2012 Tribal Webinar Series Unwinding Transmission Policies February 29 2012 1100 am 1230 PM Unwinding Transmission Policies DOE Tribal Webinar Series February 29 2012 Mike McElhany ID: 700511
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Office of Indian Energy Policy and Programs
2012 Tribal Webinar Series
Unwinding Transmission Policies
February 29, 2012 11:00 am – 12:30 PM
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Unwinding Transmission PoliciesDOE Tribal Webinar Series
February 29, 2012
Mike McElhany
Transmission Business Unit
Western Area Power AdministrationSlide3
Unwinding Transmission PoliciesOverview of WesternThe Players - Alphabet Soup
Policy SourcesFocus on FERCFERC AuthoritiesEPAct05
FERC Policy FormulationFERC FAQ
Order 1000 – O1kQuestionsSlide4
Overview of WesternSlide5
Markets 10,479 MW from 57 Federal Hydropower Projects owned by BOR , Corps, and IB&WC to preference power entities17,100 miles of high-voltage transmission line across 15-statesAbout 100 tribal customers who receive around 1.2 million megawatt hours per year
Tribes make up 10% of Western’s core power customersOverview of WesternSlide6
Overview of WesternSlide7
Transmission Business Unit-TBUTransmission FootprintRocky Mountain Region – WACM BA
Colorado River Storage ProjectLoveland Area ProjectsDesert Southwest Region – WALC BACentral Arizona ProjectColorado River Storage ProjectPacific Northwest-Pacific Southwest Intertie Project
Parker Davis Project
Boulder Canyon Project (Non-transmission)Slide8
Alphabet Soup – FederalFERC – Federal Energy Regulatory CommissionNAESB – North American Energy Standards BoardNERC – North American Electric Reliability Corporation
DOE – Department of EnergyDOI – Department of InteriorBLM – Bureau of Land ManagementEPA – Environmental Protection AgencyCongressional/Legislative Slide9
Alphabet Soup – State/RegionalPUC – Public Utility CommissionsWGA - Western Governors AssociationWIEB – Western Interstate Energy Board
WECC – Western Electricity Coordinating CouncilTEPPC – Transmission Expansion Planning Policy CommitteeRPS – Renewable Portfolio StandardsNARUC – National Association of Regulatory Utility CommissionersSlide10
Alphabet Soup – Trade AssociationsAPPA – American Public Power AssociationEEI – Edison Electric InstituteELCON – Electricity Consumers Research Council
EPSA – Electric Power Supply AssociationLPPC – Large Public Power CouncilNRECA – National Rural Electric Cooperative AssociationTAPS – Transmission Access Policy Study GroupSlide11
Policy SourcesLegislative actions – EPAct05NERC Reliability Standards Market DrivenMarket Power Driven
Power System DisturbancesIndirect sources (BLM, EPA, etc)State/Regional sourcesLocal/Consumer sourcesTrade AssociationsSlide12
Focus on FERCFERC’s Mission: Reliable, efficient and sustainable energy for consumersAssist consumers in obtaining reliable, efficient cost through appropriate regulator and market means.
Fulfilling this mission involves 2 primary goalsEnsure that rates, terms and conditions are just, reasonable and not unduly discriminatory or preferential.Promote the development of safe, reliable and efficient energy infrastructure that serves the public interest.Slide13
FERC AuthoritiesDepartment of Energy Organization ActElectric Consumers Protection ActEnergy Independence and Security Act (2007)Energy Policy Act of 2005 (EPAct05)Energy Policy Act of 1992
Federal Power ActPublic Utility Holding Company Act of 1935Public Utility Regulatory Policies Act of 1978Slide14
EPAct05 required FERC to:issue a final rule implementing the new reliability provisions (NERC)issue a report to Congress on Transmission System Monitoring (SmartGrid
)exercise its authority under the FPA in a manner that facilitates planning and expansion of transmission facilities (O1k)establish rules for incentive-based rate treatments for interstate transmissionIssue rules for applications for national transmission corridor permits Slide15
EPAct05 allowed FERC to:require comparable open access to be provided by non-regulated transmission utilities issue rules to increase transparency in electric and gas marketsprescribe such rules as it determines necessary and appropriate, to prevent manipulation of electric and gas markets.Slide16
FERC Policy FormulationFERCPetition for RulemakingNotice of Proposed Rulemaking
Notice of Final RulemakingRehearing of RulemakingDeclaratory OrdersNERCReliability Standards and Enforcement ActivitiesNAESB
Standards which lead to a seamless marketplaceSlide17Slide18Slide19Slide20
FERC FAQWho has ultimate authority over FERC?FERC answers to the U.S. Congress.Commissioners and senior staff are routinely called to testify before various committees.FERC’s decisions can be appealed before the federal courts.
