# Presentation: 496387

## Grid West Update

***PNUCC Board Meeting***
***July 9, 2004***

## OVERVIEW 

**There has been an intensive development process over the past year (June 25, 2003 – June 30, 2004) to develop a Regional Proposal, responsive to problems and opportunities identified by regional stakeholders, with the following basic features****:****	**
**	**
**Create a new independent entity with provisions for regional ****accountability**** ****and responsive governance**** **

## OVERVIEW cont.

**Use a staged implementation, phasing in features over time**:
***Beginning state – Initial features to meet immediate needs**** *
***Interim state – Functions added as ready for implementation**** *
***Advanced target state – Region manages transmission system using financial methods (adoption of features of advanced target state subject to enhanced regional accountability requirements)**** *
**Voluntary control area consolidation; consolidated control area would be operated by the independent entity on behalf of the consolidating parties, expected to be Idaho Power Company, BPA and PacifiCorp early in Beginning State**

## BASIC PRINCIPALS OF REGIONAL PROPOSAL

**All existing contracts, legal settlements, and other relevant obligations are expected to be honored according to their terms**
**Transmission owners are still in charge of their identifying company revenue requirements, subject to applicable regulatory authority**
**Cost shifts should be minimized**

## TRANSITION PRINCIPLES

**Each change must be clear improvement over current approaches to managing and using the regional transmission system **
**Each stage of evolution is fully workable as it stands**
**Proposed transition does not foreclose ability to evolve to the advanced target state (adapted as needed to changing circumstances)**

## 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 will be 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 will proceed in the next few months**
**Also, Entities interested in consolidating their control areas under Grid West in beginning state, will continue work over next few months**

## GOVERNANCE 

**Bylaws work group prepared proposed forms of Developmental and Operational Bylaws with goal of striking balance between regional accountability and independence embodied in the Regional Proposal **
**Bylaws work group’s focus was on workability and meeting a “Do No Harm” test with respect to the Regional Proposal **

## STATUS OF REGIONAL PROCESS 

**RRG on June 30 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 & Operational Bylaws at Decision Point #1 this fall **

## SCHEDULE 

**Summer review by BPA include 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 **
**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 – adopt bylaws **
**After Decision Point #1 (decision whether to adopt the developmental bylaws and fund next stage of development process) – if positive – 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 – hold elections to seat Developmental Board **
**Developmental Board’s primary focus will be to negotiate transmission agreements (TAs) with filing utiltities and ultimately to achieve the signing of TAs  by BPA and two contiguous IOUs **
**If successful, the Operational Board is seated and Grid West is implemented**