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Consolidation - NAESB

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Consolidation
The ability for a Transmission Customer to combine all or a portion of their like firm PTP reservations into a single reservation.
8/16/2016
WEQ OASIS Subcommittee
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ConsolidationWhat Is Addressed in This Presentation
Overview of Consolidation RecommendationBenefits of ConsolidationLimitationsandRestrictions
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WEQ OASIS Subcommittee
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ConsolidationRecommendation Overview
Therecommendation creates a new request type called CONSOLIDATION, whichwould be used byaTransmission Customer to merge like reservations in order to more efficiently manage their transmission inventory as a single assignment reference number in their day-to-day business. Therecommendation also changes the current standards to prohibit Resales wherethe reseller and assignee are the same entity.

8/16/2016
WEQ OASIS Subcommittee
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ConsolidationBenefits
Customer BenefitsConsolidation reservation stands by itself (capacity is removed from Parent reservations)There is no limit on the number of Parent reservationsTagging of a single reservation rather than tagging of multiple reservationsConsolidationreservation is always unconditional and not subject topreemptionConsolidation reservation may be resoldConsolidation reservationmay be redirectedRedirect asingle reservation rather thanredirecting multiplereservationsProvider BenefitsConsolidation reservations will not need to be reported in EQRCapacity is moved as opposed to only moving scheduling rights in resale
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WEQ OASIS Subcommittee
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ConsolidationKey Limitations and Restrictions
Consolidation may only combine reservations that are alike (path, product, etc.)Consolidation request must be pre-confirmedConsolidation request cannot include conditional Parent reservationsConsolidationrequestcannot includeCCOParent reservationsConsolidation request cannot include non-firm Parent reservationsConsolidation request cannot include NITS Parent reservationsRollover rights are not conveyed to the Consolidation but, instead, remain with the Parent reservation“Resales to self” are no longer permitted
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WEQ OASIS Subcommittee
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Consolidation
Questions?
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WEQ OASIS Subcommittee
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Consolidation
Supplemental Information
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WEQ OASIS Subcommittee
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ConsolidationConditionality of Firm Reservations
Section 13.2(iii) of thepro forma tariffestablishes conditional reservation deadlines for firm PTP service.one day before the commencement of dailyserviceoneweek before the commencement of weeklyserviceonemonth before the commencement of monthly service.Conditionalreservations are those that have not passed the conditional reservation deadline. These requests may be preempted.Unconditionalreservations are those that have passed the conditional reservation deadline. These requests may not be preempted.
8/16/2016
WEQ OASIS Subcommittee
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ConsolidationConditionality of Non-Firm Reservations
Section 14.2 ofthepro forma tariffdoes not technicallyestablishconditional reservation deadlines fornon-firmPTPservice, but rather establishes response times for agreeing to match a non-firm PTP competing request.immediatelyfor hourly Non-FirmPTPwithin24 hours (or earlier if necessary to comply with the scheduling deadlines provided in section 14.6) forall other Non-Firm PTPNo time limit is established for preemption by other higher priority requestsNAESB WEQ 001-4.23Aconfirmed, non-firm PTP reservation for the next hour shall not be displaced within one hour of the start of the reservation by a subsequent non-firm PTP reservation request of longer duration.All non-firm PTP reservations areunconditionalfrom challenges by other non-firm PTP requestswithin one hour of start. Response times may vary if challenged by another non-firm PTP but all are such reservations may be preempted except within 1 hour of start.Non-firm PTPreservations areconditionalat all times when challenged by another higher priority request.
