Notice of Proposed Final Resource Adequacy Plan for Transactions in the California Independent System Operator Corporation's Balancing Authority Area, 20528-20533 [E7-7870]
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Federal Register / Vol. 72, No. 79 / Wednesday, April 25, 2007 / Notices
202–208–2106 with the required
accommodations.
For further information on the
technical conference, please contact:
Robert Hellrich-Dawson (Technical
Information), Office of Markets, Tariffs
and Rates, Federal Energy Regulatory
Commission, 888 First Street, NE.,
Washington, DC 20426, (202) 502–6360,
robert.hellrich-dawson@ferc.gov.
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
[Docket No. AD07–7–000]
Conference on Competition in
Wholesale Power Markets;
Supplemental Notice of Conference
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April 19, 2007.
As announced in the Notice of
Conference issued on March 23, 2007,1
the Federal Energy Regulatory
Commission will hold a conference on
Tuesday, May 8, 2007, to examine
specific topics relating to the state of
wholesale power markets. The
conference will be held in the
Commission Meeting Room at the
Federal Energy Regulatory Commission,
888 First Street, NE., Washington, DC,
from 9 a.m. to 5 p.m. Eastern time. The
conference will be open for the public
to attend and advance registration is not
required. Members of the Commission
may attend the conference.
The agenda for this conference is
attached, and contains questions the
panelists will be asked to address. If any
changes to the agenda occur, a revised
agenda will be posted on the calendar
page for this event on the Commission’s
Web site, https://www.ferc.gov, prior to
the event.
Transcripts of the conference will be
immediately available from Ace
Reporting Company (202–347–3700 or
1–800–336–6646) for a fee. They will be
available for the public on the
Commission’s eLibrary system seven
calendar days after FERC receives the
transcript.
A free webcast of this event will be
available through www.ferc.gov.
Anyone with Internet access who
desires to view this event can do so by
navigating to www.ferc.gov’s Calendar
of Events and locating this event in the
Calendar. The event will contain a link
to its Web cast. The Capitol Connection
provides technical support for the Web
casts. It also offers access to this event
via television in the Washington, DC
area and via phone bridge for a fee. Visit
https://www.CapitolConnection.org or
contact Danelle Perkowski or David
Reininger at the Capitol Connection
703–993–3100 for information about
this service.
Commission conferences are
accessible under section 508 of the
Rehabilitation Act of 1973. For
accessibility accommodations please
send an e-mail to accessibility@ferc.gov
or call toll free 866–208–3372 (voice) or
202–208–1659 (TTY), or send a FAX to
1 72
Fed. Reg. 14,801 (March 29, 2007).
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Kimberly D. Bose,
Secretary.
[FR Doc. E7–7869 Filed 4–24–07; 8:45 am]
BILLING CODE 6717–01–P
DEPARTMENT OF ENERGY
Western Area Power Administration
Notice of Proposed Final Resource
Adequacy Plan for Transactions in the
California Independent System
Operator Corporation’s Balancing
Authority Area
Western Area Power
Administration, DOE.
ACTION: Notice of proposed final
resource adequacy plan.
AGENCY:
SUMMARY: The Western Area Power
Administration (Western) is conducting
a public process to propose a Final
Resource Adequacy (RA) Plan for
transactions in the California
Independent System Operator
Corporation’s (CAISO) Balancing
Authority Area. Pending the
development of this Final RA Plan,
Western has established interim RA
Plans to facilitate its transactions in the
CAISO Balancing Authority Area.
Western is developing this proposed
Final RA Plan as a Local Regulatory
Authority (LRA). The Final RA Plan
implemented by Western will be
submitted to the CAISO and will be
utilized by Western when Western is
acting as a Load Serving Entity (LSE) in
the CAISO Balancing Authority Area.
Western’s Current RA Plan became
effective on September 30, 2006, and
will remain in effect until superseded
by the Final RA Plan developed in this
process.
DATES: The consultation and comment
period will begin on the date of
publication of this Federal Register
notice and will end on May 25, 2007.
Western will present a detailed
explanation of the proposed Final RA
Plan at a public information forum on
May 2, 2007, 1:30 p.m. PDT, Rancho
Cordova, CA. Western will hold a public
comment forum on May 9, 2007, 1:30
p.m. PDT, Rancho Cordova, CA. At the
public comment forum, the public may
provide oral and written comments. In
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addition, the public may submit written
comments to Western at any time during
the comment period. Western must
receive all comments by the close of the
comment period to ensure they are
considered. After the Administrator
approves the Final RA Plan, it is
anticipated that it will go into effect on
July 17, 2007.
ADDRESSES: Western will hold the
public information and comment
forums at the Marriott, 11211 Point East
Drive, Rancho Cordova, CA. Written
comments can be mailed, faxed, or emailed to Ms. Sonja A. Anderson,
Acting Power Marketing Manager, Sierra
Nevada Region, Western Area Power
Administration, 114 Parkshore Drive,
Folsom, CA 95630–4710, fax (916) 985–
1931, e-mail sanderso@wapa.gov. Oral
comments must be presented at the
public comment forum which will be
held on May 9, 2007.
FOR FURTHER INFORMATION CONTACT: Ms.
Jeanne Haas, Contracts and Energy
Services Manager, Sierra Nevada
Customer Service Region, Western Area
Power Administration, 114 Parkshore
Drive, Folsom, CA 95630–4710,
telephone (916) 353–4438, e-mail
haas@wapa.gov.
SUPPLEMENTARY INFORMATION:
Authorities
Western is developing this proposed
Final RA Plan in accordance with its
power marketing authorities, which
includes the Act of June 17, 1902 (32
Stat. 388), the Act of August 26, 1937
(50 Stat. 844), the Act of August 4, 1939
(53 Stat. 1187), and the Department of
Energy Organization Act of August 4,
1977 (91 Stat. 565), including all acts
amendatory and/or supplementary to
the above listed.
Background
On February 9, 2006, the CAISO filed
its comprehensive Market Redesign
Technology Upgrade (MRTU) Tariff
with the Federal Energy Regulatory
Commission (Commission).1 Under the
MRTU Tariff, the CAISO proposed to
end the current ‘‘must offer’’ structure
and transition to a capacity-based
system. In this capacity-based system,
the California Public Utilities
Commission (CPUC) and other LRAs
establish procurement requirements for
all LSEs within their jurisdiction to
obtain sufficient resources to meet their
load with an adequate reserve margin
and to ensure appropriate resources will
be made available to the CAISO in the
Day-Ahead Market, the Hour-Ahead
1 FERC
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Docket ER06–615 (2006).
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Scheduling Process, and Real-Time
Market.2
On March 13, 2006, the CAISO filed
its Interim Reliability Requirements
Program (IRRP). On May 12, 2006, the
Commission issued an order accepting
certain modifications under the IRRP in
Docket No. ER06–723–000.3 The
modifications established under the
IRRP are intended to implement RA
programs developed by the CPUC and
other LRAs for LSEs under their
respective jurisdictions. Section 40 of
the IRRP and the MRTU Tariff provide
the guidelines for RA. The IRRP adjusts
the CAISO’s existing operations to
incorporate RA programs implemented
by the CPUC and other LRAs for the
period between June 2006 and the
implementation of MRTU.4
In the Commission’s September 21,
2006, decision in Docket No. ER–06–
615–000, which in large part accepted
and affirmed the CAISO’s proposed
MRTU Tariff, the Commission
summarized the CAISO’s RA program as
follows:
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Resource adequacy is the availability of an
adequate supply of generation or demand
responsive resources to support safe and
reliable operation of the transmission grid.
Until June 2006, the CAISO market did not
require load serving entities to procure
sufficient generation capacity to serve their
customers. The lack of this requirement
jeopardized reliability and made it difficult
to ensure that wholesale prices would remain
just and reasonable. Under MRTU, load
serving entities under the authority of the
California Public Utilities Commission will
be required to obey its requirement to
maintain a level of capacity above loadserving entities’ forecasted customer needs
(currently 15–17 percent). They will also
have to demonstrate a year in advance that
they have procured resources to cover 90
percent of their summer (May through
September) peak period needs. Other load
serving entities that are CAISO members and
serve customers in the CAISO control are
required to comply with the planning reserve
margin for capacity that is set by their Local
Regulatory Authority. If the Local Regulatory
Authority does not establish such a margin,
the default margin will be 15 percent. These
resource adequacy requirements will help
ensure sufficient supply, enhance reliability,
protect against price volatility, and reduce
the opportunities to game the market that
exist when electricity supplies are
insufficient to meet customers’ needs.5
In Paragraph 1116 of the same decision,
the Commission concluded that meeting
the MRTU RA requirements is a
reasonable condition of participation in
the CAISO markets and required that
2 See
Article V, Section 40 of the CAISO’s Tariff.
FERC ¶ 61,172 (2006).
4 Id. at paragraph 6.
3 115
5 116
FERC ¶ 61,274 (2006) at paragraph 10.
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each LSE serving load within the
CAISO-controlled grid maintain
adequate resources and not ‘‘lean on’’
others to the detriment of its customers
and grid reliability as a whole. Under
the current schedule, the MRTU is not
expected to be implemented before
February 2008.
