[Federal Register Volume 78, Number 212 (Friday, November 1, 2013)]
[Notices]
[Pages 65641-65643]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-26079]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Recommendation From the Western Area Power Administration To
Pursue Regional Transmission Organization Membership
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of Western Area Power Administration Recommendation to
Pursue Regional Transmission Organization Membership.
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SUMMARY: Western Area Power Administration (Western), Upper Great
Plains Region (Western-UGP), a power marketing administration (PMA) of
the Department of Energy (DOE), is publishing a recommendation to
pursue formal negotiations with the Southwest Power Pool (SPP), a
Regional Transmission Organization (RTO), concerning membership.
Western is seeking public comment from Western's customers, Tribes,
stakeholders, and the public at large. A decision to pursue
implementation of the recommendation will be posted to Western's Web
site.
DATES: To ensure consideration, all comments should be received by
Western at the address below on or before 4 p.m. MST December 16, 2013.
Western will present a detailed explanation of the recommendation and
listen to customer and stakeholder comments in Lincoln, Nebraska, Sioux
Falls, South Dakota, and Moorhead, Minnesota, or Fargo, North Dakota.
The specific times and locations of these forums will be posted on
Western's Web site at http://www.wapa.gov/ugp/powermarketing/AlternateOperationsStudy/AOS.htm.
The information gathered and analyzed by Western subject matter
experts, combined with stakeholder comments, detailed discussions with
the Midcontinent Independent System Operator (MISO), and the SPP,
formed the basis of the recommendation that is now being published for
comment. A decision to pursue the recommendation will be informed by
comments received in response to this Notice.
ADDRESSES: Send written comments to Western at: [email protected].
Information regarding the recommendation, including comments, letters,
and other supporting documents made or retained by Western are for the
purpose of pursuing this recommendation. Comments may also be delivered
by mail to: Upper Great Plains Region, Western Area Power
Administration, 2900 4th Avenue North, Billings, MT 59101-1266.
FOR FURTHER INFORMATION CONTACT: Jody S. Sundsted, Power Marketing
Manager, Upper Great Plains Region, Western Area Power Administration,
2900 4th Avenue North, Billings, MT 59101-1266, telephone (406) 255-
2910, email [email protected].
SUPPLEMENTARY INFORMATION: Western-UGP markets Pick-Sloan Missouri
Basin Program--Eastern Division (P-SMBP-ED) hydroelectric power and
energy to preference entities in Montana east of the continental
divide, North and South Dakota, western Minnesota and Iowa, and eastern
Nebraska. In 1998, Western-UGP, Basin Electric Power Cooperative, and
Heartland Consumers Power District implemented the Integrated
Transmission System (IS). The IS includes approximately 9,848 miles of
transmission lines owned by Basin Electric Power Cooperative, Heartland
Consumers Power District, and Western. Transmission service over the IS
is provided under Western's Open Access Transmission Tariff, with
Western-UGP serving as tariff administrator for the IS. Prior to the
IS, the Joint Transmission System (JTS) was formed and documented in
the Missouri Basin Systems Group (MBSG) Pooling Agreement dated January
31, 1963. The IS comprises transmission facilities located on both the
eastern and western electrical interconnected systems separated by the
Miles City DC tie and the Fort Peck Power Plant. Western-UGP also
operates two balancing authority areas, WAUW and WAUE, within the IS
that are also separated by the Miles City DC Tie and the Fort Peck
Power Plant.
RTO History
RTOs are not a new concept within the utility industry. The concept
of joint planning, joint power supply, cost sharing, and in some cases,
joint transmission, has occurred for decades between utilities with a
common mission and goal. In Western-UGP, the roots of RTO-like
agreements can be traced back to the January 31, 1963, MBSG Pooling
Agreement that was signed by the Assistant Secretary of the Interior
and 105 utility systems across six states, for participation in the
Federal transmission system. This agreement established the JTS, now
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known as the IS, to plan, build, operate, and maintain a joint
transmission system.
Subsequent to the creation of the MBSG and JTS, Western's
predecessor, the Bureau of Reclamation, also became a member of the
Mid-Continent Area Power Pool (MAPP). MAPP was another entity formed to
promote power pooling, transmission planning, reliability, and reserve
pooling. Certain MAPP members, including Western-UGP, were later
involved in RTO creation efforts, including a study from 2000 through
2004 for creation of the Crescent Moon RTO. This was closely followed
by another study effort from 2006 through 2008 known as the Mid-
Continent Systems Group. In 2008-2009, the IS owners and MISO jointly
developed a new type of tariff service (Module F) that would have
allowed the IS owners to place their generation and loads into the MISO
organized market but keep the IS transmission system assets out of
MISO. Ultimately, the Federal Energy Regulatory Commission rejected
these tariff changes. During the 2008 to 2009 timeframe, many of the
original MAPP Generation Reserve Sharing Pool members merged with MISO
to share contingency reserves and formed the Midwest Reserve Sharing
Group (MRSG). In 2009, the MRSG was renewing the sharing agreement and
Western-UGP terminated its participation in the MRSG agreement for
economic reasons. Prior to leaving MRSG, the IS owners were aware that
providing contingency reserves on a stand-alone basis would have been
cost prohibitive and began discussions with SPP to participate in SPP's
reserve sharing group. Western-UGP then entered into a limited-term
agreement with the SPP reserve sharing group effective with the
termination of the MRSG agreement.