8/16/2016
WEQ OASIS Subcommittee
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ConsolidationResales to Self
“Resales to self” are no longer permittedResales must be reported each quarter to FERC by the Transmission Provider in the EQR ReportConsolidation provides the same, or better, functionality as a “Resale to self”The Request for Standards Development wantedto constrainthe use ofresales toactual commercial transactions between two unique entities
8/16/2016
WEQ OASIS Subcommittee
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ConsolidationConditionality of Parent Reservations
Conditional reservations are not permitted to be Parent reservations of a ConsolidationUnder version 3.1 Business Practice Standards, only the unconditional portion of the Consolidation could serve as the Parent reservation for a firm redirectThere is no easy way to determine the conditional nature of the ConsolidationOASIS does not support a reservation with multiple segments, each with differing conditionalityIf the Consolidation is deemed to be conditional until last Parent reservation becomes unconditional, then it would be possible to have real-time tags tied to conditional reservations (could be curtailed in real time if preempted)If the Consolidation is deemed to be unconditional if any of the Parent reservations is unconditional, it could create a mechanism for converting conditional reservations to unconditional reservations
8/16/2016
WEQ OASIS Subcommittee
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ConsolidationRollover Rights
Rollover Rightsare not lost – they remainon the Parent and are not conveyed to theConsolidationConsolidation of Yearly reservations with Rollover Rights would likely lead to a complex reservation with multiple renewal dates and capacitiesRollover Rights left on Parent reservations would preserve the ability of a customer to submit a renewal for each Parent reservationRenewals could be combined with other Yearly reservations in subsequent Consolidation requests
8/16/2016
WEQ OASIS Subcommittee
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ConsolidationDifferent Service Increments
Consolidation does not permit combinations of reservations of different service incrementsConsolidation reservations inherit the Service Increment of the Parent ReservationsOASIS does not support a reservation with multiple segments, each with differing Service IncrementsWhat is the Service Increment of the combination of reservations that have different Service IncrementsEach Service Increment has a different price (e.g. $/day, $/week,etc). What is the price structure for the combination and how is the price calculated?Price must be known for Consolidation as Parent of a Firm RedirectIf there is a differential in price between the Parent and the Firm Redirect (e.g., different priced POD) the Transmission Provider may charge the differenceIf the Firm Redirect is for part of the Consolidation’s capacity, how does the price of the Consolidation change once the Firm Redirect is unconditional and capacity on the Consolidation is reduced
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WEQ OASIS Subcommittee
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ConsolidationCombination of Different Service Increments
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WEQ OASIS Subcommittee
What should the price be for a combination of different products?Examples of prices for products are given below for use in examples on the next page. Effective daily prices are computed, rounded to the nearest 3 decimal places.
The effective daily price varies by product and also varies for monthly dependent on the number of days in the month.
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ConsolidationPrice Calculation with Combination ofDifferentService Increments
8/16/2016
WEQ OASIS Subcommittee
The table above gives an example of a four day consolidation with 50 MW total each day.Each day has a different mix of products that are consolidated.Each day has a different computed price.
Theconsolidation of different service increments isnotpermittedbecause of the complexities outlined in the diagram below related to the different prices for each increment.
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ConsolidationNAESB Business Practice StandardsThat Impact Consolidation - Redirects
001-9.5.4The Transmission Provider shall ensure the Transmission Customer’s rights to take firm PTP on the original unconditional Parent Reservation’s reserved POR and POD are preserved until such time that the confirmed Redirect on a firm basis has reached its conditional reservation deadline as defined in Section 13.2 of the pro forma tariff.001-9.6.3The Transmission Provider shall reduce the Transmission Customer’s scheduling rights on the Parent Reservation’s POR and POD by the capacity redirected once the Redirect on a firm basis is confirmed and unconditional. Subsequent curtailments or other capacity reductions affecting the reserved capacity on the Redirect reservation shall not affect the Parent Reservation nor result in a reinstatement of capacity on the ParentReservation001-11.3.5The Resale reservation shall inherit the conditional nature, if any, of the Parent Reservation resold, and shall be considered unconditional at the same point in time that the Parent Reservation becomes unconditional.001-11.3.5.1If the Resale reservation is an aggregate of multiple Parent Reservations, the Resale reservation shall not be considered unconditional until all of the aggregated Parent Reservations have become unconditional.
