# Presentation: 201449

##  Western Area Power Administration

**Rocky Mountain Region**
**Customer Meeting - October 30, 2002**
** ****Standard Market Design and Regional Transmission Organizations Updates **
**Jane Meyer, Ron Moulton, Mark Fidrych, Bob Easton, **
**Jeff Ackerman, Ed Hulls, Bob Kennedy**

## Agenda

- Overview of Standard Market Design
- Overview of WestConnect Ruling
- Overview of RTO West Ruling
- How will the scheduling process change?
- Will transmission rights change?
- What could happen to existing contracts?

## Agenda (Cont.)

- Will the cost of transmission change?
- How could the planning process change?
- How is Western’s merchant preparing for possible changes?
- How is Western’s control area preparing for possible changes?
- Locational Marginal Pricing (LMP) Overview

## Standard Market Design Overview

- Jane Meyer
- Restructuring Project Manager
- RMR & CRSP

## FERC believes Standard Market Design is Needed

- FERC’s goal is to promote economic efficiency in electricity for the benefit of all Americans
- Order 888 in 1996
- Required all public utilities to:
- file open access non-discriminatory transmission tariffs
- Functionally unbundle wholesale power services from transmission services
- Imposed a reciprocity condition for non-public utilities

## FERC believes Standard Market Design is Needed

- Order 2000
- Encouraged all transmission owners to voluntarily place their transmission facilities in the hands of Regional Transmission Organizations (RTO)
- Industry has been working toward that goal:
- Independent System Operators (ISO) formed in California, New York, New England, PJM, and ERCOT
- RTOs formed in Midwest (MISO), Southeast (SETrans), Southwest (WestConnect), and Northwest (RTO West)

## FERC believes Standard Market Design is Needed

- FERC issued Notice of Proposed Rulemaking (NOPR) - July 31, 2002
- Long name:  “Remedying Undue Discrimination through Open Access Transmission Service and Standard Electricity Market Design”
- FERC Docket No. RM01-12-000
- http://www.ferc.gov/Electric/RTO/Mrkt-Strct-comments/smd.htm

## FERC believes Standard Market Design is Needed

- FERC’s Vision:
- Same set of rules for all users of the grid administered by a fair and independent entity
- Eliminate Residual Discrimination
- Lower Costs to Customers
- Customer protection through market power mitigation measures and oversight
- Clear transmission pricing and planning policies to incent investment in infrastructure
- Provide a framework for effective State & Federal regulation

## Standard Market Design -  Major Elements

- Independent Transmission Provider (ITP)
- New transmission tariff
- Transmission pricing reform
- Organized Day-Ahead (DA) and Real-Time (RT) spot markets
- Mitigation of market power and market monitoring
- Resource adequacy
- Regional planning process

## Independent Transmission Provider

- Jurisdictional utilities _mandated_ to turn over control of their transmission facilities to an independent entity - Independent Transmission Provider
- Regional Transmission Organization (RTO)
- Independent System Operator (ISO)
- Independent Transmission Company (ITC)

## Independent Transmission Provider

- Jurisdictional utilities had three options:
- Become an Independent Transmission Provider
- Cannot have financial interest, either through an affiliate or any market participant
- Contract with Independent Transmission Provider for operational control of transmission facilities
- Join a Regional Transmission Organization

## Options for Non-jurisdictional Utilities

- SMD NOPR proposes that existing reciprocity tariffs filed under 888 OATT will be grandfathered
- FERC requested comment on this provision

## Independent Transmission Provider

- Operates transmission facilities
- Administers Standard Market Design transmission tariff
- Transmission pricing
- Congestion management
- Administers organized spot market
- Long-term planning and expansions
- System impact and facilities studies

## Independent Transmission Provider

- Transmission transfer capability calculations
- Market monitoring and market power mitigation, including establishing bid caps and must-offer requirements
- Establish long-term resource adequacy requirements

