OPERATIONS and ENGINEERING

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OPERATIONS and ENGINEERING CONFERENCE April 7,
2009 FERC, NERC and WECC and other four letter
words
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Topics
Operations and Engineering Conference

• Federal Energy Regulatory Commission
• North American Electric Reliability Corporation
• Western Electric Coordinating Council
• Regional Successes
• Highlight Tri-State activities and some impacts
  on Members

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Cooperative Obligations
Operations and Engineering Conference

• Tri-State subject to limited FERC regulation
  Section 211A
• Provide non-discriminatory access
• Are Distribution Coops subject to all these FERC
  regulations?
• Generally NO however,
• All of us are subject to the mandatory NERC
  regulations.

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Federal EnergyRegulatory Commission
Operations and Engineering Conference

• A Short History
• Open Access Transmission
• Standards of Conduct
• Generator Interconnections
• Mandatory Reliability Standards

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Modern Era of Electricity Regulation
Operations and Engineering Conference

• Public Utilities Regulatory Policies Act--1978
• FERC pricing policy
• Discriminatory Access
• Vertically integrated utilities
• Applicability to Electricity
• Since 1994 FERC has issued 155 Major Orders or
  Regulations affecting the electric industry

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Open Access Transmission
Operations and Engineering Conference

• Order 888--1996
• Primary concepts
• Comparable treatment
• Reciprocity
• Standardized contract terms
• Network Integration and
• Point-to-Point Transmission Service
• Ancillary Services

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Open Access Transmission
Operations and Engineering Conference

• Rehearing Process
• Orders 888 A, B and C
• Treatment of non-jurisdictional utilities
• Used Reciprocal Transmission access as incentive
  to comply with Order 888
• Safe Harbor Tariff

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Standards of ConductFERC Order 889
Operations and Engineering Conference

• Tied to Comparable treatment
• Rules governing internal communication
• Open Access Same Time Information SystemOASIS
• In 2008 FERC eased the rules somewhat
• Perform Integrated Resource Planning without fear
  of sanctions.

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OASIS and Tagging
Operations and Engineering Conference

• Computerized system for managing all aspects of
  transmission transactions
• Posting Available transmission
• Requesting transmission
• Scheduling
• Approving schedules
• Curtailments

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Open Access TransmissionAgain
Operations and Engineering Conference

• Order 890March 2007
• FERC not satisfied with results of Order 888
• Additional rules
• Regional transmission planning
• Standardize determination of Available
  Transmission Capacity
• Conditional Firm Transmission

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Tri-State Activities
Operations and Engineering Conference

• Tri-State Safe-Harbor tariff and Standards of
  Conduct
• Filed in April 2001
• FERC approved in September 2001
• Equivalent to an IOU tariff
• Guarantees reciprocal service from other
  Transmission Providers

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Tri-State Activities
Operations and Engineering Conference

• December 2006Tri-State Board directed staff to
  begin preparation of an Oder 890 compliant
  filing.
• Updated posted tariff to incorporate some of the
  Order 890 changes.
• Currently on hold.

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Interconnection Procedures
Operations and Engineering Conference

• FERC philosophyinterconnections are an integral
  part of transmission but you can request
  interconnection without requesting transmission.
• Basis for rulesutilities favor their own plants
  over merchants.
• No surprisethis process does not work very well!

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Interconnection Procedures
Operations and Engineering Conference

• FERC Orders address 3 areas
• Large Generator Interconnections
• Small Generators (below 20 MW)
• Wind Generators
• Most activity is with large generators
• Process has completely failed
• Too easy to applytoo many speculative projects
• In 2008 Midwest Independent System Operator
  (MISO) estimated it would take 45 years to study
  all of the requests in its queue.

