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HomeMy WebLinkAboutIntertie Projet Railbet Reserve Issues 1993Raere west wou Loe eal | 4/9193 Red Wn ULLDR AFT RAILBELT RESERVE ISSUES JURISDICTION AND AUTHORITY FOR RESOLUTION Introduction: Over the course of several months, the Railbelt utilities have been discussing the interpretation of their reserve obligations under various contracts. Of particular concern is the appropriate forum for resolving the Railbelt reserve issues, since some issues require technical expertise, while other issues present policy considerations or questions of contractual intent. Railbelt reserve issues have been considered by the Bradley Lake PMC, the Railbelt Utilities Group (RUG), which has no formal responsibilities for reserve issues, and the Intertie Operating Committee (IOC), established under the Alaska Intertie Agreement (AIA). In addition to the Bradley Lake PMC, the IOC, and the RUG, the Alaska Systems Coordinating Council (ASCC) has been involved and could continue to be involved in evaluating the ramifications of alternative courses of action or suggesting possible solutions to the Railbelt reserve issues. However, the ASCC is a purely advisory group, with non-mandatory participation. Issues: The Railbelt reserve issues stem from the application of the Alaska Intertie Agreement (AIA) to the operation of the Railbelt electric system in the absence of a power pooling agree- ment. The issues are complicated by the existence of separately owned, but jointly operated, generating facilities. Three critical areas emerge from an analysis of Railbelt reserve issues: * The status of the Alaska Energy Authority as a "Particip- ating Utility" under the terms of the AIA and the consequences of that characterization. * The obligations of the Railbelt utilities to provide reserves, and the character of those reserves, under the terms of the AIA. * The role and the authority of the Intertie Operating Committee, under the AIA, to ascertain or determine project characteristics, to interpret, modify, or enforce the provisions of the AIA, or to undertake revisions to the AIA. To resolve these issues, it is first necessary to determine the appropriate forum for addressing these issues and then to do so within the framework of established agreements. Provisions of Existing Legal Agreements: Answers to several key Railbelt reserve questions.can be found within the terms of existing agreements, which in turn provide the forum and framework RLS\ IOCRES . pp for resolution of the issue. Given the broad latitude Addendum No. 1 gives to the IOC on reserve issues, and the deference given the AIA in the Bradley Lake Agreement, the majority of issues under discussion should be resolved by the IOC under the AIA. » Is AFA a "Utility Participant" under the AIA? Section 4.1.1 of the AIA provides that the AEA "will become a Utility Participant at such time as it sells power to a party that is not a Participant and is connected to the Participants’ interconnected system." AEA’s sale of Bradley Lake Power to Seward, Homer and Matanuska, who are not AIA participants, makes AEA a Utility Participant under the AIA. As a Utility Participant, AEA has a Reserve Capacity Obligation and an Operating Reserve Obligation. PRE How _is a Utility Participant’s Reserve Capacity Obligation determined? Addendum No. 1 to the AIA establishes the basis for determin- ing the reserve obligation of each Utility Participant. The initial Reserve Capacity Obligation (RCO) of each Utility Partici- pant was set at an amount equal to thirty (30) percent of the projected Annual System Demand of the Utility Participant. The RCO can be adjusted from time to time by the IOC. ae How is a Utility Participant’s Operating Reserve Obligation determined? In addition to the RCO, each Utility Participant has an Operating Reserve Obligation (ORO). Addendum No. 1 to the AIA establishes a Total ORO, which shall be equal to "150 percent of the largest generating unit contingency in operation on the interconnected systems of the Utility Participants." Each Utility Participant’s ORO is based on a formula set out in Section B-2.3.1 of Addendum No. 1. The AIA does not expressly provide the IOC with the authority to modify this formula. OROs can be modified or adjusted by the IOC from time to time. (Section B-2.1.2 of Addendum No. 1). Ars How much of a Utility Participant’s Operating Reserve Obliga- tion must be Spinning and Non-Spinning Reserves? Section B-2.2.1.1 provides that the "Spinning Reserve portion of the total Intertie System shall not be less than an amount equivalent to 100 percent of the Declared Capability of the largest generating unit contingency in operation on the interconnected systems of the Utility Participants." The Declared Capability of a Utility Participant is determined by that Participant (§ B- 2.2.1.1), but the Declared Capability of a generating unit cannot exceed the published capability of that unit (Exhibit A, Definition 2 RLS\ IOCRES. pp No. 10) and is subject to verification by the I0C for reserve purposes. The balance of the Total ORO can be maintained with Non- Spinning Reserves. Section B-2.4.1 provides that "System Spinning Reserves shall be calculated at any given instant as the difference between the sum of the net capability of all generating units on line in the respective system and the integrated System Demand of the system involved." S. Can_load shed be used in lieu of Spinning Reserves? Section B-2.4.2 provides that a "Utility Participant’s Spinning Reserve may be satisfied by an automatically controlled load shedding program. The load shedding program shall assure that controlled load can be dropped to meet the requirements of Spinning Reserve and in such a manner as to maintain system stability and not cause objectionable system conditions or cascading effects in other Utility Participants’ systems. The Operating Committee shall review and approve the Utility Participant’s load shedding program that will be used to satisfy its Spinning Reserve requirements." 