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BCTC Open Access Transmission Tariff OATT

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How does this option work? Similar to Option 2(a) ... How does this option work? [ Assume that BCTC is purchasing generator redispatch] ... – PowerPoint PPT presentation

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Title: BCTC Open Access Transmission Tariff OATT


1
BCTC Open Access Transmission Tariff (OATT)
  • Transmission Re-dispatch Options
  • January, 2006

2
Overview of Presentation
  • Background
  • Design Principles
  • Design Parameters
  • Options for Discussion
  • Overview of Options
  • Comparison
  • Discussion/Comments

3
Background
  • Issue of re-dispatch Tariff was discussed at the
    OATT Hearing
  • In the OATT decision, BCUC ordered BCTC to
    develop and submit a re-dispatch tariff as soon
    as possible extending the deferral credit to
    existing customers
  • BCTC wants to consult to determine interest in a
    more general Re-dispatch option in light of the
    most recent Capital Plan decision directing BCTC
    to look at other non-wires opportunities

4
Design Principles
  • New service should increase utilization of
    transmission assets
  • Increase availability of short term service
  • Increase long term access
  • Revenues from the new service should cover
    incremental costs. This assures the service is
    fully self-supporting
  • Service should avoid shifting of embedded
    transmission costs among customers
  • The service should be voluntary
  • If these four principles are met, the rate
    produces net benefits and has no losers. It is a
    self-supporting rate option

5
Design Parameters
  • Re-dispatch Market
  • Can be limited to only those customers wanting to
    buy or sell transmission reservations (facilitate
    trading on secondary market)
  • Can include existing and new generators
    (Incremental and Decremental)
  • Different Time Frame of Products
  • Very Short Term (1 day to 1 hour ahead of Real
    Time)
  • Short Term (1 day to 1 year ahead of Real Time)
  • Long Term (greater than 1 year)

6
Role of BCTC
  • BCTC cannot
  • Become a market maker in an accept all
    schedules market design
  • BCTC can
  • Match buyers and sellers for transmission product
    through OASIS
  • Could include a reconfiguration of transmission
    products
  • Use generation re-dispatch (a paired Inc and Dec)
    to provide additional transmission service
  • The Re-dispatch option is voluntary

7
Options for Discussion
  • Option 1
  • Expand the Deferral Credit (75) eligibility to
    include existing generators. The goal of this
    option is to increase availability and decrease
    the costs of long term service
  • Option 2
  • Facilitate secondary trading of transmission
    service through additional OASIS postings. Since
    hourly service is already released if not used,
    the goal of this option is to increase the
    liquidity of intermediate term service between 1
    day to 1 year
  • Two Options
  • Option 2(A) Facilitate secondary sales
  • Option 2(B) Promoting secondary transmission

8
Options for Discussion
  • Option 3
  • Facilitate additional transmission use by
    contracting with market participants for
    counterflows. Since existing rights holders
    become more likely to release transmission or
    produce a counterflow nearer to real time, the
    goal of this service is to increase very short
    term use between 1 hour and one day
  • BCTC contracts with generators to submit a
    counterflow schedule
  • Option 4
  • Facilitate additional long term use by allowing
    Customer to self-dispatch through congestion

9
Option 1 Extend Deferral Credit to Existing
Generators
  • How does this option work?
  • Participating existing generators would receive a
    credit against future transmission bills in
    exchange for signing a re-dispatch contract that
    allows BCTC to defer planned upgrades
  • A critical requirement is that the generators
    transmission use is a modification from their
    assumed base case use. The base case use will be
    established in BCTCs long term plan
  • Per Commission Decision, the deferral credit
    would not be made available to end-use customers
    of BC Hydro to avoid the possibility of double
    compensation
  • Prior to any upgrade, all existing generators
    that had the potential to contribute to the ATC
    needed to fulfill the long term request would be
    notified
  • Could be notified through OASIS
  • Could be part of Long Term Planning Process
  • Could be part of Open Season
  • The participating generator would then enter into
    a re-dispatch agreement with BCTC in exchange
    for a credit against future transmission service

