Comments on Draft of NWRTO Load Integration Agreement

[Carl Imparato for Power Marketer Group - July 8, 2000]

The following are some cursory comments on the current draft of the LIA (dated 11/25/97).  

1.	As a matter of structure:

•	The LIA should be a standardized agreement, with no changes made for individual entities.  It should bind the signatories to comply with the entire RTO Tariff.    There would be no need for a “Most Favored Nation” clause either.  This will promote standardization, commercial efficiency for market participants, and avoid the perception (and reality) of preferential treatment.

•	Exhibit A (Definitions) should be deleted and the RTO Tariff’s definitions should be incorporated by reference.  

•	Exhibit F (Dispute Resolution) should be deleted and the RTO Tariff’s dispute resolution procedures should be incorporated by reference.  

It makes absolutely no sense to have these Exhibits floating in each of the documents (Tariff, TCA, Bylaws, GIA, LIA…).  As the contracts are presently structured, future amendments to a single definition would require changes to dozens of contracts.  (The definitions are already inconsistent from contract to contract!)

2.	Language needs to be added to the LIA which requires the signatory to the LIA to abide by the terms and conditions of the entire RTO Tariff, and which established the supremacy of the RTO Tariff in the event of a conflict between the two documents.

3.	A key question that must be asked is “does this LIA work in a retail access environment?” Before we could comment further on the adequacy of the LIA, we need to have a better feel for how the issues of metering, settlements, retail access and local generation are going to be handled in the entire suite of NWRTO documents.  

To determine whether the documents adequately cover all of the issues, we should assume an end-state in which there is retail access in most jurisdictions.  In that case, the party to the LIA might not be the traditional Utility Distribution Company (UDC), but could be a supermarket, a factory, or a group of households.  The RTO metering and settlements protocols (in the RTO Tariff) would have to accommodate both interval metering and cumulative metering-plus-load profiling.

	It is not clear that much thought has been given to this in the LIA, especially in the areas of metering and load shedding.   For example, it is not clear whether the metering system requirements (Section 3.2) are appropriate, and whether the entire NWRTO settlements and metering concept needs to be expanded to allow for Meter Service Agents and other types of entities (as has been done in California, Desert STAR, and other ISO/RTOs).

Also, how do we intend to deal with distributed generation (or any generation) that is on the UDC side of the meter?  Will all such generation be netted out of the RTO data?  Or will the RTO require data on gross load and gross generation (for example, for billing of access charges and ancillary services charges)?

4.	As a general matter, metering requirements (all of Section 3.2) should be handled in the RTO Tariff, not in the LIA and GIA.  (For example, California, MWISA and Desert STAR all have comprehensive Tariff Appendices that deal with metering requirements.)  The LIA and GIA should bind the parties to the Tariff’s requirements.

5.	Section 6.1 (Most Favored Nations Option) should be deleted. (See comment #1 above.)

6.	Section 7 (Ancillary Services):  change “…and provide to IndeGO all data…” to “… and provide to IndeGO, through its Scheduling Coordinator, all data…”   I.e., every party that has injections or withdrawals from the grid is represented by an SC, and the SC - not the generator or load - is responsible for providing data to the RTO.

7.	Section 9.1.1:  Limitation of Liability: this is unacceptable.  The RTO should not be insulated from the consequences of negligence, gross negligence or wrongful acts or omissions.

8.	Section 9.3.3:  should not refer to the dispute resolution provisions of Exhibit F. Instead, it should refer to the dispute resolution provisions of the RTO Tariff.

9.	Section 12:  The RTO and interconnecting party should comply with the billing and payment provisions set forth in the RTO Tariff.  Period.  The RTO should not be subject to the “tariffs of the Interconecting Party,” as that would compromise the RTO’s independence by giving the Interconnecting Party veto power over the RTO’s billing and settlements procedures.  

10.	Section 14 (Dispute Resolution): this should refer to the dispute resolution provisions of the RTO Tariff, not to Exhibit F.

11.	Section 33 (WAPA language):  This should be made explicitly applicable to WAPA alone, either by referring to WAPA and/or by referring only to federal laws and regulations.  As it currently stands, the language would allow any municipal entity to create laws or regulations which would trump the RTO’s rules.

12.	Exhibit A (Definitions): this should be dropped entirely and the Definitions in the RTO Tariff should be incorporated by reference.  (In addition, the definitions of Ancillary Services, Control Area and IndeGO Transmission System Emergency need to be corrected.)

13.	Exhibit F (Dispute Resolution):  this should be dropped entirely and the dispute resolution provisions in the RTO Tariff should be incorporated by reference.

[CFI   NWRTO-LIA-comments-CFI-070800.rtf]