Under both the IRRP and MRTU
Tariffs, Western is an LRA. To ensure
non-discriminatory treatment for
transactions in the CAISO Balancing
Authority Area, Western, as an LRA,
established an interim RA Plan
comprised of an Initial RA Plan and its
Current RA Plan. Western’s Current RA
Plan can be found at https://
www.wapa.gov/sn/marketing/
racapacity.asp. However, due to the
short time frame between the
acceptance of the CAISO’s IRRP and its
effective date, Western was unable to
conduct a public process before
implementing its interim RA Plans.6
Under this notice, Western is
initiating a public process to develop its
Final RA Plan. As part of this process,
Western is soliciting input from its
customers and interested parties. The
schedule for this process is outlined
above. The Final RA Plan will be
applicable under both the IRRP and
MRTU Tariff.
Acronyms and Definitions
As used throughout the remainder of
this notice, the following acronyms and
definitions when used with initial
capitalization, whether singular or
plural, will have the following
meanings:
Administrator: The Administrator of
the Western Area Power
Administration.
Applicable Reliability Criteria: As
defined by the CAISO Tariff: The
reliability standards established by
NERC, WECC, and Local Reliability
Criteria as amended from time to time,
including any requirements of the NRC.
Balancing Authority: As defined by
NERC: The responsible entity that
integrates resource plans ahead of time,
maintains load-interchange-generation
balance within a Balancing Authority
Area, and supports Interconnection
frequency in real time.
Balancing Authority Area: The
collection of generation, transmission,
and loads within the metered
boundaries of the Balancing Authority.
The Balancing Authority maintains
load-resource balance within this area.
CAISO/ISO: The California
Independent System Operator
Corporation.
6 The Commission accepted the filing on May 12,
2006, with an effective date of May 12, 2006.
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Capacity: The electrical capability of
a generator, transformer, transmission
circuit, or other equipment.
Commission: The Federal Energy
Regulatory Commission.
Current RA Plan: That plan submitted
by Western, acting as its own LRA, to
the CAISO in September 2006.
CVP: The Central Valley Project—The
multipurpose Federal water and power
project extending from the Cascade
Range in northern California to the
plains along the Kern River south of the
city of Bakersfield, California.
Demand Forecast: An estimate of
Capacity required to meet a load over a
designated period of time.
DOE: United States Department of
Energy.
Energy: Measured in terms of the
work it is capable of doing over a period
of time; electric energy is usually
measured in kilowatthours or
megawatthours.
Final RA Plan: The plan that Western,
acting as its own LRA, will submit to
the CAISO after this process.
First Preference Customer: A customer
wholly located in Trinity, Calaveras, or
Tuolumne counties, California, as
specified under the Trinity River
Division Act (69 Stat. 719) and the New
Melones provisions of the Flood Control
Act of 1962 (76 Stat. 1173, 1191–1192).
Full Load Service Customers: The
subset of Western’s Preference
customers that has contracted with
Western to provide Portfolio
Management services and meet their
total projected loads.
Initial RA Plan: That plan submitted
by Western, acting as its own LRA, to
the CAISO on May 19, 2006.
LD Contract: Liquidated Damages
Contract—Firm liquidated damages
contracts are those transactions utilizing
or consistent with Service Schedule C of
the Western Systems Power Pool
Agreement or the Firm Liquidated
Damages product of the Edison Electric
Institute pro forma agreement, or any
other similar firm Energy contract that
does not require the seller to source the
Energy from a particular unit and
specifies a delivery point internal to the
CAISO Balancing Authority Area.
Local Capacity Area: As defined by
the CAISO Tariff: Transmission
constrained area as defined in the study
referenced in Section 40.3.1.
Local Capacity Area Resources: As
defined by the CAISO Tariff: RA
Capacity from a Generating Unit listed
in the technical study or Participating
Load that is located within a Local
Capacity Area capable of contributing
toward the amount of capacity required
in a particular Local Capacity Area.
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LRA: Local Regulatory Authority—
The Federal, state or local governmental
authority responsible for the regulation
or oversight of a utility.
LSE: Load-Serving Entity—As defined
by the CAISO Tariff: Any entity (or the
duly designated agent of such an entity,
including; e.g., a Scheduling
Coordinator), including a load
aggregator or power marketer; (i)
Serving End Users within the ISO
Control Area and (ii) that has been
granted authority or has an obligation
pursuant to California State or local law,
regulation, or franchise to sell electric
energy to End Users located within the
ISO Control Area, or (iii) is a Federal
Power Marketing Authority that serves
retail Load.
Planning Reserve Margin: As defined
by the CAISO Tariff: A Planning Reserve
Margin shall be that quantity or
percentage of capacity in megawatts
(MW) that exceeds the Demand Forecast
as set forth in Section 40.3 as provided
for in Section 40.4 of this ISO Tariff.
Power: Capacity and energy.
Preference: The requirements of
Reclamation Law which provide that
preference in the sale of Federal power
be given to certain entities, such as
municipalities and other public
corporations or agencies and also to
cooperatives and other nonprofit
organizations financed in whole or in
part by loans made pursuant to the
Rural Electrification Act of 1936
(Reclamation Project Act of 1939,
Section 9(c), 43 U.S.C. 485h(c)).
Project Use: The power used to
operate CVP or Washoe Project facilities
in accordance with authorized purposes
and pursuant to Reclamation Law.
Qualifying Capacity: As defined by
the CAISO Tariff: The maximum
capacity of an RA Resource. The criteria
for calculating Qualifying Capacity from
RA Resources may be established by the
CPUC or other applicable Local
Regulatory Authority and provided to
the CAISO, or default provisions in
Section 40.13 of this ISO Tariff.
RA: Resource Adequacy—As defined
by the CAISO Tariff: The program that
ensures that adequate physical
generating capacity dedicated to serving
all load requirements is available to
meet peak demand and planning and
operating reserves, at or deliverable to
locations and at times as may be
necessary to ensure local area reliability
and system reliability.
RA Capacity: Resource Adequacy
Capacity—As defined by the CAISO
Tariff: The generation capacity of an RA
Resource listed on an RA Plan and a
Supply Plan.
RA Plan: Resource Adequacy Plan—
As defined by the CAISO Tariff: A
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submission by a Scheduling Coordinator
for a Load-Serving Entity serving Load
in the ISO Control Area in order to
satisfy the requirements of Section 40 of
this ISO Tariff.
RA Resource: As defined by the
CAISO Tariff: A resource that is
required to offer RA Capacity. The
criteria for determining the types of
resources that are eligible to provide
Qualifying Capacity may be established
by the CPUC, other applicable Local
Regulatory Authority and provided to
the CAISO, or the default provision in
Section 40.13 of this ISO Tariff.
Reclamation: United States
Department of Interior, the Bureau of
Reclamation.
SC: Scheduling Coordinator—As
defined by the CAISO Tariff: An entity
certified by the ISO for the purposes of
undertaking the functions specified in
Section 4.5.3 of the ISO Tariff.
Western: United States Department of
Energy, the Western Area Power
Administration.
Development of RA Plans
As described above, the CAISO has
established guidelines for RA and RA
Capacity, which LSEs must meet for
transactions in the CAISO Balancing
Authority Area. Both the IRRP and
MRTU Tariff acknowledge that Western,
as an LRA, may establish its own RA
Plan.7
Western understands that the
California State Legislature enacted
Assembly Bill (AB) 380 to require the
CPUC, in consultation with the CAISO,
to establish RA requirements for all
LSEs under the CPUC’s jurisdiction.8
AB 380 requires LSEs subject to the
CPUC’s jurisdiction to procure adequate
resources to meet their peak demands,
planning, and operating reserves.9 The
State requires LSEs subject to the
CPUC’s jurisdiction to demonstrate that
they have acquired sufficient capacity to
serve their forecasted retail customer
load and a 15–17 percent margin. As a
Federal agency, Western is not subject
to the State’s jurisdiction.
Western has reviewed these
guidelines, the Commission’s decisions,
and considered Federal and industry
standards and guidelines related to
reliable operations of power systems.
Western prepared both an Initial RA
Plan and a Current RA Plan based on
the guidelines and direction provided
by the Commission, the IRRP, and the
MRTU Tariff, which conform to
Western’s practices from an operational,
7 See, e.g., Section 40.4 of MRTU Tariff, Section
40.5 of IRRP Tariff.
8 115 FERC ¶ 61,172 at paragraph 4.
9 Id.
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contractual, and statutory framework.
There are several distinct factors related
specifically to the way that Western
conducts its business that influenced
Western’s preparation of its RA Plans.
Both the Initial RA Plan and the Current
RA Plan contain detailed information on
the factors that went into Western’s
development of those RA Plans. As
stated in the SUMMARY section of this
Federal Register notice, the Current RA
Plan will remain in effect until
superseded by the Final RA Plan
developed in this process. Western
provides as part of this Federal Register
notice, the pertinent factors that
influenced Western’s preparation of its
Initial RA Plan and its Current RA Plan.
