1. Path Operator Implementation Task Force Vic Howell, Vice Chair Report to OC March 22, 2016

2. Agenda 2 W ESTERN E LECTRICITY C OORDINATING C OUNCIL New Paradigm Review Industry Update Objective of today’s presentation is to approve the following documents: – Path Operations Crosswalk Document – System Stressing Methodology Document Timeline review

3. New Paradigm Review W ESTERN E LECTRICITY C OORDINATING C OUNCIL

4. Foundational Concept Review Distinguish Total Transfer Capability (TTC) from System Operating Limit (SOL) SOLs are Facility Ratings, voltage limits, and stability limits – need to make sure these are not exceeded in the pre- and post-Contingency state No instability? No uniquely monitored “Path SOL” – Still need to determine TTC – Still need to perform prior analyses (outage studies, Operational Planning Analyses, etc.) – Still need to develop Operating Plans to address potential SOL exceedances per new TOP/IRO standards – Still need to perform Real-time Assessments and implement Operating Plans for SOL exceedances per new TOP/IRO standards – Nomograms and TTC can be used as part of Operating Plans, but these values don’t define the SOL (unless the nomogram represents a region of stability) 4 W ESTERN E LECTRICITY C OORDINATING C OUNCIL

5. POTF Basic Principle Path TTC: Not an SOL Respects SOLs Respects three-phase rating process, commercial issues, contracts, and allocations SOLs: Facility Ratings Voltage limits Stability limits These are observed pre- and post-contingency. Path Rating/SOL This decoupling requires a change in study practices to identify stability limits

6. Industry Update W ESTERN E LECTRICITY C OORDINATING C OUNCIL

7. Industry Update On Nov 19, FERC issued the final order approving the standards and definitions of Project 2014-03 (TOP/IRO Standards) 7 W ESTERN E LECTRICITY C OORDINATING C OUNCIL StandardEffective Date TOP-001-3, TOP-002-4, IRO-001-4, IRO- 002-4, IRO-008-2, IRO-014-3, IRO-017-1 April 1, 2017 TOP-003-3: All requirements except R5 IRO-010-2: R1 and R2 Jan 1, 2017 TOP-003-3 R5 IRO-010-2 R3 April 1, 2017

8. Industry Update On December 3, 2015, the WECC Board of Directors unanimously approved retirement of WECC Regional Reliability Standard TOP-007-WECC-1a On its February 10-11 BOT meeting, NERC approved WECC recommendation to retire TOP-007-WECC-1a NERC currently preparing FERC filing 8 W ESTERN E LECTRICITY C OORDINATING C OUNCIL

9. Objective of Today’s Presentation To obtain OC’s approval on two documents that POITF has developed to facilitate the implementation of the new Path Operations Paradigm. The documents are intended to provide direction and support for applicable entities to implement the recommendations and proposed solutions as outlined in the New Paradigm for Path Operations whitepaper (from POITF Charter) The POITF would like OC approval to allow sufficient time for entities to prepare for the April 1, 2017 date. – Joint Standing Committee Webinar was held on February 9, 2016 – POITF solicited and received comments – Comments were addressed in the subsequent posting 9 W ESTERN E LECTRICITY C OORDINATING C OUNCIL

10. Path Operations Paradigm Crosswalk W ESTERN E LECTRICITY C OORDINATING C OUNCIL

11. Purpose of Document This document was created to serve as a guideline for entities in the Western Interconnection to implement the new paradigm for Path Operations under new NERC Reliability Standards that have been approved or are pending approval. The crosswalk was written to accomplish the following specific objectives: – To ensure that there are no reliability gaps between the current paradigm and the new paradigm for Path Operations. – To provide a summary of the tasks and functions necessary to implement the new Path Operations Paradigm to the applicable registered entities. 11 W ESTERN E LECTRICITY C OORDINATING C OUNCIL

12. Purpose of Document This document provides a “crosswalk” to the new Standards. It does not override the Reliability Standards themselves. This document focuses on: – Establishing, communicating, and allocating TTC in the operating horizon – Performing studies – including Operational Planning Analyses (OPA) and Real-time Assessments (RTA) – to ensure that SOL exceedances are mitigated 12 W ESTERN E LECTRICITY C OORDINATING C OUNCIL

