Intertie Restoration Update

September 15, 2010

Intertie Restoration Recommendation Paper

• Expected to be released by the end of September

• Will be released at the same time as the overall Intertie Framework Recommendation Paper

• Intertie restoration initiatives fit within the context of the overall intertie framework

• Intertie Restoration paper addresses both import and export restoration

• Both initiatives will be pursued by the AESO

• LSSi is the first step in restoring import capacity

• It is expected other import initiatives will be pursued

Intertie Restoration Policy Interpretations

• Intertie Restoration services will be treated as a system service with costs allocated to load

• Consistent with government transmission policy

• Treats imports and exports similarly to internal loads and generators

• LSSi or any other import restoration services will not confer transmission rights

• Infrastructure solutions for further import restoration will also be examined

Recommended LSSi Product Design

• Procurement to be done through term contracts (1-3 years)

• Three part price mechanism recommended (similar to standby market price structure)

• Availability payment – Fixed $/MW payment based on actual consumption and willingness to be armed

• Arming payment – Indexed to pool price based on volume actually armed

• Trip Payment – Fixed $/MW payment based on volume tripped when frequency drops below 59.5 Hz

Recommended LSSi Product Design

• Availability payment is paid only when service is physically available

• No payment when the load is not available due to reduced consumption and/or unwillingness to be armed

• Arming payment is paid when the service is dispatched on to support import flows

• Indexed to pool price

• Once armed, the service is firm for the hour to support import schedule

Implementation Activity

• Dispatch tool being developed

• Arm and disarm signal to be sent using SCADA

• Participants will send the AESO armed status, current availability and future availability (next and next + 1)

• AESO will arm providers as required to support scheduled import flow

• Settlement to be a ‘shadow settlement’ system

• Providers submit monthly invoice to the AESO

• AESO performs shadow settlement to verify accuracy

Implementation Activity

• OPP Changes Required to OPP 312

• Arm and disarm duty for the system controller

• Update import capability (Revised ATC table)

• AESO will initiate consultation process on this change in the near future

Next Steps

• Finalize product design and initiate procurement process

• Contract being developed

• Procurement process will begin in the later part of Q4

• Consultation initiated on required rule changes

• LSSi targeted to be in place and operational for Q2 2011

Questions?