## New SMD Transmission Tariff

- Today - Two types of transmission service
-  Network Integration Service
-  Point-to-Point Service
- SMD - Network Access Service
- Characteristics of Network Integration Service - access to all generators on the grid
- Characteristics of Point-to-Point Service - rights are tradable
- Bundled retail load of jurisdictional utilities must take transmission service under Tariff

## Transmission Pricing

-  Today - Network and Point-to-Point transmission customers pays transmission charge for embedded costs
-  SMD
- Load pays embedded costs through access charge
- Load pays only one access charge for Network Access Service
- Pancaking (payment of more than one transmission rate for delivery from source to sink) is eliminated

## Organized Spot Markets

- Independent Transmission Provider must operate day-ahead and real-time markets for energy and ancillary services, in conjunction with the transmission market
- Voluntary, bid-based, security-constrained day-ahead spot energy market

## Organized Spot Market

- NOPR includes the use of Locational Marginal Pricing (LMP) of energy and congestion in both day-ahead and real-time markets
- NOPR includes the use of financial transmission rights to assure that transmission is used by those entities that value the transmission the most
-  Congestion Revenue Rights

## Market Monitoring

- NOPR lays out framework
- Independent market monitoring unit
- Evaluates state of market
- Identifies need for changes in market rules
- Identifies load pockets & areas where infrastructure is needed for competition
- Reports to FERC, Regional State Advisory Committee, and Board of Directors

## Resource Adequacy Requirements

- Long-term Resource Planning will be policed by independent Transmission Provider
- Mandate load serving entities to provide their share of resources through own resources and contract purchases
- Guard against over reliance on spot markets
- Assure that there are adequate transmission, generation, and demand-side resources

## Reaction by Industry

- Western Governors
- FERC should specifically set aside the Western Interconnection from its SMD rule and concentrate on working with the states to develop RTOs that address the specific problems in the Western Interconnection.  This process should begin with a well-defined and factually-supported statement of the problems in the Western Interconnection.  (September 17, 2002)

## Reaction by Industry

- Northwest Congressional Delegation
- In short, we believe this is an unnecessary, poorly conceived and dangerous academic experiment that would inject volatility and uncertainty into the comparatively stable and affordable energy system in the Northwest.  We would urge the Commission to abandon the proposal. (September 27, 2002)

## Reaction by Industry

- Senate Energy and Natural Resources Committee hearing September 17, 2002
- Senators were uniformly critical.
- Only two of the nine witnesses supported the proposed SMD rule.
- Kentucky Governor  Patton slammed the proposed rule, saying it fails the test of adopting policies that are in the best interests of the entire nation.

## SMD Comments Due

- The Commission extended comment period to November 15, 2002, except for comments which address the following:
-  (1) market design for the Western Interconnection; (2) transmission planning and pricing, including participant funding; (3) Regional State Advisory Committees and state participation; (4) resource adequacy; and (5) CRRs and transition issues
- Comments dealing with the issues are due January 10, 2003

**Notes:**
In the meantime, RTOs are being approved and market designs formulated

## Western Review of SMD NOPR

- Organized Western-wide review teams to develop responses/positions to questions in SMD NOPR
- Coordinating with BPA and DOE
- Customer comments & input welcome
- Bulk of Western’s comments will be submitted in January

**Notes:**
Copies of bullets at back of room

## SMD Delayed

- Final rule delayed until next summer
- In the meantime, RTOs have been approved and market designs are being developed by the stakeholders

## RTOs in the West

**Notes:**
Reference back to Joel - options and why we are involved

## Overview of WestConnect Ruling

- Jurisdictional Participants (Applicants)
- Arizona Public Service Company
- El Paso Electric Company
- Public Service Company of New Mexico
- Tucson Electric Power Company
- Non-Jurisdictional Participants (Involved to varying degrees)
- Salt River Project
- Western Area Power Administration
- Southwest Transmission Cooperative, Inc. (AEPCO)
- Tri-State G&T Association, Inc.
- Website:  http//www:westconnectrto.com

