Special Protection Systems- Market Rule Amendment Submission

Presentation to:

Market Operations Standing Committee

Barbara Reuber, Regulatory Affairs

January 14, 2004

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To provide OPG’s rationale for its market rule

amendment submission:– Problems with the current market rules

– Proposed solutions

Purpose of Presentation:

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Special Protection Systems (SPS) allow the IMO to increase the

utilization of the grid while maintaining system integrity.

Typical SPS control actions are generation and load rejection.

A more expensive alternative to SPS is transmission upgrades

OPG has generation rejection and runback schemes at quick-

start (hydroelectric) and non quick-start (nuclear and fossil)

facilities.

Hydro One owns the SPS equipment.

IMO directs the operation of the SPS with no obligation for direct

communication to facility impacted by the SPS.

No compensation currently provided under the market rules.

Background

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Operational Issues Facility operators need to be aware of status of SPS on an

ongoing basis to assess risk to their facilities.

Under some conditions, facilities will reject an arming request

(for reasons of safety, environment, equipment damage).

Rules allow facilities to reject a dispatch instruction for the

same reasons – need comparable allowance for SPS.

There are no requirements or standards in current market

rules for a status signal informing a facility when an SPS is

armed/ activated. For comparison, Market Rules (Appendix

4.15) require generators to provide equipment status

indication to IMO, e.g., AVR and Stabilizer status.

Accountability for providing an SPS monitoring signal is not

defined.

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Proposed Solution:

MP/ owner of facility connected to SPS needs to agree to changes

to SPS arming/ activation criteria

Where a market participant requires it, the owner/ operator of the

SPS shall provide a mechanism to inform the market participant

when the SPS is armed and activated. The mechanism shall be

satisfactory to market participant (acting reasonably).

A market participant may reject a request to arm an SPS due to

concerns regarding safety, equipment or environmental damage

or legal requirements.

Operational Issues

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Compensation Issue There are two categories of costs to a facility

impacted by an SPS: Operations and maintenance costs: Wear and tear costs

each time a generation rejection scheme is activated (significant costs) plus incremental maintenance/ verification costs (minor incremental costs).

Lost revenue: Non-quick start facilities do not receive CMSC payments for the time they are not connected to the grid as a direct result of SPS activation.

Benefits of SPSs accrue to many market participants; risks are faced solely by facility impacted by the SPS.

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Proposed Solution: Non quick-start facilities receive CMSC payment for

two hours after generation rejection based on offers already submitted.

This proposal is a compromise solution that likely does not address costs of wear and tear.

Compensation