Two-Tier Firm Curtailment Overview August 16, 2011

Two-Tier Firm Curtailment Overview Terminology Transmission Loading Relief (TLR) Two-Tier Curtailment Concept First-to-Curtail/Last-to-Curtail Examples 2 Free Template from www.brainybetty.com

Free Template from www.brainybetty.com Terminology Flowgate – A portion of the transmission system through which the Interchange Distribution Calculator (IDC) calculates the power flow from Interchange Transactions. A mathematical construct, comprised of one or more monitored transmission facilities and optionally one or more contingency facilities, used to analyze the impact of power flows upon the Bulk Electric System. Off-Path Flows Flows that cannot be traced to the Transmission Service Provider’s (TSP’s) transmission service because, by definition, off-path flows are flows from neighboring transmission systems that are not reserved on the TSP’s system. These are also referred to as Loop Flows, Off-the Path Flows, Unscheduled Flows, or Parallel Flows. On-Path Flows Flows that can be traced back to existing transmission service and their corresponding service priorities on the TSP that owns the flowgate. These are also referred to as Contract Path Flows, On-the-Path Flows or Scheduled Flows. 3 Free Template from www.brainybetty.com

Free Template from www.brainybetty.com Terminology Interchange Distribution Calculator (IDC) – The mechanism used by Reliability Coordinators in the Eastern Interconnection to calculate the distribution of Interchange Transactions over specific flowgates. It includes a database of all Interchange Transactions and a matrix of the distribution factors for the Eastern Interconnection. Tool to calculate the impact of flows on a flowgate including the source of the flow (includes both scheduled and unscheduled flows on the flowgate) Book of Flowgates (BOF) The master list of flowgates used by the IDC. Flowgates are added by to the BOF at the Reliability Coordinators request, in part to manage congestion in their footprint. Transmission Loading Relief (TLR) A procedure used in the Eastern Interconnection to relieve potential or actual loading on a Constrained Facility or Flowgate. Reliability Coordinators submits a TLR Relief request to the IDC IDC calculates relief obligations for those contributing to congestion 4 Free Template from www.brainybetty.com

Transmission Loading Relief (TLR) Levels The TLR Process has a series of TLR levels from 0-6: Level 0 is lowest state (terminates a TLR event) Level 6 is the highest level which can result in “shedding load” Two-tier firm curtailment is associated with Level 5 TLR events. Current environment - TLR Level 5 analysis shows that the following actions can prevent exceeding the System Operating Limit (SOL) or Interconnection Reliability Operating Limit (IROL): Full curtailment of non-firm Interchange Transactions and energy flows, and Reconfiguration of the transmission system, if possible, and Full or partial curtailment or reallocation of firm Interchange Transactions and energy flows. 5 Free Template from www.brainybetty.com

TLR Assigning Priorities The TLR priority of on-path transactions (from the perspective of the TSP experiencing congestion) are determined from the priority of the transmission service associated with the transaction. The priority of the off-path transactions are determined by the Weakest Link method whereby the TLR procedure assigns the priority of an off-path transaction as the lowest priority of all transmission service reservations associated with the transaction, from any TSP on the path of the transaction. (Off-path transactions don’t have associated transmission service on the TSP experiencing the congestion.) 6 Free Template from www.brainybetty.com

Two-Tier Firm Curtailment Concept The two-tier firm curtailment concept proposes to assign two levels of firm curtailment priorities for the purpose of TLR (First- to-Curtail and Last-to-Curtail). If all segments on the contract path are firm and the TSP for any segment does not have a coordination agreement with the TSP experiencing congestion the entire transaction will be considered as First-to-Curtail. In all other cases where all segments on the contract path are firm the entire transaction will be considered as Last-to-Curtail. Intra-BA firm Point-to-Point, native and network transactions will follow the same rules recognizing that intra-BA transactions have only a single segment. 7 Free Template from www.brainybetty.com

Two-Tier Firm Curtailment Concept (cont.) The Two-Tier Firm Curtailment concept provides a mechanism to address off-path firm flows on a flowgate prior to on-path flows. Two-tier curtailment applies to the Eastern Interconnection. The concept: provides an optional process that allows a TSP to ensure their flows remain in a last-to-curtail category provided coordination occurs with impacted neighbors, which may be beyond the adjacent neighbor, Provides a common approach for dealing with Parallel Flows in the Eastern Interconnection. IDC The concept will require modifications to the IDC for calculating firm relief assignments for Balancing Authorities when congestion occurs on a flowgate based on the analysis/evaluation that was done at the time service was sold/granted. 8 Free Template from www.brainybetty.com

First-to-Curtail / Last-to-Curtail First-to-Curtail includes off-path (not reserved on the TSP’s system experiencing the congestion) firm service (Interchange Transactions, network and native load service) if any TSP providing transmission service on the contract path has not previously entered into Coordination Agreement with the TSP experiencing congestion. Last-to-Curtail includes on-path firm transactions with reservations that were procured and granted firm service on the TSP’s system experiencing the congestion. Off-path firm service (Interchange Transactions, network and native load service) will also be treated as Last-to-Curtail if all TSPs providing transmission service on the contract path have previously entered into Coordination Agreement(s) with the TSP experiencing congestion. 9 Free Template from www.brainybetty.com