## Overview of WestConnect Ruling

- Requested Declaratory Order - October 16, 2001
- FERC Ruled - October 10, 2002
- Approved scope
- Approved governance structure
- Approved license plate rate for an interim period
- Approved voluntary conversion of existing contracts
- Requested more details about self-tracking

## Overview of WestConnect Ruling

- FERC Ruling (Continued)
- Approved congestion management proposal as a “Day One” mechanism and directed Applicants to engage in further discussions to develop a congestion management program that reflects market-driven solutions to clear congestion operations and that does not create seams among the Western RTOs.

## Overview of WestConnect Ruling

- FERC clarified that it is not their intent to overturn, in the final SMD rule, decisions that are made in the WestConnect Ruling
- Unclear what FERC has decided and therefore will not be overturned
- FERC was silent on many issues
- Critical items, such as congestion management, were approved with modifications
- Western needs clarification and details

## Overview of WestConnect Ruling

- Ron Moulton
- Restructuring Project Manager
- DSW

## RTOs in the West

**Notes:**
Reference back to Joel - options and why we are involved

## Overview of RTO West Ruling

- RTO West Participants
- Avista Corporation
- Bonneville Power Administration
- Idaho Power Company
- NorthWestern Energy L.L.C. (formerly Montana Power Co.)
- PacifiCorp
- Puget Sound Energy, Inc.
- TransConnect ITC
- Nevada Power Co., Sierra Pacific Power, Co., Portland General Electric
- British Columbia Hydro and Power Authority

## Overview of RTO West Ruling

- Stage 2 Filing - March 29, 2002
- Request For Declaratory Order
- Attachments
- Pricing, Congestion Management, Transmission Planning, Market Monitoring . . .
- Agreements
- Transmission Owners Agreement, Scheduling Coordinator Agreement, Paying Agent Agreement
- Implementation Plan (June 28, 2002)
- Operational 2006

## Overview of RTO West Ruling

- FERC Ruled - September 18, 2002
- Approved Scope & Governance
- Approved License Plate Pricing & Transition Period (8 Yrs)
- Conditionally Approved Congestion Management
- Approved Voluntary Contract Conversion
- Approved Planning & Expansion
- Approved Framework for Interregional Coordination

## Overview of RTO West Ruling

- FERC Ruling (Continued)
- Rejected TOA Trumps Tariff
- Defers Addressing TOA Until Tariff Complete
- Directs Applicants to File Tariff (120 days)
- Directs Development of Standards of Interconnection
- Conditionally Approves Market Monitoring Proposal
- Will Not Overturn with SMD Final Rule

## Overview of RTO West Ruling

- Stage 3 Activities (Oct 02 - Jan 03)
- Market Design Workgroup
- Market Operations
- Ancillary Services
- Cataloguing/Options
- Losses
- Metering, Control & Communications
- Tariff Development Workgroup
- Visit http://www.rtowest.com/ for more information

## Seams Steering Group - Western Interconnection (SSG-WI)

## Seams Steering Group - Western Interconnection (SSG-WI)

- Steering Group (Closed)
- SSG-WI serves as the discussion forum for facilitating the creation of a Seamless Western Market and for proposing resolutions for issues associated with differences in RTO practices and procedures.
- Workgroups (Open)
**Planning**
- Congestion Management
- Pricing Reciprocity
- Market Monitoring
- Commons Systems Interface Coordination

## Seams Steering Group - Western Interconnection

- FERC Directed CAISO, RTO West & WestConnect (within 90 days of Order)
- Codify the MOU between parties to define their commitments and the forum by which issues will be resolved.
- Provide a list of pending issues before the Steering Group and timeline for resolution of those issues.
- Visit http://www.ssg-wi.com/ for more information