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Tri-State Queue
Operations and Engineering Conference

• November 2008
• 65 requests in the queue
• 16,000 MW of new generation
• All say they want the option to provide energy to
  Tri-State
• Fall 2008, Tri-State began a queue reform
  process partially modeled on other RTOs

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Tri-State Queue
Operations and Engineering Conference

• November 2008froze queue and proposed interim
  rules
• Increased deposit from 10k to 250k
• Site control mandatory
• If a developer has a customer he gets studied
  first.
• January 12, 2009 Interim rules in effect queue
  reopened
• No new applications since then

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Stage 2 Queue Reform
Operations and Engineering Conference

• Focus on Network Transmission Customers needs
  first.
• Retain higher thresholds for applications
• 3 options for interconnecting
• Serve network load
• Request point-to-point transmission
• Interconnect at own risk
• Implement late 2009

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Interconnections to Member Systems
Operations and Engineering Conference

• Members are not required to follow FERC
  interconnection rules.
• Helpful to use as a guide
• Comparable treatment will prevent difficulties.
• Members do NOT need to have a Queue.
• In most cases, Members will be subject to NERC
  reliability standards governing transmission
  providers.

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Interconnections to Member Systems
Operations and Engineering Conference

• Colorado has its own rules for interconnecting
  small generators
• CO PUC Rule 3655
• Gap in guidance between 10 and 20 MW
• Coordination with Tri-State
• Member should perform/contract for system impact
  study when interconnection is with Member-owned
  facilities
• Study needs to be reviewed by Tri-State to
  identify impacts on transmission system

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Interconnections to Member Systems
Operations and Engineering Conference

• Tri-State will provide system models for the
  study and will provide engineering review of the
  study.
• Tri-State is planning to develop an
  interconnection handbook for Members.

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NERC
Operations and Engineering Conference

• Until 2005, compliance was voluntary.
• Energy Policy Act of 2005
• Mandatory Reliability Standards
• FERC Order 672
• Implements the requirements of EPAct 2005

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(No Transcript)
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• KEY dates
• July 20, 2006
• NERC Corporation certified as the Electric
  Reliability Organization (ERO) by FERC
• June 18, 2007
• Effective date for mandatory Reliability
  Standards in the United States

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NERC's Compliance efforts

• Compliance monitoring
• assess, investigate, evaluate, and audit to
  measure compliance with NERC standards
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• Compliance enforcement
• ensure corrective mitigating actions are taken to
  preserve bulk power system reliability
• administer financial penalties and sanctions for
  noncompliance
• Due Process
• provide registered entities the opportunity to
  contest any finding of violations

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NERC's Penalties
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NERC Enforcement Policy
Operations and Engineering Conference

• The 2005 Enforcement Policy Statement lists a
  number of factors that will guide the Commission
  in selecting sanctions
• What was the harm
• whether the violation involved manipulation,
  fraud, deceit or artifice
• whether the action was willful
• whether it was a repeat offense or pattern of
  offenses
• whether it was done by or with approval of senior
  management
• how did the wrong-doing come to light and
• what effect would potential penalties have on the
  financial viability of the company.

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Compliance Methods
Operations and Engineering Conference

• Self-certification
• Periodic reporting
• Exception reporting
• Investigations
• Random spot checking or audits
• Formal Compliance audits
• Self-reporting
• Timely and full disclosure of any alleged
  violation with a detailed mitigation plan
  submitted to the Regional Entities can reduce
  Tri-States risk of assessed penalty and
  socio-political risks.

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Member Registration
Operations and Engineering Conference

• Typically Distribution Coops would register as a
• Distribution Provider (DP)
• In Nebraska the Midwest Reliability Operator
  (equivalent to WECC) has de-registered some
  Coops
• Impossible for them to have an impact on the bulk
  electric system
• Tri-State has offered to assume reporting
  responsibility for DP

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Tri-State Activities
Operations and Engineering Conference

• Compliance Audit Scheduled for June 2009
• Mock audits conducted in October 2008 and
  February 2009
• Identified areas for improvement

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Tri-State - NERC Compliance Registry
Operations and Engineering Conference

• Generator Owner (GO)
• Generator Operator (GOP)
• Load Serving Entity (LSE)
• Planning Authority (PA)
• Purchasing Selling Entity (PSE)
• Resource Planner (RP)
• Transmission Owner (TO)
• Transmission Operator (TOP)
• Transmission Planner (TP)
• Transmission Service Provider (TSP)
• To be audited in 2009

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Member Support
Operations and Engineering Conference

• Members identified as Transmission Owners (TO)
• Delegation Order with Tri-State Tri-State will
  assume all TO responsibilities
• OM, relay testing, etc.
• Policy 109 change
• If a member requests, Tri-State will assume
  ownership of all the Members transmission assets.