The United States CVP hydro
facilities are operated by Reclamation.
The CVP Act, as amended, integrates the
various CVP facilities. The CVP is
operated primarily to meet authorized
project purposes that have a higher
priority than power generation, such as
irrigation and flood control. These
purposes are determined by Federal
law. Western’s flexibility to modify
generation schedules and ancillary
service availability is limited by these
and other related constraints. Congress
authorized the Pacific NorthwestSouthwest Alternating Current Intertie
(PACI) to firm the CVP and authorized
the California-Oregon Transmission
Project (COTP) to support the DOE
Laboratories and other Federal uses in
the State of California.10 Western
imports power into its sub Balancing
Authority Area over the PACI, COTP,
and other Federal transmission
facilities. In northern California,
Western markets power from a dozen
Federal dams including those in the
Federal CVP under its 2004 Power
Marketing Plan (Marketing Plan). Under
the Marketing Plan, Western executed
the majority of its power sales contracts
with its statutory preference and First
Preference Customers in late 1999 and
early 2000. In northern California,
Western has established a contractbased sub Balancing Authority Area
within the Sacramento Municipal
Utility District (SMUD) Balancing
Authority Area. Unlike many LSEs
Western serves a diverse group of
customers in northern California,
including large municipal utilities such
as SMUD, the City of Redding, and the
City of Santa Clara, as well as smaller
irrigation districts, Native American
Indian Tribes, and Federal and State
agencies. These customers are located
within the CAISO Balancing Authority
10 Pub. L. No. 88–552, 78 Stat. 756 (1964), as
amended; Pub. L. No. 98–360, 98 Stat. 403 (1984),
as amended, 50 Stat. 844 (1937), as amended.
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Area, the Turlock Irrigation District
Balancing Authority Area, the SMUD
Balancing Authority Area, and
Western’s own sub Balancing Authority
Area. Many of Western’s customers are
wholesale customers who are LSEs for
their own customers. Other Western
customers receive power from both
Western and another utility, such as the
Pacific Gas and Electric Company
(PG&E). Under Western’s Marketing
Plan, and from a contractual standpoint,
Western serves its loads in the CAISO
Balancing Authority Area from its sub
Balancing Authority Area. The statutes
and Marketing Plan referenced above
are not within the scope of this public
process, and reference to the statutes
and Marketing Plan are only being
included as a background for the
development of Western’s RA Plans.
Within this framework, Western
developed its RA Plans. Western refers
interested parties to the Current RA Plan
for a more thorough analysis of the
background for the development of
Western’s Current RA Plan.
Although not specifically stated in
Western’s Current RA Plan, Western has
procured its RA Capacity under both the
Initial RA Plan and the Current RA Plan
from qualifying resources either inside
or outside of the CAISO Balancing
Authority Area. These RA Capacity
purchases meet CAISO Tariff, Section
40, requirements. Western will include
in its Final RA Plan a statement that
Western may continue to procure its RA
Capacity using qualifying resources
either inside or outside the CAISO
Balancing Authority Area that meet
CAISO Tariff, Section 40, requirements.
For imports, Western will reserve firm
transmission to the tie point on
Western’s transmission system to assure
delivery compliance. Western believes
this proposed addition to the Current
RA Plan is consistent with the CAISO’s
proposed guidelines for meeting RA
Capacity requirements.
In addition, Western proposes to use
LD Contracts to meet its RA Capacity
requirements. By allowing LD Contracts
to be used, this gives Western a second
option to meet its RA Capacity
requirements. Western is unable to use
the CVP hydroelectric facilities in the
SMUD Balancing Authority Area to
meet RA Capacity requirements
because, in contrast to other utilities
and non-jurisdictional LSEs in
California, Western must follow Federal
directives in its marketing and
operations. The CVP hydroelectric
facilities are owned by Reclamation and
operated primarily to meet authorized
project purposes that have a higher
priority than power generation.
Western’s flexibility to modify
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generation schedules and ancillary
service availability is limited by these
and other related constraints.
The customers that are located in the
CAISO Balancing Authority Area for
which the RA Capacity will be procured
include Western’s Full Load Service
Customers, Western’s four First
Preference Customers, the National
Aeronautics and Space Administration
Ames (NASA Ames) Research Center,
and a subset of Reclamation’s Project
Use Customers. Collectively, these loads
are projected to have a monthly peak
demand of between 280 MW and 350
MW during the October 2006 through
December 2007 period. The RA Capacity
procured meets the collective
requirements of this pool of customers.
The table below shows the monthly
amounts of RA Capacity that have been
procured for the period October 2006
through December 2007.
Order, the Commission acknowledged
that other LRAs may develop their own
RA Plans.11 The CAISO required a filing
by May 22, 2006, for the June 2006 RA
Capacity.
Western reviewed these guidelines,
the Commission’s decisions, and
considered Federal and industry
standards and guidelines related to
reliable operations of power systems.
Based on these criteria, Western, as a
CPUC non-jurisdictional LRA, prepared
an Initial RA Plan for Western’s
transactions in the CAISO Balancing
Authority Area and submitted it to the
CAISO on May 19, 2006. The RA
Capacity standards in the Initial RA
Plan were as follows:
For purposes of this LRA Plan,
Western will phase in its Planning
Reserve Margin requirements, as
defined in the CAISO Tariff, as follows:
TABLE 1.—RA CAPACITY PROCURED
AND SUPPLIERS FOR OCTOBER 2006
THROUGH DECEMBER 2007
Month
RA capacity
(MW)
Supplier
2006
October .......
November ....
December ....
15
15
15
PG&E.
PG&E.
PG&E.
January .......
February ......
March ..........
April .............
May .............
16
16
16
16
16
June ............
July ..............
August .........
September ...
October .......
November ....
December ....
36
36
36
36
16
16
16
PG&E.
PG&E.
PG&E.
PG&E.
Coral Power
(Coral).
Coral.
Coral.
Coral.
Coral.
PG&E.
PG&E.
PG&E.
2007
If, as a result of this process,
Western’s procurement of RA Capacity
is modified, such modification will be
reflected in the Final RA Plan that
Western will supply to the CAISO.
Western’s RA Plans
Initial RA Plan
The CAISO, under Section 40 of both
the IRRP and the MRTU Tariff,
established the guidelines for RA for
LSEs for transactions in the CAISO
Balancing Authority Area. The
Commission’s May 12, 2006, IRRP Order
accepted the CAISO proposal to utilize
the CPUC’s default criteria of 15–17
percent RA Capacity for entities subject
to the CPUC’s jurisdiction. In that same
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Operative date
Planning
reserve
margin
(percent)
October 1, 2006 ........................
February 1, 2007 ......................
June 1, 2007 .............................
5
10
15
For its month-ahead showing,
Western will demonstrate that it is
prepared to meet 100 percent of its
forecasted monthly coincident peak
load.
Consistent with its Initial RA Plan,
Western issued a Request for Proposal
(RFP) for RA Capacity and procured
sufficient capacity on August 29, 2006,
to meet its 5-percent requirement for
October through December 2006.
Current RA Plan
In its September 21, 2006, decision,
the Commission stated:
Other Load serving entities that are CAISO
members and serve customers in the CAISO
control area are required to comply with the
planning reserve margin for capacity that is
set by their LRA. If the LRA does not
establish such a margin, the default margin
will be 15 percent.12
After reviewing the Commission’s
September 21, 2006, decision, Western
revised its Initial RA Plan in September
2006 to modify its Planning Reserve
Margin. In its Current RA Plan, Western
opted to provide 10-percent RA
Capacity June through September and 5percent RA Capacity in all other
months.
The Current RA Plan provides as
follows:
11 115
12 116
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FERC ¶ 61,172 at paragraph 53.
FERC ¶ 61,274 at para. 10.
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Consistent with the CAISO Tariff, Western
will make a year-ahead showing that it has
a minimum of 90 percent of the capacity
required to meet its forecasted monthly
coincident peak load in the CAISO Control
Area, as determined by Western, plus its
Planning Reserve Margin. Under the CAISO
IRRP approach, the Planning Reserve Margin
is a percentage of firm capacity over the
demand forecast available to the CAISO to
meet reserve requirements. Western has
determined that for the purposes of this LRA
Plan, it will provide capacity to the CAISO
consistent with the CAISO’s planning reserve
criteria as follows:
Proposed Final RA Plan
Western proposes that beginning in
2008 and beyond, Western will continue
to follow the procedures and standards
identified in the Current RA Plan.
However, Western proposes the
following two modifications to the
Current RA Plan:
1. Western will procure RA Capacity
from qualifying resources either inside
or outside of the CAISO Balancing
Authority Area. In order to qualify, a
resource must meet CAISO Tariff,
Section 40, requirements, and for
Planning
imports, Western will reserve firm
reserve
transmission to the tie point on
Operative months
capacity
Western’s transmission system to assure
(percent)
delivery compliance.
2. Western is proposing that it may
June–September ......................
10
opt to designate some of its contract
January–May & October–December ..................................