## How Could Scheduling Process Change?

- Mark Fidrych
- Utility Restructuring Advisor
- RMR & CRSP

## How Could Scheduling Process Change?

**Today** (Day(s) Ahead)
- Independently or via Scheduling Agent
- Customers have various Op Agreements with Service Providers
- Forecast Needs (Determine Loads)
- Decide on Supplier(s)
- Arrange/Verify Transmission
- Submit Pre-Schedule to Control Area for System Reliability Analysis

## How Could Scheduling Process Change?

**Today** (“Next Hour”)
- Independently or via Scheduling Agent
- Evaluate Forecast (Incorporate Load Changes)
- Verify Supplier(s)
- Verify Transmission
- Modify Pre-Schedule

## How Could Scheduling Process Change?

**Today** (“Real-Time”)
- Independently or via Scheduling Agent
- Respond to Contingencies/Curtailments
- Adjust Schedules
- Acquire Emergency Resources
- Interrupt Load
- Verify Delivery

## How Could Scheduling Process Change?

**SMD** (Day Ahead)
- Independently or Load Serving Entity
- Network Operating Agreement with ITP
- Forecast Needs (Determine Loads)
- Determine if want price/delivery certainty
- Decide on Supplier(s)
- Bilateral Transactions
- Venture into the Day-Ahead & Real-time Spot Markets

## How Could Scheduling Process Change?

**SMD** (Day Ahead)
- Designate Receipt & Delivery Points
- Transmission Service Scheduled in the Day Ahead Market
- Synchronizes Energy and Transmission Schedules
- Analysis of Physically Feasible Dispatch
- Source/Sink required for Simultaneous Feasibility Evaluation
- Must hold Congestion Revenue Rights (CRR) or Agree to Congestion Costs

## How Could Scheduling Process Change?

**SMD** (“Real-Time”)
- Independently or Load Serving Entity
- Evaluate Forecast (Incorporate Load Changes)
- Revise Receipt and/or Delivery Points

## How Could Scheduling Process Change?

**SMD** (“Real-Time”)
- Independently or Load Serving Entity
- Respond to Contingencies
- Interrupt Load
- Take other Emergency Actions which may be required
- Respond to Curtailments
- Should only be associated with “trapped loads”
- Verify Delivery

## How Could Scheduling Process Change?

**SMD** Versus **Today**
- No Longer Required
- Load/Resource Balanced Schedule
- Transmission Reservations
- 100% of Forecasted Load Met by Resource
- Designation of Network Resources
- New Features
- Voluntary, Bid-Based Energy Markets
- Ancillary Service Bid-Based Markets
- Transmission & Energy Delivery are Coupled

## How Could Scheduling Process Change?

- Differences Between **SMD** and RTOs In the West
- Both WestConnect and RTO West require Balanced Schedules
- Both Require a Scheduling Coordinator Function

## How Could Transmission Rights Change?

- Ron Moulton
- Restructuring Project Manager
- DSW

## How Could Transmission Rights Change?

- Today
- Physical Transmission Rights
- Network Integration
- Long-Term Firm Point-to-Point
- Short-term & Non-Firm Point-to-Point
- Acquired
- OASIS
- Pre-888 Transmission Service Agreements

## How Could Transmission Rights Change?

- SMD (Financial Rights Model)
- Network Access Transmission Service
- Congestion Revenue Rights (CRR)
- Hedge Congestion Costs
- Tradable
- Obligation or Option
- Acquired
- Directly Assigned from the ITP
- Auction
- Secondary Markets

## How Could Transmission Rights Change?

- WestConnect (Physical Rights Model)
- Non-Converted Rights (NCRs)
- Firm Transmission Rights (FTRs)
- Recallable Transmission Rights (RTRs)
- Non-firm Transmission Rights (NTRs)
- Acquired
- Directly Assigned from WestConnect
- Auction
- Secondary Market

## How Could Transmission Rights Change?

- RTO West (Financial Rights Model)
- Catalogued Transmission Rights (CTRs)
- Financial Transmission Options (FTOs)
- Acquired
- Directly Assigned from RTO West
- Auction
- Secondary Market

