ACTIONS IN COMPLIANCE WITH FERC ORDER NO 719 WHOLESALE

Section 1. Demand Response and Market Pricing During Periods of Operating Reserve

47

RTO required to accept bids from DRR on basis comparable to any other resources, for ancillary services that are acquired in a competitive bidding process, if the demand response resources: (1) are technically capable of providing the ancillary service and meet the necessary technical requirements; and (2) submit a bid under the generally-accepted bidding rules at or below the market-clearing price, unless laws or regulations of the relevant electric retail regulatory authority do not permit a retail customer to participate. All accepted bids would receive the market-clearing price.

R. Dillon

MWG

RTWG

Filing Letter

Tariff

Future Markets for new, competitive ancillary services.

Dates for MOPC and BOD meetings to consider these issues TBD.

57

Describe in the compliance filing their efforts to develop adequate customer baselines in order to depict a demand response resource’s normal load on any given day.

R. Dillon

MWG

Filing Letter

Dates for MOPC and BOD meetings to consider these issues TBD.

59

While the Final Rule does not set forth a standardized set of technical requirements for demand response resources participating in ancillary services markets, each RTO, in conjunction with its stakeholders, will develop its own minimum requirements. The Final Rule also requires that RTOs and ISOs will coordinate with each other in the development of such technical requirements and provide the Commission with a technical and factual basis for any necessary regional variations.

G. Wallaert

(NAESB Standards)

MWG

Filing Letter

Dates for MOPC and BOD meetings to consider these issues TBD.

61

RTO is required to file a proposal to adopt reasonable standards for system operators to call on demand response resources and mechanisms to measure, verify, and ensure compliance with any such standards.

MWG

RTWG

ORWG

Filing Letter

Dates for MOPC and BOD meetings to consider these issues TBD.

81

RTOs must incorporate new parameters into their ancillary services bidding rules that allow demand response resources to specify a maximum duration in hours that the demand response resources may be dispatched, a maximum number of times that the demand response resource may be dispatched during a day, and a maximum amount of electric energy reduction that the demand response resources may be required to provide either weekly or daily.

MWG

RTWG

ORWG?

Filing Letter

Dates for MOPC and BOD meetings to consider these issues TBD.

85

RTOs are free to propose additional parameters as long as they do not provide undue preference to demand response resources vis-à-vis supply-side resources and interested persons may raise these additional bidding parameters with their deliberations with the individual RTO.

R. Dillon

MWG

Filing Letter

86

RTOs must incorporate bidding parameters that allow demand response resources to specify limitations on the duration, frequency, and amount of their service. RTOs and ISOs are required to confer with each other on such parameters and methods and to provide a technical and factual basis for any necessary regional variations.

MWG

RTWG

ORWG?

Filing Letter

Dates for MOPC and BOD meetings to consider these issues TBD.

88

The new requirements for bidding rules pertain only to demand response resources although the RTO may propose to apply them more broadly.

R. Dillon

MWG

Filing Letter

89

All demand response resources can specify operational limits in their bids as a way for these resources to minimize the risk that they are called on too frequently, thereby making participation in ancillary services markets more feasible.

MWG

RTWG

ORWG?

Filing Letter

Dates for MOPC and BOD meetings to consider these issues TBD.

97

The Commission will require RTOs in cooperation with their customers and other stakeholders to perform an assessment through pilot programs or other mechanisms of the technical feasibility and value to the market of smaller demand response resources providing ancillary services within one year of the effective date. This report will include whether smaller demand response resources can reliably and economically provide operating reserves and report these finding to the Commission. Additional issues that were raised by commenters such as the need for measurement and verification standards and a definition of what constitutes “small demand response resource” should also be addressed.

L. Nickell

MWG

RTWG

ORWG - lead

Filing by year end 2009

Due one year after effective date; ORWG take lead in developing assessment in time to report to MOPC by mid-year meeting

111

The Final Rule requires that all RTOs modify their tariff to eliminate any deviation charge to a buyer in the energy market for taking less electric energy in the real-time market than was scheduled in the day-ahead market during a real-time market period which the RTO has declared an operating reserve shortage or makes a generic request to reduce load in order to avoid an operating reserve shortage. This requirement does not apply to RTO wholesale demand response program participants but rather to market buyers who voluntarily provide additional demand response either during or prior an RTO-directed operating reserve shortage in an effort to improve system reliability.

