Southwest Power Pool MARKET WORKING GROUP MEETING July …

Southwest Power Pool

MARKET WORKING GROUP MEETING

July 8, 2011

Net Conference

• Summary of Motions •

No motions were made during this meeting.

Page 1 of 3

Minutes No. [162]

Southwest Power Pool

MARKET WORKING GROUP MEETING

July 8, 2011

Net Conference

• M I N U T E S •

Agenda Item 1 – Call to Order, Proxies, Agenda Discussion

Chair Richard Ross (AEP) called the meeting to order at 8:35 a.m. The attendance was recorded and proxies were announced (Attachment 1 – MWG Attendance July 8 2011). The following members were represented by proxy:

Matt Moore (GSE) for Mike Wise (GSE) Mike Mushrush (OMPA) for Gene Anderson (OMPA)

The group reviewed the agenda (Attachment 2—MWG Agenda July 8 2011) and made no changes.

Agenda Item 2 – Modeling of Plants in EMS

Casey Cathey (SPP) expanded upon his presentation from the June 21-22, 2011 meeting (Attachment 3 – Plant modeling in Marketplace). Casey Cathey (SPP) walked MWG members through three different options (Attachment 4 – Modeling Options-Examples) for modeling non-combined cycle units electrically equivalent to the transmission grid (Attachment 5 – Plant Modeling in the SPP Integrated Marketplace). Due to the changes coming in the Marketplace, SPP staff wanted to inform members about the advantages and disadvantages of each option before moving forward with vendor design. Members asked questions about telemetry needs, dispatch instructions, Operating Reserve deployment, Resource offer granularity and visibility needs for reliability. After much discussion, MWG members continued to support the option (#3) for plant-level modeling as currently outlined in the Marketplace Protocols.

Agenda Item 3 – Review of Motions, Action Items and Future Meetings

Motions

No motions were made during this meeting.

Action Items

No action items were assigned during this meeting.

Future Meetings July 19, 2011 (1 p.m. – 6 p.m.) July 20, 2011 (8:15 a.m. – 12 p.m.) Location: AEP Office Room: 8th Floor August 16, 2011 (1 p.m. – 6 p.m.) August 17, 2011 (8:15 a.m. – 12 p.m.) Location: AEP Office Room: 8th Floor

Page 2 of 3

Minutes No. [162]

Page 3 of 3

Market Working Group Minutes July 8, 2011 September 20, 2011 (1 p.m. – 6 p.m.) September 21, 2011 (8:15 a.m. – 12 p.m.) Location: AEP Office Room: 8th Floor

Agenda Item 4 – Adjournment

Richard Ross (AEP) thanked the group and adjourned the meeting at 9:47 a.m. Respectfully Submitted, Debbie James Secretary Attachments Attachment 1—MWG Attendance July 8 2011 Attachment 2—MWG Agenda July 8 2011 Attachment 3 – Plant modeling in Marketplace Attachment 4 – Modeling Options-Examples Attachment 5 – Plant Modeling in the SPP Integrated Marketplace

X = In Person ℡ = By Phone * = By ProxyAttend Full Name Company E-mail Business Phone Other PhoneDay 1 ℡ Richard Ross (Chair) AEP rross@aep.com (918) 382-9285 (918) 284-8702

Keith Sugg (V-Chair) AECC ksugg@aecc.com (501) 570-2413 ℡ Debbie James (Sec.) SPP djames@spp.org (501) 614-3577 ℡ Aaron Rome Midwest Energy (785) 625-1431 ℡ Ann Scott Tenaska ascott@tnsk.com (817) 462-1514 ℡ Darrell Wilson OGE wilsondw@oge.com (405) 553-2773 * Gene Anderson OMPA geneaengr@aol.com (405) 645-2280 ℡ Joshua Kirby WFEC j_kirby@wfec.com (405) 247-4403 (405) 317-3790 ℡ Jessica Collins Xcel Energy jessica.l.collins@xcelenergy.com (303) 571-7740 (303) 910-7960 ℡ Lee Anderson LES landerson@les.com (402) 467-7591