## How could Transmission Rights Change? (Summary Table)

## What Could Happen to Existing Contracts?

- Today
- Firm Electric Service Agreements
- Bundled (Power & Transmission)
- Transmission Service Agreements
- Network Integration
- Long-term Firm Point-to-Point
- Short-term & Non-Firm Point-to-Point
- Pre-888 Transmission Service Agreements

## What Could Happen to Existing Contracts?

- SMD
- All OATT Agreements Converted to Network Access Service (NAS)
- Receive CRRs (Subject to Simultaneous Feasibility)
- Pre-Order 888 Agreements Given Opportunity to Convert to NAS
- Converted
- Receive CRRs
- Non-Converted
- Transmission Owner Receives CRRs
- Transmission Owner Takes Network Access Service to Honor Pre-Order 888 Agreements
- Transmission Owner Picks Up Cost Differences

## What Could Happen to Existing Contracts?

- WestConnect
- Converted
- Receive Firm Transmission Rights
- Non-Converted
- Receives Non-Converted Rights
- WestConnect Picks Up Cost Differences in Grid Management Charge

## What Could Happen to Existing Contracts?

- RTO West
- Converted
- Receive Financial Transmission Options
- Non-Converted
- Receives Catalogued Transmission Rights
- Transmission Owner Picks Up Cost Differences

## How will Costs Change?

- Jane Meyer
- Restructuring Project Manager
- RMR & CRSP

## How will Costs Change?

- Today
- Standard Market Design
- WestConnect
- RTO West

## Costs - Today and SMD

-             TODAY
- Transmission Service
- Network Integration Service
- Long-term Point-to-Point
- Short-term and non-firm Point-to-Point
- Pre-OATT arrangements
- Pay pancaked rates if use more than one system from generator to load

-               SMD
- Transmission Service
- Network Access Service (ITP)
- Pre-OATT arrangements

## Costs - Today and SMD

-             TODAY
- Bilateral generation agreements
- Long-term
- Short-term
- Bundled
- Unbundled

-               SMD
- Bilateral generation agreements
- Long-term
- Short-term
- Bundled
- Unbundled
- Cost of congestion under Locational Marginal Pricing - (ITP)

## Costs - Today and SMD

-             TODAY
- Spot market generation purchases

-               SMD
- Day Ahead Settlement
- Real Time Settlement
- 	- Locational
-       Marginal Price
-       (LMP)
- 	- LMP reflects the
-       cost of energy and
-       congestion
- - (ITP)

## Costs - Today and SMD

-             TODAY

-               SMD
- Purchase and Sale of Congestion Revenue Rights (financial hedge for cost of congestion during Day Ahead)

## Costs - Today and SMD

-             TODAY
- Ancillary Services
- - Scheduling and Dispatch
- - VAR Support
- Regulation
- Energy Imbalance
- Reserves
- Self provide or purchase from Transmission Owner or Control Area

-               SMD
- Ancillary Services - ITP
- - Scheduling and Dispatch
- VAR Support
- Regulation
- Reserves
- Self provide or purchase from ITP

## Costs - Today and SMD

-             TODAY
- Energy Imbalance

-               SMD
- Real Time Settlement
- Generators will be paid or will pay the variance between Day Ahead Schedules and actual generation
- Load will pay or be paid for the variance between Day Ahead Schedule and actual load.

## Costs - Today and SMD

-             TODAY
- Other costs

-               SMD
- Other costs
- Grid Management Charge
- Annual operating cost of ITP/RTO
- PJM - $0.40/ MWh
- CAISO - $0.84/ MWh - (Source: RTO West Cost Benefit Study dtd March 11, 2002)

##   A

- G2

- G3

- Today Load A pays:
- $2.00 transmission rate for delivery of G1 generation
- $2.00 + $3.00 = $5.00 for delivery of G2 generation
- Load A pays pancaked transmission rates for delivery of generation from G2

