WSPP Operating Committee BAL 002 Update. Kenneth W. Otto, PE March 7, 2014

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1 WSPP Operating Committee BAL 002 Update Kenneth W. Otto, PE March 7, 2014

2 Disclaimer This presentation is for informational purposes and should not be construed as, and does not constitute legal advice. Participants should seek their own legal counsel to make their own legal determination regarding the subject matter discussed herein.

3 The Basics First we need to understand: NERC BAL-001 NERC BAL-002

4 NERC BAL-001 Title: Real Power Balancing Control Performance Purpose: To maintain Interconnect steadystate frequency within defined limits by balancing real power demand and supply in real-time.

5 NERC BAL-002 Title: Disturbance Control Performance Purpose: The purpose of the Disturbance Control Standard (DCS) is to ensure the Balancing Authority is able to utilize its Contingency Reserve to balance resources and demand and return Interconnection frequency within defined limits following a Reportable Disturbance.

6 NERC BAL-002 cont. Because generator failures are far more common than significant losses of load and because Contingency Reserve activation does not typically apply to the loss of load, the application of DCS is limited to the loss of supply and does not apply to the loss of load.

7 The BAL-002-WECC-2 Standard Purpose: To specify the quantity and types of Contingency Reserve required to ensure reliability under normal and abnormal conditions. Requires an RSG or BA to carry a sufficient quantity of reserve to restore balance following the most severe single contingency that may occur within the RSG/BA s area of responsibility

8 What the Standard Is Defines the quantity and quality of Contingency Reserves required to be held in the WECC Clearly defines who is responsible for carrying these reserves. Balancing Authorities unless the BA is a member of a Reserve Sharing Group (RSG) Reserve Sharing Group

9 What the Standard Is Not It is not a Frequency Response Standard It is not a prescription on how or when to respond to a contingency It is not a Regulating Reserve standard It is not intended to firm up energy sales

10 What the Standard Is Not It is not intended to firm up energy sales

11 Firm Sales A seller of Firm energy under Schedule C Has an obligation to back up the sale in the event the primary source of generation is lost. May carry its own back-up generating resources May contract with a third party for back-up generating resources

12 Reserve Sharing Groups A Firm sale may be backed by a Reserve Sharing Group (for a short period, generally one hour) If the seller is a member of a Reserve Sharing Group and If the seller s generator is covered by the Reserve Sharing Group If the loss of said generator meets the Reserve Sharing Group s criteria for initiating a response Keeping in mind that a Reserve Sharing Group s primary interest is to restore balance of supply and demand within its footprint.

13 BAs A Firm sale may be backed indirectly by a BA (for a short period, generally one hour) If the seller s generator resides in the BA If the loss of said generator causes an imbalance of supply and demand within the BA s footprint and is severe enough to warrant a reserve response. Keeping in mind that a BA s primary interest is to restore balance of supply and demand within its footprint in order to continue to serve the loads within its boundaries.

14 BAs and RSGs Have no obligation to back your sales Are obligated to balancing supply and demand within their boundaries for the purpose of reliably operating the system Can and do curtail schedules to restore energy balance Deploy reserves for reliability purposes, not to support the market efforts of PSEs

15 Sellers Must ensure that they are fully cognizant of their relationship with both BAs and RSGs. Know your Reserve Groups by-laws and operating policies Know your interconnection agreement with your BA Understand your BA s tariff

16 Sellers Know under what conditions your loss of resource will be backed by a third party Determine what additional generating reserves you might choose to have available to back your Firm sales.

17 Buyers Know your seller Know the path of delivery Know your risk of losing an energy import Purchase according to your level of comfort

18 Changes to BAL-002-WECC-2 No longer assigns load responsibility to an energy transaction Energy transactions no longer change the amount of reserves an RSG or BA are required to carry under the Standard Removes the RSG/BA s reliance on the firmness of energy market transactions to restore supply/demand balance

19 Requirement R1 R1 minimum amount of Contingency Reserves is the greater of Most Severe Single Contingency or 3 Percent of Load plus 3 Percent of Generation

20 Requirement R2 R2 minimum Operating Reserve Spinning equal to 50 percent of R1 Must be immediately and automatically responsive to frequency Must be fully responsive within 10 minutes While Operating Reserve Spinning must be initially responsive to frequency, R2 does not require a full automatic response via governor action. Initial response only.

21 Requirement R3 R3 requirement for additional reserves if the Sink BA is buying energy associated with the Source BA s Contingency Reserves For example, purchase of energy that is recallable by the Source BA for reserve activation. Tagged as Product Code C-RE: Capacity associated with energy recallable for reserves. This product is energy which is recallable within ten minutes of activation of reserves and has been included in the Source Balancing Authorities reserve resources.

22 Requirement R4 R4 requirement for additional reserve at the Source BA if they have sold Contingency Reserves which can be called upon by the Buyer. C-SP: Capacity for spinning reserve. On-Demand spinning reserve obligation/resource is a spinning reserve product that can be activated through the adjustment of a capacity e-tag. C-NS: Capacity for non-spinning reserve. On-Demand nonspinning reserve obligation/resource is a non-spinning reserve product that can be activated through the adjustment of a capacity e-tag.

23 BAL-002-WECC-2 Contingency Reserve Guidance Document For further clarification: Western Electricity Coordinating Council > Library > Documentation Categorization Files > Regional Standards > BAL-002-WECC-2 Contingency Reserve Guidance Document

24 WSPP Agreement References Schedule C C 3.9 Seller shall be responsible for ensuring that Service Schedule C transactions are scheduled as firm power consistent with the most recent rules adopted by the applicable NERC regional reliability council.

25 WSPP Agreement References Schedule A A 3.8 Unless otherwise agreed, the Purchaser shall be responsible for maintaining operating reserve requirements as back up for Economy Energy Service purchased and the Seller shall not be required to maintain such operating reserve.

26 Need to change? Refers to operating reserve requirements as back up for Economy Energy Service purchased. Is such a requirement still valid?

27 QUESTIONS?