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Enron Documents 2001 Folder Profile Control # 2001-000102 Name ICopy of letter to Secretary Bill Richardson to David Boerget Priority Important Folder Trigger Letter DOE Addressee Source PM-O Bill Richardson l l [Bill Richardson I Date Received 1/4/01l Subject Text-- ------ Correspondence Date 1/2/01 Enclosing for filing Docket No. RM99-2-000, Utah Associated Municipal Power Systems' RIDS Information | Head of Agency Answer to Joint Motion of Electricity I Consumers Resource Council, Et Al. Sensitivity Not Applicable 1 Action Office # Classification None Signature/Approval____ Point of Contact GREENA [NA | Organization ID EXECCORR2 Action Requested Assigned To Prog Determination GC Special Instructions Date Due | Date Completed 1/4/01 I -uu i-uUU102 1/4/01 9:14 a SHEA & GARDNER 1800 MASSACHUSETTS AVENUE. N.W. WASHINGTON. D.C. 20036-187Z 120z2 828-2000 ROBIET T. sASSECHt4 TIMOTHY K. SHUBA FAX: (202I 828-2195 HEATHER . ANDERSON JILL eLANINSAR NLJANINIW. SOLEY MICHAEL S. GIANNOTTO REtiA N. GLA2ER TIMOTHY H. EDGAR RBEAL IMICHAEL . BOLOET. S.C.AOTION HOWARD R. RUBIN DAVIO R. ESOUIVEL RALP J. MOORE. JR. JrFFREY C.CARTIN DONALD J. MUNRO LISA N. HARRISON MAITIN J. LYtNN WILLIAM I. HANLON DnTI DAGMAR STIANDBERG MICHELE L. SVOWNIN STXPHarN J. POLLAK LIUTABEITRUNYAN GEISE TIMOTHY G. LYNCH ADAM 4. CHUD DAVID BOOTH BsERS COLLrTTE C. GOODMAN MATTHEW M. HOFrMAN CLENA A. BAtLIS JOHN 0. ALOOCK LAURA S. WERTHEIMER JAMES CHAD OPPENHEIMER ROSS C. DAVIES WLJOHLAM0S.ALLDMOCKLAUBDS. WCT R MH.OAVID OOBBINS RICHARD A. PASCHAL WILLIUAM . MOORlE ICHARDOK. WTER TCHRISTOPHERL. SAGERS RICHARD L. HATHENT III JOHN TOWNSEND RICH THOHAS J. NIKULA JEFFREY M. KLEIN DOMINICK V. RED JA-MS R. IEKE EUGENIA L ANGAN January 2, 2001 SENO COUNSEL WILLIAM r. SHcEHAN NANCYa. STONE WARER W. C.RDNER LAWRENCE J. LATTO R. JAMES WOOLSET CHRISTOPHER C. PALMER VFeWERICA C. SCHAFRIC MCARKS. RAFFMAN OF COUNSEL AVIODS. COOK VALERIE C. ROSS RICHARD T. CONWAY A.THONY A. LAPHA STEPHEN J. HALE MICHAEL IK. ISENNAN "WILIAM4 . DfElMPSY _EC C. JFF PATRICK M. HANLON JOHN MOUSTAKAS FRANMCS M. SHEA IIOO- 19O80 Bv Hand Delivery Mr. David P. Boergers Secretary Federal Energy Regulatory Commission 888 First Street, N.E. Washington, DC 20426 Re: Docket No. RM99-2-000 Dear Mr. Boergers: Enclosed for filing in the above-referenced docket are an original and 14 copies of "Utah Associated Municipal Power Systems' Answer to Joint Motion of Electricity Consumers Resource Council, Et Al." Please file-stamp and return the extra copy of the foregoing document by the delivering courier. Very truly yours, Timothy K. Shuba TKS/jg Enclosures cc: Service List a UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION Regional Transmission Organizations )Docket No. RM99-2-000 UTAH ASSOCIATED MUNICIPAL POWER SYSTEMS' ANSWER TO JOINT MOTION OF ELECTRICITY CONSUMERS RESOURCE COUNCIL, ET AL. On December 15,2000, Electricity Consumers Resource Council, Electric Power Supply Association, Enron Power Marketing, Inc., Reliant Energy Power Generation, Inc., and Dynegy Inc. (collectively, the "Joint Movants"), filed in this docket a Joint Motion to Convene a Technical Conference on Interregional Coordination. Pursuant to Commission Rule 213, Utah Associated Municipal Power Systems ("UAMPS") hereby files this answer in support of the Joint Motion. The Joint Motion correctly points out that "few of the RTO compliance filings showed meaningful steps towards interregional coordination," and that the "push" to resolve these issues and achieve "seamless trading areas" consisting of multiple RTOs "must come from FERC." Joint Motion at 5. The Joint Movants therefore urge the Commission to "convene a technical conference to develop a specific template for seams resolution which RTOs would be required to meet." Id. at 7. UAMPS wholeheartedly agrees with the Joint Movants' shared perceptions (1) that resolving "seams issues" between RTOs is of critical importance, and (2) that to this point, jurisdictional utilities and other stakeholders have not devoted the time or resources necessary to 2 adequately address these points. UAMPS agrees with the Joint Movants' view that seams issues must be addressed in order to maximize the effective size - and thus the benefits - of the markets that RTOs are intended to create. However, UAMPS is more immediately concerned with the actual harm that a lack of effective interregional coordination will have on load-serving entities like it, whose loads and resources do not fall within the borders of a single proposed RTO. The Commission should therefore act as the Joint Movants request, not only to maximize the benefits Order No. 2000 was expected to achieve, but to avoid impairing some entities' ability to provide reliable electric service. As UAMPS has noted in other dockets, UAMPS has members and resources in two different proposed RTO regions in the Western Interconnection: RTO West and Desert STAR. See Protest and Motion to Intervene of Utah Associated Municipal Power Systems, Docket No. RT01-35-000 (Nov. 20,2000). While most of UAMPS' members and resources are dependent upon RTO West utilities, four of its members and more than a third of its firm resources, measured in megawatts, are located within Desert STAR's proposed territory.