Parallel Flow Visualization and Flowgate Allocations Equity Concerns of Non-Market Transmission Owners Equity Concerns of Non-Market Transmission Owners

Parallel Flow Visualization – For reliability Objectives – Meet needs of Reliability Coordinator, RC – Observe impacts on congested flowgates – Provide IDC with current information – Increase accuracy of Gen to Load impacts (timely updates) – Observe magnitude and source of all impacts Objectives – Meet needs of Reliability Coordinator, RC – Observe impacts on congested flowgates – Provide IDC with current information – Increase accuracy of Gen to Load impacts (timely updates) – Observe magnitude and source of all impacts

Parallel Flow Visualization – Non-Market priorities Objectives – Accurately prioritize certain non-market GtL flows in real time that today may be inappropriately treated as firm, due to shortcomings in the IDC (e.g. Non-designated network resources) Objectives – Accurately prioritize certain non-market GtL flows in real time that today may be inappropriately treated as firm, due to shortcomings in the IDC (e.g. Non-designated network resources)

Parallel Flow Visualization – Centralized calculations Objectives – Perform impact calculation at a central location for both the market flows as well as the non- market GtL flows – Presently, the non-market BA GtL impact calculation is performed at a central location (IDC), whereas the market flow impact on flowgates is calculated by each market entity, then uploaded to the IDC. Objectives – Perform impact calculation at a central location for both the market flows as well as the non- market GtL flows – Presently, the non-market BA GtL impact calculation is performed at a central location (IDC), whereas the market flow impact on flowgates is calculated by each market entity, then uploaded to the IDC.

Parallel Flow Visualization - Equity Concerns This desire to have a centralized calculation seems to have been interpreted by some as a REQUIREMENT that the impact calculation and prioritization for the market flow and the non-market GtL flow must be the SAME. This has significant equity implications, and NAESB should consider this change carefully. This desire to have a centralized calculation seems to have been interpreted by some as a REQUIREMENT that the impact calculation and prioritization for the market flow and the non-market GtL flow must be the SAME. This has significant equity implications, and NAESB should consider this change carefully.

Concept being proposed DNR designation is being proposed as the basis for determination of firm usage. Under this concept, what is designated as firm usage by the non-market BAs doesnt conceptually change. Therefore, may be reasonable for non-market BAs. This would be a significant change from what is presently being done for prioritization of market flow. Is the DNR designation an equitable basis of firm usage for the market? DNR designation is being proposed as the basis for determination of firm usage. Under this concept, what is designated as firm usage by the non-market BAs doesnt conceptually change. Therefore, may be reasonable for non-market BAs. This would be a significant change from what is presently being done for prioritization of market flow. Is the DNR designation an equitable basis of firm usage for the market?

How we got to where we are today.. (our view of history, and why it is relevant)

Section 28.3 Language obligates the Transmission Provider to; …provide Firm Transmission Service over the Transmission System to the Network Customer for the delivery of Capacity and Energy from its designated Network Resources to service its Network Loads … [emphasis added] Network Integration Transmission Service (NITS)

Example: Historical Tariff Area Network Load Network Resource Section 28.3 (NITS) Firm Transmission

RTO / Market Areas

Historic Control (Tariff) Areas OTP MP MDU NSP SMP MECIES WPL WEP UE IP IPL MECS PSI DQE DPL CGE MH GRE PSI

Example: Historical Tariff Area Network Load Network Resource Section 28.3 (NITS) Firm Transmission

RTO / Market Areas OTP MP MDU NSP SMP MECIES WPL WEP UE IP IPL MECS PSI DQE DPL CGE MH GRE PSI Network Load Network Resource

RTO / Market Areas OTP MP MDU NSP SMP MECIES WPL WEP UE IP IPL MECS PSI DQE DPL CGE MH GRE PSI Network Load Network Resource Historically, the system was not planned nor built for firm deliveries between historic Control Areas

RTO / Market Areas OTP MP MDU NSP SMP MECIES WPL WEP UE IP IPL MECS PSI DQE DPL CGE MH GRE PSI Network Load Network Resource CONSTRAINTS..!! If System Constraints - Can all of this market dispatch from DNRs be firm?