Future Markets

MWG

RTWG

ORWG?

SPP Engineering?

Filing Letter

Future Market-(day ahead)

127

RTOs and ISOs are directed to modify their tariffs to eliminate deviation charges for virtual purchasers, during the same period as they are eliminated for physical purchasers as set out above, unless the RTO or ISO upon compliance makes a showing that it would be appropriate to assess such deviation charges for virtual purchasers during this period. This approach establishes a reasoned generic policy and still provides an opportunity for each RTO or ISO, on a case-by-case basis, to present a factual record that the generic policy does not fit its overall market design.

Filing Letter

Future Markets

154

The Final Rule requires that RTOs amend their market rules as necessary to permit an Aggregator of Retail Customers (ARC) to bid demand response on behalf of retail customers directly into the RTOs organized markets, unless the laws or regulations of the relevant electric retail regulatory authority do not permit a retail customer to participate.

MWG

RTWG

ORWG?

Filing Letter

We already allow.

158

RTOs will amend its tariff and market rules as necessary to allow an ARC to bid demand response into the RTOs organized markets in accordance with the following criteria and flexibilities:

1. The ARC’s demand response bid must meet the same requirements as a demand response bid for any other entity, such as an LSE.

2. The bidder has only an opportunity to bid demand response in the organized market and does not have a guarantee that its bid will be selected.

3. The term “relevant electric retail regulatory authority” means the entity that establishes the retail electric prices and any retail competition policies for customers, such as the city council for a municipal utility, the governing board of a cooperative utility, or the state public utility commission.

4. An ARC can bid demand response either on behalf of only one retail customer or multiple retail customers.

5. Except for circumstances where the laws and regulations of the relevant retail regulatory authority do not permit a retail customer to participate, there is no prohibition on who may be an ARC.

6. An individual customer may serve as an ARC on behalf of itself and others.

7. The RTO may specify certain requirements, such as registration with the RTO, creditworthiness requirements, and certification that participation is not precluded by the relevant electric retail regulatory authority.

8. The RTO may require the ARC to be an RTO member if its membership is a requirement for other bidders.

9. Single aggregated bids consisting of individual demand response from a single area, reasonably defined, may be required by the RTO.

10. An RTO may place appropriate restrictions on any customer’s participation in an ARC-aggregated demand response bid to avoid counting the same demand response more than once.

11. The market rules shall allow bids from an ARC unless this is not permitted under the laws or regulations of relevant electric retail regulatory authority.

ORWG-specifically i). See below.

MWG

RTWG

ORWG?

SPP Legal

Filing Letter

We already meet requirement in a., b., d., f., h., possibly h. and k.

On e. and g., need to research Attachment AH on references to relevant retail regulatory authority

164

With regard to SPP’s comments that there is no retail access within SPP, the Commission noted that its ARC requirements are not limited to aggregation of retail customers who have retail choice. The Commission will not prejudge whether any nascent ARC program will satisfy the requirements. Nor will they decide whether a regulator of a traditional, vertically-integrated monopoly utility may give permission for an ARC to aggregate retail customer’s demand responses for bidding into SPP’s markets. SPP may explain in its compliance filing its situation regarding retail choice but should also explain how it would accommodate a bid from an ARC consistent with the criteria listed.

SPP / Regulatory and Legal

Filing Letter

Systems currently accommodate. Attachment AH requires ARC to attest that they have relevant regulatory authority.

194

Each RTO is required to reform or demonstrate the adequacy of its existing market rules to ensure that the market price for energy reflects the value of energy during operating reserve shortage. The RTO is also required to provide, as part of the compliance filing, a factual record that includes historical evidence for its region regarding the interaction of supply and demand during periods of scarcity and the resulting effects on market prices, an explanation of the degree to which demand resources are integrated into the various markets, the ability of demand resources to mitigate market power and how market power will be monitored and mitigated, among other factors.

