1. BAL-002-WECC-1 Contingency Reserves
David Lemmons
BAL-002 Drafting Team Chair
March 6, 2008
Albuquerque, NM

2. Acronyms ACE – Area Control Error BA – Balancing Authority
CR – Contingency Reserves
CRR Contingency Reserve Requirement
DCS – Disturbance Control Standard
LR – Load Responsibility
MSSC – Most Severe Single Contingency
RSG – Reserve Sharing Group

3. Overview of Presentation
What is and is not covered
Discuss Existing Rules for CR
Contrast Proposed Rules for CR
Provide Reasoning behind Drafting Team Recommendations

4. Proposed BAL-002: Responds to FERC and NERC request for re-write
Is a permanent replacement for the existing, FERC-approved WECC-regional standard, BAL-002-WECC-0 (Operating Reserves)
Responds to FERC and NERC request for re-write
Addresses comments provided to FERC and NERC by WECC entities during approval process of BAL-002-WECC-0
Maintains level of CR similar to existing standard

5. What is/is not in the Standard
Deals with:
minimum level of Contingency Reserves
what qualifies as Contingency Reserves
Does not deal with:
Who activates reserves
Why activate reserves
When to activate reserves
How to activate reserves
Discussion Points: Doesn’t deal with activation because that is directed by the NERC standard.

6. Current WECC CR Requirements (BAL-STD-002-0 DCS)
Requires a Minimum Level of CR equal to MSSC for BA/RSG
If MSSC is less than 5% of LR served by Hydro plus 7% of LR served by Thermal, required to carry this amount of reserves
Additional Reserves for Certain Market Transactions
Restore Reserves within 60 Minutes after Event

7. Proposed Contingency Reserves BAL-002-WECC-1
Changes CR requirement to greater of MSSC or 3% Load plus 3% Generation
Specifies rules for reserve transactions
Reserve requirements are not increased or decreased due to energy transactions.
Requires CR to be deliverable to count as meeting requirement
Aligns reserve restoration period with NERC at 105 minutes from event
Discussion Items: Relax restoration period due to PWG study showing no real impact to reliability.

8. Reasoning Behind Changes
FERC Order approving Tier 1 standards require WECC to address issues raised in some way.
Drafting Team discussed multiple options including no changes to the standard.
When issues were discussed by the drafting team, proposed solutions were adopted into the standard.

9. Reasoning Behind Changes (cont)
Remove market issues from the reliability standard
1. WECC should focus on the interpretation of reliability criteria. It should not define energy market products. (WECC Board of Directors Approved Definition of Load Responsibility)
Change to NERC format
Only include Requirements, not philosophy
Not a training document
No duplication of other standards

10. Load Responsibility Discussion Points
It has been documented that there is no technical basis for the current 5/7 requirement.
Definition of LR is impacting efficient market operations in the Western Interconnection.
Reliability entities and market entities may not be on the same page when discussing LR and Firm Products.
The WECC Board determined that WECC should not be defining market products in its LR interpretation.
Unclear treatment of non-hydro, non-thermal generation

11. Drafting Team Recommendation
Remove LR from Reserve Requirement without significantly reducing the reserves required in the WECC.
Since Contingencies happen due to generation and transmission, the drafting team voted to support the proposed requirement that is calculated based on a split of load and generation for each BA/RSG.

12. Reasons for Decision
Proposal ensures there is not a significant reduction in existing WECC total requirement
Proposal does not cause a significant shift of responsibility based on data available
i.e. reserves in each RSG stayed basically the same
COMPROMISE!
Required to meet the time line given to the drafting teams

13. Impacts to the CR Levels
The next few slides show the impact of the proposal to the WECC as a whole and each responsible entity.
Summer Peak Load Data is from July 24, 2006.

14. Total Reserves Required in WECC

15. Reduction to CRR – Summer Peak Load

16. Reserve Requirement by Entity

17. Reserve Transactions
Specific tag codes (INT-BPS-018-0) must be used so all “parties” to the transaction are aware of expectations/requirements.
Requirement R1.2 dictates that if a transaction is utilized by the source BA as part of its non-spinning reserve, the sink must increase the amount of reserve it carries equal to the transaction.
This replaces the old language referring to “interruptible transactions”
NERC BAL-002 R2.6 Requires that the same capacity not be used to meet two or more entities’ reserve requirements.

18. Reserve Transactions (cont.)
Requirement R1.3 requires that the source BA increase its reserve requirement by an amount equal to transactions in which it will respond to an event in the sink BA. The delivery must be on “Firm” Priority 7 Transmission Service.
This is comparable to the language related to “on-demand obligations”
It should be noted that this does not impact how RSGs operate.
NERC BAL-002 R2.6 Requires that the same capacity not be used to meet two or more entities’ reserve requirements.

19. Spinning Reserve
At least one-half of the Contingency Reserve must be Spinning Reserve
To qualify, it must be automatically responsive to frequency deviations

20. Types of Reserves
Requirement R3 sets out what qualifies as meeting the reserve requirements
Limits have been put on when Load (other than Interruptible Loads) can be used to meet the Requirement
Reliability Coordinator must have issued an EEA for the BA

21. Other Changes to Standard
Removed language requiring other NERC standards be met since it is duplicative
Adopted NERC required violation and time horizon items since the WECC has agreed to abide by NERC Standards requirement
Changed Reserve Restoration Period to match NERC requirement since WECC PWG study shows no impact to reliability

22. Questions?