5 deliveries (existing and future LD
Contracts) as RA Capacity. These
For its month-ahead showing, Western will contracts are backed by reserves in the
demonstrate that it is prepared to meet 100
originating Balancing Authority Area
percent of its forecasted monthly coincident
and are, therefore, considered firm.
peak load.
Western has further determined that it will Western has existing firm transmission
rights on the PACI and COTP for
conduct a public process to provide its
contracts originating in the Northwest,
customers and other interested parties the
opportunity to provide input to Western with and the remaining contracts have
regard to the amount and character of RA
delivery points in North Path 15 (NP15),
Capacity it will provide in the future.
which are firmed by the CAISO or self
provided by the supplier under CAISO
Consistent with the Current RA Plan,
Tariff guidelines.
Western issued an RFP for RA Capacity
Western, as an LRA, will file its Final
and procured sufficient capacity on
RA Plan with the CAISO. When Western
September 28, 2006, to meet the above
acts as an LSE for transactions in the
requirement for calendar year (CY)
CAISO Balancing Authority Area,
2007.
Western will comply with its Final RA
Other notable provisions of Western’s
Plan.
Current RA Plan are:
Request for Comments
1. Western has designated CVP
hydroelectric facilities in the SMUD
The Final RA Plan adopts Western’s
Balancing Authority Area as a system
Current RA Plan with the addition of
resource, with 100 percent of forecasted the two items described above. Western
capacity considered to be Qualifying
seeks input from interested stakeholders
Capacity. The amount of Qualifying
on the Current RA Plan as it will be
Capacity for each month is determined
incorporated into the Final RA Plan.
utilizing Western’s rolling 12-month
Western’s Current RA Plan can be found
forecast at a 50-percent probability of
at: https://www.wapa.gov/sn/marketing/
exceedance for the appropriate month.
racapacity.asp. You may also request a
Imports of CVP generation into the
copy of the Current RA Plan by (1)
CAISO Balancing Authority Area are
Mailing a request to Ms. Jeanne Haas at
firm, backed by operating reserves as
114 Parkshore Drive, Folsom, CA 95630;
required by the Western Electricity
(2) e-mailing a request to
Coordinating Council (WECC) and the
haas@wapa.gov; or (3) telephoning a
North American Electric Reliability
request to Ms. Jeanne Haas at (916) 353–
Council (NERC) standards. Western will 4438.
not make CVP capacity available to the
As part of this proceeding, Western
CAISO for scheduling in the Day-Ahead requests comments on its proposed
or Real-Time markets for RA purposes
Final RA Plan. The comments must be
due to specific Federal statutes,
within the scope of this proceeding.
regulations, and policies which Western Western is asking for specific comments
must follow in its marketing and
on the following:
operations processes.
2. Western has designated 100 percent Types of Resources for RA Capacity
of its contract deliveries (existing and
An LRA has discretion on the type of
future LD Contracts) as Qualifying
resource to use to provide RA Capacity.
Capacity.
Section 40 of the CAISO Tariff allows an
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15:21 Apr 24, 2007
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Fmt 4703
Sfmt 4703
LRA to provide its own criteria for
determining qualifying resource types
and the Qualifying Capacity from such
resources.
In addition, Section 40 of the MRTU
Tariff has an additional requirement not
prescribed in the IRRP Tariff. Under the
MRTU Tariff, LRAs must also consider
Local Capacity Area Resources
requirements (Local RAR) to be made
available to the CAISO. The CAISO has
stated in Section 40.3.1 of the MRTU
Tariff that the CAISO will collaborate
with the CPUC, LRAs within the CAISO
Balancing Authority Area, and other
market participants to establish the
parameters, assumptions, and other
criteria to be used and described in the
technical study that permit compliance
with Applicable Reliability Criteria.
For Local RAR requirements, Western
has completed an analysis of its loads
and concluded that a minimal amount
of Western CAISO loads may be subject
to additional charges associated with
this requirement. Given the size of these
loads and the limited exposure to costs,
Western is not anticipating the need to
procure local RA Capacity associated
with this requirement. Western will
continue to monitor the Local RAR
process as new information becomes
available to determine if this approach
needs to be revisited.
In its May 12, 2006, Order in Docket
No. ER06–723–000, the Commission
stated ‘‘WAPA, as an LRA, can
determine the extent to which
liquidated damages contracts count
toward its RA requirements.’’ 13
Western, as an LRA, has submitted both
an Initial RA Plan and its Current RA
Plan with its own standards for meeting
its Qualifying Capacity requirements
including its RA Capacity standards,
which have been provided to the
CAISO.
Congress authorized the construction
of both the PACI and the COTP so
Western could import power from the
Pacific Northwest. Currently, Western
imports this power into its sub
Balancing Authority Area. Included in
the power Western imports are LD
Contracts. Western further notes that LD
contracts are backed by reserves in the
originating Balancing Authority Area
and are, therefore, considered firm.
Western has existing transmission rights
on the PACI and the COTP for the
contracts originating in the Northwest,
and the remaining contracts have
delivery points in NP15, which are
firmed by the CAISO or self provided by
the supplier under CAISO Tariff
guidelines.
13 115
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Western proposes to include the
following as RA Capacity resources:
1. LD Contracts with firm
transmission to a tie point if it is an
import.
2. RA Capacity procured from
qualifying resources either inside or
outside the CAISO Balancing Authority
Area. In order to qualify, a resource
must meet CAISO Tariff, Section 40,
requirements, and for imports, Western
will reserve firm transmission to the tie
point on Western’s system to assure
delivery compliance.
Western requests comments on the
inclusion of these resources, if other
resources should be included, or
whether certain resources listed above
should be excluded. After considering
the comments received during this
process, Western will establish a final
list of types of resources which, as an
LRA, Western will include as part of its
Final RA Plan.
As part of this proceeding, Western
requests comments on the types of RA
Capacity, including Local RAR that
Western should be procuring on behalf
of its loads in the CAISO Balancing
Authority Area.
Amount of RA Capacity To Be Procured
Section 40 of both the IRRP and the
MRTU Tariff allow an LRA to establish
its own criteria for the establishment of
its Planning Reserve Margins. Western
is committed to meeting operating
reserve requirements consistent with
WECC and NERC standards. Within
Western’s sub Balancing Authority
Area, Western has sufficient resources
to reliably operate and balance the loads
and resources consistent with prudent
utility practice. Western’s loads on the
CAISO’s transmission grid, for which
Western is the LSE, are less than 1
percent (peak demand estimate of 350
MW) of the overall demand of the
CAISO transmission grid (CAISO’s 2007
Summer Assessment estimated at
47,000 MW). Western has procured RA
Capacity consistent with the standards
identified in the Current RA Plan
through 2007, which is 10 percent June
through September and 5 percent in all
other months, based on projected
monthly peak customer loads.
Western proposes that beginning in
2008 and beyond, Western will continue
to procure RA Capacity in the same
manner as is identified in the Current
RA Plan (10 percent June through
September and 5 percent in all other
months). This proceeding will
determine Western’s standards for
meeting the CAISO’s RA Capacity
requirements in Section 40 of the IRRP
and MRTU Tariff in the future. Once
this process has concluded, Western
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15:21 Apr 24, 2007
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will review its Current RA Plan and,
based on the comments received, may
make modifications before submitting a
Final RA Plan to address future
procurement of RA Capacity.
As part of this proceeding, Western
requests comments on the amount
(monthly percentage) of RA Capacity it
should procure in the future.
Allocation of Costs for RA Capacity
Under Western’s current
methodology, Western is allocating the
monthly costs associated with its
procurements of RA Capacity on a load
ratio share basis to the loads in the
CAISO Balancing Authority Area for
which the RA Capacity was procured.
These customers include Western’s Full
Load Service Customers, Western’s four
First Preference Customers, the NASA
Ames Research Center, and a subset of
Reclamation’s Project Use Customers.
Under the current allocation
methodology, all of these loads are
allocated a respective share of RA
Capacity costs based on their projected
load levels in the months that are
covered by the current procurements.
Western believes it is appropriate to
allocate these costs to these customers
since Western, as the LSE, incurs these
charges to schedule with the CAISO on
behalf of these customers.
Western proposes that beginning in
2008 and beyond, Western will continue
to allocate the monthly costs associated
with its procurements of RA Capacity
on a load ratio share basis to the loads
that are receiving the benefits of those
procurements.
As part of this proceeding, Western
requests comments on whether to
maintain the existing methodology for
allocating costs among customers for RA
Capacity costs or to implement a new
methodology. Western requests that
comments to change the methodology
contain reasons for the change.
Western will address all comments
within the scope of these proceedings in
its Federal Register notice
implementing a Final RA Plan. The
Federal Register notice will be
published prior to the effective date of
the Final RA Plan.
Normally, the final plan would be
effective 30 days after Administrator
approval. In this instance, after the
Administrator approves the Final RA
Plan, Western anticipates the effective
date of the Final RA Plan will be July
17, 2007. Western’s Final RA Plan must
be in place by this date to align
Western’s procurement process with the
CAISO’s required annual showing for
CY 2008 by September 30, 2007. This
allows Western to be competitive in the
RA Capacity market.