10
Option 2 (a) Facilitate Secondary Transmission
Sales
  • How does this option work?
  • This service would be similar to the sales or
    assignment of transmission service under Section
    23.1 of OATT
  • When a customer has a service request rejected
    due to insufficient ATC, the customer can then
    post OASIS request with bid price, path, quantity
    and time to all transmission customers
  • Likewise, a transmission customer with unused PTP
    service can post OASIS offer
  • If a match is found, notification is sent to BCTC
    of the service transfer
  • All restrictions in Section 23.1 of OATT applies
  • The role BCTC could be that of a clearing house,
    making availability and requirements of services
    transparent. Note that BCTC only facilitates
    communication and recording of the transaction,
    but plays no role in matching, negotiation and
    financial settlement

11
Option 2 (b) Promoting Secondary Transmission
Sales
  • How does this option work?
  • Similar to Option 2(a)
  • BCTC would take the unused service on consignment
    and actively promote the sales of such service
  • BCTC would charge a service fee
  • The risk of stranded unused transmission rests
    with Transmission Customer

12
Option 3 Counterflow
  • How does this option work? Assume that BCTC is
    purchasing generator redispatch
  • This would occur in the hourly market after
    general flow patterns are known
  • Customers would submit voluntary incremental and
    decremental energy offers (incs and decs)
    along with their energy schedules
  • BCTC would match incs and decs and post
    additional ATC
  • Pricing could take a number of forms
  • Each block of incremental transmission is priced
    separately at the inc/dec cost (cost-based supply
    curve of incremental transmission)
  • All transmission is priced at the applicable ST
    rate (implies that BCTC would only accept inc/dec
    pairs that cost less than the ST rate)
  • All incremental transmission is priced at an
    inc/dec clearing price

13
Option 4 Customer Self-dispatch
  • How does this option work?
  • This service would be initiated by a customer
    having their service rejected due to insufficient
    ATC
  • Instead of taking shaped service, the customer
    would take block service and the customers
    service in the months where ATC is insufficient
    becomes recallable
  • If the customers service got recalled, it would
    have to arrange for its own dispatch to meet its
    energy delivery obligations
  • Customer would pay Long-term Firm Point To Point
    rate and get refund for service curtailed at the
    Short term, Non-firm rate

14
Comparison of Alternatives
  • Option 1 Extend Deferral Credit to Existing
    Generators
  • Relatively easy to implement
  • May be infrequently used
  • Could create perverse incentives for existing
    generators to create congestion and then get paid
    to redispatch
  • The generators would not have an incentive to
    increase their own transmission costs and then
    receive 75 percent of the deferral cost savings
  • Relatively low value, because participants only
    get paid a 75 percent of cost savings from
    deferral cost savings rather than market value
  • May not increase use of the system

15
Comparison of Alternatives
  • Option 2 Facilitate Secondary Transmission
    Sales
  • No need for new service (just modification of
    OASIS and business practice/customer training)
  • Much more flexible than Option 1
  • Potential for increased use of the interties on a
    firm and non-firm basis
  • Small Potential for BCTC to lose revenue because
    it sells less hourly
  • Does not create possible use of generation to
    create ATC
  • Can create export ATC only if transmission is
    released in same constrained direction

16
Comparison of Alternatives
  • Option 3 BCTC Purchases Counterflow
  • Option 3 is a new service that is more difficult
    to implement than either Options 1 or 2
  • Option 3 is more flexible than the other options
    and would probably be used more frequently
  • Costs to implement, depend on number of
    participants, number of products and how much
    BCTC has to implement
  • Can only be implemented on internal paths due to
    WECC rules

17
Comparison of Alternatives
  • Option 3 BCTC Purchases Counterflow (cont)
  • Potential for customers to hold back beneficial
    flows to create congestion, then get paid to
    relieve it. This problem is present in Options 1
    and 2, but since problem is proportional to the
    benefits, the problem is magnified in this option
  • Is this a real problem? Beneficial flows do have
    value that are not recognized under current
    system
  • Can create firm export ATC only if transmission
    is released in same constrained direction or
    re-dispatch relieves internal path constraint

18
Comparison of Alternatives
  • Option 4 Customer Self-dispatch
  • Option 4 provides an alternative to shaped
    service where a customer can arrange for
    alternative delivery at times of congestion
  • It is relatively simple to implement
  • It would make full use of the system
  • It may reduce ST PTP opportunities
  • May also crowd out shaped service
  • May not fit well with customer financing and
    contracting needs

19
Questions for Discussion
  • Which option would you be most interested in?
  • Are we missing anything?
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