# Presentation: 056803

## Western’s OATT Revision

- Open Access Transmission Service Tariff
- Public Meeting
- Nov 8, 2004
- Darrick Moe, Project Manager

## Motivation for Revision

- Western’s OATT not revised since its adoption in 1998
- Making needed adjustments at this time
- FERC issued Large Generator Interconnection (LGI) Order 2003 in July of 2003
- Affects all jurisdictional entities with OATT

## OATT Revision Process

- Western wide Team (Team) formed April 2004
- Membership
- All Western Regions
- Various Functional Areas
- Sub-Team focused on LGI Issues
- Informal Public Process now ongoing
- See _http://www.wapa.gov/oatt.htm_
- E-mail comments to _[tariffcomments@wapa.gov](mailto:tariffcomments@wapa.gov)__ _
- Targeting early 2005 for FERC filing

## Large Generator Interconnections

- FERC Order 2003
- Standardizes process for interconnecting generators larger than 20 MW
- Makes LGI Procedures and Agreements (LGIP/IA) part of OATT
- LGI filing required to retain safe-harbor status
- Western indicated to FERC we would comply with Order 2003 provisions to the extent possible
- Gave notice that filing would be forthcoming

## Deviations from LGI Pro Forma

- Eliminate provisions subjecting Western to FERC’s jurisdiction or State authority
- Eliminate non-applicable provisions related to taxes and indemnification
- Assure compliance with environmental laws
- Clarify that all permits responsibility of Interconnection Customer
- Eliminate provisions that could result in Western liability for liquidated damages
- Require contract reassignments receive prior approval from Western

## Best Effort to Meet Timelines

- Numerous rigid timelines are defined
- Western has limited ability to increase staff
- Western is subject to Regional Reliability review
- Western will use best efforts to comply with timelines

## LGI Construction Cost Estimates

- Western will use best efforts to estimate construction costs for network upgrades
- Actual costs for construction of network facilities will be recovered by Western, regardless of deviation from initial estimates
- Up front payments will always be required, not other forms of security
- Anti-Deficiency rules require funds on deposit before work begins

## Construction Cost Allocation Issues

- Provisions remain allowing transmission provider or interconnection customer to build
- If customer builds network upgrade facilities
- Western policy requires inspectors during construction
- Costs to be borne by Interconnection Customer
- Drawings and documents provided must comply with Western’s standards
- Clarified these costs to be at interconnection customer’s expense:
- All voice communications equipment
- All costs associated with negotiating LGIA
- Clarified all invoices to be paid within 30 days

## Limitation on Term

- Pro Forma provisions have no definitive term limit
- Western is limited to 40 year power sale contract term for power sales
- Similar contract term for generator interconnection mirrors Reclamation Law
- Will allow for renegotiation at end of term
- If generation facility ceases operation for 3 consecutive years, may terminate after 90-day- notice

## Meter Testing

- Meters at point of interconnection become Western’s property
- Pro Forma provisions would require Western testing every 2 years
- This deviates from some Western Regional testing practices
- Provision altered to provide Western-owned meters tested in accordance with regional meter testing policies
- Retain option for Customer to request inspection and reimburse Western for costs

## Payments for Network Upgrades

- Network upgrade costs paid up-front by interconnection customer
- Western will repay interconnection customer for network upgrades using bill crediting on transmission service
- Includes payment of interest, capped at Federal interest rate
- Credits will not be limited to 5 years; will extend as long as required to repay investment
- Credits will not exceed transmission customer’s bill
- Prevents Anti-Deficiency and cash flow issues

## Generation Output Scheduling

- Generator output deviations from scheduled values cause energy imbalances in host control area
- Such deviations will be subject to Western’s energy imbalance provisions in project rates

## LGIP Study Provisions

- Change in location of point of interconnection
- Results in a new queue position under Pro Forma provisions
- Western would allow such a change by mutual consent
- Consent granted in circumstances for which the study assumptions/conditions are not impacted
- Off-Peak transmission loading to be studied
- Instead of just on-peak
- When required for reliability