C. Monroe

L. Nickell

R. Dillon

MWG

RTWG

ORWG

SPP Legal

Filing Letter

Tariff

Dates for MOPC and BOD meetings to consider these issues TBD.

VRLs are a form of scarcity pricing.

208

The Commission required each RTO to ensure that the market price for energy accurately reflect the value of energy during an operating reserve shortage but given regional differences did not want to prescribe one particular approach, the four approaches below were suggested or any other approach that achieves the same objectives:

1. RTOs would increase the energy supply and demand bid caps above the current levels only during an emergency.

2. RTOs would increase bid caps above the current level during an emergency only for demand bid while keeping generation bid caps in place.

3. RTOs would establish a demand curve for operating reserves, which has the effect of raising prices in previous agreed-upon way as operating reserves grow short.

4. RTOs would set the market-clearing price during an emergency for all supply and demand response resources equal to the payment make to participants in an emergency demand response program.

A. McQueen

R. Dillon

MMU

MWG

ORWG

Filing Letter

Tariff

Dates for MOPC and BOD meetings to consider these issues TBD.

235

The Independent Market monitor is to provide the Commission with its view on any proposed reforms. (regarding the above four approaches)

EMA

247

The Commission established 6 criteria to evaluate and RTOs proposal designed to ensure that the shortage pricing proposal achieves the objectives of this requirement while protecting customers form market power.

1. Improve reliability by reducing demand and generation during periods of operating reserve shortage.

2. Make it more worthwhile for customers to invest in demand response technologies.

3. Encourage existing generation and demand resources to continue to be relied upon during an operating reserve shortage.

4. Encourage entry of new generation and demand resources.

5. Ensure that the principle of comparability in treatment of and compensation to all resources is not discarded during periods of operating reserve shortage.

6. Ensure market power is mitigated and gaming behavior is deterred during periods of operating reserve shortages including, but not limited to, showing how demand resources discipline bidding behavior to competitive levels.

??

Filing Letter

195

RTOs are also free to propose other pricing reforms and associated mitigation that meet the criteria herein. (above)

MWG

RTWG

ORWG

Filing Letter

199

Existing rules should combine effectively with the more vigilant monitoring required in this rule to dissuade the exercise of market power.

A. McQueen

MMU

RTWG

Filing Letter

204

Each RTO is required to address in its compliance filing how its selected method of shortage pricing interacts with its existing market design.

R. Dillon

MWG

RTWG

Filing Letter

248

RTOs are required to explain how its market rules will reduce or avoid periods of operating reserve shortage as well as how its market rules will reliably reduce demand and increase generation during periods of operating reserve shortage.

R. Dillon

MWG

RTWG

ORWG

Filing Letter

258

The Commission will allow an RTO to phase in any new pricing rules over a period of a few years, provided that this period is not protracted. Any phase-in must be justified as part of the RTOs overall proposal to change its pricing rules.

MWG

RTWG

Filing Letter

Dates for MOPC and BOD meetings to consider these issues TBD.

274

RTO will assess and report on any remaining barriers to comparable treatment of demand response resources that are within the Commission’s jurisdiction and to submit its findings and any proposed solutions along with a timeline for implementation to the Commission in its compliance filing 6 months after publication date.

MWG

RTWG

ORWG?

274

Each RTOs Independent Market Monitor must submit a report describing its views on these issues to the Commission.

MWG

MMU

SPP Legal

274

In each RTOs report, any significant minority views must by identified but not every opinion of every stakeholder must be addressed.

MOPC

275

RTOs report should identify all known barriers and provide an in-depth analysis of those that are practical to analyze in the compliance time frame given for analyzing the remainder. This should include but is not limited to technical requirements as well as performance verifications limitations. It need not include a formal cost-benefit analysis for each barrier and proposal to overcome it.