Market to Non-Market Challenges
Approximately 50 percent of Western-UGP's preference load is beyond
the edge of the IS and delivered across third-party transmission
systems in the MISO and the SPP predominately under arrangements made
by those preference customers. This separation creates market to non-
market seams between Western-UGP, MISO, and SPP and impacts both
Western-UGP's and other local utilities' marketing of power across the
seams. To address certain transmission congestion in the MISO and SPP
footprints, the reliability coordinator cuts power schedules in and out
of those RTOs under Transmission Loading Relief (TLR) protocols in
addition to re-dispatching generation within its footprint. Western-UGP
has experienced many TLR schedule cuts on short-term sales and
purchases, as well as firm power schedules necessary to meet its
obligations. Western-UGP has few options to avoid TLRs. These TLR
impacts are directly related to Western-UGP and the IS owners' unique
footprint in relation to energy markets. In addition to the MISO and
SPP seams on the east and south, Western-UGP is constrained by limited
access to the Canadian markets to the north, as well as to western
markets, due to limitations of available capacity for energy transfers
through the AC-DC-AC interconnection ties. Historically, Western-UGP
has had opportunities to sell and purchase short-term energy from many
different entities in response to hydro-generation variability.
However, with entities joining MISO and its organized energy market,
Western-UGP has seen those opportunities decrease significantly. With
the SPP Integrated Marketplace planned to become operational in 2014,
Western-UGP anticipates substantial reduction in bi-lateral short-term
energy trading opportunities. Western-UGP recognizes the variability of
the hydro-generation and the historic need Western-UGP has had for
access to energy markets to realize the lowest cost energy purchases
and optimized short-term energy sales. As a result, Western-UGP has
performed an assessment of the costs, benefits, and risks of
alternative operating models while continuing to reliably serve our
firm power commitments.
The Alternative Operations Study (AOS)
For purposes of this assessment, Western is considering placing
only the portion of the IS located in the eastern electrical
interconnected system within an RTO market. The options for future
operating models analyzed included a Stand Alone configuration, Join
MISO, and Join SPP.
The Cost/Benefit Analysis (CBA) for this study measured and
compared six criteria in each of the three options.
1. RTO Trade Benefit
2. Administrative Costs
3. Transmission Expansion
4. Capacity Benefits
5. IS Transmission Revenue--Cost Shifts
6. Drive-Out Impacts
There were significant monetary separations in the CBA results. The
CBA results have shown the Join SPP option provides more benefits than
the other two options.
Qualitative risks were analyzed through the use of a Multi-Criteria
Decision Analysis (MCDA) tool. The MCDA uses marketing plan and rate
stability, and agreements as major criteria to assess the options with
multiple metrics for each. Weight factors were assigned to each of the
criteria and each of the metrics based on the relative importance of
the criterion or metric to the overall decision. Each metric was rated
according to the qualitative scale to determine the appropriate risk
rating, and the risk score associated with each option was subsequently
developed through application of the weighting of the risk. The risk
score for the Join SPP option was the lowest and, therefore, the most
favorable option from a qualitative risk standpoint. Further
information regarding the CBA and the MCDA can be found in the
recommendation documents referenced in the Availability of Information
section below.
Based on the analysis performed, Western-UGP concluded that the
potential benefits of the Join SPP option are significant enough for
Western-UGP to solicit feedback from customers and other stakeholders
regarding its recommendation to pursue formal negotiations with SPP
regarding membership. Timing considerations are such that these actions
should proceed quickly.
The information gathered and analyzed by Western subject matter
experts, combined with stakeholder comments, formed the basis of the
recommendation that is now being published for review. A decision to
pursue the recommendation will be informed by comments received in
response to this notice. A decision by Western to move forward with
formal negotiations with SPP will result in detailed membership
discussions consistent with Western-UGP statutory requirements as
captured in the AOS assumptions. Western's Administrator has been
designated as the appropriate Federal regulatory authority with respect
to transmission facilities within the PSMBP-ED in accordance with
Section 1232(a)(1)(A) of the Energy Policy Act of 2005, codified at 42
U.S.C. 16431.
Availability of Information
The recommendation is available for review and comment on Western's
Web site at http://www.wapa.gov/ugp/powermarketing/AlternateOperationsStudy/AOS.htm. The recommendation and supporting
documents contain information that pertains only to Western-UGP.
Western is seeking comments on the substance of the recommendation and
its proposal to
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pursue the Join SPP option. Comments submitted in response to this
notice should include the following information:
1. Name and general description of the entity submitting the
comment.
2. Name, mailing address, telephone number, and email address of
the entity's primary contact.
3. Identification of any specific recommendation the comment
references.
Environmental Compliance
In compliance with the National Environmental Policy Act (NEPA) of
1969 (42 U.S.C. 4321-4347), Council on Environmental Quality
regulations (40 CFR parts 1500-1508), and DOE NEPA regulations (10 CFR
part 1021), Western is in the process of determining whether an
environmental assessment or an environmental impact statement should be
prepared or if this action can be categorically excluded from those
requirements. Further environmental review actions will be posted to
http://www.wapa.gov/ugp/Environment/default.htm.
Dated: October 29, 2013.
Mark A. Gabriel,
Administrator.
[FR Doc. 2013-26079 Filed 10-31-13; 8:45 am]
BILLING CODE 6450-01-P