## Participant Funding

- FERC allows RTOs to explore participant funding options
- Western reserves the right to explore participant funding as appropriate
- May be appropriate in some circumstances for Western’s transmission
- Western has history of open use of transmission and collaborative approach to construction

## Modified OATT Provisions

- Western’s mailing address for transmission service information replaced with updated web address information
- References to Regional Reliability Councils updated to current names
- Energy Imbalance Schedule modified to clarify that Western has option to use in-kind or financial repayment and to increase EI bandwidth

## Network Operating Agreements and Committees

- Network Operating Agreements and Committees made optional for each Network Integration Transmission Service (NITS) contract
- Instead of a NOC, Western meets separately and jointly with NITS customers, as needed
- More effective than Pro Forma Network Operating Committee
- Simplicity of some NITS contracts makes NOA unnecessary

## Deposit Methodology Altered

- For entry into queue for Firm Point to Point service exceeding one year and new NITS contracts
- Application fee updated to $3,500 across Western
- Pro Forma deposit of first month’s service to be required
- Capped at a max of $100,000
- To be repaid with a credit on first month’s service
- Western to continue policy of not paying interest on deposits or study advances, due to rate impacts and Federal financial operating restrictions
- However, customer may opt to establish interest-bearing escrow account for queue deposit

## Advance Collection of Funds

- To prevent potential anti-deficiency or cash-flow problems, Western has discretion to require for these conditions:
- For Western acquiring ancillary services from a 3rd party
- As requested by the transmission customer
- When the services are not available from Western
- Due to creditworthiness concerns associated with a new application for service

## Late Payments for OATT Service

- Western has experienced some difficulty in receiving timely payments for transmission service
- Late fees assessed on firm power deliveries result in higher interest charges than under OATT
- OATT late payment interest provisions have been conformed to those used for firm power customers
- May also require advance payment for customers chronically late in submitting payments
- Required to prevent cash-flow or Anti-Deficiency concerns for Western

## Transmission System Peak Calculation

- Pro Forma OATT specifies all firm to be included in monthly transmission system peak
- Western’s detailed transmission rate formula
- Filed with FERC in conjunction with OATT
- Specifies that only firm lasting one year or more included in transmission system peak
- Short-term firm revenue from previous year used to reduce revenue requirement
- Including in peak calculation could skew outcome, resulting in costs not being recovered from appropriate customers
- Does not significantly impact rate calculation
- Therefore, adjusting OATT to conform with rate filings

## Longer Term Non-Firm Service

- Pro Forma Non-firm Point to Point service limited to one month in duration
- Some transmission customers expressed  interest in longer terms
- Regions provided flexibility to offer longer term non-firm service
- Regional business practice postings would define specific provisions
- Will not conflict with existing tariff provisions

## OATT Attachments J & K

- Clarify that Sierra Nevada Region’s Path 15 investments will be marketed by the California ISO
- Provisions made contingent upon *Authorized *funding levels
- Western’s change of rates provisions removed; not applicable to formula-based rates
- Study and deposit costs for Bureau of Reclamation and Corps of Engineers LGI can be waived

## The Panel

- Ron Klinefelter
- Corporate Service Office
- Office of General Counsel Team Member
- Bob Kennedy
- Rocky Mountain Region, Operations
- Lead the LGI Sub-Team efforts
- Steve Sanders
- Upper Great Plains Region, Operations
- Substantial contributions to OATT Modification

## Submitting Comments

- All comments must be received by Nov. 22
- Options for submission
- E-mail to _[tariffcomments@wapa.gov](mailto:tariffcomments@wapa.gov)_
- Use form at _http://www.wapa.gov/oatt.htm_
- Fax to (720) 962–7059 (Attn:  OATT Comm)
- Write:    Western Area Power Admin
- 			 Attn: Corporate Communications
- 			 P.O. Box 281213
- 			 Lakewood, CO 80228–8213
- Comments and responses to be posted to web