Western Electricity Coordinating Council Market Issues Subcommittee Report to the Market Interface Committee Philip Tice March 6-7, 2008

Western Electricity Coordinating CouncilWestern Electricity Coordinating Council

Market Issues Subcommittee

Report to the

Market Interface Committee

Philip Tice

March 6-7, 2008

Western Electricity Coordinating Council

Issues MIS is Addressing

• Day-Ahead Trading Timelines Guideline

• Policy on Market Energy Terms/Transactions in Reliability

• Prescheduling Evaluation Task Force

• Merchant Communications Business Practice


Prescheduling Evaluation Task Force

PETF


PETF Status

• Majority of research and drafting completed.

• Paper contains lots of good information.

• Balance between finishing paper and having it complete.

• Challenge remaining is taking paper beyond just being a compilation of information.


PETF Update

• Next Steps– PETF conference call in mid March to

collaborate on Executive Summary.– Present report to MIS at April Meeting.

• Questions.

• Contacts - Emily Shults or Leesa Nayudu


NERC/NAESB ATC Drafting Team WECC Efforts


Energy Product Code Drafting Team


Regional Criteria Status

• Approved by MIC in October 2007.• Approved by WECC Board in December

2007• New Energy Product Codes added to

NERC TSIN Product Code registry in early February.

• Old Energy Product Codes removed from NERC TSIN Product Code registry in early March.


Regional Criteria Status

• The Regional Criteria has been implemented.

• The Drafting Team has completed its work.


Trading Timelines


Trading Timelines Update

• Task Force posted a Trading Timelines Proposal on WECC web site under general comments. – Issue is trading starts as early as 5 am PPT.– Proposed solution is reinstitute agreement of 6

am trading start time and request adjustment of ICE physical index determination times.



• Questions asked in Trading Timelines Proposal:– Do you support what is being considered (and

why).– Do you oppose it (and why).– In what ways can this concept be improved.


Trading Timelines Update• 35 comments received over one week! • Broad response geographically and by

organization type.• Majority of responses supportive.

– Improved load and resource planning information.– Reduces time spread between electric and gas

trading.– Addresses issue of a known time to be ready to

trade.– Petition change in ICE physical index calculation

times.



Task Force presented a recommendation to MIS in January.

MIS approved a trading timelines guideline.


So What is a WECC Guideline?

• Definition: A WECC Committee approved document whose purpose is to educate, train, and/or promote consistency among members.

• There are no specific penalties for non-compliance.

• Non-compliance issues should be discussed and resolved through the WECC standing committees.


WECC Trading Timelines Guideline

• Guideline: The trading of day-ahead energy transactions in the Western Interconnection should begin no earlier than 6:00 a.m. Pacific Prevailing Time.


WECC Trading Timelines Guideline• Background: For several years there has been an informal

agreement that day-ahead trading in the WECC should begin no earlier than 6:00 a.m. Pacific Time. Recently the day-ahead trading has been occurring as early as 5:00 a.m. Pacific Time. This has resulted in day-ahead trading analysts and traders on the West Coast having to come in at increasingly earlier and uncertain hours to complete the necessary forecasts and analysis, prior to the beginning of trading. The MIS was asked if it could evaluate the situation and perhaps facilitate a solution. The MIS is fully aware it cannot “establish” trading timelines. However, market efficiencies and liquidity are a concern of the MIS. Some have expressed an additional concern that rate payers might be disadvantaged by such trading practices and

having pricing indexes affected by trading activity prior to West Coast traders being on

site and prepared to trade.


WECC Trading Timelines Guideline

• Support: There has been strong support from market participants to begin trading at 6:00 a.m. Pacific Time. Comments from the industry were solicited from January 15 to January 22, 2008 and brought a significant response with near unanimous support for the 6:00 a.m. start time.



MIS requests the MIC approve this guideline. Implementation date - April 1, 2008. MIC Chair to notify the electricity trading

community: WECC membership WSPP WPTF ICE, Dow Jones and other index publishers Trading platforms and Broker community.



Discussion & Questions.


Trading Timelines UpdateMotion:

• The MIC approves the Trading Timeline Guideline with an implementation date of April 1, 2008. The MIC chair is instructed to notify the WECC membership and other appropriate parties in the electricity trading community of the approval of the guideline and the implementation date.


Policy on Energy Market Terms/Transactions in

Regional Reliability Standards


Market T/T in Reliability Standards

• MIS discussed whether a WECC policy should be developed addressing use of energy market terms or transactions in regional reliability standards.

• MIS concluded a policy was warranted.

• MIS developed a policy.

• MIS approved a policy and instructed its chair to seek MIC approval.


So What is a WECC Policy?