Free Template from www.brainybetty.com Examples Inter-BA Transmission Service Current Curtailment Two-Tier Curtailment – No Coordination Agreement Two-Tier Curtailment – Coordination Agreement Intra-BA Transmission Service 10 Free Template from www.brainybetty.com

Current Curtailment (Inter-BA Transmission Service) Firm Transmission Service sold/granted from BA-1 to BA-3 and from BA-2 to BA-3 Congestion is occurring on Flowgate 223. Both Flows A and B are contributing to congestion on flowgate 223. Both flows used in calculating relief obligations on the same level (Flow A service was sold/granted in BA 2, Flow B was not) BA 2 BA 1 BA 3 Flow A FG 223 FG 102 Flow B FG 315 Note: Parallel Flow impacts are subject to TLR curtailments only to the extent the impacts exceed the minimum IDC Threshold. 11 Free Template from www.brainybetty.com

Free Template from www.brainybetty.com Two-Tier Curtailments – No Coordination Agreement (Inter-BA Transmission Service) Firm Transmission Service sold/granted from BA-1 to BA-3 and BA-2 to BA-3 No Coordination Agreement exists Both Flows A & B are contributing to congestion on FG 223 Flows A goes into Last-to-Curtail (Service sold/ granted in BA-2) Flow B goes into First-to-Curtail (Service not sold/ granted in BA-2) BA 2 BA 1 BA 3 Flow A FG 223 FG 102 Flow B FG 315 Note: Parallel Flow impacts are subject to TLR curtailments only to the extent the impacts exceed the minimum IDC Threshold. 12 Free Template from www.brainybetty.com

Free Template from www.brainybetty.com Two-Tier Curtailments – Coordination Agreement (Inter-BA Transmission Service) Firm Transmission Service sold/granted from BA-1 to BA-3 and BA-2 to BA-3 Coordination Agreement exists between TSPs in BA-1 and BA-2 TSPs in BA-1 and BA-2 analyzed impacts of Flows prior to selling /granting service Congestion is occurring on FG 223 both Flows A & B are contributing to Flows A and B goes into Last-to-Curtail BA 2 BA 1 BA 3 Flow A FG 223 FG 102 Flow B FG 315 Note: Parallel Flow impacts are subject to TLR curtailments only to the extent the impacts exceed the minimum IDC Threshold. 13 Free Template from www.brainybetty.com

Current Curtailment (Intra-BA Transmission Service) Firm Transmission Service sold/granted from BA-1 to BA-3 and within BA-2 Congestion is occurring on FG 315 both Flows A & B are contributing to congestion Flows A is not subject to curtailment (not reported to the IDC) Flow B is used to determine curtailment relief obligation BA 2 BA 1 BA 3 Flow A FG 223 FG 102 Flow B FG 315 Note: Parallel Flow impacts are subject to TLR curtailments only to the extent the impacts exceed the minimum IDC Threshold. 14 Free Template from www.brainybetty.com

Free Template from www.brainybetty.com Two-Tier Curtailments – No Coordination Agreement (Intra-BA Transmission Service) Firm Transmission Service sold/granted from BA-1 to BA-3 and within BA-2 No Coordination Agreement exists Congestion is occurring on FG 315 both Flows A & B are contributing to congestion Flows A goes into First-to-Curtail Flow B goes into Last-to-Curtail BA 2 BA 1 BA 3 Flow A FG 223 FG 102 Flow B FG 315 Note: Parallel Flow impacts are subject to TLR curtailments only to the extent the impacts exceed the minimum IDC Threshold. 15 Free Template from www.brainybetty.com

Free Template from www.brainybetty.com Two-Tier Curtailments – Coordination Agreement (Intra-BA Transmission Service Example) Firm Transmission Service sold/granted from BA-1 to BA-3 and within BA 2 Coordination Agreement exists with TSPs in BA-1 and BA-3 When selling/granting service TSP in BA-2 considered impact on BA-3 Congestion is occurring on Flowgate 315 both Flows A & B are contribution to congestion Both Flows A & B go into Last-to-Curtail BA 2 BA 1 BA 3 Flow A FG 223 FG 102 FG 315 Note: Parallel Flow impacts are subject to TLR curtailments only to the extent the impacts exceed the minimum IDC Threshold. 16 Free Template from www.brainybetty.com

Free Template from www.brainybetty.com Summary Under the current process those entities that purchase firm transmission service on a particular path are subject to the same pro-rata curtailments as those who did not purchase firm transmission service on the path when congestion occurs on a particular flowgate and both flows are contributing to the congestion. Two-Tier Curtailments provides a set of standards for addressing parallel flows in the Eastern Interconnection. If an entity does not cause parallel flows that contribute congestion on another system there are no additional requirements. (There would be no need/incentive to enter into Coordination Agreements.) 17 Free Template from www.brainybetty.com

Free Template from www.brainybetty.com Questions ? 18 Free Template from www.brainybetty.com