Does FERC have jurisdiction over Western?Western has filed a “Safe Harbor” OATTWestern must be compliant with NERC Reliability Standards, FERC enforcement of violations has not been tested yet. Slide21
Order 1000 – O1k - TimelineOrder 888 in 1996: Requires open access to transmission facilities to address undue discrimination to bring more efficient, lower cost power to the Nation’s electricity consumers
Order 890 in 2007: Requires Coordinated, open and transparent regional transmission planning processes to address undue discriminationSlide22
Order 1000 – O1k - TimelineOrder 1000 in 2011Requires transmission planning at the regional level to consider and evaluate possible transmission alternatives and produce a regional transmission plan
Requires the cost of transmission solutions chosen to meet regional transmission needs to be allocated fairly to beneficiariesSlide23
Order 1000 – RequirementsPlanning RequirementsCost Allocation Requirements
Nonincumbent Developer RequirementsComplianceSlide24
Order 1000 – PlanningPublic utility transmission providers are required to participate in a regional transmission planning process that satisfies Order 890 principles and produces a regional transmission planLocal and regional transmission planning processes must consider transmission needs driven by public policy
Look for more efficient and cost-effective solutionsSlide25
Order 1000 – Cost AllocationRegional transmission planning processes must have a regional cost allocation method for a new transmission facility selected in the regional plan for purpose of cost allocationNeighboring transmission planning regions must have a common interregional cost allocation method for a new interregional transmission facility that the regions select
Participant-funding of new transmission facilities is permitted, but is now allowed as the regional or interregional cost allocation methodSlide26
Order 1000 – Cost AllocationCosts allocated “roughly commensurate” with estimated benefitsThose who benefit pay, those who don’t benefit don’t pay
Benefit-to cost thresholds must not exclude projects with significant net benefitsNo allocation of cost outside a region unless other region agreesCost Allocation methods and identification of beneficiaries must be transparentDifferent allocation methods could apply to different types of transmission facilitiesSlide27
Order 1000 – Nonincumbent Developers
Rule promotes competition in regional transmission planning processes to support efficient and cost effective transmission developmentRule requires the development of a not unduly discriminatory regional process for transmission project submission, evaluation, and selectionSlide28
Order 1000 – ComplianceEach transmission provider is required to make a compliance filing within twelve months of the effective date of the Final Rule (October 2011 - October 2012)
The compliance filing for interregional transmission coordination and interregional cost allocation must be file within eighteen months of the effective date (October 2011 - April 2013)Slide29
Order 1000 – ActivitiesWestern is participating in the formation of an O1k compliant planning regionPlanning Regions in the Western Interconnect
WestConnect – (Western is participating)ColumbiaGrid – (Bonneville Power Administration)NTTG – Northern Tier Transmission GroupCAISO – California ISOSlide30
Mike McElhany TBU Manager
mcelhany@wapa.govLinks:www.ferc.govwww.nerc.com
www.wapa.govSlide31
Office of Indian Energy Policy and Programs
Upcoming Webinars
March 28, 2012 at 11:00 am MST: Understanding the Transmission Queue Process
May 30, 2012 at 11:00 am MST: Today’s Energy Supply – Yesterday’s Grid
July 25, 2012 – Grid Reliability – Impacts to Tribal Renewable Projects
September 26, 2012 - DOE Office of Indian Energy’s START Program Status Updates Slide32
Office of Indian Energy Policy and Programs
Tracy LeBeau
Office of Indian Energy Policy and Programs
Tracey.Lebeau@Hq.Doe.Gov
Lizana Pierce Tribal Energy Program lizana.pierce@go.doe.gov
Steve Tromly
WAPA Tribal Program Manager
tromly@wapa.gov
Randy Manion
WAPA Renewable Program Manager
manion@wapa.gov