6. How should "quality of spin" and "system response" issues be resolved? The IOC has a great deal of authority concerning reserve issues. Section B-2.4.2 requires the IOC to review and approve load shedding programs to assure system stability and section B- 2.4.4 requires the IOC to utilize prudent utility practices in assessing effective utilization of capacity, transmission limita- tions, and local area requirements. In the course of these duties, it would be appropriate for the IOC to discuss and develop criteria for assessing the reliability of various spinning reserve and system reliability issues and options. Independent of the provisions of the AIA, the ASCC could address, and has, in fact, been considering, these issues. ie Who determines reserve requirements? The AIA delegates authority to the IOC on a number of reserve- related issues. The IOC can establish criteria for automatic load shedding and review and approve a Utility’s load shedding programs (§§ B-3.2.3, B-2.4.2), adjust Reserve Capacity Obligations (§ A- 1.1.2), determine Accredited Capability for each Utility Partici- pant (§ A-1.1.3), determine, adjust, or modify each Utility Participants’ Operating Reserve Obligations (§§ B-2.1.2, B-2.3.1), modify or change Total ORO, Spinning and Non-Spinning Reserve ratios, and criteria for generating unit capability for Operating Reserves (§ B-2.2.3), and establish procedures to assure that Operating Reserves are available on the systems of the Utilities at all times (§ B-2.4.3). 3 RLS\IOCRES. pp If the IOC members are dissatisfied with capacity or operating reserve obligations or criteria for the Railbelt, the IOC is an appropriate forum to resolve those differences. Be How should a jointly-owned generating unit be treated for the purpose of determining reserve obligations? The AIA does not specifically address jointly-owned generating units. In the absence of IOC direction, it would be reasonable to assign each utility a percentage of the generating unit based on its ownership interest for reserve purposes. 9. Should Utility Participants be allowed to make non-firm sales of their Spinning Reserves? Nothing in the AIA precludes Utility Participants from making non-firm sales of Spinning Reserves, provided the non-firm sales can be discontinued quickly enough to insure system reliability. (§B-2.4.2) 10. If a Utility Participant sells firm or non-firm power, should the selling or the purchasing utility be required to provide reserves for that sale? This is an issue that must be resolved on a contractual basis between the selling and the purchasing utility. Interconnected utilities should seek a consistent approach. Jurisdiction and Authority for Resolution: Only the IOC has contractual responsibility for resolving issues related to reserve obligations in the Railbelt. However, the IOC has tended to focus on the technical expertise of the Railbelt utilities and has been unsuccessful in resolving some of the fundamental policy questions inherent in this debate. Thus, it may be appropriate to convene the Railbelt Utility Managers to resolve these policy questions. In addition, resolution of certain technical questions may depend on the resolution of closely-related policy issues. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE Although the majority of the Railbelt reserve issues are contractu- ally reserved for the IOC, there are certain limited issues for resolution by the BPMC. * Declare Project capability * Establish criteria for the allocation of capacity and energy * Establish criteria for Participant Project scheduling RAILBELT UTILITY MANAGERS -- POLICY ISSUES The following issues arise under the AIA, but have not successfully 4 RLS\ IOCRES . pp been resolved on a technical level by the existing IOC members. These policy issues require the immediate attention of the Railbelt utility managers. * Address AEA’s status as a "Utility Participant" under the AIA. * Determine the acceptability of selling spinning reserves under AIA and IOC operating criteria. * Discuss and consider possible amendments or modifications to the technical and/or procedural provisions of the AIA. * Clarify the status of the investigation into "quality" and "system response" criteria for reserves. (Currently being discussed by ASCC.) * Affirm or, if necessary, recommend modification to, ASCC planning and operating criteria for interconnected utilities. INTERTIE OPERATING COMMITTEE -- TECHNICAL ISSUES The following issues are assigned to the IOC by the provisions of Addendum No. 1. The relevant contract provision is cited. * Determine each Utility Participant’s Reserve Capacity Obligation. (B-2.1.2) * Determine each Utility Participant’s Operating Reserve Obligation. (B-2.1.2) * Establish criteria for the approval of programs to provide load shed in lieu of spin (SILOS). (B-2.4.2) * Determine the spinning and non-spinning portions of each Utility Participant’s Operating Reserve Obligations. (B- 2.4.3) * Determine the availability of each Utility Participant’s Operating Reserves. (B-2.4.3) * Establish criteria for assessing the capability of a generating unit used to provide Operating Reserves. (B- 2e2/J2) andy) 43) * Determine each Utility Participant’s Accredited Capabili- ty. (A-1.1.3) * Establish criteria for system response when Spinning Reserves are sold. (B-2.4.3) * Establish criteria for determining the reserve require- ments of jointly-owned generating units. (B-2.1.2) Summary and Recommendations The range of issues outlined above is extensive and potentially contentious among the Railbelt utilities. Issues that the IOC has been unable to resolve are identified above and should immediately be considered by the Railbelt utility managers. Simultaneously, the IOC should begin the task of establishing the various technical criteria, definitions, and requirements it is charged with developing under the AIA. The establishment of objective, agreed- 5 RLS\IOCRES. pp upon criteria for accrediting generating resources, determining reserve obligations, assessing generating capability, etc. could allow many of these issues to be resolved on a more objective, less political basis, thus insuring that adequate reserve capability is provided in the Railbelt. 6 RLS\IOCRES . pp