Meeting Notes
Committee:
Data Work Group
Committee
Leader:
Jamie Austin
From Date
November 17, 2015
To Date
November 24 2015
10:30 – 10:35
10:35 – 10:45
10:45 – 11:00



11:00 – 12:00

Welcome and Introductions
WECC Anti–Trust Policy Summary
Review and Update Wheeling Rates
o Wheeling vs. hurdle rates
o Addressing previous concerns (e.g. wheeling between CFE and
CAISO, etc.)
o Modeling full rates
New Proposed Wheeling Rates
o Exempt wheeling for out of area generation
o Exempt wheeling on firm transfers
o AB32
Meeting Objectives
The TEPPC regions are defined at an operational level, and in most cases
those definitions correspond to the balancing authority boundaries. At the
balancing authority level, some of the distributed load centers or Load Serving
Entities (LSE) are consolidated to model the operational aspects associated
with a BA, such as wheeling tariffs and reserve requirements. Wheeling rates
or tariff rates are associated with the cost to deliver energy over transmission.
Typically wheeling rates apply to the non-firm power transfers as firm transfers
are considered to be sunk costs. The objective at this meeting is to address
what values to use for wheeling rates in the TEPPC 2026 Common Case.
Welcome and Introductions
Dan covered the WECC anti-trust policy. Jamie welcomed participants,
reviewed the agenda and explained that today’s call focuses on Wheeling
Rates for TEPPC 2026 Common Case.
1
Review and Update Wheeling Rates
Wheeling vs. hurdle rates
Jamie explained often that the terms “hurdle rates” and “wheeling rates” are
often used synonymously, however in reality the two differ greatly. “Wheeling
Rates” cover utility tariffs, the cost of transporting power over transmission
lines. Whereas, “Hurdle Rates” are used to align the imperfection of real
dispatch with the perfect foresight of model generated dispatch. E.g., TEPPC
used “Hurdle Rates” in the TEPPC 2010 back-cast as a Band-Aid to cover
inexplicable results and align with historic results.
Addressing previous concerns (e.g. wheeling between CFE and CAISO,
etc.)
Jamie noted that we’ve learned from the last round, and developing wheeling
rates for the TEPPC 2024 CC may require some customization:
 AVISTA has direct access to Mid C prompting the question: shouldn’t
the Mid C market be consistently modeled to better associate
Northwestern entities with reach to Mid C?
 Do all exports from CFE to the CAISO reflect the $14.81/MWh CO2
hurdle rate? Should there be a wheeling rate between CEF and
CAISO?
Jan Strack responded that there is a wheeling rate on CFE exports to
CAISO and that he will be willing to provide the numbers.
 There should not be wheeling rates between PACE and PACW
Modeling full rates
Jamie explained that wheeling rates should be used to cover non-firm
transactions, whereas, in the TEPPC database they are applied as flat rates on
all transfers resulting in double dipping. Firm transactions are associated with
rights that have sunk costs and should not be charged wheeling rates. Jamie
added most WECC paths are fully committed; the non-firm piece constitutes a
small percentage of total flows on the transmission, about 10 to 20% maximum.
Given that TEPPC does not model contractual rights, why not use the WECC
path rating catalogue information on ownership to approximate firm vs. nonfirm? This is where the percentage ownership and scheduling allocations of
paths are listed.
Jamie agreed with Dan that modeling hurdle rates is a conversation belonging
to the modeling workgroup; however, DWG is attempting here to collect
updates for “Wheeling Rates”.
2
Jamie thanked Xiaobo Wang for taking the initiative to start the update and for
his willingness to present.
New Proposed Wheeling Rates
Xiaobo began his discussion by addressing the basics of wheeling charges,
including Transmission Access Charges (TAC). See his enclosed presentation
that explains that TAC equals utilities’ annual transmission revenue
requirement divided by utilities’ annual energy consumption.
151124 TAS-DWG Transmission Wheeling Rates - XBWang.pdf
Steven Wallace asked, how do you account for losses modeled as an element
of LMP?
Xiaobo responded that from the transmission view the loss impact is dependent
on generator location, near vs. far; however the generator has the same heat
rate and hence the same cost.
Steven commented that this may impose a “virtual hurdle” if you overstate
wheeling rates by adding a component of hurdle rates. Hurdle rates and other
barriers represent other costs on transmission that are not wheeling rates.
Xiaobo agreed if the loss component becomes too large…what we’re looking at
are the marginal losses, an approximation.