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20533
On the effective date, the Final RA
Plan will replace the Current RA Plan.
As discussed in the body of this notice,
the Final RA Plan may differ from the
CPUC’s or other LRA’s RA Plan.
Western’s Final RA Plan is being
developed by Western as an LRA and is
intended to only apply to Western,
acting as an LSE in the CAISO
Balancing Authority Area. It is not
meant to apply to other LSEs in the
CAISO Balancing Authority Area. Those
LSEs are subject to the authority of the
CPUC or other LRAs and, as such, are
outside of Western’s jurisdiction.
Availability of Information
All studies, comments, letters,
memorandums, or other documents
made or kept by Western for developing
the final plan, will be made available for
inspection and copying at Western’s
Sierra Nevada Region Office, located at
114 Parkshore Drive, Folsom, CA
95630–4710.
Environmental Compliance
In compliance with the National
Environmental Policy Act (NEPA) of
1969 (42 U.S.C. 4321, et seq.); the
Council on Environmental Quality
Regulations for implementing NEPA (40
CFR parts 1500 through 1508); and the
Integrated DOE NEPA Implementing
Procedures (10 CFR part 1021), Western
has determined that this action is
categorically excluded from the
preparation of an environmental
assessment or an environmental impact
statement.
Determination Under Executive Order
12866
Western has an exemption from
centralized regulatory review under
Executive Order 12866; accordingly, no
clearance of this notice by the Office of
Management and Budget is required.
Dated: April 18, 2007.
Timothy J. Meeks,
Administrator.
[FR Doc. E7–7870 Filed 4–24–07; 8:45 am]
BILLING CODE 6450–01–P
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[Federal Register Volume 72, Number 79 (Wednesday, April 25, 2007)]
[Notices]
[Pages 20528-20533]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-7870]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Notice of Proposed Final Resource Adequacy Plan for Transactions
in the California Independent System Operator Corporation's Balancing
Authority Area
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of proposed final resource adequacy plan.
-----------------------------------------------------------------------
SUMMARY: The Western Area Power Administration (Western) is conducting
a public process to propose a Final Resource Adequacy (RA) Plan for
transactions in the California Independent System Operator
Corporation's (CAISO) Balancing Authority Area. Pending the development
of this Final RA Plan, Western has established interim RA Plans to
facilitate its transactions in the CAISO Balancing Authority Area.
Western is developing this proposed Final RA Plan as a Local Regulatory
Authority (LRA). The Final RA Plan implemented by Western will be
submitted to the CAISO and will be utilized by Western when Western is
acting as a Load Serving Entity (LSE) in the CAISO Balancing Authority
Area.
Western's Current RA Plan became effective on September 30, 2006,
and will remain in effect until superseded by the Final RA Plan
developed in this process.
DATES: The consultation and comment period will begin on the date of
publication of this Federal Register notice and will end on May 25,
2007. Western will present a detailed explanation of the proposed Final
RA Plan at a public information forum on May 2, 2007, 1:30 p.m. PDT,
Rancho Cordova, CA. Western will hold a public comment forum on May 9,
2007, 1:30 p.m. PDT, Rancho Cordova, CA. At the public comment forum,
the public may provide oral and written comments. In addition, the
public may submit written comments to Western at any time during the
comment period. Western must receive all comments by the close of the
comment period to ensure they are considered. After the Administrator
approves the Final RA Plan, it is anticipated that it will go into
effect on July 17, 2007.
ADDRESSES: Western will hold the public information and comment forums
at the Marriott, 11211 Point East Drive, Rancho Cordova, CA. Written
comments can be mailed, faxed, or e-mailed to Ms. Sonja A. Anderson,
Acting Power Marketing Manager, Sierra Nevada Region, Western Area
Power Administration, 114 Parkshore Drive, Folsom, CA 95630-4710, fax
(916) 985-1931, e-mail sanderso@wapa.gov. Oral comments must be
presented at the public comment forum which will be held on May 9,
2007.
FOR FURTHER INFORMATION CONTACT: Ms. Jeanne Haas, Contracts and Energy
Services Manager, Sierra Nevada Customer Service Region, Western Area
Power Administration, 114 Parkshore Drive, Folsom, CA 95630-4710,
telephone (916) 353-4438, e-mail haas@wapa.gov.
SUPPLEMENTARY INFORMATION:
Authorities
Western is developing this proposed Final RA Plan in accordance
with its power marketing authorities, which includes the Act of June
17, 1902 (32 Stat. 388), the Act of August 26, 1937 (50 Stat. 844), the
Act of August 4, 1939 (53 Stat. 1187), and the Department of Energy
Organization Act of August 4, 1977 (91 Stat. 565), including all acts
amendatory and/or supplementary to the above listed.
Background
On February 9, 2006, the CAISO filed its comprehensive Market
Redesign Technology Upgrade (MRTU) Tariff with the Federal Energy
Regulatory Commission (Commission).\1\ Under the MRTU Tariff, the CAISO
proposed to end the current ``must offer'' structure and transition to
a capacity-based system. In this capacity-based system, the California
Public Utilities Commission (CPUC) and other LRAs establish procurement
requirements for all LSEs within their jurisdiction to obtain
sufficient resources to meet their load with an adequate reserve margin
and to ensure appropriate resources will be made available to the CAISO
in the Day-Ahead Market, the Hour-Ahead
[[Page 20529]]
Scheduling Process, and Real-Time Market.\2\
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\1\ FERC Docket ER06-615 (2006).
\2\ See Article V, Section 40 of the CAISO's Tariff.
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On March 13, 2006, the CAISO filed its Interim Reliability
Requirements Program (IRRP). On May 12, 2006, the Commission issued an
order accepting certain modifications under the IRRP in Docket No.
ER06-723-000.\3\ The modifications established under the IRRP are
intended to implement RA programs developed by the CPUC and other LRAs
for LSEs under their respective jurisdictions. Section 40 of the IRRP
and the MRTU Tariff provide the guidelines for RA. The IRRP adjusts the
CAISO's existing operations to incorporate RA programs implemented by
the CPUC and other LRAs for the period between June 2006 and the
implementation of MRTU.\4\
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\3\ 115 FERC ] 61,172 (2006).
\4\ Id. at paragraph 6.
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In the Commission's September 21, 2006, decision in Docket No. ER-
06-615-000, which in large part accepted and affirmed the CAISO's
proposed MRTU Tariff, the Commission summarized the CAISO's RA program
as follows:
Resource adequacy is the availability of an adequate supply of
generation or demand responsive resources to support safe and
reliable operation of the transmission grid. Until June 2006, the
CAISO market did not require load serving entities to procure
sufficient generation capacity to serve their customers. The lack of
this requirement jeopardized reliability and made it difficult to
ensure that wholesale prices would remain just and reasonable. Under
MRTU, load serving entities under the authority of the California
Public Utilities Commission will be required to obey its requirement
to maintain a level of capacity above load-serving entities'
forecasted customer needs (currently 15-17 percent). They will also
have to demonstrate a year in advance that they have procured
resources to cover 90 percent of their summer (May through
September) peak period needs. Other load serving entities that are
CAISO members and serve customers in the CAISO control are required
to comply with the planning reserve margin for capacity that is set
by their Local Regulatory Authority. If the Local Regulatory
Authority does not establish such a margin, the default margin will
be 15 percent. These resource adequacy requirements will help ensure
sufficient supply, enhance reliability, protect against price
volatility, and reduce the opportunities to game the market that
exist when electricity supplies are insufficient to meet customers'
needs.\5\
\5\ 116 FERC ] 61,274 (2006) at paragraph 10.
In Paragraph 1116 of the same decision, the Commission concluded that
meeting the MRTU RA requirements is a reasonable condition of
participation in the CAISO markets and required that each LSE serving
load within the CAISO-controlled grid maintain adequate resources and
not ``lean on'' others to the detriment of its customers and grid
reliability as a whole. Under the current schedule, the MRTU is not
expected to be implemented before February 2008.
Under both the IRRP and MRTU Tariffs, Western is an LRA. To ensure
non-discriminatory treatment for transactions in the CAISO Balancing
Authority Area, Western, as an LRA, established an interim RA Plan
comprised of an Initial RA Plan and its Current RA Plan. Western's
Current RA Plan can be found at https://www.wapa.gov/sn/marketing/
racapacity.asp. However, due to the short time frame between the
acceptance of the CAISO's IRRP and its effective date, Western was
unable to conduct a public process before implementing its interim RA
Plans.\6\
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\6\ The Commission accepted the filing on May 12, 2006, with an
effective date of May 12, 2006.
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Under this notice, Western is initiating a public process to
develop its Final RA Plan. As part of this process, Western is
soliciting input from its customers and interested parties. The
schedule for this process is outlined above. The Final RA Plan will be
applicable under both the IRRP and MRTU Tariff.
Acronyms and Definitions
As used throughout the remainder of this notice, the following
acronyms and definitions when used with initial capitalization, whether
singular or plural, will have the following meanings:
Administrator: The Administrator of the Western Area Power
Administration.