• Definition: A WECC Board Approved document whose purpose is to establish the general path, direction and objectives agreed to by the Board, and provide guidance for subsequent Regional Reliability Standards, Regional Criteria, and Guidelines.

• There is no compliance measurement or enforcement associated with Policies.


Market T/T in Reliability Standards

• Policy Principles– Energy market terms and transactions

should not be part of establishing or affecting requirements in a mandatory reliability standard.

– Energy market terms and transactions may be appropriate to how an entity complies with a mandatory reliability standard.


Guidance for Drafting Teams

The Question – Should the MIC/MIS advocate providing drafting teams with guidance as issues arise or should the it advocate development of a comprehensive WECC guidance document to use by drafting teams?



Where have drafting teams looked to understand the process to accomplish their task? WECC Standards Development Process. NERC Reliability Standards Development

Process. Instructions from NERC, FERC, WECC.


Guidance for Drafting Teams MIC Steering Discussion.

– MIS policy a component of guidance. – MIC should advocate need for guidance

document at JGC and volunteer to lead effort.

– NERC procedure as a foundation.– Inform Board and coordinate with GNC.– Policy on when regional reliability

standards will be used?



Benefits of developing a policy.– Clarity.

– Consistency.

– Measurability.

– Efficiency.

– Compress the process.



Reasons to maintain status quo. – No need to address the obvious.

– Unproductive use of time and resources.

– Not a regular activity.



• Discussion & questions.



• Direction to pursue:

– MIS Policy vote.

– Advocate development of guidance document for drafting teams at JGC.

• Discussion & questions.


Market T/T in Reliability Standards Motion:

• The MIC approves the Policy on the use of energy market terms or transactions in reliability standards. The MIC chair is instructed to advance this policy to the WECC Board for approval.


Merchant Communications Drafting Team


Merchant Communication Drafting Team

• WECC received a Communication Protocol Business Practice Request in early October.

• Request is “Communications to preempt or aid in mitigating Capacity and Energy Emergencies.”

• Assigned to MIC.

• MIS form a Drafting Team.


Drafting Team• Steve Kerns - Chair

• Jeff Ackerman, Brenda Anderson,

Ali Amirali, Prem Bahl, Joy Barton

Shannon Black, Bill Casey,

David Lemmons, Patrick Monson,

Chris Nebrigich, Phil Tice,

Larry Williamson, Luis Zaragosa,

Wells Mike


Recent Activities • Conference call meetings January 11th

& 25th, February 22nd.

• DT posted and distributed a survey in early February– What communications do you use today?

– Should both merchant and reliability entities be notified?

– Should LSE initiate and send the message?


Recent Activities (Cont.)

• DT survey questions.– Should a WECC developed

communication process be used before an EEA is declared?

– Will the communication process be abused by some?

– Should a scripted message be used?

– Are there security concerns with these messages?


Recent Activities (Cont.)

• DT survey questions. – What are effective methods to deliver

messages to real time traders?• wesTTrans bulletin board, WECCNet,

– Could this open the door for anti-competitive behavior?


Next Steps

• DT analyzing survey responses.

• DT is debating whether this should be a WECC regional criteria or a guideline.

• DT goal is to have a process available for use by summer, with approvals to follow.

• Questions – contact Steve Kerns – [email protected]


NWPP Merchant Communications Task Force Update


Daily Assessment Data Update• Data issues being discussed:

– Inclusion of uncertain resources (returning to service from outages).

– Inclusion of purchases that are yet to be made.

– Load forecast accuracy. – Sustainability of resources.– Consideration of intermittent resources– Frequency of data updates.– Data disconnect (what data represents)

between reliability and merchants.


Daily Assessment Data Update

• Task force developed whitepaper framing the issue.

• Reliability entities responsible for determining data requirements.

• A WECC wide issue.

• MIC and OC subcommittee involvement likely.


Market Issues Subcommittee 2008 Goals

Support efforts of the NERC/NAESB and the WECC ATC standard drafting teams.

Evaluate effects of pre-scheduling timelines and procedures on reliability and markets within WECC.

Support the MIC in increasing and strengthening the communication of NAESB activities; to assist WECC members in monitoring, understanding, and participating in NAESB activities


Market Issues Subcommittee 2008 Goals

Monitor FRR and other proposed reserve policies and evaluate market implications.

Support the drafting team in developing a WECC-wide merchant reliability communications methodology.

Support the MIC objective of providing the interface between the merchant and reliability community.


MIS Meetings

• April 29-30 Las Vegas

• August 7-8 Salt Lake City

• November 20-21 To be determined


Market Issues Subcommittee

QUESTIONS????

Documents

Western Electricity Coordinating Council Market Issues Subcommittee Report to the Market Interface Committee Philip Tice March 6-7, 2008