- Embedded Cost
- Transmission Rate = $2.00    Rate = $3.00   Rate = $4.00

- G1

- B

- C

##   A

- G2

- G3

- Under SMD and License Plate Rate:
-   Revenue currently collected from pancaked rates is paid by load physically located on transmission system.
-   Revenue currently paid by non-firm and short-term transactions is collect from load physically located on transmission system
-   Load pays License Plate Rate for access to generators on grid, plus congestion costs
-   Load A pays  $2.25 for delivery of G1 or G2 or G3 generation
-   Load C pays $4.15 for delivery of G1 or G2 or G3 generation
-   The cost shifts which occur depend on each customer’s situation

-            Transmission Rate = $2.00    Rate = $3.00  Rate = $4.00

- G1

- B

- C

-                License Plate Rate = $2.25    Rate = $3.60  Rate = $4.15

##   A

- G2

- G3

- Under Postage Stamp Rate:
- All load pays the same rate for access to all generators on grid, plus payment of congestion costs.
- Load A, B or C pay
-   $3.14 for delivery of G1 or G2 or G3 generation

-            Transmission Rate = $2.00    Rate = $3.00  Rate = $4.00

- G1

- B

- C

-                License Plate Rate = $2.25    Rate = $3.60  Rate = $4.50

- Postage Stamp Rate = $3.14 (Blue, Yellow, Purple Transmission 		                 Revenue Requirement/A+B+C load)

## Estimate of Embedded Cost Rate ($/kW-Mo) - Today and SMD					

**                                               ****LAP****	****  CRSP**
**Today****	****                            $2.88****	****   $2.06**
**License Plate 1/ ****	****	****$3.28   $4.45**
**Postage Stamp****	****2/                $2.38   $2.38**
- 1/  LAP and CRSP transmission owners would no longer receives revenue from non-firm, short-term, and long-term transactions to loads physically located on other systems.
- 2/  All loads pay the average transmission rate.

## Embedded Costs under WestConnect

- License Plate Rate - Access Area Rate
- Model approved by FERC, but rate formulas will not be approved until later
- WestConnect model includes several mitigation proposals to reduce costs shifts among transmission customers
- Transmission Adjustment Component (TAC)
- Revenue currently collected by Western from non-firm, short-term or converted long-term contracts would be offset by congestion management revenues or export fees and the balance collected through the TAC

## Embedded Costs under WestConnect

- Mitigation measures (continued)
- TAC concept approved by FERC, but rate formulas will not be approved until later
- Transfer Payments between participating transmission owners for converted contracts
- With these mitigation measures in place, Western’s transmission rate should not increase above today’s rate

## Embedded Costs under WestConnect

- Transition to end-state by Jan 1, 2009
- End-State embedded cost model includes a postage stamp rate for higher voltage (highway) and a license plate rate for lower voltage transmission facilities (zone)
- Impact unknown until details are developed

## WestConnect Highway-Zonal Model

- Highway Rate
- (A + B + C high voltage)

- Zone A
- (A low voltage)

- Zone B
- (B low voltage)

- Zone C
- (C low voltage)

## Embedded Costs under RTO West

- License Plate Rate - Company Rate
- Company Rate in effect for eight years
- Filing includes several mitigation proposals including
- Transfer Payments for converted contracts between participating transmission owners
- Backstop Recovery triggered if revenues from short-term, non-firm and long-term contracts are not offset by net surplus from congestion management and or export fees

## Costs - Summary

- Bilateral transactions continue
- Two-step settlement process for spot market under LMP
- Congestion revenue rights would be purchased and sold to hedge against congestion costs
- Pancaked rates would be eliminated
- WestConnect and RTO West include mitigation measures for cost shifting

## How Could the Planning Process Change?

- Bob Easton
- Operations, Engineering, & Planning
- Manager
- RMR

## How Could the Planning Process Change?

- Today’s process
- Possible Seams Steering Group - Western Interconnection (SSG-WI) planning process