Steven asked if this pertains to the linearized hourly generator dispatch.
Xiaobo explained that charging imports and exports is clearing twice, hence
you just change export:
•
Exports are subject to TAC, because export is viewed as load.
•
Import is not subject to TAC, because import is viewed as generation
•
For wheeling-through, export is charged and import is not charged
Further, transmission wheeling charges are trade barriers among BA’s; making
“WECC-wide centralized dispatch” less optimal.
Each BA has its own tariff. You may ask why is the ISO wheeling rate so high
when compared to other wheeling charges in the West. In general, building
transmission in California is much more expensive than anywhere else in the
West.
Xiaobo explained that in addition to the tariff-based wheeling charges, there are
also other barriers (aka “frictions”) that impede trades between BA’s. So
Hurdle rate = Wheeling rate + Friction.
Jamie asked about the basis for charging friction? Xiaobo responded this is
consistent with MISO; the value MISO charge is $3/MWh.
3
Jamie expressed a concern about adding Friction Rate as suggested by Xiobo,
given that NTTG’s experience that better results have been achieved in the
backcast without the use of hurdle rates. Further, Jamie added that it is not
the time or the place for deciding on using Friction Rates; the topic should be
revisited on future MWG calls.
Jan asked if NTTG and COGRID results from the back-cast with and without
Hurdle Rates can be shared with the group.
Xiaobo summarized as a rule, “export wheeling charge” should be applied to
every BA.
Jamie asked if this should apply to every BA--how about in the case of PACE
and PACW interchanges where there are two BA’s but one company…
Xiaobo added there are exceptions to the general rule. Wheeling rates should
be excluded for the following three scenarios:
•
Trading hubs are free of export wheeling charges
•
Firm transmission rights are free of pancaked charges along the way. If
there is firm transmission right, wheeling charges are “exempted”.
•
No wheeling charge for remote generators; all remote generators have
firm transmission rights or associated transmission.
•
“Contract paths”
•
“Path-based free-wheeling”
Stan asked what’s behind the drop in 2014 on CAISO’s historical wheeling
rates slide. Xiaobo speculated a likely cause might be a financial adjustment
between member utilities or revenue requirement (see plot on slide 8).
With reference to slide 10 regarding future wheeling rates, Steven asked if the
red line incorporates 50% added RPS? Xiaobo responded no--this was last
year’s forecast, before the passing of SB 350.
Steven questioned why the “redline” declines after 2021?
Xiaobo responded that his best guess is that the rise in the 2016 to 2020
forecast is impacted by real transmission investments; starting from 2015
actual wheeling rates, from few months ago, followed by the forecast. The
upward trend is purely caused by forecasted transmission investments.
Jan noted that California has already largely achieved the year 2020 33% RPS
requirement, and there is a phase-in period between year 2020 and 2030 when
the 50% RPS requirement applies, so it is not surprising that the CAISO’s
existing wheeling-out charge would not change much between now and year
2026; i.e., California doesn’t need to add much transmission between now and
2026 to accommodate renewable resource requirements through year 2026.
4
Xiaobo further explained that the table on slide 12, Wheeling Rates of Other
BA’s, is consistent with what we have in the TEPPC 2024CC. Given that we’ve
modeled trading hubs such as Mid C, you see the number of BAs has been
reduced to 24 from 38 bubbles.
Xiaobo’s summary recommendation includes:
•
For the CAISO BA, forecasted wheeling rate for year 2026 is ready for
use
•
For other BAs, updated and forecasted wheeling rates are needed;
Xiaobo escalates 2010 and 2012 rates using a deflator to 2016 dollars.
These can be used absent of new updates.
•
For all BAs, add a $3/MWh friction (hurdle rate = wheeling rate +
friction). Xiaobo recommends keeping hurdle rates separate from
wheeling rates by the use of parallel path approach - Jamie
believes more work is necessary to justify using friction rates.
Jamie thanked Xiaobo for his diligence and contribution on Wheeling rates and
urged participants to submit more current numbers. In the case of PACE &
PACW rates, the $3.15/MWh stated in 2016 dollars is less than half current rate
posted on the PAC OASIS for on-peak hour.
