Southwest Power Pool, Inc s2

Southwest Power Pool, Inc.

1.Overview

DC Tie Transmission Reservation

DC Tie Automation required modification of SPP Business Practices 1500, 1700, and 2350. (Click the link to access the Business Practices.)

Preemption and Competition Automation

As part of the automation initiative undertaken in preparation for the Integrated Marketplace, SPP will implement the Preemption and Competition Module (PCM) from OATI. This module will automatically process valid preemptions and competitions, including those involving the Right of First Refusal. The PCM Module introduces a number of changes with respect to the Transmission Customer’s actions when involved in a Right of First Refusal competition as either a Challenger or Defender. The PCM process flow is outlined below.

The Right of First Refusal is the process that gives the customer of a confirmed transmission service reservation the option to retain the service priority by matching a competing request of either longer duration or higher service increment within the same Service Request Tier. This right is only offered to reservations that have a status of CONFIRMED. Requests that are in STUDY, RECEIVED, ACCEPTED, or COUNTEROFFERRED status are automatically preempted by requests of longer duration or higher service increment.

PCM Definitions

Defender – A Confirmed reservation of a specific service class, service increment, and duration, as well as Transmission Customer holding confirmed reservation. Challenger – A Pending, pre-confirmed, competing request of either longer duration or higher service increment within the same Service Request Tier as a referenced Defender, as well as Transmission Customer submitting a competing request. Service Class – categorization of service type, i.e. firm, non-firm Service Increment – length of service intervals, i.e. hourly, daily, weekly, monthly Duration – number of service increments

Rationale A pre-confirmed request, for a longer duration or higher service increment than a CONFIRMED reservation (Defender), is submitted for a given path for which there is insufficient capacity to grant in full the Challenger (competing request). The new request must have 1) the same POR and POD for any AFC failure or 2) share a POR or POD with a DC Tie on any ATC failure; and 3) be of the same tier, but be longer in duration or higher service increment. This request for service would normally be refused for the lack of ATC/AFC, but is instead considered for acceptance based upon previously submitted and confirmed, lower priority or shorter duration requests/reservations that could be preempted/displaced. Capacity must be available for the Defender reservation to upgrade and MATCH the Challenger’s request duration. Southwest Power Pool, Inc.

PCM Process Flow

Non-Competing Requests

Requests on the SPP AC system and DC Ties are received and processed by SPP Tariff and Interchange desk under the current procedures.

Competing Requests (One Challenger – One Defender)

1. At such point as a request cannot be granted in full because of the lack of ATC/AFC, the PCM Module will identify the existence and feasibility of any Defenders that could be challenged for the requested capacity. a. The PCM module requires that the Challenger’s request must be able to be granted in full, absent any Defender matching, for the Right of First Refusal competition to be invoked.

2. If a Defender is identified for a valid competition, the PCM Module will initiate actions required to begin the competition. a. PCM Module will recall the needed capacity from the identified Defender. b. PCM Module will systematically issue a COUNTEROFFER Matching TSR b.i. This COUNTEROFFER Matching TSR will be presented to the Defending Transmission Customer on OASIS in the COUNTEROFFER status. NOTE: The system initiated RECALL of a confirmed reservation, followed by the issuance of a COUNTEROFFER Matching request, serves as notification to the Defending Transmission Customer that the original reservation has been challenged. Defenders will have a response time as specified in NAESB WEQ—1, Table 4-2

3. A Defender will exercise his right to retain his service (to MATCH) by setting the COUNTEROFFER Matching TSR status to CONFIRMED. a. Upon confirmation, any remaining capacity of the original reservation will be recalled.

4. A Defender will elect to Not Match by setting the COUNTEROFFER Matching TSR status to WITHDRAWN or allowing the request to be automatically retracted. a. There is currently no option to REBID the COUNTEROFFER Matching TSR. NOTE: In the event that a Defender does not match, the Defender that choose not to match will forfeit their capacity and the Challenger will be counteroffered the capacity from the Defender that chose not to match.

5. In the event a COUNTEROFFER Matching TSR is CONFIRMED by the Defender, the PCM Module will re-evaluate the Challenger to determine available capacity.

a. If partial service is available, the challenger’s TSR will be counteroffered with the available capacity. a.i. The challenger will have a specified time to act on the COUNTEROFFER per Table 4.2 in the Appendix. b. If no capacity is available, the challenger’s TSR will be REFUSED. Southwest Power Pool, Inc.

Multiple Defenders (One Challenger – Multiple Defenders)

1. If there are multiple defenders, they will be Recalled by the amount needed to fulfill the challenger’s original request and a Counteroffer Matching TSR will be generated. a. Defenders will have a specified time to act on their respective COUNTEROFFER Matching TSR per Table 4.2 in the Appendix. 2. Once the Defender’s COUNTEROFFER Matching TSRs reach a final status, the system will re-evaluate the challenger’s TSR to verify if capacity is available. a. If enough capacity exists, the challenger’s TSR will be ACCEPTED. b. If partial service is available, the challenger’s TSR will be counteroffered with the available capacity. c. If no capacity is available, the challenger’s TSR will be REFUSED. NOTE: In the event that a Defender(s) does not match, the Defender(s) that choose not to match will forfeit their capacity and the Challenger will be counteroffered the capacity from the Defender(s) that chose not to match. The Challenger has the standard option to Confirm or WITHDRAW the final COUNTEROFFER.

NAESB WEQ-Business Practice Standards - Version 003 Table 4-2 PTP REQUEST TIMING REQUIREMENTS

TS_CLASS SERVICE_INCREMENT Time Transmission Transmission QUEUED Provider Customer Prior to Evaluation Confirmation Time Start Time Limit Limit after ACCEPTED or COUNTEROFFER

NON-FIRM HOURLY <1 hour Best Effort 5 minutes NON-FIRM HOURLY >1 hour 30 minutes 5 minutes NON-FIRM HOURLY Day ahead 30 minutes 30 minutes NON-FIRM DAILY N/A 30 minutes 2 hours NON-FIRM WEEKLY N/A 4 hours 24 hours NON-FIRM MONTHLY N/A 2 days 24 hours