Resale Business Practice

Standards3 Options remain

Scope of the issue – 2 scenarios

• Resale is done in the unconditional window o Resale does not get competed or bumped

• Resale is done in the conditional window o Resale could be identified as a Defender in Short Term Competition and

Preemption.• Questions are:

o What do you do with the Resale?o How do you do it?

Real Issue – When the parent is Conditional

• Current State:• ISSUE: WEQ 001 and WEQ 013 are not consistent

in the treatment of capacity on a Resaleo BPS WEQ 001 refers to the movement of scheduling rights not capacity.o BPS WEQ 013 refers to the movement of capacity

• ISSUE: FERC language and guidanceo FERC has already approved the current language and definition of

Resales

• ISSUE: Transparency and traceabilityo Current BPS WEQ 001 and WEQ 013 do not explicitly call out how to

ensure that the resale has capacity to redirect, they just state that a resale shall have the ability to redirect.

Option 1 – Status Quo• Current WEQ Version 3 Standards and

Implementation guide remain unchanged in regards to Resaleso Assignees do not have ROFRo Resales are not subject to P&C

• Only the Parent is subject to Competitiono This option allows TP to annul all Resales due to P&C on the parent

• ISSUES• We will still have the same contradiction between WEQ 001 and

WEQ 013• We will still have issues in traceability and transparency• Billing• Resale to self would shield TC from P&C• Aggregation of Resales

Option 2 – Move Capacity

• Move Capacity from the parent to the Resale• Assignee has ROFR• Does not limit Secondary Transmission Market• Customer Satisfaction

• ISSUES:o Business Practice Standards Change

• Changes to WEQ Resale definitions and WEQ 001o TP Defender identification meta data trackingo WEQ EC and FERC Supporto Billing (Although this is an issue, NAESB Should not be addressing Billing

issues as a standards making organization)o System/Process updateso Aggregation of Resales

Option 3 - Restrict Resales to the Unconditional

window• Do not allow Resales until the Unconditional

windowo Conditionality transfers from the parent to the childo If parent tries to Resell in the conditional window, they will not be able

to do so.

• ISSUES: o Business Practice Changeo Implementation Guide Changeo Minimizes Secondary Transmission Marketo Low customer satisfaction

Agreement on Options• Do you understand all Three options?• Are there other options?

Issues with Each Option

• Option 1: o We will still have the same contradiction between WEQ 001 and WEQ 013o We will still have issues in traceability and transparencyo Billing (Although this is an issue, NAESB Should not be addressing Billing issues as a standards making organization)o Resale to self would shield TC from P&Co Still have issue with Daisy Chaino Aggregation of Resales

• Option 2: o Business Practice Standards Change

• Changes to WEQ Resale definitions and WEQ 001o TP Defender identification meta data trackingo WEQ EC and FERC resistance to Supporto Billing (Although this is an issue, NAESB Should not be addressing Billing issues as a standards making organization)o System/Process updateso Aggregation of Resales

• Option 3 (No resale of the Conditional Reservation): o Business Practice Changeo Implementation Guide Changeo Minimizes Secondary Transmission Marketo Low customer satisfactiono Possible FERC resistance to Support

• Option 4 (fix Option 1 Issues): o We will have to fix the same contradiction between WEQ 001 and WEQ 013o We will still have issues in traceability and transparencyo Billing (Although this is an issue, NAESB Should not be addressing Billing issues as a standards making organization)o Resale to self would shield TC from P&Co Still have issue with Daisy Chaino Aggregation of Resales

• Option 5 (Transfer): o Utilize the Transfer Mechanism for Resaleso Fix some attributes of stop and start timeo This will have the three party approval

Benefits of Each Option

• Option 1: o No changes to current Business Practice Standards o Already approved by WEQ EC and FERC

• Option 2:o Update to Standards will make WEQ 001 and WEQ 013 consistento Traceabilityo Encourages Secondary Transmission Market Flexibilityo Ability to redirect a Resale is already described in Standards

• Option 3:o Ease of implementationo Minimal WEQ Business Practice Standard changes requiredo Easiest for TP to implement

Options Side by SideOption 1 Option 2 Option 3

Change to Standard

No Yes Yes

Is there a contradiction between WEQ BPS

Yes No No

EC approval Yes Not yet Not Yet

FERC Approval Yes Not Yet Not Yet

Change to Implementation guide

No No Yes

Options Side by Side – continuedOption 1 Option 2 Option 3

Traceability Little Yes Little

Secondary market impact

Little to None Little Yes

Conditionality Stays with the parent and the child is part of the parent (WEQ 001-scheduling rights )

Conditionality transfers from the Parent to the Child

Un-conditionality transfers from the Parent to the Child

Duration Not an issue Must be determined

Not an issue

Queue Time Not an issue Must be determined

Not an issue

Option 1 Option 2 Option 3

Price Not an issue Must be considered

Not an issue

Billing Same Billing Issues as now

Billing issues in regards to a Resale exercising ROFR, loss of capacity on Resale

Billing does not have to account for loss of capacity on a Resale due to P&C

Aggregation Issue Issue Not an Issue

Recommendation• Option 2

o Keeps Secondary Market Flexibilityo Treatment of Resales is both transparent and traceableo Facilitate consistency in BPS and Implementationo Consistent with current BPS regarding redirecting a Resaleo Allows for Aggregation of Resales to be processed as their own capacity

Option 2 – Draft language

• Conditional Parento Resale in the Conditional Window

• Child will inherit the Conditionality of the Parento Child will inherit the Service Increment of Parent

• Child has it’s own Durationo Duration will be consistent with current motion 3

• Based on Start Date and Time and End Date and Time• Child has it’s own Queue Time

o Queue time is set when the Resale is entered into OASIS• Child has it’s own Price

o Price is that amount entered into OASIS when the Resale is entered.

Option 2 – Draft Language

• A Resale will be evaluated to determine if it is a valid Defender on but not limited to the SERVICE_INCREMENT , Capacity and POR/POD inherited from the Parent, and the duration, queue time and price determined when the Resale is entered into OASIS

• A Resale will be identified as a Defender consistent with all other Business practice standards for P&C

Option 2 – Draft Language

• Resale Matching request will be based off of the Resale reservation in OASIS and must match duration of the Challenger

Resale Defender Example

• When Resale is identified as a valid Defender based on it’s TSR in OASIS, the resale will have ROFR.o To exercise ROFR the Resale must match the duration of the Valid

Challenger

• Exampleo Parent is monthly, 3 month durationo Child has Service Increment of 1 month, but is 1 week in durationo Both the parent and the child are identified as valid defenders to a 4

month requesto Parent must match the remaining month to exercise ROFRo Child must match all four months to exercise ROFR