Daily Rules, Proposed Rules, and Notices of the Federal Government
1. Pursuant to section 215 of the Federal Power Act (FPA),
2. In Order No. 890, the Commission found that the lack of a consistent and transparent methodology for calculating available transfer capability is a significant problem because the calculation of available transfer capability, which varies greatly depending on the criteria and assumptions used, may allow the transmission service provider to discriminate in subtle ways against its competitors.
3. The Commission approves the Reliability Standards filed by NERC in this proceeding as just, reasonable, not unduly discriminatory or preferential, and in the public interest.
4. On March 19, 2009, the Commission issued its Notice of Proposed Rulemaking (NOPR) proposing to approve the six MOD
5. In April 1996, as part of its statutory obligation under sections 205 and 206 of the FPA
6. The same day it issued Order No. 888, the Commission issued a companion order, Order No. 889,
7. Among the information public utilities were required to post on their OASIS was the transmission service provider's calculation of available transfer capability. Though the Commission acknowledged that before-the-fact measurement of the availability of transmission service is “difficult,” the Commission concluded that it was important to give potential transmission customers “an easy-to-understand indicator of service availability.”
8. Although Order No. 888 obligated each public utility to calculate the amount of transfer capability on its system available for sale to third parties, the Commission did not standardize the methodology for calculating available transfer capability, nor did it impose any specific requirements regarding the disclosure of the methodologies used by each transmission service provider.
9. Section 215 of the FPA requires a Commission-certified ERO to develop mandatory and enforceable Reliability Standards that provide for the reliable operation of the Bulk-Power System, which are subject to Commission review and approval. If approved, the Reliability Standards are enforced by the ERO subject to Commission oversight, or by the Commission independently. As the ERO, NERC worked with industry to develop Reliability Standards improving consistency and transparency of available transfer capability calculation methodologies. On April 4, 2006, as
10. On February 16, 2007, the Commission issued Order No. 890, which addressed and remedied opportunities for undue discrimination under the
11. The Commission stated in Order No. 890 that the available transfer capability-related Reliability Standards should, at a minimum, provide a framework for available transfer capability, total transfer capability and existing transmission commitments calculations. The Commission did not require that there be just one computational process for calculating available transfer capability because, among other things, it found that the potential for discrimination and decline in reliability level does not lie primarily in the choice of an available transfer capability calculation methodology, but rather in the consistent application of its components, input and exchange data, and modeling assumptions.
12. On March 16, 2007, the Commission issued Order No. 693, approving 83 of the 107 Reliability Standards filed by NERC in April 2006.
13. In response to the requirements of Order No. 890 and related directives of Order No. 693,
14. The Available Transmission System Capability Reliability Standard (MOD-001-1) serves as an “umbrella” Reliability Standard that requires each applicable entity to select and implement one or more of the three available transfer capability methodologies found in MOD-028-1, MOD-029-1, or MOD-030-2. MOD-004-1 and MOD-008-1 provide for the calculation of capacity benefit margin and transmission reliability margin, which are inputs into the available transfer capability calculation. NERC states that its filing wholly addresses eight of the 24 Reliability Standards that the Commission did not approve in Order No. 693 because further information was needed.
15. NERC contends that the Reliability Standards will have no undue negative effect on competition, nor will they unreasonably restrict available transfer capability on the Bulk-Power System
16. NERC states that all three methodology Reliability Standards (MOD-028-1, MOD-029-1, and MOD-030-2) share fundamental equations that, while mathematically equivalent, are written in slightly different forms. As a result, the manner of determining the components varies between methodologies. The employment of any two methodologies, given the same inputs, may produce similar, but not identical, results. As noted by NERC there are fundamental differences in the proposed methodologies that can keep them from producing identical results. For example, the rated system path methodology does not use the same frequent simulations of power flow used by the other two methodologies. NERC states that the rated system path methodology therefore will rarely generate numbers that identically match those determined by an entity using the other two methodologies.
17. NERC states that it has worked closely and collaboratively with NAESB, conducting numerous joint meetings and conference calls, to develop the MOD Reliability Standards and related NAESB business-practice standards.
18. According to NERC, it and NAESB have coordinated the development of these business practices and the Reliability Standards to ensure that there are no duplications or double counting between the business practice standards and the Reliability Standards. They intend to continue to coordinate as necessary so that the available transfer capability-related Reliability Standards are compatible and consistent.
