Western States Energy Solutions

Introduction

• Purpose of Presentation• History / Background• The Deal• RETA Opportunities

Portrait of Transmission

• History– Transmission in West • Joint Funding• Generation to Load• Interconnection and Loop reliability

• Post FERC 889– Reliability Transmission– Market Hubs and Load Center Generation Targets• Palo Verde, Mead, Albuquerque, El Paso, CALIFORNIA

FERC 889 and FERC 888 “OATT”

• Separation of interconnection and Transmission Service (LGIP and OASIS)

• Pro Forma• Read the RULES

The Queue

• First In First Out• Each project treated for reality• Each Project build is for that project only• TPs not required to Cluster and cannot control

their Queue

OATT and Other Ways

• Interconnection versus Transmission Service• OATT versus LGIP• “Open Season” concept versus OATT• OATT for a line not a TOs

THE OATT

• FERC requires confidentiality by the Transmission Providers if requested

• FERC Allows Clustering of Interconnection Requests if Requested

• Transmission Owners (TO) are not disposed to cluster their Queues because FERC has not enabled this and it will cost the TO FERC Attorney time to work this out.

• BPA and “Open Season”

The PUC / ACC and Cost Recovery• PUC and ACC do not want transmission cost not for

local load in the rate base.• Economic Lines to export from the state are a concern

for the Public Utility (The Grid)• Lines now in the system are for bringing generation to

loads and approved for rate base• Joint Ownership of large long distance lines is to spread

cost (Thus Open Season)• PNM, EPE, and TSGT are businesses and can make

money external to Load Serving Entity retail rate basing• PNM, EPE, and TSGT have transmission cost centers

and charge wheeling under OATT

What is the Problem

• Individual renewable projects to small to build long T Lines and pay wheeling

• Are you real for justification of investment and assured return

• What can the Users Afford• Can TPs Help with transmission (Queue Rules)

Elements of “The Deal”

• Users– Pay Wheeling for use of the transmission to pay

off the capital investment• Capital– Loan the Funding for the Transmission

• Builder, Owner, Operator, Maintainer– Process “The Deal”

• RETA – Facilitate “The Deal” triangle

The Transmission Triangle

UsersCapital

Build/Own

Users

• Number of generators in a general location “Cluster”

• Load Target • Size of Cluster and need for transmission• Interconnection Queue consolidation• Joining of the “Open Season”

Capital

• Evidence of repayment• Statement of ROE• FERC Permitted process

Builder, Owner, Operator, TO

• FERC TO• ROE / Effort• “Open Season” ??• OATT??• ACC/PUC Concerns

Bringing the Users of New Mexico

• Accumulation of the Users• Collector Transmission • Express• Joining of the Plans

Wind Locations

SWAT NM Subgroup PNM Study

SWAT NM Subgroup PNM Presentation

RETA Proposal

• RETA created Clusters• RETA Establish a means to answer “Are You

Real?”• RETA OATT Request of TOs• RETA broker the deal with TO, Capital, Users.

Why RETA

• State Entity, “If you can’t trust the state, who can you trust”?

• Can hold confidentiality if necessary• Can Cluster and request transmission• Can assure transmission external to and

cognizant of PUC / ACC concerns• Can coordinate “The Deal(s)”

What is the Problem / Did we solve the Problem?

• “To Small to build”. Clustering provides a means to Critical Mass. RETA can Cluster.

• Are you real? RETA could get long term subscription to transmission or up front payment to assure reality.

• What wheeling rate can you pay? Planners can tell us the cost and then we find the wheeling rate to repay the loans.

What is the Problem / Did we solve the Problem? (Contd.)

• Planners can determine the cost and thus the wheel rate – Network Transmission– Point to Point– Loop flow concerns

• Clustering can remove the Queue stack. • Did we unearth the many more problems?

Questions

• Input from my partners in Planning??• Input from PUC??• Input from generators??• Input from TOs??