Applicable Reliability Criteria: As defined by the CAISO Tariff:
The reliability standards established by NERC, WECC, and Local
Reliability Criteria as amended from time to time, including any
requirements of the NRC.
Balancing Authority: As defined by NERC: The responsible entity
that integrates resource plans ahead of time, maintains load-
interchange-generation balance within a Balancing Authority Area, and
supports Interconnection frequency in real time.
Balancing Authority Area: The collection of generation,
transmission, and loads within the metered boundaries of the Balancing
Authority. The Balancing Authority maintains load-resource balance
within this area.
CAISO/ISO: The California Independent System Operator Corporation.
Capacity: The electrical capability of a generator, transformer,
transmission circuit, or other equipment.
Commission: The Federal Energy Regulatory Commission.
Current RA Plan: That plan submitted by Western, acting as its own
LRA, to the CAISO in September 2006.
CVP: The Central Valley Project--The multipurpose Federal water and
power project extending from the Cascade Range in northern California
to the plains along the Kern River south of the city of Bakersfield,
California.
Demand Forecast: An estimate of Capacity required to meet a load
over a designated period of time.
DOE: United States Department of Energy.
Energy: Measured in terms of the work it is capable of doing over a
period of time; electric energy is usually measured in kilowatthours or
megawatthours.
Final RA Plan: The plan that Western, acting as its own LRA, will
submit to the CAISO after this process.
First Preference Customer: A customer wholly located in Trinity,
Calaveras, or Tuolumne counties, California, as specified under the
Trinity River Division Act (69 Stat. 719) and the New Melones
provisions of the Flood Control Act of 1962 (76 Stat. 1173, 1191-1192).
Full Load Service Customers: The subset of Western's Preference
customers that has contracted with Western to provide Portfolio
Management services and meet their total projected loads.
Initial RA Plan: That plan submitted by Western, acting as its own
LRA, to the CAISO on May 19, 2006.
LD Contract: Liquidated Damages Contract--Firm liquidated damages
contracts are those transactions utilizing or consistent with Service
Schedule C of the Western Systems Power Pool Agreement or the Firm
Liquidated Damages product of the Edison Electric Institute pro forma
agreement, or any other similar firm Energy contract that does not
require the seller to source the Energy from a particular unit and
specifies a delivery point internal to the CAISO Balancing Authority
Area.
Local Capacity Area: As defined by the CAISO Tariff: Transmission
constrained area as defined in the study referenced in Section 40.3.1.
Local Capacity Area Resources: As defined by the CAISO Tariff: RA
Capacity from a Generating Unit listed in the technical study or
Participating Load that is located within a Local Capacity Area capable
of contributing toward the amount of capacity required in a particular
Local Capacity Area.
[[Page 20530]]
LRA: Local Regulatory Authority--The Federal, state or local
governmental authority responsible for the regulation or oversight of a
utility.
LSE: Load-Serving Entity--As defined by the CAISO Tariff: Any
entity (or the duly designated agent of such an entity, including;
e.g., a Scheduling Coordinator), including a load aggregator or power
marketer; (i) Serving End Users within the ISO Control Area and (ii)
that has been granted authority or has an obligation pursuant to
California State or local law, regulation, or franchise to sell
electric energy to End Users located within the ISO Control Area, or
(iii) is a Federal Power Marketing Authority that serves retail Load.
Planning Reserve Margin: As defined by the CAISO Tariff: A Planning
Reserve Margin shall be that quantity or percentage of capacity in
megawatts (MW) that exceeds the Demand Forecast as set forth in Section
40.3 as provided for in Section 40.4 of this ISO Tariff.
Power: Capacity and energy.
Preference: The requirements of Reclamation Law which provide that
preference in the sale of Federal power be given to certain entities,
such as municipalities and other public corporations or agencies and
also to cooperatives and other nonprofit organizations financed in
whole or in part by loans made pursuant to the Rural Electrification
Act of 1936 (Reclamation Project Act of 1939, Section 9(c), 43 U.S.C.
485h(c)).
Project Use: The power used to operate CVP or Washoe Project
facilities in accordance with authorized purposes and pursuant to
Reclamation Law.
Qualifying Capacity: As defined by the CAISO Tariff: The maximum
capacity of an RA Resource. The criteria for calculating Qualifying
Capacity from RA Resources may be established by the CPUC or other
applicable Local Regulatory Authority and provided to the CAISO, or
default provisions in Section 40.13 of this ISO Tariff.
RA: Resource Adequacy--As defined by the CAISO Tariff: The program
that ensures that adequate physical generating capacity dedicated to
serving all load requirements is available to meet peak demand and
planning and operating reserves, at or deliverable to locations and at
times as may be necessary to ensure local area reliability and system
reliability.
RA Capacity: Resource Adequacy Capacity--As defined by the CAISO
Tariff: The generation capacity of an RA Resource listed on an RA Plan
and a Supply Plan.
RA Plan: Resource Adequacy Plan--As defined by the CAISO Tariff: A
submission by a Scheduling Coordinator for a Load-Serving Entity
serving Load in the ISO Control Area in order to satisfy the
requirements of Section 40 of this ISO Tariff.
RA Resource: As defined by the CAISO Tariff: A resource that is
required to offer RA Capacity. The criteria for determining the types
of resources that are eligible to provide Qualifying Capacity may be
established by the CPUC, other applicable Local Regulatory Authority
and provided to the CAISO, or the default provision in Section 40.13 of
this ISO Tariff.
Reclamation: United States Department of Interior, the Bureau of
Reclamation.
SC: Scheduling Coordinator--As defined by the CAISO Tariff: An
entity certified by the ISO for the purposes of undertaking the
functions specified in Section 4.5.3 of the ISO Tariff.
Western: United States Department of Energy, the Western Area Power
Administration.
Development of RA Plans
As described above, the CAISO has established guidelines for RA and
RA Capacity, which LSEs must meet for transactions in the CAISO
Balancing Authority Area. Both the IRRP and MRTU Tariff acknowledge
that Western, as an LRA, may establish its own RA Plan.\7\
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\7\ See, e.g., Section 40.4 of MRTU Tariff, Section 40.5 of IRRP
Tariff.
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Western understands that the California State Legislature enacted
Assembly Bill (AB) 380 to require the CPUC, in consultation with the
CAISO, to establish RA requirements for all LSEs under the CPUC's
jurisdiction.\8\ AB 380 requires LSEs subject to the CPUC's
jurisdiction to procure adequate resources to meet their peak demands,
planning, and operating reserves.\9\ The State requires LSEs subject to
the CPUC's jurisdiction to demonstrate that they have acquired
sufficient capacity to serve their forecasted retail customer load and
a 15-17 percent margin. As a Federal agency, Western is not subject to
the State's jurisdiction.
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\8\ 115 FERC ] 61,172 at paragraph 4.
\9\ Id.
---------------------------------------------------------------------------
Western has reviewed these guidelines, the Commission's decisions,
and considered Federal and industry standards and guidelines related to
reliable operations of power systems. Western prepared both an Initial
RA Plan and a Current RA Plan based on the guidelines and direction
provided by the Commission, the IRRP, and the MRTU Tariff, which
conform to Western's practices from an operational, contractual, and
statutory framework. There are several distinct factors related
specifically to the way that Western conducts its business that
influenced Western's preparation of its RA Plans. Both the Initial RA
Plan and the Current RA Plan contain detailed information on the
factors that went into Western's development of those RA Plans. As
stated in the Summary section of this Federal Register notice, the
Current RA Plan will remain in effect until superseded by the Final RA
Plan developed in this process. Western provides as part of this
Federal Register notice, the pertinent factors that influenced
Western's preparation of its Initial RA Plan and its Current RA Plan.
The United States CVP hydro facilities are operated by Reclamation.
The CVP Act, as amended, integrates the various CVP facilities. The CVP
is operated primarily to meet authorized project purposes that have a
higher priority than power generation, such as irrigation and flood
control. These purposes are determined by Federal law. Western's
flexibility to modify generation schedules and ancillary service
availability is limited by these and other related constraints.
Congress authorized the Pacific Northwest-Southwest Alternating Current
Intertie (PACI) to firm the CVP and authorized the California-Oregon
Transmission Project (COTP) to support the DOE Laboratories and other
Federal uses in the State of California.\10\ Western imports power into
its sub Balancing Authority Area over the PACI, COTP, and other Federal
transmission facilities. In northern California, Western markets power
from a dozen Federal dams including those in the Federal CVP under its
2004 Power Marketing Plan (Marketing Plan). Under the Marketing Plan,
Western executed the majority of its power sales contracts with its
statutory preference and First Preference Customers in late 1999 and
early 2000. In northern California, Western has established a contract-
based sub Balancing Authority Area within the Sacramento Municipal
Utility District (SMUD) Balancing Authority Area. Unlike many LSEs
Western serves a diverse group of customers in northern California,
including large municipal utilities such as SMUD, the City of Redding,
and the City of Santa Clara, as well as smaller irrigation districts,
Native American Indian Tribes, and Federal and State agencies. These
customers are located within the CAISO Balancing Authority
[[Page 20531]]
Area, the Turlock Irrigation District Balancing Authority Area, the
SMUD Balancing Authority Area, and Western's own sub Balancing
Authority Area. Many of Western's customers are wholesale customers who
are LSEs for their own customers. Other Western customers receive power
from both Western and another utility, such as the Pacific Gas and
Electric Company (PG&E). Under Western's Marketing Plan, and from a
contractual standpoint, Western serves its loads in the CAISO Balancing
Authority Area from its sub Balancing Authority Area. The statutes and
Marketing Plan referenced above are not within the scope of this public
process, and reference to the statutes and Marketing Plan are only
being included as a background for the development of Western's RA
Plans. Within this framework, Western developed its RA Plans. Western
refers interested parties to the Current RA Plan for a more thorough
analysis of the background for the development of Western's Current RA
Plan.
