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PUC EIM Group Update

PUC EIM Group Update. Travis Kavulla Commissioner – Montana Public Service Commission Chair – PUC EIM Group WECC Market Interface Committee July 18 , 2013. Outline of presentation. What is the PUC EIM Group? Next steps from the April 8-9, 2013 EIM meeting in Boise

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PUC EIM Group Update

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  1. PUC EIM Group Update Travis Kavulla Commissioner – Montana Public Service Commission Chair – PUC EIM Group WECC Market Interface Committee July 18, 2013

  2. Outline of presentation • What is the PUC EIM Group? • Next steps from the April 8-9, 2013 EIM meeting in Boise • Next steps approved by the PUC EIM Group at the April meeting • Developments/action items added since the April meeting

  3. What is the PUC EIM Group? • Formed in early 2012 • Purpose: • Investigate issues surrounding an EIM and the potential costs and benefits to ratepayers; and • Foster a conversation between regulators and industry in a multi-state cooperative setting

  4. April 8-9 joint PUC EIM Group/NWPP MC meeting • Stakeholder meeting to follow up on “next steps” from the Sep. 2012 PUC EIM Group meeting in Tempe and to spur industry action • ~ 200 participants, including substantial representation by FERC (Chairman Wellinghoff, Commissioner Norris, and nine FERC staff members) • Presentations by FERC staff, NREL, CAISO, PacifiCorp, SPP, NWPP MC, and SVERI (presentation links on slide 15)

  5. April 8-9, 2013 joint PUC EIM Group/NWPP MC EIM meeting • NWPP MC’s quantitative analysis of the benefits and costs of an EIM and work on EMT measures, including the Following Reserve Assistance Program, or “FRAP” (EIM presentation| EMT presentation | FRAP presentation) • The CAISO/PacifiCorp EIM MOU and EIM Benefits Analysis (CAISO presentation | PacifiCorp presentation) • A comparison of the NREL, NWPP MC and CAISO/PacifiCorp benefits analyses by NREL (NREL presentation) • An update on the ongoing work of the Southwest Variable Energy Resource Initiative (SVERI presentation) • FERC’s qualitative analysis of the reliability benefits of an EIM (FERC presentation) • Updated market operator proposals from the CAISO and SPP (CAISO presentation | SPP presentation)

  6. EIM Benefits & Market Operator Costs

  7. EIM Participant Costs

  8. Summary of Costs/Benefits • “Greenfield” EIM more costly and less efficient to implement • Costs and benefits depend on a number of factors: • Footprint used • Inputs into models: • Hydro • Fuel costs – e.g., natural gas pricing • Flex Reserves • Transmission transfer capability • Hurdle rates • FERC Qualitative Benefits: (1) enhanced situational awareness; (2) faster delivery of replacement generation after end of contingency reserve sharing assistance; and (3) enhanced integration of renewable resources

  9. Next Steps from Boise(approved by PUC EIM group in April) • Continue the PUC EIM Group’s work through the end of 2013. • Express appreciation to both the CAISO/PacifiCorp EIM and the NWPP MC for their work, including their efforts to obtain cost and benefit data to aid in the decision-making process that the utilities will undertake. • Encourage both the CAISO/PacifiCorp EIM and the NWPP MC to: • Make their analyses open to peer review; • To the extent permitted by confidentiality laws, make their evaluations available to state commissions and other relevant state officials; • Hold stakeholder outreach webinars to convey and discuss the results; and • Continue to evaluate varying governance models for any proposed EIM.

  10. Next Steps from Boise (con’t) • Participate in the CAISO stakeholder process and encourage the CAISO and PacifiCorp to: • Remain open to new participants; • Explore governance models that encourage more participation; and • Explore technical issues that merit discussion, with an eye toward their potential impacts on out-of-California potential participants. • Encourage the NWPP MC to: • Parse out, to the BA-level, results from EIM benefits studies and identify costs associated with implementing an EIM and Order 764, and, to the extent necessary, encourage commissions to request jurisdictional utilities to participate in such studies; • Continue modeling work and provide an analysis schedule and make any new results public; • To the extent financially feasible, undertake further sensitivity analyses as requested by stakeholders; and • Work further on the FRAP project and other enhanced market tools currently under consideration.

  11. Next Steps from Boise (con’t) • Encourage utilities to evaluate costs, benefits and obstacles to participating in the CAISO/PacifiCorp EIM, any proposed NWPP MC EIM, or any market tool developed by the NWPP MC and others, and to: • Share the results with state commissions and other relevant agencies; and • Consider requesting assistance from DOE, NREL, the CAISO/PacifiCorp EIM, and the NWPP MC in interpreting these evaluations. • Work with SVERI to better understand its analysis and plans for further work. • Explore transmission connectivity through BAs absent participation by those BAs in the EIM.

  12. Activities since Boise • 4-25-13: PUC EIM Group submits letter to Ed Beck, thanking him for his presentation on behalf of SVERI at the Boise meeting and requesting that SVERI hold a follow-up webinar for the PUC EIM Group and its stakeholders. • 4-26-13: PUC EIM Group submits letter to Pat Reiten and Bill Drummond, co-chairs of the NWPP MC, thanking them for co-hosting the EIM meeting in Boise and providing the following specific advice: • Urges the NWPP MC to continue its EIM benefits sensitivity analyses, parse out the BA-level benefits of an EIM, and further refine the cost estimates of an EIM. • Asks that the NWPP MC consider, in its ongoing analyses, the impacts of joining the CAISO/PacifiCorp EIM. • Requests that these views be conveyed at the May 7 closed-door meeting of the NWPP MC Executive Committee.

  13. Activities since Boise (con’t) • 4-26-13: PUC EIM Group submits letter to Steve Berberich, President and CEO of the CAISO: • Thanks both the CAISO and PacifiCorp for their joint work in explore the costs and benefits associated with an EIM. • Requests that certain technical issues that impact outside-of-California participants in an EIM be further clarified in subsequent drafts of the EIM straw proposal. • Requests that the CAISO further analyze and consider alternative governance options. • Requests that CAISO and PacifiCorp continue the active engagement of outside-of-California parties in the stakeholder process.

  14. Additional next steps (post Boise) • Closely follow activities related to the developing CAISO/Pacificorp EIM. • Evaluate the final NWPP MC report on its analysis of the benefits/costs of an EIM • Monitor work of NWPP MC on EIM governance • Monitor NV Energy’s EIM benefit/cost study • Evaluate IRP requirements to consider options to achieve needed system flexibility, including participation in an EIM

  15. Questions?

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