C. Monroe

L. Nickell

B. Sugg

R. Dillon

MWG

RTWG

ORWG

Section 2. Long-Term Power Contracting in Organized Markets

301, 303, 304

RTOs dedicate a portion of their Web sites for market participants to post offers to buy or sell electric energy on a long-term basis. The Commission requires each RTO to submit a compliance filing describing actions the RTO has taken, or plans to take, to comply with the requirement and providing information on the bulletin board the RTO has chosen to implement. The Commission declined to mandate a specific for the Web site but will leave the implementation to the RTO and their stakeholders. This discretion includes decisions over the amount and type of data to be posted by participants, whether participants must include a proposed price in their posting, as well as password and security requirements, post the disclaimer on the web site indicating they are not responsible for the content posted by users and outlining the terms and conditions under which users may post offers to buy or sell under long-term agreements.

B. Sugg

L. Nickell

A. McQueen

MMU

SPP Legal

SPP IT Apps

MWG

BPWG

CWG

Filing Letter

Project needs to be opened for this.

302

If an RTO, in consultation with its stakeholders, believes that costs of the bulletin board will be significant, it may explain in its compliance filing how it plans to recover the costs, including whether it plans to charge users of the bulletin board.

B. Sugg

L. Nickell

A. McQueen

MOPC

BOD

SPP IT and Communications Staff

Filing Letter

Section 3. Market Monitoring Policies

328

RTOs shall include provisions in their tariffs: (1) obliging themselves to provide their MMUs with access to market data, resources, and personnel sufficient to enable them to carry out their functions; (2) granting MMUs full access to the RTO database; and (3) granting MMUs exclusive control over MMU-created data.

A. McQueen

MMU

RTWG

Filing Letter

Tariff

Dates for MOPC and BOD meetings to consider these issues TBD.

AG 3.1

329

MMUs may share data under their exclusive control, subject to pertinent confidentiality provisions.

A. McQueen

MMU

Filing Letter

AG 8.1 (check to see if this goes far enough)

329

Access to the RTO database includes access to RTO operational information.

A. McQueen

MWG

RTWG

Filing Letter

AG 8.2

339

MMUs are required to report to the RTO Board of Directors with management representatives on the board excluded from the oversight function. MMUs are permitted to report to management for administrative purposed, such as pension management, payroll, and the like.

A. McQueen

MMU

Filing Letter

Dates for MOPC and BOD meetings to consider these issues TBD.

AG 3.1 – does not mention exclusion of SPP mgmt from oversight

341

The Commission identifies the core MMU duties as: (1) identifying ineffective market rules, (2) reviewing the performance of markets, and (3) making referrals to the Commission. If the internal market monitor is responsible for carrying out any or all of these things, it must report to the board (as must the external market monitor).

A. McQueen

MMU

RTWG

Filing Letter

Dates for MOPC and BOD meetings to consider these issues TBD.

AG 1.3 – check language regarding referrals to the commission

354

Commission outlines the functions of the MMU.

A. McQueen

MWG

RTWG

Filing Letter

Dates for MOPC and BOD meetings to consider these issues TBD.

AG covers generally – needs clarification

360

The RTO shall include in its tariff that it may require the MMU to submit its report in draft form to the RTO for review and comment but it may not alter the reports generated by the MMU or dictate the MMUs conclusions.

A. McQueen

MMU

SPP Legal

Filing Letter

Dates for MOPC and BOD meetings to consider these issues TBD.

Not in tariff – add section

374

The Final Rule directs that if an RTO employs a hybrid MMU structure; it may authorize its internal MMU to conduct mitigation. However, this solution works only if the external market monitor is charged with the responsibility of reviewing the quality and appropriateness of the mitigation conducted by the internal market monitor.

A. McQueen

R. Dillon

L. Nickell

MMU

MWG

RTWG

Filing Letter

Tariff

Dates for MOPC and BOD meetings to consider these issues TBD.

Consider whether to keep GLDFs in MMU or move to SPP Operations

External MM does no oversight and internal MMU does so this should be moved from MMU to RTO (operations)

375, 376

Difference between prospective and retrospective mitigation: The Commission makes it clear that it is only prospective mitigation that affects the operation of the market and therefore it is only prospective mitigation that creates a potential conflict of interest for an MMU. The Commission directs that RTOs may allow their MMUs, regardless of whether it uses a hybrid structure, to conduct retrospective mitigation. (For these purposes, the Commission considers prospective mitigation to include only mitigation that can affect market outcomes on a forward-going basis, such as altering the prices of offers or altering the physical parameters of the offer (e.g., ramp rates and start-up times) at or before the time they are considered in a market solution. All other mitigation would be considered retrospective. P. 375 Should any question arise as to categorization whether for existing or proposed tariff revisions, the RTO may seek guidance from the Commission in its compliance filing. P. 376

A. McQueen

MMU

MWG?

