Southern California Edison Stakeholder Comments

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13 Δεκ 2013 (πριν από 3 χρόνια και 6 μήνες)

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Southern California Edison

Stakeholder Comments


PacifiCorp’s Energy Imbalance Market (EIM)


Stakeholder and Tariff Revision Plan


issued July 18, 2013


Submitted by

Company

Date
Submitted

Paul Nelson



(626)

302
-
4814

Jeff Nelson




(626) 302
-
4834

Southern California Edison

August 9, 2013



The following are
Southern California Edison
’s

(SCE)
comment
s

on
PacifiCorp’s Energy
Imbalance Market (EIM) Stakeholder and Tariff Revision
Plan issued July 18, 2013
1

and presentation
2

at
the July 30, 2013 stakeholder meeting. SCE has
power contracts with units located within PacifiCorp’s
balancing authority
,

therefore
SCE is an impacted stakeholder in PacifiCorp

s process to implement an
EIM. SCE appreciates PacifiCorp engaging impacted parties for feedback
on
the proposed process and
necessary changes to PacifiCorp’s tariffs.




SCE comments
on
the following issues
:




The August 30
deadline for intent to par
ticipate in the EIM should be considered an

expression of

interest and not a binding
commitment



Encouraging formation of new EIM En
tities should not be a principle of transmission
rate design



Tariffs for EIM participants and non
-
participants needs careful

review to prevent unintended
consequences




Schedule lacks sufficient time for meaningful review and comment


SCE has had limited time to review the information provided by PacifiCorp and
SCE continues to

review other aspects of the PacifiCorp’s plan
.
Lack of comments on specific issues here does not
constitute endorsement
.





1

http://www.oasis.oati.com/PPW/PPWdocs/PacifiCorp_EIM_Stakeholder_Plan_and_Schedule.docx
.

2

http://www.oasis.oati.com/PPW/PPWdocs/PacifiCorp_EIM_Workshop_July_30_2013.pdf

Southern California Edison

Comments on PacifiCorp’s EIM
Stakeholder and Tariff
Revision Plan

August 9, 2013


2

1.

The August 30 deadline for intent to participat
e in the

EIM should be consider
ed

an
expression of
interest
and

not a binding commitment

In the Tariff Revision Plan issued on July 18
, 2013, “
PacifiCorp requires notification of
intent to participate by either load serving entities with resources, or stand
-
alone resources
within its BAAs by August 30, 2013
.”
3

It is reasonable to request parties to express interest
in EIM participation

so PacifiCorp can gauge interest
in
participation within their balancing
authority area (BAA). However, since tariffs that detail the
operational
and cost impacts
have not been developed
, nor approved by FERC
, it would be unreasonable to expect
parties
t
o make a binding commitment to participate in the EIM. PacifiCorp should clarify the term
‘intent’.


2.

Encouraging formation of new EIM Entities should not
be a principle of
t
ransmission rate design

During the July
30, meeting, PacifiCorp listed a set of p
rinciples for transmission rates
associated with EIM.
SCE supports t
he principles of
cost recover
y for the transmission
owner
,
non
-
discriminatory

rates
,

and
cost

certainty

for the transmission user
. However,
“Encourage formation of new EIM Entities”
4

should not be a principle of
transmission
rate
design.

It would be improper to design a transmission rate to benefit a specific class of
transmission customers. In fact attempting to do so could violate the principle of non
-
discriminatory rates.


3.

Tari
ffs for EIM participants and non
-
participants need careful review to prevent
unintended consequences

PacifiCorp has noted
the
changes to Imbalance Service Schedules 4 and 9 to
accommodate EIM. The methodology to recover imbalance energy is very differe
nt
between PacifiCorp and the CAISO. For example, PacifiCorp
currently uses
deviation bands
with penalties for each deviation band
, however, the

EIM
proposal
will use the locational
marginal price for settling generation deviations. Another difference i
s how unit



3

http://www.oasis.oati.com/PPW/PPWdocs/PacifiCorp_EIM_Stakeholder_Plan_and_Schedule.docx
., page 7.

4

July 30 workshop presentation, slide 32.

Southern California Edison

Comments on PacifiCorp’s EIM
Stakeholder and Tariff
Revision Plan

August 9, 2013


3

commitment costs are recovered

in PacifiCorp’s tariffs and the CAISO bid cost recovery
mechanism
. If there are differences in cost recovery between participants and non
-
participates this will create incentives or dis
-
incentives for EIM partici
pation. These changes
could also lead to uni
ntended cost shifting due to differences in cost recovery allocation.

The
development of these tariffs requires careful review.


4.

Schedule lacks sufficient time for meaningful review and comment

In the CAISO rev
iew process, SCE and other parties
5

ha
ve

commented that the schedule
in the CAISO and PacifiCorp
implementation agreement to create an EIM

is t
o
o aggressive
and lacks time for adequate review by stakeholders.
6

It is clear from the
second revised

CAISO
E
IM Proposal (Proposal) that the creation of an EIM market with PacifiCorp (or
other interested parties) is not a simple extension of the current CAISO tariffs and operations
onto EIM participants. The
Proposal

presents a solution to deal with greenhouse g
as (GHG)
emission costs that creates a fundamentally different locational market price (LMP) for the
EIM Entity than compared to LMPs in the CAISO.
7

In addition, the Proposal introduces
market power mitigation, allocation of uplifts, proposals for transmi
ssion service, flexible
ramping constraints, an
d minimum shift optimization.

The aggressive timeline is also in PacifiCorp’s review process. For example, parties will
have 11 days to comment on PacifiCorp’s tariff framework proposal.
This is simply no
t
enough time to understand the implications of the
EIM
proposal and provide meaningful
recommendations or alternatives for stakeholder review.

The impacts of different cost
recovery treatment between EIM participation or non
-
participation that will cre
ate incentives
for parties to choose whether EIM participation is beneficial. The CAISO and PacifiCorp
need to be careful that the tariff design does not create unintended behavior impacts or cost
shifting.

The risk of designing a deficient or defective

EIM market that may impact large portions
of the Western Electricity Coordinating Council is too important to rush simply to make an



5

PG&E, BPA,
and PowerEx have also expressed concerns about the EIM schedule.

6

http://www.caiso.com/informed/Pages/StakeholderProcesses/EnergyImbalanceMarket.aspx

7

Example 1 in the Pro
posal

shows that the LMP’s in EIM Entity would not recover their costs, and therefo
r requires
a separate payment.

Southern California Edison

Comments on PacifiCorp’s EIM
Stakeholder and Tariff
Revision Plan

August 9, 2013


4

arbitrary deadline. SCE also recommends parties have time to review comments from others
and offer additional reply comme
nts. While this might delay the implementation by some
nominal period, the benefit of issue identification and resolution clearly justifies a delay.
Better to plan well now and avoid possible future costly mistakes.

SCE recommends PacifiCorp, in consultation with
CAISO
, include more time for EIM
and tariff design and stakeholder review and reconsider their implementation schedule.