19. NERC proposes the Available Transmission System Capability Reliability Standard (MOD-001-1) as part of a set of Reliability Standards which are designed to work together to support a common reliability goal: To ensure that transmission service providers maintain awareness of available system capability and future flows on their own systems as well as those of their neighbors. NERC states that, historically, differences in implementation of available transfer capability methodologies and a lack of coordination between transmission service providers have resulted in cases where available transfer capability has been overestimated. As a result, systems have been oversold, resulting in potential or actual violations of system operating limits and interconnection reliability operating limits. NERC states that MOD-001-1 is the foundational Reliability Standard that obliges entities to select a methodology and then calculate available transfer capability or available flowgate capability using that methodology. NERC contends that such selection ensures that the determination of available transfer capability is accurate and consistent across North America and that the transmission system is neither oversubscribed nor underutilized.
20. NERC states that, unlike the current set of voluntary available transfer capability standards, MOD-001-1 requires adherence to a specific documented and transparent methodology. NERC states that it requires applicable entities to calculate available transfer capability on a consistent schedule and for specific timeframes. According to NERC, MOD-001-1 requires users, owners and operators to disclose counterflow assumptions and outage processing rules to other reliability entities. NERC states that this Reliability Standard prohibits applicable entities from making transmission capability available on a more conservative basis for commercial purposes for either planning for native load or use in actual operations. NERC's MOD-001-1 also requires entities, for the first time, to exchange and use available transfer capability data. NERC states that the Reliability Standard reflects industry's consensus best practices for determining available transfer capability.
21. MOD-001-1 includes nine requirements, which apply to all transmission service providers and transmission operators. To ensure consistency of enforcement, NERC states that each requirement is supported by a measure that identifies what is required and how the requirement will be enforced.
22. Under Requirement R1, a transmission operator must select one of three methodologies for calculating available transfer capability or available flowgate capability for each available transfer capability path for each time frame (hourly, daily or monthly) for the facilities in its area. As stated above, the three methodologies are: The area interchange methodology, the rated system path methodology, and the flowgate methodology.
23. Several requirements within this MOD-001-1 address the calculation of available transfer capability or available flowgate capability. Requirement R2 requires each transmission service provider to calculate available transfer capability or available flowgate capability values hourly for the next 48 hours, daily for the next 31 calendar days and monthly for the next 12 months. Requirement R6 requires each transmission operator in its calculation of total transfer capability or total flowgate capability to use assumptions no more limiting than those used in its
24. MOD-001-1 also includes several record keeping and information sharing requirements for transmission service providers. Requirement R3 requires each transmission service provider to keep an available transfer capability implementation document that explains the implementation of its chosen methodology(ies), its use of counterflows, the identities of entities with which it exchanges information for coordination purposes, any capacity allocation processes, and the manner in which it considers outages. Requirement R4 requires transmission service providers to keep specific reliability entities advised regarding changes to the available transfer capability implementation document.
25. In Order No. 693, the Commission directed the ERO to develop modifications to the available transfer capability Reliability Standards to include a requirement that applicable entities make available assumptions and contingencies underlying available transfer capability and total transfer capability calculations. NERC contends that this Reliability Standard addresses this issue by requiring disclosure in the available transfer capability implementation document under Requirement R3.1 and part of the data exchange required by Requirement R9. NERC states that it has agreed with NAESB that requirements for posting information are more appropriately addressed through the NAESB process. Accordingly, NERC states that NAESB will be addressing the requirements associated with posting this information, instead of NERC.
26. The Capacity Benefit Margin Methodology Reliability Standard (MOD-004-1) provides for the calculation of capacity benefit margin. NERC defines capacity benefit margin as the amount of firm transmission capability set aside by the transmission service provider for load-serving entities, whose loads are located on that transmission service provider's system, to enable access by the load-serving entities to generation from interconnected systems to meet generation reliability requirements.
27. Reliability Standard MOD-004-1 applies to transmission service providers, transmission planners, load-serving entities, resource planners and balancing authorities. As discussed more fully below, NERC states that it does not specify a particular methodology for calculating capacity benefit margin, but rather improves transparency by requiring adherence to specific documented and transparent methodology to ensure consistent and reliable calculation, verification, preservation and use of capacity benefit margin.
