WSPP Inc' wspp'org

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WSPP Inc. wspp.org

• 20 years of enabling competitive power markets

Federal Energy Regulatory Commission December 18,
2006
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Mission Statement

• To provide a catalyst for an efficient and robust
  wholesale electric power market that allows WSPP
  members to effectively manage their power
  deliverability and price risk

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Who are we?
The most widely used wholesale electric power
sales contract in the country

• An organization made up members from all walks of
  the power industry
• An organization with a diverse membership
• Buyers and sellers
• Private, public and governmental entities
• Financial institutions and aggregators
• Regional, national and international
• Wholesale and retail

Just to name a few
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What are we?
A 20 year old organization that has facilitated
market evolution

• Established by FERC in 1987 as a multi-state bulk
  power marketing experiment. The experiment was
  meant to test whether broader pricing flexibility
  for coordination and transmission services would
  promote increased efficiency, competition, and
  closer coordination of economy sales
• Accepted by FERC on a non-experimental basis in
  1991
• Governed by a board of directors of all members
  comprising the Executive Committee (EC)

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Membership composition
Over 300 members from diverse market sectors
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Membership changes with the market
Over 300 members and growing
16 New Members in 2006 (so far) Mirant Energy
Trading, LLC Clark County Public Utilities (Clark
County PUD 1) Cinergy Marketing Trading,
LLP Old Lane Commodities, LP Alcoa Power
Marketing, Inc. Safeway, Inc. Midwest Energy,
Inc. Credit Suisse Energy, LLC City of Alma,
KS City of Iola, KS City of Scranton, KS City of
Wathena, KS Klickitat PUD (Klickitat County PUD
1) Central Arizona Water Conservation
District City of Moreno Valley, CA Power and
Water Resources
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Geographical reach changes with membership
We cut across almost all NERC Regions
MD2
WA gt 15 OR gt 10
9
CT 6
5
NJ 1
9
DE 1
14
DC 2
MA 6
9
CA gt 45
7
10
6
gt 35
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WSPP promotes open membership
Membership requirements create ease of market
entry

• All market participants are eligible
• Designate a member to the Executive and Operating
  committees
• Be a signatory to the WSPP Power Sales Agreement
• Obtain FERC approval if jurisdictional
• Maintain or contract for 24 hour scheduling
  coverage
• Minimal membership fee

Organizational requirements are minimal

• The organization conducts at least three meetings
  annually of all members and more frequently to
  address contractual matters
• One member equals one vote regardless of size
• A 90 approval vote of the Executive Committee is
  required to amend the contract

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WSPP adds value
A proven industry standard .

• To the member
• Access to over 300 contractual parties and
  growing
• Reduced transactional costs and improved risk
  management
• Standardized and widely accepted throughout the
  western markets
• Used in all active mediums brokers, bilateral,
  electronic exchanges
• Not entity or geographically limited
• Body of case law supporting the contract
• Comfort developed by members for members

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WSPP adds value
A proven industry standard .

• To the market
• Facilitates market liquidity
• Price discovery
• Multiple buyers and sellers
• Daily published indices
• Contributes to market efficiencies
• Increases system reliability through greater
  availability of generation
• Reduces end-user costs
• Can be used by centralized market participants to
  transact in the forward markets which enables
  greater risk management

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Elements of the agreement
The product descriptions and contract provisions
have already been agreed to...

• Major components of the agreement
• Products
• Schedule A Economy Energy Service
• Schedule B Unit Commitment Service
• Schedule C Firm Sales or Exchange Service
• Pricing
• Market based
• Cost based
• Credit worthiness and assurances
• Forced majeure
• Non performance/damages
• Dispute resolution process
• Default/termination

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Agreement usage
Transacting with simplicity

• Executing a transaction is streamlined down to
  agreement on
• Number of megawatts
• Point of delivery
• Delivery hours (on-peak or off-peak)
• Delivery timeframe (e.g. July September 2007)
• Schedule (e.g. WSPP Schedule C)
• Price

• Used to transact in various delivery periods
• Real-time
• Pre-schedule
• Balance of month
• Prompt month
• Term

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Strategic efforts
Meeting the needs of its members

• Improving communications with members
• Website redevelopment
• www.wspp.org
• Positioning the organization for broader
  membership
• Changing the organizational name from Western
  System Power Pool, Inc., to WSPP Inc. to reflect
  national market presence and increase the appeal
  to eastern markets
• Holding committee meetings in non-western
  locations
• Maintaining the usability of the contract for its
  members
• Continue to evolve the contract to keep pace with
  changes in the energy marketplace

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WSPP looking forward to the next 20 years of
enabling wholesale power markets
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Attendees
Jeff Atkinson (incoming Chairman) Public
Utility District of Grant County(509) 754-5059
jatkins_at_gcpud.org William Gaines (Vice
Chairman) Superintendent / COOTacoma
Power(253) 502-8203Bgaines_at_cityoftacoma.org Dua
ne Farmer (current Chairman) Director of
Fuels and Wholesale Market Policy Public
Service Company of New Mexico [phone]
dfarmer_at_pnm.com
Jim Lobdell (Secretary/Treasurer) VP Power
Operations Resource Strategy Portland General
Electric [phone] jim.lobdell_at_pgn.com Bobby
Campo (Operating Committee Chairman) Operating
Agent WSPP [phone] b.campo_at_sbcglobal.net
l Arnie Podgorsky WSPP Counsel Wright
Talisman, P.C. [phone] podgorsky_at_wrightla
w.com