Opinion ID: 3164648
Heading Depth: 2
Heading Rank: 1

Heading: The Winter 2013-2014 Reliability Program

Text: On June 28, 2013, ISO New England filed with the Commission proposed revisions to section III of its Tariff. The revisions, which were titled the “Winter 2013-14 Reliability Program,” were intended to maintain system reliability during the 2013-2014 cold-weather months. In its filing, ISO New England explained that during the mild 20122013 winter, it had seen instances where generators had lacked sufficient fuel to allow for reliable operation during 6 extended periods of cold weather. Therefore, an immediate solution was needed to avoid serious threats to system reliability for the upcoming winter. The Program was designed to be a time-limited, discrete, out-of-market solution, which, in future years, would yield to a marketbased solution. In order to better understand the Program, it is helpful to have at least a general sense of the New England region’s power system and electricity markets, as well as the parties who participated in or were affected by the Program. The following summary outlines the system and the principal parties: The Energy Pathway: First, a “generator” produces the required electric energy. Next, a “transmission owner” (i.e., an entity that owns and maintains transmission facilities) “transmits” the energy to a “local distributor” (also called a “network customer,” “transmission customer,” or “local public utility”). Finally, the local distributor “distributes” the energy to end-users. The amount of energy demanded by end-users is often called “Load.” This entire system (i.e., the network of facilities, equipment, and transmission lines) is called “the grid.” The Various Parties and “Load” Concepts:  Load-Serving Entities (such as TransCanada) secure electric energy, transmission service, and related services to serve the demands of their customers. Load-Serving Entities sell the energy that they acquire pursuant to contracts with local distributors and end-users. After a local distributor or end-user purchases energy, the transmission owner transmits the energy to the local distributor, who then distributes it to the end-user. 7 Real-Time Load Obligation is a Load-Serving Entity’s total energy commitment for a certain time period. If the costs of the Program are allocated to Real-Time Load Obligation (which is fulfilled by Load-Serving Entities such as TransCanada), then the Load-Serving Entities assume the responsibility for the cost of the Program. The Load-Serving Entities try to recoup these costs from endusers under their existing contracts.  Transmission Owners own the energy transmission lines that are used to transmit energy from the generators to the local distributors. This service is called “Regional Network Service.” Transmission owners charge Regional Network Service charges for their services. Regional Network Load: At any particular time, a certain amount of energy will require Regional Network Service. This energy is called Regional Network Load. If the Winter Reliability Program costs are allocated to Regional Network Load, then transmission owners bear those costs. Transmission owners, in turn, can recoup these costs through Regional Network Service charges.  Independent System Operators (“ISOs”) are independent, federally regulated organizations formed at the recommendation of FERC to impartially coordinate, control, and monitor the operation of a regional bulk electric power system, including the dispatch of electric energy over the system, and the monitoring of the electricity markets to ensure the safety and reliability of the system.  End-users are the consumers who use the energy. See the ADDENDUM for references that define and discuss the New England region’s power system, the principal parties in the system, and “load” concepts. 8