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Member Support
Operations and Engineering Conference

• Most Members are designated as Distribution
  Providers (DP)
• At Members request, Tri-State has offered to
  sign delegation agreements to assume reporting
  responsibility for DP.
• Tri-State is investigating feasibility of
  acquiring ownership of all first level
  transformers.

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WECC
Operations and Engineering Conference

• Very aggressive on compliance.
• 970 current ongoing investigations
• Sanction for failure to trim trees and incident
  occurs
• 250,000 per day until entire right-of-way is
  clear

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WECC Regional Standards
Operations and Engineering Conference

• FERC approved Eight WECC Regional Reliability
  Standards (June 8, 2007)
• WECC-BAL-STD-002-0 (Operating Reserves)
• WECC-IRO-STD-006-0 (Qualified Path Unscheduled
  Flow Relief)
• WECC-PRC-STD-001-1 (Certification of Protective
  Relay Applications and Settings)
• WECC-PRC-STD-003-1 (Protective Relay and Remedial
  Action Scheme Misoperation)
• WECC-PRC-STD-005-1 (Transmission Maintenance)
• WECC-TOP-STD-007-0 (Operating Transfer
  Capability)
• WECC-VAR-STD-002a-1 (Automatic Voltage
  Regulators)
• WECC-VAR-STD-002b-1 (Power System Stabilizers)

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Current Issue
Operations and Engineering Conference

• Where does the bulk electric system (BES) end?
• Is the first level transformer included in the
  BES?
• WECC says yes, but is inconsistent with at least
  one other region.

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WECC
Operations and Engineering Conference

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Reliability First Corporation
Operations and Engineering Conference

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Request to NERC
Operations and Engineering Conference

• Y-W Electric Association, and others, have been
  cited by WECC for noncompliance related to
  protection devices for transformers.
• YW and Tri-State have filed a Request for
  Interpretation
• Cites above examples of inconsistency

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Successes in the West
Operations and Engineering Conference

• Regional Planning
• Colorado Coordinated Planning Group
• WestConnect
• WesTTrans OASIS
• Pricing Experiment

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Regional Transmission Planning
Operations and Engineering Conference

• Interconnection-wide Planning
• Transmission Expansion Planning Policy Committee
• TEPPC
• Subregional Transmission Planning Groups

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WECC Regional Planning Process
Operations and Engineering Conference

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Operations and Engineering Conference

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WestConnect
Operations and Engineering Conference

• Coordination role for 3 Subregional Groups
• Southwest Area Transmission Planning GroupSWAT
• Sierra Subregional Planning GroupSSPG
• Colorado Coordinated Planning GroupCCPG

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Western Interconnection Planning
Operations and Engineering Conference

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Operations and Engineering Conference

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Operations and Engineering Conference

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WestConnect
Operations and Engineering Conference

• WesTTrans OASIS
• Single point of entry to access transmission
  across the Rocky Mountain and Southwest
• Non-firm Transmission Pricing Experiment
• Approved by FERC
• Scheduled in service date 4/15/09
• Two year life span
• Single rate for transmission across multiple
  systemshighest of rate

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Tri-State Compliance Staff
Operations and Engineering Conference

• Mark Conner
• 303-254-3834
• Anna Wang
• 303-254-3710

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Interconnection Staff
Operations and Engineering Conference

• Policy
• Ron Steinbach 303-254-3355
• Study Administrator
• Gerald Brooks 303-254-3282
• Requests
• Larry Stark 303-254-3772
• Tracy Sliman 303-254-3939