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\10\ Pub. L. No. 88-552, 78 Stat. 756 (1964), as amended; Pub.
L. No. 98-360, 98 Stat. 403 (1984), as amended, 50 Stat. 844 (1937),
as amended.
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Although not specifically stated in Western's Current RA Plan,
Western has procured its RA Capacity under both the Initial RA Plan and
the Current RA Plan from qualifying resources either inside or outside
of the CAISO Balancing Authority Area. These RA Capacity purchases meet
CAISO Tariff, Section 40, requirements. Western will include in its
Final RA Plan a statement that Western may continue to procure its RA
Capacity using qualifying resources either inside or outside the CAISO
Balancing Authority Area that meet CAISO Tariff, Section 40,
requirements. For imports, Western will reserve firm transmission to
the tie point on Western's transmission system to assure delivery
compliance. Western believes this proposed addition to the Current RA
Plan is consistent with the CAISO's proposed guidelines for meeting RA
Capacity requirements.
In addition, Western proposes to use LD Contracts to meet its RA
Capacity requirements. By allowing LD Contracts to be used, this gives
Western a second option to meet its RA Capacity requirements. Western
is unable to use the CVP hydroelectric facilities in the SMUD Balancing
Authority Area to meet RA Capacity requirements because, in contrast to
other utilities and non-jurisdictional LSEs in California, Western must
follow Federal directives in its marketing and operations. The CVP
hydroelectric facilities are owned by Reclamation and operated
primarily to meet authorized project purposes that have a higher
priority than power generation. Western's flexibility to modify
generation schedules and ancillary service availability is limited by
these and other related constraints.
The customers that are located in the CAISO Balancing Authority
Area for which the RA Capacity will be procured include Western's Full
Load Service Customers, Western's four First Preference Customers, the
National Aeronautics and Space Administration Ames (NASA Ames) Research
Center, and a subset of Reclamation's Project Use Customers.
Collectively, these loads are projected to have a monthly peak demand
of between 280 MW and 350 MW during the October 2006 through December
2007 period. The RA Capacity procured meets the collective requirements
of this pool of customers. The table below shows the monthly amounts of
RA Capacity that have been procured for the period October 2006 through
December 2007.
Table 1.--RA Capacity Procured and Suppliers for October 2006 Through
December 2007
------------------------------------------------------------------------
RA capacity
Month (MW) Supplier
------------------------------------------------------------------------
2006
------------------------------------------------------------------------
October........................... 15 PG&E.
November.......................... 15 PG&E.
December.......................... 15 PG&E.
------------------------------------------------------------------------
2007
------------------------------------------------------------------------
January........................... 16 PG&E.
February.......................... 16 PG&E.
March............................. 16 PG&E.
April............................. 16 PG&E.
May............................... 16 Coral Power (Coral).
June.............................. 36 Coral.
July.............................. 36 Coral.
August............................ 36 Coral.
September......................... 36 Coral.
October........................... 16 PG&E.
November.......................... 16 PG&E.
December.......................... 16 PG&E.
------------------------------------------------------------------------
If, as a result of this process, Western's procurement of RA
Capacity is modified, such modification will be reflected in the Final
RA Plan that Western will supply to the CAISO.
Western's RA Plans
Initial RA Plan
The CAISO, under Section 40 of both the IRRP and the MRTU Tariff,
established the guidelines for RA for LSEs for transactions in the
CAISO Balancing Authority Area. The Commission's May 12, 2006, IRRP
Order accepted the CAISO proposal to utilize the CPUC's default
criteria of 15-17 percent RA Capacity for entities subject to the
CPUC's jurisdiction. In that same Order, the Commission acknowledged
that other LRAs may develop their own RA Plans.\11\ The CAISO required
a filing by May 22, 2006, for the June 2006 RA Capacity.
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\11\ 115 FERC ] 61,172 at paragraph 53.
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Western reviewed these guidelines, the Commission's decisions, and
considered Federal and industry standards and guidelines related to
reliable operations of power systems. Based on these criteria, Western,
as a CPUC non-jurisdictional LRA, prepared an Initial RA Plan for
Western's transactions in the CAISO Balancing Authority Area and
submitted it to the CAISO on May 19, 2006. The RA Capacity standards in
the Initial RA Plan were as follows:
For purposes of this LRA Plan, Western will phase in its Planning
Reserve Margin requirements, as defined in the CAISO Tariff, as
follows:
------------------------------------------------------------------------
Planning
reserve
Operative date margin
(percent)
------------------------------------------------------------------------
October 1, 2006............................................ 5
February 1, 2007........................................... 10
June 1, 2007............................................... 15
------------------------------------------------------------------------
For its month-ahead showing, Western will demonstrate that it is
prepared to meet 100 percent of its forecasted monthly coincident peak
load.
Consistent with its Initial RA Plan, Western issued a Request for
Proposal (RFP) for RA Capacity and procured sufficient capacity on
August 29, 2006, to meet its 5-percent requirement for October through
December 2006.
Current RA Plan
In its September 21, 2006, decision, the Commission stated:
Other Load serving entities that are CAISO members and serve
customers in the CAISO control area are required to comply with the
planning reserve margin for capacity that is set by their LRA. If
the LRA does not establish such a margin, the default margin will be
15 percent.\12\
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\12\ 116 FERC ] 61,274 at para. 10.
After reviewing the Commission's September 21, 2006, decision, Western
revised its Initial RA Plan in September 2006 to modify its Planning
Reserve Margin. In its Current RA Plan, Western opted to provide 10-
percent RA Capacity June through September and 5-percent RA Capacity in
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all other months.
The Current RA Plan provides as follows:
[[Page 20532]]
Consistent with the CAISO Tariff, Western will make a year-ahead
showing that it has a minimum of 90 percent of the capacity required
to meet its forecasted monthly coincident peak load in the CAISO
Control Area, as determined by Western, plus its Planning Reserve
Margin. Under the CAISO IRRP approach, the Planning Reserve Margin
is a percentage of firm capacity over the demand forecast available
to the CAISO to meet reserve requirements. Western has determined
that for the purposes of this LRA Plan, it will provide capacity to
the CAISO consistent with the CAISO's planning reserve criteria as
follows:
------------------------------------------------------------------------
Planning
reserve
Operative months capacity
(percent)
------------------------------------------------------------------------
June-September............................................. 10
January-May & October-December............................. 5
------------------------------------------------------------------------
For its month-ahead showing, Western will demonstrate that it is
prepared to meet 100 percent of its forecasted monthly coincident
peak load.
Western has further determined that it will conduct a public
process to provide its customers and other interested parties the
opportunity to provide input to Western with regard to the amount
and character of RA Capacity it will provide in the future.
Consistent with the Current RA Plan, Western issued an RFP for RA
Capacity and procured sufficient capacity on September 28, 2006, to
meet the above requirement for calendar year (CY) 2007.
Other notable provisions of Western's Current RA Plan are:
1. Western has designated CVP hydroelectric facilities in the SMUD
Balancing Authority Area as a system resource, with 100 percent of
forecasted capacity considered to be Qualifying Capacity. The amount of
Qualifying Capacity for each month is determined utilizing Western's
rolling 12-month forecast at a 50-percent probability of exceedance for
the appropriate month. Imports of CVP generation into the CAISO
Balancing Authority Area are firm, backed by operating reserves as
required by the Western Electricity Coordinating Council (WECC) and the
North American Electric Reliability Council (NERC) standards. Western
will not make CVP capacity available to the CAISO for scheduling in the
Day-Ahead or Real-Time markets for RA purposes due to specific Federal
statutes, regulations, and policies which Western must follow in its
marketing and operations processes.
2. Western has designated 100 percent of its contract deliveries
(existing and future LD Contracts) as Qualifying Capacity.
Proposed Final RA Plan
Western proposes that beginning in 2008 and beyond, Western will
continue to follow the procedures and standards identified in the
Current RA Plan. However, Western proposes the following two
modifications to the Current RA Plan:
1. Western will procure RA Capacity from qualifying resources
either inside or outside of the CAISO Balancing Authority Area. In
order to qualify, a resource must meet CAISO Tariff, Section 40,
requirements, and for imports, Western will reserve firm transmission
to the tie point on Western's transmission system to assure delivery
compliance.