Michael Wise Golden Spread Electric Coop mwise@gsec.coop (806) 379-7766 ℡ Patty Denny KCPL patricia.denny@kcpl.com (816) 654-1702 ℡ Randy Gillespie Kelson Energy randy.gillespie@kelsonenergy.com (443) 542-5137 ℡ Rick McCord EDE rmccord@empiredistrict.com (417) 625-5129

Rick Yanovich OPPD (402) 514-1031 ℡ Shah Hossain Westar Shah_Hossain@wr.com (785) 575-6453 ℡ Aaron Shipley SPP ashipley@spp.org

Alan McQueen SPPBarbara Stroope SPPBarry Spector Wright Talisman

℡ Bart Tsala PCI btsala@powercosts.com (405) 447-6933 ℡ Bill Nolte SECI bdnolte@sunflower.net (420) 272-5458

Bill Olson Xcel Energy bill.olson@xcelenergy.comBill Thompson AEPBrandon Whittle Excelon brandon.whittle@gmail.com (512) 422-9063Brenda Harris Oxy brenda_harris@oxy.comBrent Hebert Horizon Wind brent.hebert@horizonwind.com (713) 265-0365Brett Kruse CalpineBrian Holmes Structure brian.holmes@thestructuregroup.comBruce Walkup AECC bwalkup@aecc.com (501) 570-2639Bryn Wilson OGE wilsonwb@oge.comCarrie Cooper ETEC carrie.cooper@gdsassociates (770) 715-7189

℡ Carrie Simpson SPP csimpson@spp.org (501) 688-1757 ℡ Casey Cathey SPP ccathey@spp.org (501) 614-3267

CJ Brown SPP cbrown@spp.orgCharles Waso cwaso@aol.comChris Casale Iberdrola chris.casale@iberdrolausa.comChris Jones Duke Energy chris.jones@duke-energy.comChris Werner AEP cmwerner@aep.comCliff Franklin WestarCody Parker SPP cparker@spp.orgDanielle Strain AECI dstrain@aeci.orgD l B WFEC

Market Working GroupJuly 8, 2011

Net Conference

Darryl Boggess WFEC d_boggess@wfec.com (405) 247-4518 ℡ Dave McGinnis Utilicast dmcginnis@utilicast.com

Dave Savage RES-Americas david.savage@res-americas.comDavid Charles Basin Electric Power Co. dcharles@bepc.com (701) 557-5631

℡ David Erickson AEPDavid Hackett KEMA dhackett@us.kema.com (321) 600-1228Derek Mosolf MCG Energy dmosolf@mcgenergy.com

℡ Dirk Dietz NPPD drdietz@nppd.comDoug Clark AEP dclark@aep.comDowell Hudson SPP dhudson@spp.orgEd Hammons GRDA ehammons@grda.com

℡ Eric Alexander GRDA ealexander@grda.comEric Jensen AREVAFarrokh Rahimi OATI farrokh.rahimi@oati.net (615) 360-1654

℡ Gary Cate SPP gcate@spp.org ℡ Gary Rosenwald The Glarus Group gary.rosenwald@theglarusgroup.com

Gay Anthony SPP ganthony@spp.org ℡ George Fee AEP

George Kelly AccentureGordon Scott EPIC Merchant Energy (281) 760-4562Heather Starnes SPP hstarnes@spp.orgJaime McAlipine Chermac Energy mcalpinekl@chermacenergy.com 405-340-9326James Fife PSI/EPV jfife1@entergy.com (281) 297-5406

℡ James Sanderson KCC j.sanderson@kcc.ks.gov (785) 271-3159Jason Smith SPP jsmith@spp.org

℡ Jeff Anderson OATI jeff.anderson@oati.netJessica Zahnow Argus Media jessica.zahnow@argusmedia.com 503-227-5481

