market interface committee recent regulatory activities philip tice october 14, 2011

Market Interface Committee Recent Regulatory Activities

Philip Tice

October 14, 2011

2

Ancillary Services Firm Exchanges Severe Weather Inquiry

Topics for this Report

3

FERC Ancillary Services NOI

RM11-24-000 June 16, 2011

Third-Party Provision of Ancillary Services

Accounting and Financial Reporting for New Electric Storage Technologies

Frequency Regulation NOPR

4

FERC NOI

Comment period ended August 22, 2011 Comments from 50+ entities. Support for adjustments to expand

Ancillary Service markets. Broad range of approaches suggested.

No issuance by FERC yet.

5

FERC Locational Exchange NOI

• EL10-71- Petition for Declaratory Order

• Locational exchanges are not transmission transactions that must be conducted under authority of an OATT, but rather are wholesale power sales transactions.

• NOI - RM11-9-000 – February 2011– Comments due by April 25, 2011– About 20 commenters’.

6

FERC NOI

• Comments generally supportive.

• Suggest NOI be used to provide guidance for use of exchanges.

• No issuance by FERC yet

7

Southwest Cold Weather Event

• February 1-5, 2011• Widespread electricity outages and natural

gas curtailments in Texas and other Western states.

• Approximately 4.4 million electric customers in ERCOT and WECC affected.

• Service curtailed to over 50,000 gas customers in New Mexico, Arizona and Texas.

8

Southwest Cold Weather Event

• FERC, NERC and State Commission inquiries.

• FERC & NERC joint inquiry and report.– AD11-09-000

• Identify the causes of the disruptions and identify any appropriate actions for preventing their recurrence.

• Report issued August 16, 2011.

9

Cold Weather Event

• Longest sustained cold spell in 25 years.

• Temperatures at least 15 F below normal.

• Extreme in terms of temperature, wind and duration of event.

• Storm extreme not without precedent.

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Cold Weather Event

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Electric System Issues

• Loss or unavailability of generation.– 67% attributable to weather.– 12% indirectly weather related.– Winterization.

• Over 250 unit outages in ERCOT, WECC and SPP.

• 1.2 million MWh of energy unavailable.• Some transmission limitations.

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Electric System IssuesSouthwest - Number of Units Tripped, Derated, and Failed to

Start - Feb. 1 - 5, 2011

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Gas System Issues

• Production declines.– Freeze-offs.– Icy roads.– Rolling blackouts. – Winterization.

• Processing plant impacted by wellhead problems and volumes.

• Time consuming chore of manually shedding some customers.

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Gas System Issues

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Gas System Issues

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Key Findings & Recommendations Electric• Entities should consider preparation for

winter season as critical as summer peak season.

• Take steps to assure black start units can be utilized during severe weather events.

• Real output capability forecast should consider severe weather forecasts.– TOP-002-2 R15

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Key Findings & Recommendations Electric• States should consider rules requiring

winterization plans.

• Communication processes should be improved between reliability and market participants during severe weather events.

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Key Findings & Recommendations Electric

• NERC has committed to submit a Standards Action Request to require generators to develop, maintain and implement plans for winterization of their units.

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Key Findings & Recommendations Gas• States should consider whether adoption

of weatherization standards is warranted for the gas industry.

• States should be approached concerning exemption critical gas production and processing facilities from rolling blackouts.

20

Cold Weather Event Report Resources

• Materials and graphics in presentation from The Report on Outages and Curtailments During the Southwest Cold Weather Event on February 1-5, 2011.

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Links to FERC-NERC Report

• http://www.ferc.gov/EventCalendar/Files/20110915110000-A-4-presentation.pdf

• http://www.ferc.gov/legal/staff-reports/08-16-11-report.pdf

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FERC Meeting Agenda October 2011

• RM11-7-000/AD10-11-000 - Frequency Regulation Compensation in the Organized Wholesale Power Markets.

Philip TiceDeseret Power Electric Cooperative

801.619.6505philtice@deseretpower.com