## Existing Planning Process

## Slide 84

## SSG-WI Planning Process

- SSG-WI analysis of inter-RTO system needs

- TLRP input

- WECC Joint Regional Planning (Unsponsored projects, potential needs)

- Post system needs and corresponding transmission solutions for market to screen for alternatives

- LSE Resource Planning

- RTO Price Signals

- Build transmission project

- WECC rating process and regional planning: participation interest)

- Implement non-tx project

- Voluntary Sponsorship of specific projects

- Market proposes non-tx alternatives to relieve inter-RTO needs

- SSG-WI Expansion Plan

- Environmental,
- Siting Process

## Proposed Planning Process for SSG-WI 

- SSG-WI

**Public Workshops**

**Solicit Input**
**Present Results**

- WECC

- CREPC

- Fundamentals:
- Invite WECC representation on PWG
- PGW open to all Stakeholders - CCPG,
- generator owners, marketers, TO’s, etc.
- Reports made to SSG_WI will be in the form of Majority and Minority Reports
- Extensive use of Internet  to make information public subject  to security concerns

- PWG

- Planning Process

- Individual Stakeholders

- RTO Planning Processes

- CCPG, NWPP, ETC.

**Notes:**
SSG-WI Planning Work group appoints a Study Lead coordinator, to direct work of sub-groups and deliver on study objectives and goals
SSG-WI PWG liaises with SSG-WI steering group, with WGA, WEC, CREPC and other relevant bodies 
Study Lead reports to, and receives guidance from, PWG on all matters relating to study.  Sets up 3 sub-groups to:
collect and validate all necessary study data (network, loads, and resources) under nominated data coordinator acting through area data collectors.  Sets up informal data collection process (to be formalised later).  Defines  data templates, manages study database(s) in concert with PAC analysis team.  Makes all data available to PWG
advise on existing and new generation: fuels/prime movers costs and types, typical/actual economic and performance data, and prospective siting locations.  Members provide data on request from data coordinator
advise on existing network and on proposed transmission expansions: circuit data, flowpath ratings/nomograms.  Advise on feasibility and security of transmission expansion options.  Members provide data on request from data coordinator

## Merchant Preparations forSMD / RTO Implementation

- Jeff Ackerman
- Montrose Energy Management and
- Market Office
- Manager

## Merchant Preparations forSMD / RTO Implementation

- Montrose merchant is preparing to act as  Scheduling Coordinator for Federal Generation Resources.
- Potential for scheduling Federal generation into four separate RTO’s.
- 	-	RTO West
- 	-	WestConnect
- 	-	CAISO
- 	-	MISO

## Merchant - RTO Scheduling and Settlement Process Concerns

- Multiple RTO participation will increase scheduling and settlement complexity.
- Increase workload in real-time, pre-schedule, and settlement functional areas.  Seams coordination and common tools among RTO’s will help.
- Increase in IS software development and programming support will be required.  Automation will be a key requirement!

## Items of Concern for the Merchant Office 

- Extent of RTO participation?
- Electronic scheduling requirements.
- Transmission reservation rights “CRR’s” for Federal Generation and Firm Electric Service obligations.
- IT programming support and overall staffing requirements.

## How is Western’s Control Area preparing for possible changes?

- Ed Hulls
- Operations Manager
- RMR

## How is Western’s Control Area preparing for possible changes?

**Tools**
**Staffing**

## Operational Impacts

## Operational Impacts

## Flexible Staffing

## Questions

- Jane Meyer
- meyer@wapa.gov or 970-461-7245
- Mark Fidrych
- fidrych@wapa.gov or 970-461-7240
- Ron Moulton
- moulton@wapa.gov or 602-351-2446
- Bob Easton
- aeaston@wapa.gov or 970-461-7272

## Questions

- Jeff Ackerman
- ackerman@wapa.gov or 970-240-6209
- Ed Hulls
- hulls@wapa.gov or 970-461-7566
- Bob Kennedy
- rkennedy@wapa.gov or 970-461-7259