8/16/2016
WEQ OASIS Subcommittee
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ConsolidationNAESB Business Practice Standards That Impact Rollover Rights
001-20.1The Transmission Provider upon approving a long-term firm PTP request with rollover rights, shall post on OASIS the information relevant to the rollover rights associated with that request. Such information shall be posted such that it can be viewed and queried using thetransstatusandrolloverOASIS Templates (See Business Practice Standards WEQ-002 and WEQ-013).001-9.7.1The Transmission Customer shall indicate their intent to convey on-going rollover rights held on a long-term firm PTP reservation through a request to Redirect on a firm basis submitted on the Transmission Provider’s OASIS in accordance with the following:001-9.7.1.1TheTransmission Service attributes of the request to Redirect on a firm basis must correspond to a valid long-term firm PTP offered by the Transmission Provider; however, the duration (stop/start time) may be as noted in Business Practice Standard WEQ-001-9.7.4.001-9.7.1.2Therequest to Redirect on a firm basis must be submitted prior to the deadline for exercising the Transmission Customer’s rollover rights on the Parent Reservation being redirected.001-9.7.1.3Thestop time of the request to Redirect on a firm basis must be identical to the stop time (end of term) of the Parent Reservation being redirected.001-9.7.1.4Thecapacity of a request to Redirect on a firm basis must not exceed the Eligible Rollover Capacity held on the Parent Reservation at the time of request submission.001-9.7.1.5Allother aspects of the request to Redirect on a firm basis must meet all additional requirements for a request to Redirect on a firm basis as specified in this Business Practice Standard WEQ-001-9 or established by the Transmission Provider’s tariff, including any limitations on Redirects on a firm basis with respect to paths available for redirect, handling of differentials in pricing, etc.001-9.7.2Any request to Redirect on a firm basis submitted that does not meet all of the requirements of Business Practice Standards WEQ-001-9.7.1.1 through WEQ-001-9.7.1.5 shall not be considered eligible for conveyance of rollover rights and shall be treated as any other request to Redirect on a firm basis as provided for in these standards.
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WEQ OASIS Subcommittee
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ConsolidationRequest for Standards Development
RequestR09015:Createa new OASIS mechanism that allows for the merger of like reservations without the use of the resale mechanismTransmissionCustomers may from time-to-time may have a portfolio of transmission service reservations from a single provider on a single path. For ease of tracking and efficiency, the customers desire to combine or merge like reservations (i.e., firm, non-firm,etc.)into a single reservation. Under existing OASIS business practices and protocols, customers must use the Resale mechanisms to merge two or more like reservation under a single assignment reference number. In other words, customers sell their reservations back to themselves.While use of the resale mechanism gives the customer a single reservation to manage, it is not desirable because: 1) the use of Resale to merge reservations presents a false picture of what is really happening, and 2) Transmission Providers must report all resales to FERC and establish transmission reassignments agreements with the assignee.This request is for a new OASIS mechanism (a combination of business practices and protocols) that allows for the merger of like reservations without the use of the resale mechanism and resulting the additional contracting and administrative requirements (for additional details refer to FERC Order 890).The proposed standard or enhancement would be used by the transmission customer to merge like reservations in order to more efficiently manage a single assignment reference number in their day-to-day business. It would also not allow resales, reassignments, or transfers to occur where the reseller and assignee are the same entity.This would allow customers to merge like reservations into a single reservation allowing the customer to more effectively and efficiently manage theirtransmission portfolios.This would constrain the use of resale, reassignment, and transfers to actual commercial transactions between two unique entities.This would reduce the Electronic Quarterly Reporting burden on both FERC staff and Transmission Providers by reducing the resale reporting to actual bilateral transactions.
8/16/2016
WEQ OASIS Subcommittee
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Consolidation - NAESB