13. Summary of the Document ItemFunctionEntitiesApplicable Standards 1Performing transfer analysis to determine TTC TOPMOD-001-2 TOP-002-4 2Communicate the Path TTC; Agree on a TTC that respects the SOL Allocates the Path TTC among TOPs TOP TSP TOP-002-4 MOD-001-2 3Monitoring flowTOPTOP-001-3 4Adjustment to TTC for real time eventsTOPMOD-001-2 5 & 6Mitigation for SOL exceedanceRC TOP BA IRO-008-2 TOP-001-3 IRO-006-WECC-2 7Monitor schedules across path/BA boundaries BATOP-002-4 TOP-001-3 8Establishment of SOL and ensuring RTA is performed TOPTOP-001-3 FAC-014-2 13 W ESTERN E LECTRICITY C OORDINATING C OUNCIL

14. WECC Path Ratings and SOLs Note from the RC: The RC’s current SOL Methodology states that SOLs shall not exceed WECC Path Ratings Upon implementation of the POTF recommendation, WECC Path Ratings will have no relationship to SOLs However, the WECC Path rating process remains unchanged and continues in the planning horizon 14 W ESTERN E LECTRICITY C OORDINATING C OUNCIL

15. Role of WECC Path Ratings For the initial rollout of the POTF recommendation, WECC Path Ratings should be considered to serve as TTC caps. If entities in WECC agree with this approach and see a need to formalize it, the appropriate WECC committee should take steps to ensure enforceability of this recommendation prior to April 1, 2017. 15 W ESTERN E LECTRICITY C OORDINATING C OUNCIL

16. System Stressing Methodology W ESTERN E LECTRICITY C OORDINATING C OUNCIL

17. Purpose of Document Objective is to either identify instability risks or to rule them out for the Operating Horizon studies Identify instability risks? – Establish stability limits and related Operating Plans Rule out instability risks? – Use steady state Contingency analysis of actual or expected conditions for pre- and post-Contingency reliable operations, develop and implement Operating Plans as necessary 17 W ESTERN E LECTRICITY C OORDINATING C OUNCIL

18. New Methodology SOLs are Facility Ratings, voltage limits, and stability limits Facility Ratings and voltage limits are known – nothing to “establish” Need to make sure these are not exceeded in the pre- and post-Contingency state – many ways of doing that Need to determine cascading and instability risks and establish stability limits System must be stressed further than TTC studies to identify cascading and instability risks How much further? Stressing methodology intended to address this issue 18 W ESTERN E LECTRICITY C OORDINATING C OUNCIL

19. POITF Goals We want: For studies to be practical and to reflect realistic operations We don’t want: To waste an engineer’s time performing unrealistic studies that are an academic exercise 19 W ESTERN E LECTRICITY C OORDINATING C OUNCIL

20. Methodology Summary Not a one-size-fits-all prescriptive method TOPs have the responsibility to determine how far to stress their system to identify practical and realistic instability risks Methodology provides guidelines to assist TOPs in making that decision Methodology is applicable to seasonal planning and outage coordination studies at a minimum Any instability or Cascading risks identified as a result of applying this methodology must be communicated to the RC For identified Cascading or instability risks, the RC will collaborate with the TOP(s) in the establishment of stability limits and/or Operating Plans to mitigate these risks 20 W ESTERN E LECTRICITY C OORDINATING C OUNCIL

21. POITF Timeline New TOP/IRO standards effective 4/1/2017 New paradigm implementation to coincide with new TOP/IRO standards on 4/1/2017 Peak’s SOL Methodology is the ultimate mechanism for implementing the new paradigm Peak will issue revised SOL Methodology on 10/1/2016 with a 4/1/2017 effective date WECC working with NERC and FERC for retirement of TOP-007-WECC-1a to be effective on 4/1/2017 21 W ESTERN E LECTRICITY C OORDINATING C OUNCIL

22. Request to OC Resolved, That the Western Electricity Coordinating Council Operating Committee (OC) hereby approves the Current Path Operator Crosswalk Paper dated February 18, 2016.

23. Request to OC Resolved, That the Western Electricity Coordinating Council Operating Committee (OC) hereby approves the System Stressing Methodology dated February 18, 2016.

24. Next Steps From the POITF Charter: Identify and address potential challenges and provide support to applicable entities in their individual and combined efforts to transition to the new paradigm for path operations in concert with implementation of applicable NERC Standards and RC SOL Methodology revisions Hold forums as directed by the OC for WECC entities to discuss improvements needed to support the industry transition to the new paradigm for path operations 24 W ESTERN E LECTRICITY C OORDINATING C OUNCIL

25. Next Steps Peak to revise its SOL Methodology Goal: major revision to be issued on Oct 1 Recent RC outreach for stakeholder engagement Stakeholder list nearly completed Formation of small team 25 W ESTERN E LECTRICITY C OORDINATING C OUNCIL