Short-term Competition and Preemption (STCP) May 2015 Presenter: Marie Pompel Bonneville Power Administration

What is STCP?  STCP is when an incoming transmission request will try and take away capacity from a confirmed reservation or another pending request that has shorter duration and a lower priority than the incoming request.

Why STCP?  In FERC Order 890 the commission determined that it is appropriate for transmission customers to compete for capacity on the transmission system to promote longer duration, higher priority requests to more fully utilize the capacity available.

What Started STCP?  Governing Principles FERC Orders  890, 890A, 890B, 676H etc NAESB Business Practices (derived from FERC Orders)  National focus Pro Forma Tariff  Each Transmission providers Tariff must be approved by FERC

What STCP applies to:  Transmission Request with a duration of less than 1 year  Firm and Non-Firm  PTP and NT

How does Competition work?  Competition or Preemption is initiated when an incoming request for transmission is determined to be a valid Challenger and there are available valid Defenders.  The TP will evaluate the Challenger and Defenders, and will grant capacity appropriately according to the current version 3 NAESB BPS’s

What is a Challenger?  A Challenger is a Transmission request that meets certain minimum criteria: Flat profile * Pre-confirmed * Longer duration than other reservations Higher priority than other reservations Higher price than other reservations *  When the original request is submitted, the Transmission Customer will probably not know that they will be identified as a Challenger. *This is not in the current Version 3 standards, but is in the proposed STCP updates currently being addressed at the OS Subcommittee

What is a Defender?  A Defender is the transmission request/reservation that will either be bumped or have to compete to retain transmission capacity. A Pending Transmission request of shorter duration than the challenger will be bumped A Transmission Reservation of a lower Tier will be bumped A Transmission Reservation of the same tier, shorter duration or smaller price will be competed.

Types of Preemption  Bumping (non –ROFR): when a challenger takes a defender’s capacity without the defender being able to match the duration of the challenger’s request. A pending PTP request may be bumped by a higher priority PTP or NT request. A conditional PTP reservation may be bumped by an NT request or long-term higher priority PTP.  Competition (ROFR): occurs when a higher priority PTP request challenges a conditional PTP reservation. The reservation can defend itself by matching the duration of the challenging request. A conditional PTP reservation may be competed by a higher priority PTP request. A conditional PTP reservation may be competed by an equal priority and longer duration PTP request. A conditional PTP reservation may be competed by an equal duration and higher price PTP request.

When is a reservation conditional?  A reservation is conditional when it is still eligible to be bumped or competed. In the NAESB BPS’s there is a timing table that establishes the minimum timing requirements. This table is currently found in WEQ 001 table 4.2.

When is a request conditional?  Requests that have not been Confirmed are still at risk of being bumped (by NT or long- term and short-term PTP)  These include requests that are in “Accepted” status, but not yet in “Confirmed” status by the Transmission Customer (such as in a Counter-Offer, or requests that were submitted “not pre-confirmed”).

Current (As of 5/12/2015) Table 4-2

Examples of TP’s currently evaluating Transmission requests for preemption and competition.  Bonneville Power Administration  Idaho Power  Southwest Power Pool  MISO  Entergy

Changes to STCP  Due to Order 676H – the NAESB OS Subcommittee had to stop their work on updating the BPS’s on STCP and instead had to update the BPS’s to apply a new Redirect principle in which the redirect capacity is still held out on the parent reservation until the Redirect is Unconditional.  The work is nearing completion and the NAESB OS will now return to their work in STCP incorporating the new Redirect standards in their STCP standards drafting.

Appendix: STCP Terms  Tier: the priority given to certain types of requests and reservation for identifying valid challengers and defenders, and whether the defender(s) have ROFR (matching rights). Such fields will be used to determine tiers: service increment, duration, pre-confirmation, and queue time (found in WEQ 001 Table 4.3).  Right of First Refusal (ROFR): where a holder of a reservation has the ability to avoid capacity from being taken, usually by extending the duration of its reservation to match the duration of the request that is challenging it.

Appendix: Reservation Priority Tiers