination Work Group*

***PRWG** -- Price Reciprocity Work Group*

**[1^st^ Quarter - 2003]{.underline}**

-   **MMWG** -- **High Priority**. Develop and detail options for the
    Steering Group to consider (as part of forming a recommendation to
    the Western RTOs) related to whether the West-wide market monitoring
    function should be structured around a single, primary market
    monitor for the Western RTOs' markets, or if this function can be
    performed by an umbrella or coordinating body that monitors for
    seams issues.

> **[Status]{.underline}: The MMWG developed and detailed the three
> structure options for the West-wide market monitoring function, and
> reached consensus on an "umbrella" approach. The Steering Group
> considered the MMWG's consensus proposals on October 17, 2003 and
> adopted a resolution that 1) reaffirms its support for the development
> and implementation of a West-wide market monitoring functions; 2)
> supports further development of the "umbrella" proposal; and 3)
> directs the MMWG to further explain a develop issues identified in the
> Steering Group discussion.**

-   **CSIC** - Propose implementation plans for seams-related systems
    and processes.

> **[Status]{.underline}: While proposals for several systems related to
> seams have been developed, further work to create specific
> implementation of these plans needs to be synchronized to the
> development activities of the proposed RTOs in the West.**

-   **CSIC** - Examine other systems as appropriate.

> **[Status]{.underline}: CSIC sponsored, in conjunction with the SSG-WI
> Congestion Management Alignment Work Group (CMAWG), the formation of
> the Single Market Interface (SMI) task group. This group is developing
> the basis for a single point of access for market participants to gain
> the use of transmission in the interconnection, and applicable market
> activity, with a single pass. Work has focused thus far on
> understanding the participants and the needed characteristics of the
> single market interface. Work is targeted, but not yet underway, to
> identify a methodology for making three (or more) dissimilar markets
> and non-RTO participants work seamlessly together in one interface.**
>
> **CSIC has developed and prioritized a plan for on-going work. The
> present focus is on the single market interface (noted above),
> participation in and development of requirements and protocols for
> data communications between and external to RTOs, and possibly to
> address joint training and operator certification.**

-   **PRWG** - Identify applicable existing charges and proposed charges
    applied to various transactions.

> **[Status]{.underline}: COMPLETED**

**The PRWG developed a high-level comparison of pricing proposals and
charges for the California ISO, WestConnect and RTO West. The pricing
and charges comparison was completed and posted to the PRWG page of the
SSG-WI website on April 7, 2003.**

-   **CMAWG -- High Priority**. First report on progress of work group
    on the high level technical tasks described below:

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-   **CMAWG** -- **High Priority**. Analyze whether a mixed model of
    physical and differing (options versus obligation-based) financial
    rights, including their scheduling implications, is manageable for
    both system operators and users, and whether it allocates
    transmission efficiently;

> **[Status]{.underline}: This is the overall, ongoing problem being
> addressed by the CMAWG. All activities have this as the end goal. So
> far, the analysis indicates that the mixed model can be made to work,
> but the analysis is continuing and not yet complete.**

-   **CMAWG** -- **High Priority**. Determine whether, to the extent
    redispatch is required or used to manage congestion, it is necessary
    to have a single set of congestion clearing prices across the seams
    so that no inter-RTO barriers to trade or arbitrage opportunities
    result, and if so, how the RTOs can assure it. Establish whether
    this requirement extends to multiple products such as ancillary
    services, as well as redispatch for congestion clearing, and to both
    day-ahead and real-time markets;

> **[Status]{.underline}: There is general agreement that a single set
> of prices is needed for congestion management at the seams, whether
> generated explicitly by a locational pricing congestion management
> scheme or as a step in a physical rights congestion management scheme.
> The CMAWG is developing the mechanism by which these prices from the
> three RTOs can be converged in the day-ahead market. The CMAWG has not
> yet addressed other markets.**

-   **CMAWG** -- **High Priority**. Evaluate whether there is a way to
    allow differing granularity for the physical system model used by
    each Western RTO for its internal and its external calculations
    (internal to one is external to the others) or whether a single
    equally detailed physical model is required for each RTO.

> **[Status]{.underline}: There is general agreement that a single,
> relatively detailed physical model of the entire interconnection
> should be used by each RTO. The model should accurately reflect the
> impact of transactions in any single RTO on flows on all significant
> paths in the interconnection. Each RTO may have a version that adds
> additional internal detail for transmission elements that do not
> affect or are not affected by external transactions.**

**[2nd Quarter - 2003]{.underline}**

-   **CSIC -** Implementation coordination (helping the Western RTOs
    keep current with and take into consideration each other's systems
    implementation processes).