2. Western is proposing that it may opt to designate some of its
contract deliveries (existing and future LD Contracts) as RA Capacity.
These contracts are backed by reserves in the originating Balancing
Authority Area and are, therefore, considered firm. Western has
existing firm transmission rights on the PACI and COTP for contracts
originating in the Northwest, and the remaining contracts have delivery
points in North Path 15 (NP15), which are firmed by the CAISO or self
provided by the supplier under CAISO Tariff guidelines.
Western, as an LRA, will file its Final RA Plan with the CAISO.
When Western acts as an LSE for transactions in the CAISO Balancing
Authority Area, Western will comply with its Final RA Plan.
Request for Comments
The Final RA Plan adopts Western's Current RA Plan with the
addition of the two items described above. Western seeks input from
interested stakeholders on the Current RA Plan as it will be
incorporated into the Final RA Plan. Western's Current RA Plan can be
found at: https://www.wapa.gov/sn/marketing/racapacity.asp. You may also
request a copy of the Current RA Plan by (1) Mailing a request to Ms.
Jeanne Haas at 114 Parkshore Drive, Folsom, CA 95630; (2) e-mailing a
request to haas@wapa.gov; or (3) telephoning a request to Ms. Jeanne
Haas at (916) 353-4438.
As part of this proceeding, Western requests comments on its
proposed Final RA Plan. The comments must be within the scope of this
proceeding. Western is asking for specific comments on the following:
Types of Resources for RA Capacity
An LRA has discretion on the type of resource to use to provide RA
Capacity. Section 40 of the CAISO Tariff allows an LRA to provide its
own criteria for determining qualifying resource types and the
Qualifying Capacity from such resources.
In addition, Section 40 of the MRTU Tariff has an additional
requirement not prescribed in the IRRP Tariff. Under the MRTU Tariff,
LRAs must also consider Local Capacity Area Resources requirements
(Local RAR) to be made available to the CAISO. The CAISO has stated in
Section 40.3.1 of the MRTU Tariff that the CAISO will collaborate with
the CPUC, LRAs within the CAISO Balancing Authority Area, and other
market participants to establish the parameters, assumptions, and other
criteria to be used and described in the technical study that permit
compliance with Applicable Reliability Criteria.
For Local RAR requirements, Western has completed an analysis of
its loads and concluded that a minimal amount of Western CAISO loads
may be subject to additional charges associated with this requirement.
Given the size of these loads and the limited exposure to costs,
Western is not anticipating the need to procure local RA Capacity
associated with this requirement. Western will continue to monitor the
Local RAR process as new information becomes available to determine if
this approach needs to be revisited.
In its May 12, 2006, Order in Docket No. ER06-723-000, the
Commission stated ``WAPA, as an LRA, can determine the extent to which
liquidated damages contracts count toward its RA requirements.'' \13\
Western, as an LRA, has submitted both an Initial RA Plan and its
Current RA Plan with its own standards for meeting its Qualifying
Capacity requirements including its RA Capacity standards, which have
been provided to the CAISO.
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\13\ 115 FERC ] 61,172 at para. 98.
---------------------------------------------------------------------------
Congress authorized the construction of both the PACI and the COTP
so Western could import power from the Pacific Northwest. Currently,
Western imports this power into its sub Balancing Authority Area.
Included in the power Western imports are LD Contracts. Western further
notes that LD contracts are backed by reserves in the originating
Balancing Authority Area and are, therefore, considered firm. Western
has existing transmission rights on the PACI and the COTP for the
contracts originating in the Northwest, and the remaining contracts
have delivery points in NP15, which are firmed by the CAISO or self
provided by the supplier under CAISO Tariff guidelines.
[[Page 20533]]
Western proposes to include the following as RA Capacity resources:
1. LD Contracts with firm transmission to a tie point if it is an
import.
2. RA Capacity procured from qualifying resources either inside or
outside the CAISO Balancing Authority Area. In order to qualify, a
resource must meet CAISO Tariff, Section 40, requirements, and for
imports, Western will reserve firm transmission to the tie point on
Western's system to assure delivery compliance.
Western requests comments on the inclusion of these resources, if
other resources should be included, or whether certain resources listed
above should be excluded. After considering the comments received
during this process, Western will establish a final list of types of
resources which, as an LRA, Western will include as part of its Final
RA Plan.
As part of this proceeding, Western requests comments on the types
of RA Capacity, including Local RAR that Western should be procuring on
behalf of its loads in the CAISO Balancing Authority Area.
Amount of RA Capacity To Be Procured
Section 40 of both the IRRP and the MRTU Tariff allow an LRA to
establish its own criteria for the establishment of its Planning
Reserve Margins. Western is committed to meeting operating reserve
requirements consistent with WECC and NERC standards. Within Western's
sub Balancing Authority Area, Western has sufficient resources to
reliably operate and balance the loads and resources consistent with
prudent utility practice. Western's loads on the CAISO's transmission
grid, for which Western is the LSE, are less than 1 percent (peak
demand estimate of 350 MW) of the overall demand of the CAISO
transmission grid (CAISO's 2007 Summer Assessment estimated at 47,000
MW). Western has procured RA Capacity consistent with the standards
identified in the Current RA Plan through 2007, which is 10 percent
June through September and 5 percent in all other months, based on
projected monthly peak customer loads.
Western proposes that beginning in 2008 and beyond, Western will
continue to procure RA Capacity in the same manner as is identified in
the Current RA Plan (10 percent June through September and 5 percent in
all other months). This proceeding will determine Western's standards
for meeting the CAISO's RA Capacity requirements in Section 40 of the
IRRP and MRTU Tariff in the future. Once this process has concluded,
Western will review its Current RA Plan and, based on the comments
received, may make modifications before submitting a Final RA Plan to
address future procurement of RA Capacity.
As part of this proceeding, Western requests comments on the amount
(monthly percentage) of RA Capacity it should procure in the future.
Allocation of Costs for RA Capacity
Under Western's current methodology, Western is allocating the
monthly costs associated with its procurements of RA Capacity on a load
ratio share basis to the loads in the CAISO Balancing Authority Area
for which the RA Capacity was procured. These customers include
Western's Full Load Service Customers, Western's four First Preference
Customers, the NASA Ames Research Center, and a subset of Reclamation's
Project Use Customers. Under the current allocation methodology, all of
these loads are allocated a respective share of RA Capacity costs based
on their projected load levels in the months that are covered by the
current procurements. Western believes it is appropriate to allocate
these costs to these customers since Western, as the LSE, incurs these
charges to schedule with the CAISO on behalf of these customers.
Western proposes that beginning in 2008 and beyond, Western will
continue to allocate the monthly costs associated with its procurements
of RA Capacity on a load ratio share basis to the loads that are
receiving the benefits of those procurements.
As part of this proceeding, Western requests comments on whether to
maintain the existing methodology for allocating costs among customers
for RA Capacity costs or to implement a new methodology. Western
requests that comments to change the methodology contain reasons for
the change.
Western will address all comments within the scope of these
proceedings in its Federal Register notice implementing a Final RA
Plan. The Federal Register notice will be published prior to the
effective date of the Final RA Plan.
Normally, the final plan would be effective 30 days after
Administrator approval. In this instance, after the Administrator
approves the Final RA Plan, Western anticipates the effective date of
the Final RA Plan will be July 17, 2007. Western's Final RA Plan must
be in place by this date to align Western's procurement process with
the CAISO's required annual showing for CY 2008 by September 30, 2007.
This allows Western to be competitive in the RA Capacity market.
On the effective date, the Final RA Plan will replace the Current
RA Plan. As discussed in the body of this notice, the Final RA Plan may
differ from the CPUC's or other LRA's RA Plan. Western's Final RA Plan
is being developed by Western as an LRA and is intended to only apply
to Western, acting as an LSE in the CAISO Balancing Authority Area. It
is not meant to apply to other LSEs in the CAISO Balancing Authority
Area. Those LSEs are subject to the authority of the CPUC or other LRAs
and, as such, are outside of Western's jurisdiction.
Availability of Information
All studies, comments, letters, memorandums, or other documents
made or kept by Western for developing the final plan, will be made
available for inspection and copying at Western's Sierra Nevada Region
Office, located at 114 Parkshore Drive, Folsom, CA 95630-4710.
Environmental Compliance
In compliance with the National Environmental Policy Act (NEPA) of
1969 (42 U.S.C. 4321, et seq.); the Council on Environmental Quality
Regulations for implementing NEPA (40 CFR parts 1500 through 1508); and
the Integrated DOE NEPA Implementing Procedures (10 CFR part 1021),
Western has determined that this action is categorically excluded from
the preparation of an environmental assessment or an environmental
impact statement.
Determination Under Executive Order 12866
Western has an exemption from centralized regulatory review under
Executive Order 12866; accordingly, no clearance of this notice by the
Office of Management and Budget is required.
Dated: April 18, 2007.
Timothy J. Meeks,
Administrator.
[FR Doc. E7-7870 Filed 4-24-07; 8:45 am]
BILLING CODE 6450-01-P