5
Name
Austin, Jamie
Amjadi, Amir
Alvarado, Al
Anderson, Grace
Baack, Jim
Bailey, Michael
Barbose, Galen
Brathwaite, Leon
Brownlee, Ben
Beckstead, Dan
Belval, Ron
In attendance at the 112415 Meeting:
Company
Name
PAC
x
Lau, Elaine
Larsen, Peter
Le, David
CEC
Lee, Peter
CEC
Lehr, Ron
VoteSolar
Lindsay, Jimmy
WECC
Linvill, Carl
LBNL
Mao, Megan
CEC
Energy Strategies
WECC
TEP
x
x
Charles, Gillian
Chhajed, Pushkar
Colburn, Mitch
Coe, Scott
Cole, Brian
Corum, Ken
Darth
Deaver, Paul
Decker, Megan
Denker, Brendan
Depenbrock, Fred
Delleney, Mike
Donnohoo, Pearl
Didsayabutra, Paul
Elkins, Mat
Eaton, Pam
Evans, Mike
Ezequiel
Filippi, Jim
Fisher, Emily
Freeman, Bryce
Gazewood, Jim
Green, Irina
RAP
SCE
WWND
CEC
CEC
McCann, Richard
Broad, Diane
Brathwaite, Leon
Brinkman, Gregory
Brooks, Donald
Brown, Elise
Brush, Ray
Burner, Bob
Carr, Tom
Carvallo, Juan Pablo
Maracas, Kate
Marxen, Chris
McLean, Christopher
Company
CPUC
LBNL
CAISO
BPA
AWEA
CEC
NREL
CPUC
SPSG
Western
Duke Energy
WIEB
IID
NPCC
LCG Consulting
IPC
NWPCC
x
CEC
SRP
Nevada Hydro
CAISO
NREL
COGRID
WECC
SPSG
Shell Energy
IID
First Solar
NREL
WYOC
BLM
CAISO
x
x
x
McIntosh, Henry
Mejia, Roni
Misca, Catalin
Miller, Tom
Milligan, Michael
Moore, Jack
Moussa, Effat
Moyer, Keegan
Newman, Raymond
Nail, George
Nothstein, Greg
Pacheco, Ezquiel
Pacini, Heidi
Papic, Milorad
Pascoe, Bill
Perez, Army
Piper, David
SDG&E
SCE
CAISO
PG&E
NREL
E3
SDG&E
WECC
x
PN&M
x
Prochnik, Julia
Pryor, Mark
Puglia, Peter
Quick, Kirha
Raub, Jenika
NRDC
CEC
CEC
WECC
SRP
Richard, J
Rowe, Sarah
Rucker, Magdalena
Samaan, Nader
Satchwell, Andy
Schlag, Nick
Schanahan, Patrick
Schellberg, Ron
CEC
OPUC
x
IID
ICF
IPC
TREL
WECC
SCE
x
NWNL
LBNL
E3
IPC
6
Griffin, Karen
Schilmoeller, Michael
CEC
Grau, Judy
Gutierrez, Noe
IID
Hagman, Chris
Hands, Betsey
Harner, Patrick
Harris, Gerald
Harris, Kevin
Harwood, Patrick
Hein, Jeff
Heutte, Fred
Hodge, Bri-Mathias
Holland, Stan
Hosie, Bill
Huang, Wenxiong
ATC
MT
IID
Reos
COGRID
WAPA
Xcel
NWEC
NREL
WECC
Duke Energy
PLEX
Jenka, Raub
Jensen, Richard
Johnson, Anders
Johnson, Colby
Jourabchi, Massoud
Kates, David
Kelly, Nancy
Klapka, Paul
Klein, Joel
Knudsen, Steve
Kujala, Ben
Kravchuk, Luba
SRP
CEC
BPA
WECC
NWPCC
Nevada Hydro
SCE
CEC
BPA
NWPCC
CAISO
x
x
x
x
x
NWPCC
Schmidt, Jason
Xcel Energy
Simmons, Steve
NWPCC
Singh, Harliv
Spears, Michael
Satyal, Vijay
Strack, Jan
Stefan
Stokes, Mark
Tanghetti, Angela
Trinh, Lan
Vaughn
Voisin, Nathalie
Von Reis Baron, Kate
Wang, Xiaobo
Wallace, Steven
Wheeler, Dan
Williams, Stan
White, Keith
White, Stephen
Weiss, Steve
Woertz, Byron
Wong, Lana
Zhang, Yi
Zhu, Jin
Zhang, Hui
Zichella, Carl
Xcel Energy
x
WECC
SDG&E
OPUC
x
CEC
ABB
NWNL
PGE
CAISO
CPS
Gaelectric
BPA
CPUC
BPA
BPA
WECC
CEC
CAISO
ABB
x
x
x
x
NRDC
7