28. To improve consistency and transparency in the calculation of capacity benefit margin, the Reliability Standard imposes twelve requirements on entities electing to use a capacity benefit margin. Requirement R1 requires the transmission service provider that maintains capacity benefit margin to prepare and keep current a capacity benefit margin implementation document that includes at a minimum: (1) The process through which a load-serving entity within a balancing authority associated with the transmission service provider, or the resource planner associated with that balancing authority area, may ensure that its need for transmission capacity to be set aside as capacity benefit margin will be reviewed and accommodated by the transmission service provider to the extent transmission capacity is available; (2) the procedure and assumptions for establishing capacity benefit margin for each available transfer capability path or flowgate; and (3) the procedure for a load-serving entity or balancing authority to use transmission capacity set aside as capacity benefit margin, including the manner in which the transmission service provider will manage situations where the requested use of capacity benefit margin exceeds the amount of capacity benefit margin available.
29. Requirement R2 requires the transmission service provider to make its current capacity benefit margin implementation document available to the transmission operators, transmission service providers, reliability
30. Requirements R3 and R4 require each load-serving entity and resource planner to determine the need for transmission capacity to be set aside as capacity benefit margin for imports into a balancing authority by using one or more of the following to determine the generation capability import requirement:
31. Requirement R5 requires the transmission service provider to establish at least every 13 months a capacity benefit margin value for each available transfer capability path or flowgate to be used for available transfer capability or available flowgate capability during the 13 full calendar months (months 2-14) following the current month (the month in which the transmission service provider is establishing the capacity benefit margin values). Similarly, Requirement R6 requires the transmission planner to establish a capacity benefit margin value for each available transfer capability path or flowgate to be used in planning during each of the full calendar years two through ten following the current year (the year in which the transmission planner is establishing the capacity benefit margin values). All values must reflect consideration of each of the following, if available: (1) Any studies performed by load-serving entities or resource planners pursuant to Requirement R3 for loads within the transmission service provider's area; or (2) any reserve margin or resource adequacy requirements for loads within the transmission service provider's area established by other entities, such as municipalities, state commissions, regional transmission organizations, independent system operators, regional reliability organizations, or regional entities. Once determined, the capacity benefit margin values will be allocated along available transfer capability paths based on the expected import paths or source regions provided by load-serving entities or resource planners. Capacity benefit margin values for flowgates will be allocated based on the expected import paths or source regions provided by load-serving entities or resource planners and the distribution factors associated with those paths or regions, as determined by the transmission service provider.
32. Requirements R7 and R8 require the transmission service provider and the transmission planner to notify all load-serving entities and resource planners that determined they had a need for capacity benefit margin of the amount, or the amount planned, of capacity benefit margin set aside, within 31 calendar days after the establishment of capacity benefit margin.
33. Requirement R9 requires the transmission service provider that maintains capacity benefit margin and the transmission planner to provide, subject to confidentiality and security requirements, copies of the applicable supporting data, including any models, used for determining capacity benefit margin or allocating capacity benefit margin over each available transfer capability path or flowgate to each of the associated transmission operators and to any transmission service provider, reliability coordinator, transmission planner, resource planner, or planning coordinator within 30 calendar days of their making a request for the data.
34. Requirement R10 requires the load-serving entity or balancing authority to request to import energy over firm transfer capability set aside as capacity benefit margin only when experiencing a declared level 2 or higher NERC energy emergency alert.
35. When reviewing an arranged interchange service request using capacity benefit margin, Requirement R11 requires all balancing authorities and transmission service providers to waive, within the bounds of reliable operation, any real-time timing and ramping requirements.
36. Requirement R12 requires all transmission service providers maintaining capacity benefit margin to approve, within the bounds of reliable operation, any arranged interchange using capacity benefit margin that is submitted by an “energy deficient entity”
37. NERC states that MOD-004-1 complies with the requirements of Order No. 890 and related directives of Order No. 693 because it sets criteria that allow load-serving entities to request transfer capability to be set aside in the form of capacity benefit margin in a consistent and transparent manner. Consistent with the Commission's direction, the Reliability Standard provides an approach for determining capacity benefit margin that is flexible and does not mandate a particular methodology.
38. Requirements R5 and R6 require that the transmission service provider and transmission planner utilize the information contained in the studies if it has been provided to them when establishing capacity benefit margin values and mandate the re-evaluation of
39. In response to the requirement that capacity benefit margins values be verifiable,
40. In response to the Commission's call for clarity in the process for requesting capacity benefit margin,
41. The Transmission Reliability Margin Methodology Reliability Standard (MOD-008-1) provides for the calculation of transmission reliability margin. Transmission reliability margin is transmission transfer capability set aside to mitigate risks to operations, such as deviations in dispatch, load forecast, outages, and similar such conditions.