Filing Letter

Tariff?

Dates for MOPC and BOD meetings to consider these issues TBD.

Review Market Mitigation Plan

We do no retrospective mitigation on a systematic basis – only in the context of an investigation

378

The Commission also directs that each RTOs tariff shall clearly state which functions are to be performed by MMUs and which by the RTO.

A. McQueen

MMU

MWG if anything needs to be clarified in the rules or tariff

Filing Letter

Tariff

Dates for MOPC and BOD meetings to consider these issues TBD.

Changes to be made through modification to mitigation plan.

379

RTOs are directed to review their mitigation tariff provisions with a view to making them as non-discretionary as possible whether performed by the MMU or by the RTO and to reflect any needed changes in their compliance filings.

A. McQueen

MMU

MWG

RTWG

Filing Letter

Tariff

Dates for MOPC and BOD meetings to consider these issues TBD.

Need to review mitigation plan to see determine if non-discriminatory enough.

380

Each RTO is directed to include in its tariff the minimum ethics standards to be applicable to its MMU (below from the NOPR) with certain modifications as explained. (minimums listed in P. 380)

A. McQueen

MMU

SPP Legal

Filing Letter

Tariff

Dates for MOPC and BOD meetings to consider these issues TBD.

Not specified in tariff. AG refers generally to Standards of Conduct.

384, 387

These are minimums and the RTO is free to propose more stringent ones. P. 384 The ethics requirements apply to both the MMU itself as well as its employees. P. 387

A. McQueen

MMU

SPP Legal

Filing Letter

Tariff

Dates for MOPC and BOD meetings to consider these issues TBD.

Not specified in tariff. AG refers generally to Standards of Conduct.

392

RTOs shall include all MMU provisions in one section of the tariff as well as inclusion of a mission statement in the introductory portion of the MMU portion of the tariff section, which sets forth the goals to be achieved by the MMU, including the protection of customers and market participants by the identification and reporting of market design flaws and market power abuses.

SPP Legal

MMU

SPP Legal

Filing Letter

Tariff

Dates for MOPC and BOD meetings to consider these issues TBD.

Legal send draft to MMU for initial review.

Could reword Section 1.2 of AG into mission statement.

393

RTOs shall also include in its tariff provisions a statement that in the event of any inconsistency between the centralized MMU section and provisions set forth elsewhere, that the provisions in the centralized MMU section control, although the RTO should attempt to avoid such consistencies.

SPP Regulatory

RTWG

Filing Letter

Tariff

Dates for MOPC and BOD meetings to consider these issues TBD.

This may be OK in tariff but statement could be added to clarify.

395, 396

The NOPR contained a proposal by the Commission that MMUs report on aggregate market performance no less than quarterly to the Commission staff, to staff of interested state commissions, and to the management and board of the RTO. The Commission also proposed that the MMUs make one or more of their staff members available for regular conference calls with representatives of the Commission, state commissions, and the RTO. P. 395 The Commission also proposed that market participants by included in the dissemination of reports which can be accomplished by posting them to the RTO website. Participation by market participants, Commission staff, state commission staffs and attorneys general should be included if they desire to attend. P. 396

Legal

MMU

MWG

RTWG

Filing Letter

Tariff?

Legal can start discussion – reports are done monthly now.

Alan McQueen would like to formulate a proposal to report quarterly to RSC.

397

There shall also be a provision in the RTO tariff that the annual state of the market reports are a requirement with the same group dissemination as quarterly reports.

A. McQueen

MMU

Filing Letter

Tariff

Dates for MOPC and BOD meetings to consider these issues TBD.

AG 7.2

Alan wants to make this part of the internal process to disseminate other reports.

Is web posting good enough to satisfy this?