RTO/Market Areas OTP MP MDU NSP SMP MECIES WPL WEP UE IP IPL MECS PSI DQE DPL CGE MH GRE PSI Network Load Network Resource Constraints – Internal & External Issue not just internal to the market footprint

Market Start-up OTP MP MDU NSP SMP MECIES WPL WEP UE IP IPL MECS PSI DQE DPL CGE MH GRE PSI Network Load Network Resource Constraints – Internal & External Central dispatch across the entire market footprint (internal to and across historic CAs) without tagging. There wasnt enough firm transmission to justify that all market generation was firm to all market load. (For example, generation in Indiana couldnt service XCEL loads in Minnesota due to constraints) Central dispatch across the entire market footprint (internal to and across historic CAs) without tagging. There wasnt enough firm transmission to justify that all market generation was firm to all market load. (For example, generation in Indiana couldnt service XCEL loads in Minnesota due to constraints)

OTP MP MDU NSP SMP MECIES WPL WEP UE IP IPL MECS PSI DQE DPL CGE MH GRE PSI Network Load Network Resource CONSTRAINTS..!! Constraints – Internal & External It was recognized that the non-markets would be adversely and in-equitably impacted if markets didnt constrain the centralized dispatch Some approach was needed to properly set the priority of the broader market footprint dispatch, while recognizing the transmission rights within the market It was recognized that the non-markets would be adversely and in-equitably impacted if markets didnt constrain the centralized dispatch Some approach was needed to properly set the priority of the broader market footprint dispatch, while recognizing the transmission rights within the market Equitable Prioritization – On Market Start-up??

OTP MP MDU NSP SMP MECIES WPL WEP UE IP IPL MECS PSI DQE DPL CGE MH GRE PSI Network Load Network Resource CONSTRAINTS..!! Constraints – Internal & External The Markets documented firm rights on the system based on: Firm GtL delivery internal to historic CAs Existing historic Firm PtP between historic CAs. An Allocation process was developed based on these historic firm rights to define limits for a firm centralized market dispatch The Markets documented firm rights on the system based on: Firm GtL delivery internal to historic CAs Existing historic Firm PtP between historic CAs. An Allocation process was developed based on these historic firm rights to define limits for a firm centralized market dispatch Allocation Process

OTP MP MDU NSP SMP MECIES WPL WEP UE IP IPL MECS PSI DQE DPL CGE MH GRE PSI Network Load Network Resource CONSTRAINTS..!! Constraints – Internal & External Markets were allowed to dispatch centrally (without tagging between historic CAs), but the market flow impact on flowgates was prioritized based on the historic firm usage The allocation process divides the market flow on a flowgate into three priorities (Firm-7, ED-6/NN-6, and ED-2/NH-2) Updating allocations for system changes/additions is necessary Markets were allowed to dispatch centrally (without tagging between historic CAs), but the market flow impact on flowgates was prioritized based on the historic firm usage The allocation process divides the market flow on a flowgate into three priorities (Firm-7, ED-6/NN-6, and ED-2/NH-2) Updating allocations for system changes/additions is necessary Allocation Process (cont.)

OTP MP MDU NSP SMP MECIES WPL WEP UE IP IPL MECS PSI DQE DPL CGE MH GRE PSI Network Load Network Resource CONSTRAINTS..!! Constraints – Internal & External MISO has consolidated historic CAs/BAs into one BA No significant transmission additions have occurred to span the historic CAs The non-markets believe that there is still NOT sufficient firm transmission available for any market gen to be delivered to any market load MISO has consolidated historic CAs/BAs into one BA No significant transmission additions have occurred to span the historic CAs The non-markets believe that there is still NOT sufficient firm transmission available for any market gen to be delivered to any market load Since then..

OTP MP MDU NSP SMP MECIES WPL WEP UE IP IPL MECS PSI DQE DPL CGE MH GRE PSI Network Load Network Resource CONSTRAINTS..!! Constraints – Internal & External The need for Allocations has not been eliminated The desire to have the same GtL calculation and complexity in updating the allocations are not sufficient justification to disregard the recognition that there was and still is limited firm transmission to transfer between the historic market CAs Use of DNR status only doesnt properly reflect delivery capability across a broad market The need for Allocations has not been eliminated The desire to have the same GtL calculation and complexity in updating the allocations are not sufficient justification to disregard the recognition that there was and still is limited firm transmission to transfer between the historic market CAs Use of DNR status only doesnt properly reflect delivery capability across a broad market Since then.. (cont.)

