# Presentation: 487037

## Grid West Update

***WECC Board Meeting***
***July 29-30, 2004***

## INTRODUCTION 

**In May, 2003 representatives of the Northwest states and the filing utilities agreed to initiate a renewed Regional Representatives Group (RRG) effort to address regional transmission problems.**
**An intensive development process took place over the past year (June 25, 2003 – June 30, 2004) to develop a Regional Proposal that was responsive to problems and opportunities identified by regional stakeholders and not to FERC mandates.  **
** ****The focus of the RRG has been to develop solutions that are “home grown” and that will meet the unique needs of our region.**
**	**
**	**

##   Create a New Independent Entity

**The Regional Proposal lays a foundation for an independent entity with the following basic features****:**
**Creation of a new entity independent of market participants with provisions for regional ****accountability**** ****and responsive governance**** –****a balance of  enough independence to be flexible and workable and with enough regional accountability that it has the region’s trust**
**Staged Governance**
***Developmental Corporation with limited purposes, authority and life span***
***Operational Corporation implements Regional Proposal***
**Phased in features over time**:
***Initial features to meet immediate needs**** *
***Additional features may be  added as ready for implementation**** ****and subject to regional accountability requirements***
***Potential adoption of five specific features that  are subject to enhanced regional accountability requirements***

##             Features of Independent Entity cont.

-  **“****Special Issues” list**
- To proceed these issues require a higher approval (7 of 9 Board members) if the Member Representative Committee votes contrary to Board’s proposal.* *
*(a) chronic congestion backstop,*
*(b) move to financial rights-based congestion management,*
*(c) departure from company rate approach,*
*(d) authorizing market monitor to impose penalties, and*
*(e) adopting loss methodology that overrides individual company loss methodologies*
**Voluntary control area consolidation**
- Consolidated control area would be operated by the independent entity on behalf of the consolidating parties *(early in beginning state expected to be at least Idaho Power Company, BPA, and PacifiCorp)*

## BENEFITS

**More efficient use of the transmission system**
**Independent region-wide planning to give a clearer picture of regional needs and independently determine beneficiaries**
**Better integration of renewables and demand-side resources**
**Enhance reliability by an earlier, broader view of the regional transmission system**
**Create transparency to protect against gaming**
**Reduction of pancaked rates and transactions costs**
**Independent market monitor **
**Regional dispute resolution **
**One stop shopping (e.g., scheduling and new interconnections)**

## Developmental Stage

## TECHNICAL WORK 

**The Regional Representative Group’s (RRG) Transmission Services Liaison Group (TSLG) contracted for services of The Structure Group to help develop beginning state definition **
**Initial focus of TSLG was on cost drivers for other ISO efforts around the country, quickly moving to developing technical details of beginning state **

## TECHNICAL WORK cont.

**The RRG Risk and Reward Study Group formed to prepare a high-level risk/reward analysis with a regional perspective before seating the Development Board**
**Data collection for pricing work proceed this summer**
**Also, entities interested in consolidating their control areas under Grid West in beginning state, will continue work over next few months**

##           STATUS OF REGIONAL PROCESS 

**On June 30 the RRG agreed that the bylaws are “good enough” for further review because they are not inconsistent with Regional Proposal and sufficiently complete and stable for review **
**During the summer BPA will evaluate whether to support adoption of the Developmental Bylaws at Decision Point #1 this fall **

## SCHEDULE 

**Summer review by BPA includes National Academy of Public Administration review of the bylaws for workability, and consulting with customers and regional parties.  Other outreach activities by RRG stakeholders to inform regional entities of nature of proposal **
**August 3 RRG Update Conference Call**
**September 23 and 24:  RRG meeting, BPA report, and progress reports on work **
**October 1:  RRG meeting, review open issues, response to BPA**

## SCHEDULE cont. 

**October 14:  RRG meeting, RRG assessment, Decision Point #1 – whether to support adoption****of  bylaws **
**After Decision Point #1:  If positive,  arrange funding for next stage of development process, RTO West Board formally adopts Developmental Bylaws,  proceed with executive search firm for Board candidates, membership enrollment process, outline of tariff, transmission agreement contours, better beginning state definition, etc. **
**Early 2005:  Work completed **

## SCHEDULE cont. 

**Then 4 – 6 weeks BPA review **
**Spring 2005 Anticipated Decision Point #2:  If positive, hold elections to seat Developmental Board **
**Developmental Board’s primary focus will be to negotiate transmission agreements (TAs) with filing utilities and ultimately to achieve the signing of TAs by at least  BPA and two contiguous IOUs **
**If successful, the Operational Board is seated and Regional Proposal is implemented**