398

Also the Commission directed that the time period for offer and bid data be reduced to three months but that an RTO could produce the data sooner with accompanying justification or, if it demonstrates a potential for collusion concern, a four-month lag period or some other mechanism to delay the release of a report if the release were otherwise to occur in the same season as reflected in the data. In addition, the Commission agrees that the practice of masking the identity of participants should be retained.

A. McQueen

MMU

Filing Letter

This has been assigned within the MMU to organize project to get this done.

Not required to be written into tariff.

Discussion with FERC Staff by R. Dillon has confirmed that FERC expects us to comply with the shortened time frame even though we do not currently provide this data publicly

422

It is assumed that the data to be released would consist not only of physical offers and bids but demand and virtual offers and bids as well. However, if the RTO objects to such inclusion, they may address this in their filings. Likewise, if they want to release additional data, such as system lambda, that should be addressed in the filing also.

Alan McQueen

MMU

SPP Communication (web page posting)

SPP IT

Filing Letter

See previous.

475

RTOs consider structuring the MMU section of the tariff to include, preferably in this general order:

-Introduction and Purpose

-Definitions

-Independence and Oversight

-Structure

-Duties of the Market Monitor

-Duties of the RTO

-Data Access, Collections and Retention

-Information Sharing

-Ethics

-RTO-Specific Provisions

-Protocol on Referrals of Investigations to the Office of Enforcement

-Protocols on Referrals of Perceived Market Design Flaws and Recommended Tariff Changes to the Office of Energy Market Regulation

A. McQueen

MMU

Legal

RTWG

Filing Letter

Tariff

Dates for MOPC and BOD meetings to consider these issues TBD.

To the extent that there are deficiencies previously identified – those will be added and other existing sections will be fit together as close as reasonably possible to this outline.

Section 4. Responsiveness of RTOs to Customers and Other Shareholders

477, 502, 503

The Commission establishes four criteria which RTOs must possess to meet requirements of this section. They are: (1) inclusiveness; (2) fairness in balancing diverse interests; (3) representation of minority interests; and, (4) ongoing responsiveness. P. 477

Each RTO must include in a filing to the Commission how it is fulfilling, or will fulfill, these obligations. P. 502 RTO independence remains fundamental and will be preserved but the Commission finds that an RTO board must be responsive to the concerns of customers and stakeholders as it provides those entities with confidence in the RTOs independent governance processes. P. 503

S. Duckett

MMU

RTWG

Filing Letter

Dates for MOPC and BOD meetings to consider these issues TBD.

556

The Commission will require each RTO to post on its Web site a mission statement or organizational charter. The Commission encourages each RTO to include in its mission statement, among other things, the organization’s purpose, guiding principles, and commitment to customers and other stakeholders, and ultimately to the consumer who benefits from and pay for electricity services. The mission statement or organizational charter may include additional information, such as elements form the RTOs governing documents. The Commission does not expect that any explicit statement of the responsiveness objective would conflict with the elements of the RTOs mission.

S. Duckett

RTWG

Filing Letter

565

The Commission requires that each RTO make a compliance filing that proposes changes to its responsiveness practices and procedures to comply with the responsiveness requirement or that demonstrates that its practices and procedures already satisfy the requirement for responsiveness. The compliance filing must also propose posting, or report of posting, of the RTOs mission statement or organizational charter on its respective Web site. This filing shall be submitted within 6 months of publication in the Federal Register.

S. Duckett

Check to see if what is already out there complies-SPP staff

Filing Letter

Dates for MOPC and BOD meetings to consider these issues TBD.

567

The compliance filing should also include how the RTO plans to satisfy, or currently satisfies, each responsiveness criterion. It should include for each criterion an explanation of the process (e.g., stakeholder meetings, technical conferences, board discussions) that the RTO used to develop its compliance filing demonstration and describe major dissenting views.

S. Duckett

May just need to explain that we already comply-make sure

Filing Letter

Dates for MOPC and BOD meetings to consider these issues TBD.

567

In the event that an RTO completes its responsiveness compliance requirements in less than six months, they may file them ahead of the specified due date. The Commission will assess whether each filing satisfies the proposed requirements and issue additional orders as necessary.