OTP MP MDU NSP SMP MECIES WPL WEP UE IP IPL MECS PSI DQE DPL CGE MH GRE PSI Network Load Network Resource CONSTRAINTS..!! Constraints – Internal & External Before the DNR designation be allowed as the basis of firm usage of the market, the market needs to demonstrate to NAESB that they have sufficient firm transmission to deliver from their market gen to their market load across their entire footprint on a comparable basis to the non-markets. – This wasnt the case on market start-up – What has changed that would allow this use of footprint-wide DNR designation in markets? There is a Significant equity issue on all market impacted flowgates, if market flow is prioritized as firm solely based upon DNR status, if firm transmission really doesnt exist. Before the DNR designation be allowed as the basis of firm usage of the market, the market needs to demonstrate to NAESB that they have sufficient firm transmission to deliver from their market gen to their market load across their entire footprint on a comparable basis to the non-markets. – This wasnt the case on market start-up – What has changed that would allow this use of footprint-wide DNR designation in markets? There is a Significant equity issue on all market impacted flowgates, if market flow is prioritized as firm solely based upon DNR status, if firm transmission really doesnt exist. NAESB / Need to ensure Equity

OTP MP MDU NSP SMP MECIES WPL WEP UE IP IPL MECS PSI DQE DPL CGE MH GRE PSI Network Load Network Resource CONSTRAINTS..!! Constraints – Internal & External Assuming the allocations are maintained, MISO has argued that the non-market GtL flow should be prioritized based on allocations during congestion, just like the market flow… However; – For the non-market, transmission service priority (for GtL and PtP) is set based on the service that has been demonstrated and granted. Priority should be based upon that TP designation. – For the non-market, the allocations are considered during the granting of such firm service. Assuming the allocations are maintained, MISO has argued that the non-market GtL flow should be prioritized based on allocations during congestion, just like the market flow… However; – For the non-market, transmission service priority (for GtL and PtP) is set based on the service that has been demonstrated and granted. Priority should be based upon that TP designation. – For the non-market, the allocations are considered during the granting of such firm service. Allocations – Impact to non- markets

OTP MP MDU NSP SMP MECIES WPL WEP UE IP IPL MECS PSI DQE DPL CGE MH GRE PSI Network Load Network Resource CONSTRAINTS..!! Constraints – Internal & External Also; other equity concerns.. – Markets have documented to NERC that they do not currently achieve their assigned curtailment obligations – that transfers the impact to the non- market uses (equity concern as well as reliability) – The non-markets are required to meet their curtailment obligations, or they are found non- compliant. The non-markets cannot avoid a curtailment due to it being too large. – Non-markets have not disagreed that non-firm resources should be prioritized as non-firm during congestion, and presumed that those uses of the system will be prioritized correctly during congestion based upon IDC improvements. Also; other equity concerns.. – Markets have documented to NERC that they do not currently achieve their assigned curtailment obligations – that transfers the impact to the non- market uses (equity concern as well as reliability) – The non-markets are required to meet their curtailment obligations, or they are found non- compliant. The non-markets cannot avoid a curtailment due to it being too large. – Non-markets have not disagreed that non-firm resources should be prioritized as non-firm during congestion, and presumed that those uses of the system will be prioritized correctly during congestion based upon IDC improvements. Allocations – Impact to non- markets

Non-market requests to NAESB NAESB ensure that any change to the prioritization of the market flow consider whether it is equitable to both market/non-market to make such change. – Use of DNRs in the market to set market flow priority would adversely and in-equitably impact the non- markets. NAESB not recommend or endorse elimination of allocations to set the market flow priorities until such time as the markets have clearly demonstrated that allocations are no longer needed. NAESB consider the parallel operation/test mode (existing IDC versus Parallel Visualization effort) before implementing changes that impact equity NAESB ensure that any change to the prioritization of the market flow consider whether it is equitable to both market/non-market to make such change. – Use of DNRs in the market to set market flow priority would adversely and in-equitably impact the non- markets. NAESB not recommend or endorse elimination of allocations to set the market flow priorities until such time as the markets have clearly demonstrated that allocations are no longer needed. NAESB consider the parallel operation/test mode (existing IDC versus Parallel Visualization effort) before implementing changes that impact equity