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MIC RBC Task Force Report Raj Hundal Feb 1, 2013.

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Presentation on theme: "MIC RBC Task Force Report Raj Hundal Feb 1, 2013."— Presentation transcript:

1 MIC RBC Task Force Report Raj Hundal Feb 1, 2013

2 MIC RBC Task Force Report The MIC RBC Task Force (MIC RBC TF) is tasked with studying the commercial impacts of RBC and unscheduled flows and report back with a whitepaper. Task Force started its work in Jan 2013, and has met 2 – 3 times a week over the last 3 weeks to draft the whitepaper The Task Force decided due to its limited time to produce a whitepaper that it would be best to develop a methodology to determine the commercial impacts of unscheduled flow based on eTag curtailments, and then leverage the work of PWG and UFAS to determine the RBC contribution levels. The Task Force members have studied the impacts of the unscheduled flow on their commercial operations and estimated the monetized impacts. Task Force members have also listed out non-monetized impacts that are a result of unscheduled flows and would require a more detailed analysis to determine cost impacts.

3 Preliminary Results of MIC RBC TF The following estimates were provided by Task Force member for the commercial operation impacts due to unscheduled flow in 2012 –Powerex - $2.33 Million –Tri-state – $307K* (this is a initial estimate – to be finalized) –WAPA - $666K –Portland GE - $127K Tri-State estimates in 2011 the commercial impacts to be $1.9 Million Based on the analysis performed by each entity for 2012, the average cost was over $20 per MWh. The Task Force will use the avg cost per MWh value to estimate the overall impacts of unscheduled flow and RBC. WECC obtained information from webSAS that provided an estimate of Off-Path accommodation to be approx 138K MWh. It is estimated that this volume results in a commercial impact of approx $2.76 Million WECC is in the process of obtaining On-Path accommodation volume

4 Estimate using WECC WSM results PWG and WECC staff performed analysis on 30 events based on a snapshot in time and using the WECC Wide System model to determine effects of RBC on system flow by limiting BAs to L10. PWG Study Results showed that in 25/30 events (83.3 %) when BAs were within L10 the system flow was reduced by a total of MWh PWG Study Results showed that in 5/30 events (16.7 %) when BAs were within L10 the system flow increased by a total of MWh PWG Study Results showed that Overall system flow was reduced by MWh if BAs operated within L10 during the 30 events. On average system flow was reduced in each USF event by MW If you assume the average reduction is applied over the 1300 events in 2012 and using the avg cost of $20 per MW, you can estimate a possible RBC impact of $1.58 Million ($20*60.86*1300) to commercial operations This is only one method to determine a possible RBC component.

5 Non-Monetized Impacts Many entities have changed their trading and transaction habits to avoid the potential unscheduled flow curtailments. The identified commercial market impacts include: –Underutilized and stranded OATT rights, –higher costs to sellers as a result of negotiated settlements or liquidated damages, –higher costs for re-supply of energy from various sources –avoid certain bilateral transactions or trading hubs altogether because of the risk of USF curtailments and impacts. –unable to offer supply to markets –Additional cost to re-supply customers through purchase of additional transmission rights –Significant time and effort has been required of back office staff to manage the volume of curtailments, and to engage in the subsequent negotiation with customers over liquidated damages –Reputation damage –and lost market opportunity.

6 Next Steps for MIC RBC TF Complete draft of whitepaper by first week of Feb 2013 Post for public comment Address public comments Provide a whitepaper for WECC Board and Standing Committee discussion for Mid-March


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