FERC Filings
MOTION TO INTERVENE AND PROTEST OF ELECTRIC POWER SUPPLY ASSOCIATION-Desert STAR, Inc.-Docket No. RT01-44-000
B. The Scope and Configuration of the DSTAR Region are Inappropriate.
DSTAR covers a substantial area, but one in which the jurisdictional utilities serve only about half of the customers. The filing entities are to be commended for their efforts to address the issues affecting non-jurisdictional transmission owners and public power in particular.
However, EPSA is very concerned that Nevada Power Company has attempted to exclude itself from the DSTAR region by instead proposing to join RTO West. The inclusion of Nevada Power Company within the proposed RTO West rather than DSTAR would render the geographic scope of both proposed RTOs inappropriate and contrary to the interest of efficient commerce in the Western Interconnection Among other factors, an RTO with an appropriate scope and configuration should resolve loop flow issues, offer transmission service at non-pancaked rates, improve operations and planning, and coordinate transmission expansion.
The boundaries of an RTO should encompass one contiguous geographic area, encompass a highly interconnected portion of the grid, recognize trading patterns, and take existing regional boundaries into account. Nevada Power’s participation in RTO West ignores all of these factors.
Nevada Power’s major transmission interconnections are at the Mead, McCullough and Navajo switchyards, where it interconnects with the facilities of California and Arizona utilities. With the exception of a single 345-kV tie with PacifiCorp in southwestern Utah, which interconnection is less than 10% of Nevada Power’s total import capability, Nevada Power has no direct electrical connections with the remaining RTO West participants. All of Nevada Power’s other transmission interconnections are with entities in the Desert Southwest and California.
The proposal to include Nevada Power in RTO West rather than DSTAR ignores the electrical realities of Nevada Power’s existing interconnections; but more important, it ignores the commercial reality that Nevada Power purchases a large percentage of its resources from the Desert Southwest region and has entered into reserve sharing and other commercial arrangements with Desert Southwest entities. All of these factors indicate that it is inappropriate for Nevada Power to participate in RTO West and that it is inappropriate for Nevada Power to not participate in DSTAR.
The result of incorrectly drawn RTO boundaries will be financial harm to loads and generators throughout both the DSTAR and Nevada Power areas. Under the DSTAR Tariff proposal, loads that reside within Nevada Power’s service territory would be subject to pancaked exit fees for purchases of energy or capacity from DSTAR entities and generators in the DSTAR region would be subject to pancaked exit fees for sales into Nevada. Similarly (under the pancaked exit fee proposal advocated by Nevada Power’s parent company, Sierra Pacific Resources, in the RTO West filing), loads that reside in the DSTAR region would be subject to pancaked exit fees for purchases of energy and capacity from Nevada and generators located within Nevada Power’s service territory would be subject to pancaked exit fees for sales into DSTAR.
The Commission should therefore exercise its authority to determine reasonable boundaries for RTOs by requiring that Nevada Power join the proposed DSTAR RTO. Participation in DSTAR would provide the greatest benefit to the consumers and generators in the Nevada Power service area and the remainder of the Desert Southwest; conversely, Nevada Power’s participation in RTO West would harm participants in the regional marketplace by effectively isolating Nevada Power from that marketplace.
Thus, assuming Nevada Power joins the proposed DSTAR, the RTO will minimally satisfy Order No. 2000’s requirements as to scope and regional configuration for the immediate to near term. Over time, however, EPSA believes that further structural reorganization is required to facilitate the development of broad-based regional competitive power markets. Accordingly, the Commission should require DSTAR to (1) coordinate with neighboring RTOs, ISOs and other systems immediately to address seams issues as necessary to allow RTO operational start-up by December 15, 2001 as required by Order No. 2000; (2) join with RTO West in the near term in proposing a combined RTO structure that incorporates each region’s best practices; and (3) move towards establishing a unified regional market for the entire Western Interconnection.