> **[Status]{.underline}: CSIC attempted to collate implementation plans
> for the three proposed RTOs but found it impractical in view of the
> re-evaluation of design, phasing, and implementation schedules the
> RTOs forming in the West.**

-   **CSIC -** Simulation coordination (helping the Western RTOs develop
    process simulation approaches that take into account approaches of
    neighboring RTOs and avoid gaps in the simulations).

> **[Status]{.underline}: This will be delayed until there is sufficient
> definition of designs and implementation plans between the forming
> RTOs.**

-   **CSIC** - Business process modeling (identify opportunities to
    improve consistency among the Western RTOs with respect to
    transaction processes and terminology).

> **[Status]{.underline}: Work began on schedule to develop a framework
> for building and refining business processes. CSIC has focused on the
> settlement process and actively participated in review and comment on
> the Electronic Scheduling Collaborative Use cases. The Business
> Architecture Development Group (BAD) has been established as one of
> the primary SSG-WI groups.**

-   **PRWG** - Collect data and analyze the financial implications on
    the current/proposed processes for collecting revenues related to
    interregional transactions.

> **[Status]{.underline}: A data collection task group of the PRWG
> compiled, checked and coordinated one month of data about transactions
> between the three current/proposed RTO regions. This information for
> September 2002 was completed in August 2003. The PRWG evaluated the
> data and decided that the test data demonstrated that it was
> worthwhile to collect transaction data between the RTO regions for an
> entire year.**
>
> **The data collection task group is now proceeding with collecting
> twelve months of transaction data for the time period June, 2002
> through May, 2003; the group agreed to seek information on all imports
> and exports by MW and to separate out by line item (if possible) the
> existing transmission contracts, as well as losses or other separable
> data. The PRWG is determining if other data are needed to evaluate the
> range of price reciprocity options.**

-   **MMWG** -- **High Priority**. Develop an initial proposal regarding
    confidentiality of and access to data.

> **[Status]{.underline}: The MMWG reached consensus on general
> principles regarding confidentiality and access to information as
> reflected in its October 17th consensus proposal. The MMWG did not
> resolve the question of state access to information, although no one
> is proposing to limit the states\' current rights to access market
> monitoring data and work product. The Commission currently has before
> it the California ISO's filing regarding its proposed regulatory
> server (Amendment 55), and this filing involves all of the data
> questions raised by the MMWG. While the Commission's decision will not
> reach beyond California, the MMWG believes that the Commission's
> eventual order will assist the MMWG in reaching a consensus
> recommendation on state access to information.**

-   **PWG** **-- High Priority**. Develop a process to identify
    transmission projects that are needed for economic reasons to
    facilitate a competitive and seamless West-wide wholesale
    electricity market.

> **[Status]{.underline}: COMPLETED**
>
> **The SSG-WI Planning Process is described in the document "SSG-WI
> Planning Function and its Interactions within the Western
> Interconnection," approved by the SSG-WI Steering Group on August 5,
> 2003 posted to the PWG page of the SSG-WI website.**
>
> **The SSG-WI Planning Process includes an annual study program, an
> identification of system needs and economic projects, preparation of a
> SSG-WI Transmission Report, and dissemination of information to
> stakeholders.**

-   **PWG** -- **High Priority**. For projects that: (1) would have a
    direct effect on more than one RTO, (2) are developed by sponsors
    outside of the Planning Work Group planning process, and (3) seek
    cost recovery from Western RTO ratepayers, SSG-WI will develop a
    process to evaluate whether the projects are justified (necessary
    and cost-effective).

> **[Status]{.underline}: COMPLETED**
>
> **The PWG considered this issue and recommended that, because the
> requested assistance may vary from situation to situation, the process
> response to these projects should be customized to the particular need
> and the detailed requirements determined at that time. This was
> approved by the SSG-WI Steering Group on August 5, 2003.**

**The PWG expects that few projects will meet the criteria described in
this issue. Most projects will be more appropriately addressed through
one or more of the RTOs. Whether SSG-WI undertakes additional detailed
studies and assessments, as well as the nature of these studies and
assessments, will be determined by SSG-WI and the entity requesting
help. Factors used in these studies, such as metrics, standards, and
criteria will be determined at that time on a case-by-case basis.**

-   **PWG** -- **High Priority**. Determine if and how SSG-WI will
    support implementation projects recommended by the Planning Work
    Group.