℡ Jim Flucke KCPL jim.flucke@kcpl.comJim Guidroz Supervisor of Tariff Administration jguidroz@spp.org (501) 614-3900

℡ Jim Krajecki Customized Energy Solutions jkrajecki@ces-ltd.comJim Stevens PSI/EPV jim@psisoft.net (713) 253-9396JJ Guo AEP jguo@aep.comJodi Woods SPP jwoods@spp.orgJoe Taylor Xcel Energy josepth.c.taylor@excelenergy.com (303) 571-7462John Baum NovisJohn Harvey John Deere Renewables harveyjohna@johndeere.com (515) 267-3532 (515) 473-5680

℡ John Hyatt SPP jhyatt@spp.orgJohn Luallen SPP jluallen@spp.orgJohn Stephens City Utilities John.Stephens@cityutilities.net (417) 831-8470John Sturm Aces Power Marketing (APM) jsturm@acespower.com (317) 696-9031

X = In Person ℡ = By Phone * = By ProxyAttend Full Name Company E-mail Business Phone Other PhoneDay 1

Market Working GroupJuly 8, 2011

Net Conference

℡ John Varnell Tenaska jvarnell@tnsk.com (817) 462-1037 ℡ Jon Sunneberg NPPD jmsunne@nppd.com

Josh Phillips SPP jphillips@spp.orgJulie Slone AEP jaslone@aep.comKathy Schuerger Xcel Energy kathy.schuerger@xcelenergy.comKen Donald UtilicastKevin Patten AEP kwpatten@aep.com

℡ Kim Sullivan WFEC k_sullivan@wfec.comKristen Rodriguez Electric Power Engineers/Wind Coalition krodriguez@epeconsulting.com (254) 399-8676Liam Noailles Xcel Energy liam.d.noailles@xcelenergy.com (305) 571-2792Lyman Wilkes Physical Systems Integration lwilkes@psisoft.net (713) 443-4026 (281) 297-5449Mak Nagle SPP mnagle@spp.org

℡ Marisa Choate SPP mchoate@spp.org (501) 688-1707Mark Watson Platts markham_watson@platts.comMark Wiggins PCI mwiggins@powercosts.comMary Jo Montoya Xcel Energy mary.j.montoya@xcelenergy.com (303) 571-7191Matt Binette binette@wrightlaw.com

℡ Matt Johnson TEA ℡ Matt Moore Golden Spread Electric Coop mmoore@gsec.coop (806) 367-8687

Matt Pawlowski NextEraMatt Wolf Entergy EMOMark Lawlor Right of WindMike Hood AECC mike.hood@aecc.com

℡ Mike Mushrush OMPA mmushrush@ompa.comMitch Williams WFEC m_williams@wfec.comNeil Robertson SPP nrobertson@spp.orgNick Parker SPP nparker@spp.orgPatti Kelly SPP pkelly@spp.org (501) 614-3381Patty Harrell DC Energy harrell@dc-energy.comPaul Dietz Westar paul.a.dietz@ westarenergy.com

℡ Pete Kinney WAPA kinney@wapa.gov (605) 882-7560 (605) 228-6758Philip Bruich SPP pbruich@spp.orgPhyllis Bernard SPP Board of Directors phyllis_bernard@sbcglobal.net

℡ Randy Root GRDA rroot@grda.comRichard Dillon SPP rdillon@spp.org (501) 614-3228Ron Chartier SECI rchartier@sunflower.net (785) 623-3379