-" Because of the substantial number of transactions that UAMPS will therefore have to schedule across proposed RTO borders, UAMPS has a great appreciation for the difficulties that seams issues may cause, and a unique perspective on the benefits that may be gained by further expanding or combining proposed RTOs' geographic scope. However, regardless of whether existing or proposed RTOs are ever combined, the various RTOs within each interconnection must be able to operate compatibly across their borders. For both of these reasons, the currently-proposed RTOs should Historically, and including both firm and nonfirm resources, nearly half of UAMPS' resources have come from the proposed Desert STAR service area. be formed in a manner that minimizes their differences by adequately addressing seams issues and ensuring compatible operations. Reconciling differences will become increasingly difficult as methods and practices are agreed to, and then institutionalized and implemented within each RTO. Because of its geographic position, UAMPS has actively participated in the workgroups and policy committees of both RTO West and Desert STAR, and has consistently focused on trying to ensure that those two organizations' operations, pricing, congestion management, and planning will be as compatible as possible. UAMPS hosted the only meeting specifically held between some of the participants of the two organizations, and has participated in Western Market Interface Committee meetings where the issues of compatibility between RTO operations were discussed. UAMPS is well aware, then, that the three potential RTOs in the Western interconnection, at least, have devoted very little time thus far to coordinating plans or proposals. As a result, serious incompatibilities in fact appear to be developing. While their respective filings are not complete, the existing RTO West and Desert STAR documents suggest that their operations may be incompatible in significant respects. For example, RTO West is proposing to alter the current contract path method of reserving transmission to a flow based model, in which RTO West will use a source, a sink, and powerflow distribution factors to determine what specific flowpaths the proposed transaction will use. Desert STAR has considered flow-based models, but because of the topology of its transmission system has determined that they are not needed. Finally, we understand that the CAL ISO intends to propose flow-based scheduling within its borders, but will continue to use contract path methodology at its interfaces with other RTOs or control areas. These methodologies, of .4 course, must be coordinated if interregional transactions are to occur. If UAMPS schedules a delivery from Powerex at the Canadian Border to serve load in Utah, under the RTO West model a significant amount of this energy will flow over facilities controlled by the CAL ISO and/or Desert STAR. Neither the RTO workgroups nor the RTO West RRG have resolved how this flow would be handled by RTO West, the California ISO and Desert STAR, respectively. This hodgepodge of methodologies, most of which are incomplete, will cause substantial operational problems if the differences are not accommodated or reconciled well before the RTOs are N implemented. In addition to causing operational problems that may threaten reliability, inconsistent RTO policies may cause unjustifiable and unintended cost shifts among users of combined RTO systems. For example, the current RTO West and Desert STAR documents show that RTO West does not currently anticipate charging export fees for the use of its transmission system for export or "through" transactions, whereas Desert STAR does intend to utilize such fees as a part of its pricing structure. The result of this mismatch is that UAMPS' resources in Desert STAR will share the costs of transmission usage for exports to UAMPS loads in RTO West, while the costs of the transmission system serving UAMPS' RTO West loads will not be similarly shared by generator or marketer exports out of RTO West. Thus, load-serving entities such as UAMPS will therefore be required to subsidize marketers and others who make similar use of more than one RTO's facilities - an anomalous result which surely should not occur simply by default. UAMPS recognizes that at least
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