> **[Status]{.underline}: COMPLETED**

**The SSG-WI Steering Group approved the recommendations of the PWG on
August 5, 2003. It was decided that SSG-WI will provide support for
projects by:**

-   **Indicating that the proposed project would serve a need identified
    by PWG studies;**

-   **Indicating that the sponsor was active within the planning
    process;**

-   **Indicating that the project might prove useful to the region such
    as increasing Transfer Capability and relieving congestion;**

-   **Making SSG-WI models available for others' use;**

-   **Providing technical analysis and support if requested by the
    sponsor;**

-   **Upon request of a project sponsor or state siting agency,
    supporting the siting process.**

> **SSG-WI expects the existing processes to evolve to reflect an
> increasing planning role for the RTOs.**

-   **PWG -- High Priority.** Develop a process to resolve differences
    in transmission interconnections that will enable parties to avoid
    going to the Commission under the process set forth in sections 210
    and 211 of the Federal Power Act.

> **[Status]{.underline}: COMPLETED**
>
> **Following review of this issue, the PWG recommended that existing
> processes in the West and future RTO processes would adequately
> address this issue. The SSG-WI Steering Group approved this
> recommendation on August 5, 2003.**
>
> **The RTOs will apply their own procedures to resolve RTO to RTO
> differences, including differences in interconnection requirements.
> SSG-WI will serve as the forum to facilitate resolution of these
> differences. For interconnections between RTO members, interconnection
> issues will be addressed in accordance with the procedures of each
> RTO. Where a decision involves an entity that is not a member of an
> RTO, interconnection decisions relating to that entity will be made by
> that entity in conjunction with the affected RTO.**

-   **CMAWG -- High Priority**. Second report on progress of work group
    on the high level technical tasks described under "1^st^ Quarter"
    above.

> **[Status]{.underline}: The CMAWG continued work on priority projects
> described under 1^st^ Quarter and completed and posted both a first
> and second quarter report to the SSG-WI.**

**[3^rd^ Quarter - 2003]{.underline}**

-   **PWG** -- **High Priority**. Develop SSG-WI Western Interconnection
    Transmission Plan.

> **[Status]{.underline}: COMPLETED**
>
> **The Transmission Report submitted with this filing completes this
> task. In the future, reports will be prepared on an annual basis.**

-   **PRWG** - Finalize development of options for price reciprocity.

> **[Status]{.underline}: During the second and third quarters, the PRWG
> revisited and refined the four options it had earlier developed and
> added a variation on one of the options. The refined descriptions of
> the options will be completed during the fourth quarter and ready for
> analysis once the evaluation data is compiled.**

-   **CMAWG** -- **High Priority**. Develop a consensus proposal
    concerning the "core elements" of a seamless Western electricity
    market. This effort will build off of the work previously done
    through the Western Electricity Coordinating Council (the "WECC")
    and will clarify which elements of the western market need only to
    be compatible and those that need to be standardized.

> **[Status]{.underline}: The CMAWG is working on a proposal that goes
> well beyond describing the core elements of a seamless market. It is
> working on developing a description of the process by which the market
> can be made seamless, while maintaining the distinctive
> characteristics of the three RTOs' filed market designs. This process
> is not complete, but is more ambitious than originally proposed to the
> Commission.**
>
> **As part of this description, the CMAWG has also agreed on the need
> for a single market interface (SMI), going beyond current OASIS
> functions, between RTOs and market participants and among the RTOs.
> Work on the SMI concept is being shared between CMAWG and CSIC through
> a new work group.**
>
> **Also as part of this description, the CMAWG has described a
> mechanism for incorporating energy trading hubs into the RTO
> congestion management schemes.**

-   **CSIC --** Participate in developments related to market interface
    requirements, protocols and implementation.

> **[Status]{.underline}: CSIC is identifying key forums for development
> of market interface requirements and protocols with the intent of
> participating in these broad-based efforts in order to learn from and
> implement them in the west where possible.**

**[4^th^ Quarter - 2003]{.underline}**

-   **PRWG** - Develop proposals for addressing pricing seams with and
    services offered to non-participants.

> **[Status]{.underline}: As the PRWG completes the descriptions of the
> price reciprocity options, the group at the same time is identifying
> issues related to pricing seams with and services offered to non-RTO
> participants.**

-   **PRWG** - Develop assessment criteria, consider available pricing
    options, and identify suggested alternative.

> **[Status]{.underline}: The PRWG developed and agreed on definitions
> of evaluation criteria. Definitions of four criteria were posted to
> the PRWG page of the SSG-WI website on April 7, 2003.**
>
> **The PRWG is continuing to add further definition to the options and
> collect the data necessary to evaluate the options. The PRWG has
> re-evaluated its timeline and concluded a realistic target for
> developing a suggested price reciprocity alternative for the SSG-WI
> Steering Group's consideration is during the second quarter of 2004
> after the evaluation data are collected and compiled.**