℡ Ron Thompson NPPD rfthomp@nppd.com (402) 845-5202Roy Klusmeyer WFEC

℡ Roy True Aces Power Marketing (APM) royt@acespower.com (317) 695-4146Ryan Garrett SPP rgarrett@spp.orgRuss McRae ARVEASam Ellis SPP sellis@spp.orgS K Edi Mi i k @ di i iSam Kwong Edison Mission skwong@edisonmission.comSoren Nielsen nielsensoren@yahoo.comSteve Gaw Wind Coalition steve@windcoalition.org (573) 645-0777Steve Haun shaun@les.comStacy Rodgers SAIC stacy.l.rodgers@saic.com (214) 587-5197Steve McDonald Aces Power Marketing (APM) smcdonald@acespower.com (317) 344-7113Stuart Rein Boston Pacific srein@bostonpacific.comTom Burke Aces Power Marketing (APM) tburke@acespower.com (512) 788-4901Tom Fritsche SPP tfritsche@spp.orgTony Alexander SPP talexander@spp.orgTony Delacluyse PCI tony@powercost.comTrent Carlson JP Morgan trent.a.carlson@jpmorgan.comTrey Fleming SAIC trey.s.fleming@saic.com (713) 345-0753Tyler Wolford TEA twolford@teainc.org (904) 360-1460Walt Shumate Shumate & Associates waltshumate@sbcglobal.net (512) 496-7704Walt Yeager Duke Energy walt.yeager@duke-energy.comWayne Camp Accenture wayne.camp@accenture.com (856) 204-0298Wendell Drost Alstom wendell.drost@areva-td.com (318)348-0014Wenchun Zhu Wind Capital Group zxhu@windcapitalgroup.com

41

Relationship-Based • Member-Driven • Independence Through Diversity

Evolutionary vs. Revolutionary • Reliability & Economics Inseparable

Southwest Power Pool, Inc. MARKET WORKING GROUP MEETING

July 8, 2011 Net Conference

• A G E N D A •

Day 1 – 8:30 a.m. – 10:00 a.m.

1. Call to Order, Proxies, Agenda Discussion ........................................................................ Richard Ross

2. Modeling of Plants in EMS ................................................................................................ Casey Cathey

3. Review of Motions, Action Items and Future Meetings .................................................... Debbie James

4. Adjournment ....................................................................................................................... Richard Ross

Plant modeling in Integrated Marketplace

June 21st, 2011

Casey Cathey, P.E. ccathey@spp.org ∙ 501.614.3200

Plant modeling in Integrated Marketplace

• Current Design in Marketplace protocols ported from EIS design

• MP may aggregate individual physical units to a plant

• Example:    

• Resource will provide 3‐part offer on plant

• Resource will be committed and dispatched as a plant

• RTGEN (EMS AGC app) will disaggregate proportionally for Set‐Points

3

Plant modeling issues

• Market will clear all 5 products on the plant‐wide basis

• RTGEN deploys on unit basis

• Unclear which units are responding to set‐point

• Dispatch issues may be overcome, but commitment is all or none

• Plants have 1 set of attributes

– Plant modeling may be acceptable for a CC but it limits the commitment flexibility of a multi‐unit non‐CC

4

Common Bus logic

• Common Bus logic is a grouping for determination of response

– Logic that sums dispatch and output in order to determine response

– This logic may be utilized in lieu of plant modeling in order to obtain benefits of plant modeling, without complicating or losing commitment benefits

5

Plant modeling recommendation

• MWG to consider removing the plant‐level modeling known in EIS Market for the Integrated Marketplace due to:  

– The additional complexities associated with proper commitment of non‐CC plants, 

– Communication calculation issues, 

– Loss of granularity for situational awareness, analysis, & monitoring 

6

Non-Combined Cycle Plant Modeling in the SPP Integrated Marketplace

Introduction 

In SPP’s current EIS market, multiple units at a location can be aggregated into a plant for market dispatch.  With the introduction of the SPP Integrated Marketplace, the implications of using a similar plant modeling methodology deserve careful consideration. 

This report presents the known options available for non‐combined cycle plant modeling for units electrically equivalent to the transmission grid.  A description of each option is included along with a list of advantages and disadvantages. 

Modeling Methodology Options for Non‐Combined Cycle Plants 

Option #1 – Non‐Combined Cycle Plants not allowed in any aspect of the SPP Integrated Marketplace 

This option would require unit level modeling for all generation resources excluding combined cycle plants. 

