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Power Marketing Administrations Leading the Nation’s Transition to a 21st Century Electric Grid

November 19, 2012 - 12:54pm

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The Joint Outreach Team, made up of experts from DOE and the Western Area Power Administration, is working to develop strategies to ensure the viability, sustainability, and resiliency of Western to continue to meet its core mission and respond to the energy challenges of the 21st century.

The Joint Outreach Team, made up of experts from DOE and the Western Area Power Administration, is working to develop strategies to ensure the viability, sustainability, and resiliency of Western to continue to meet its core mission and respond to the energy challenges of the 21st century.

The Energy Department’s Power Marketing Administrations (PMAs) play a vital role in operating and maintaining a federal transmission system that supports our nation’s economic competitiveness, security and prosperity. Earlier this year, Secretary of Energy Steven Chu called on the four PMAs to help lead the 21st century transformation of our nation’s electricity sector to better protect our economic and national security. As part of this process, the Energy Department determined to work first with Western Area Power Administration (Western) to solicit on-the-ground input needed to support these goals.
 
Embracing this challenge, staff from Western and the Energy Department formed a Joint Outreach Team (JOT) to gather information from Western’s customers, tribes, and stakeholders through a structured public outreach process. The robust interaction generated from the public process resulted in the draft recommendations summarized below. After the 60-day comment period on the draft recommendations closes, the JOT will finalize the recommendations and submit them to Secretary Chu for consideration.

In response to input received during the stakeholder process, the JOT developed the following set of principles that were used to help guide the development of the recommendations:

  • Consider the unique attributes of Western’s regions
  • Coordinate with federal generating agencies (U.S. Bureau of Reclamation, U.S. Army Corps of Engineers, and International Boundary and Water Commission)
  • Ensure that the beneficiary pays, a pricing approach based on the idea that the most efficient allocation of resources occurs when consumers pay the full cost of the goods that they consume
  • Consider the existing efforts within Western
  • Ensure that Western stays within the limits of its legal authority

Recommendations:

Increasing Operational Efficiencies

The JOT identified several aspects of existing operations that Western may improve to increase operational efficiencies, many of which build on work already being done by Western’s customers and peers. These efforts could relieve unnecessary redundancies and duplication, potentially reducing costs over time.
 
Specific actions would include:

  • Determining the regulation reserve capacity for each Balancing Authority (BA).
  • Consolidating Western’s four OASIS sites, an Internet-based system for obtaining services and for moving wholesale quantities of electricity.
  • Revising Western’s Large Generator Interconnection Procedures (LGIP) to conform to changes recommended by WestConnect’s LGIP Work Group.
  • Studying Western’s rates to identify potential opportunities to eliminate rate pancaking, which is when wholesale electric customers must pay each owner of transmission a separate rate.
Transmission Products and Services Opportunities

Numerous areas for improvement to Western’s existing transmission products, processes and services were reviewed, and various opportunities were found to move the organization toward a standard approach in serving customers on Western’s transmission system. These initiatives may allow for more efficient and optimized use of Western’s transmission system, leading to additional operational flexibility and lower overall costs to all users.
 
Specific actions would include:

  • Evaluating opportunities to make Western’s rate setting methodologies more consistent across the organization.
  • Evaluating Western’s customer Integrated Resource Planning (IRP) program.
  • Initiating a Western-wide Infrastructure Investment Study to prioritize investments in the transmission system.
  • Identifying potential combined transmission system opportunities within a subset of Western’s regions.
  • Exploring options for moving from contract path to a flow-based environment.
Variable Energy Integration

To respond to an evolving environment, numerous operational and business practices were examined to fully understand how existing and new initiatives could be used by Western to efficiently and effectively operate and optimize transmission services. The following initiatives may provide Balancing Authorities additional flexibility by allowing them to fully meet load demands, generation changes and disturbances, and enable integration and aggregation of variable energy products that could provide cost effective alternatives to customers, tribes, and stakeholders.

Specific actions would include:

  • Coordinating implementation of FERC Order 764, including intra-hour scheduling. 
  • Evaluating the implementation of available new technologies, including the ace diversity interchange, reliability-based controls and the dynamic scheduling system.
  • Developing a business case evaluation of the west-wide energy imbalance market (EIM) initiative to enable Western to proactively determine if EIM is beneficial to its customers, stakeholders and Tribes. 
  • Establishing a renewable energy liaison to help facilitate the integration of renewable energy projects.

A notice of availability of the draft recommendations will be published in the Federal Register tomorrow, November 20, with the Draft Recommendations from the Joint Outreach Team posted to Western’s Defining the Future website. The JOT will then finalize the recommendations and submit them to the Secretary of Energy for consideration. It is critical that the JOT hear from a variety of stakeholders, customers and tribes to make thoughtful and well-informed decisions about how to address the challenges facing the grid. Comments can be submitted via email to JOT@wapa.gov. Comments will be posted on Western’s Defining the Future website

 

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