Advantages 

‐ Maximizes Economic Efficiency Individual unit modeling will allow the Integrated Marketplace to maximize economic efficiency compared to aggregated plants.  Individual unit modeling allows for more efficient commitment and dispatch co‐optimization of the available generation resources across all the products when the expanded sets of offer parameters are considered.  

‐ Maximizes Visibility for Reliability Operators Aggregated plants reduce the visibility of the operational status of the individual units that comprise the plant.  Requiring unit level modeling will allow SPP discreet control of the individual units increasing reliability and situational awareness.  

‐ Expanded Resource Offer Granularity Market Participants would be allowed to submit a resource offer for multiple units as opposed to a single resource offer for the plant. 

Disadvantages 

‐ Expanded Resource Offers Submissions and Settlement Market Participants would be allowed to submit a resource offer for multiple units as opposed to a single resource offer for the plant. Shadow settlements complexity increases.  

‐ Individual Metering Required    

Attachment 5--Plant Modeling in the SPP Integrated Marketplace.docx Page 1 of 3

Option #2 – Non‐Combined Cycle Plants allowed in all aspects of the SPP Integrated Marketplace 

Plants and Units would essentially be utilized the same by the Integrated Marketplace.  Please note: for Market Participants currently registered as multiple physical units behind a single unit record may continue to do so in the Marketplace.   

Advantages 

‐ Offers for the Aggregated Plants Enables a Reduced Number of Offers and Settlement Locations  

‐ Additional Flexibility for Market Participants 

Disadvantages 

‐ Ability to Follow Dispatch Plants providing Operating Reserve could have an increased risk of disqualification due to poor performance.  If this occurs, fewer generation resources will be available to provide Operating Reserve and could increase the risk of scarcity pricing.  

‐ Increased Offer Complexity in the Integrated Marketplace Some of the resource offer parameters introduced by the Integrated Marketplace may be difficult to assign to an aggregated plant.  For example, an aggregated plant can only offer a single startup cost.  If the startup cost of one of the individual units is submitted, the plant might not be made whole for the startup cost of the entire plant.  If the startup cost of the entire plant is submitted, the plant could appear un‐economical to the commitment engine.  

‐ Decreased Unit‐Level Awareness for SPP Reliability and Market Operations BA and RUC Operators will not have visibility into the actual output and capabilities of the individual units   

Option #3 – Plant Aggregates converted to Individual Units in RTGEN (Existing EIS and Marketplace approach; units modeled as a single plant in Market system)  

The reliability (EMS) model and telemetry have individual units (subject to potential registration thresholds).  Market clears the plant resource and disaggregates the plant quantities to send ICCP dispatch instructions on a per unit basis.  There will be an option to allow the ICCP dispatch instructions to be rolled up to a plant level set point. 

Advantages 

‐ Unit‐Level Data is Available for SPP Reliability Operations  

‐ Offers for the Aggregated Plants Enables a Reduced Number of Offers and Settlement Resources 

 ‐ Additional Flexibility for Market Participants 

Attachment 5--Plant Modeling in the SPP Integrated Marketplace.docx Page 2 of 3

Attachment 5--Plant Modeling in the SPP Integrated Marketplace.docx Page 3 of 3

Disadvantages 

‐ ICCP Instructions are Disaggregation of Plant Instructions Market Participants operate to sum of ICCP data for units at the plant.  Dispatch instructions are different for ICCP and XML:  ICCP is at unit level and XML is for the Aggregate Plants.    

‐ Disaggregation rules could be complex and likely will not cover all operating scenarios.  Example:  Fourteen 40 MW units at a single plant get an XML instruction of 140 MWs.  Does each unit get a 10 MW instruction?  

‐ Increased Offer Complexity in the Integrated Marketplace  

‐ Individual Metering Required  

‐ Reduced ramp sharing flexibility  

‐ Reduced product substitution flexibility