regular meeting of the commissioners of...

Balancing Authority of Northern California

Regular Meeting of the Commissioners of BANC 2:00 P.M. Wednesday, May 24, 2017 Telephonic Meeting Only

Accessible Public Meetings - Upon request, BANC will provide written agenda materials in appropriate alternative formats, or disability-related modification or accommodation, including auxiliary aids or services, to enable individuals with disabilities to participate in public meetings. Please send a written request, including your name, mailing address, phone number and brief description of the requested materials and preferred alternative format or auxiliary aid or service at least 3 days before the meeting. Requests should be sent to: Kris Kirkegaard, 915 L Street, Suite 1480, Sacramento, CA 95814 or to [email protected].

Balancing Authority of Northern California NOTICE OF REGULAR MEETING AND AGENDA

Notice is hereby given that a regular meeting of the Commissioners of the Balancing Authority of Northern California (BANC) will be held on May 24, 2017 at 2:00 p.m. The meeting will be Telephonic Only.

This meeting shall also consist of a simultaneous teleconference call at the following locations:

City of Shasta Lake Modesto Irrigation District 4332 Vallecito Street 1231 11th Street City of Shasta Lake, CA 96019 Modesto, CA 95354 Roseville Electric City of Redding Electric Dept. 2090 Hilltop Circle 777 Cypress Avenue Roseville, CA 95747 Redding, CA 96001 SMUD Trinity Public Utilities District Customer Service Center Building, Rubicon Room 26 Ponderosa Lane 6301 S Street, Sacramento, CA 95817 Weaverville, CA 96093

AGENDA

1 Call to Order.

2 Matters subsequent to posting the Agenda.

3 Public Comment – any member of the public may address the Commissioners concerning any matter

on the agenda.

4 Consent Agenda A. Minutes of the Regular Commission Meeting held on April 26, 2017.

B. BANC Operator’s Report (Revised February & April).

C. Compliance Officer’s Report.

D. PC Committee Report.

E. General Manager’s Report.

5 Regular Agenda Items – Discussion and Possible Action

A. Consider & possibly approve Resolution 17-05-18 BANC/WAPA Dynamic Scheduling Operating Agreement and Dynamic Transfer Balancing Authority Operating Agreement Schedule 1 Amendment.

B. Consider & possibly accept Resolution 17-05-19 2017 Summer Load & Resources Assessment of the Balancing Authority of Northern California.

C. A. Update on EIM implementation.

D. Discussion on Strategic Planning Meeting.

6 Adjournment

mailto:[email protected]

MINUTES OF THE REGULAR MEETING OF THE COMMISSIONERS OF THE

BALANCING AUTHORITY OF NORTHERN CALIFORNIA (BANC)

April 26, 2017 Regular Meeting Minutes Page 1 of 2

April 26, 2017 On this date, a Regular Meeting of the Commissioners of the Balancing Authority of Northern California (BANC) was held at 915 L Street, Suite 1480, Sacramento, CA 95814. Representatives Present:

Member Agency Commissioner Modesto Irrigation District Greg Salyer, Acting Chair

City of Redding Paul Cummings

City of Roseville Todd White

Sacramento Municipal Utility District Arlen Orchard

City of Shasta Lake Absent

Trinity Public Utilities District Absent

Agency Liaison Western Area Power Administration Absent (Sonja Anderson, Kevin

Howard present) 1. Call to Order: Acting Chair Salyer called the meeting to order at 2:01 p.m. 2. Matters Subsequent to Posting the Agenda: None. 3. Public Comment: Acting Chair Salyer invited comments from the public and none were

given. 4. Consent Agenda: Mr. Orchard moved, Mr. Cummings seconded, and the participating

Commissioners unanimously approved the Consent Agenda items comprised of the: (A) Minutes of the Regular Commission Meeting held on February 22, 2017; (B) BANC Operator’s Reports (Feb & March); (C) Compliance Officer’s Reports (March & April); (D) PC Committee Report; and (E) General Manager’s Report.

5. Regular Agenda Items:

A. Mr. White moved, Mr. Orchard seconded, and the participating Commissioners unanimously approved Resolution 17-04-05 2017 Appointing Secretary of BANC.

B. Mr. Shetler presented a brief overview of the 2016 Audited Financials. Mr. Cummings moved, Mr. White seconded, and the participating Commissioners unanimously accepted the 2016 Audited Financials.

C. Mr. Shetler provided an EIM Implementation Update, including updates related to the activities of BANC’s EIM Oversight Committee and topics such as cost allocation, consultant project management support, Phase 2, and discussions with CAISO including such topics as network model & data sharing and a review of a bilateral trading issue. Following delivery of the Regulatory Report and Discussion on Strategic Planning

MINUTES OF THE REGULAR MEETING OF THE COMMISSIONERS OF THE

BALANCING AUTHORITY OF NORTHERN CALIFORNIA (BANC)

April 26, 2017 Regular Meeting Minutes Page 2 of 2

Matters, Mr. White moved, Mr. Cummings seconded, and the participating Commissioners unanimously approved Resolution 17-04-06 EIM Phase II Consultant Support and BANC Funding Mechanism.

D. Mr. Braun provided the Commission with a Regulatory Update, including the CAISO’s filing of an EIM Implementation Agreement and a description of other party participation in the relevant docket at the Federal Energy Regulatory Commission. Mr. Braun also provided a briefing on other regional and state developments.

E. Mr. Shetler updated the Commission on the Strategic Plan progress. The 2017 Strategic Planning Session is planned for June 28 from 1-5 p.m. This year’s agenda is currently under development.

The meeting was adjourned at 2:52 p.m. Minutes approved on May 24, 2017. __________________________ C. Anthony Braun, Secretary

BALANCING AUTHORITY OF NORTHERN CALIFORNIA

P.O. BOX 15830 • D109 • SACRAMENTO • CA 95852 ‐1830

A JOINT POWERS AUTHORITY AMONG

Modesto Irrigation District, City of Redding, City of Roseville, Trinity Public Utilities District,

City of Shasta Lake, and Sacramento Municipal Utility District 1

TO: BANC Commission RE: BANC Operator Report for February 2017 - REVISED Operations:

• Normal BA operations • No significant BA issues • NWPP

o 1 contingency requiring activation of NWPP o 139.1 MW average generation lost o 139.1 MW maximum generation lost o All recoveries within 3.75 minutes

• USF o 8 of 28 days with instances of USF mitigation procedure utilized

▪ 3 days on Path 66 o No operational impact on BANC

Monthly Notes:

• No additional notes for February 2017


P.O. BOX 15830 • D109 • SACRAMENTO • CA 95852 ‐1830

A JOINT POWERS AUTHORITY AMONG

Modesto Irrigation District, City of Redding, City of Roseville, Trinity Public Utilities District,

City of Shasta Lake, and Sacramento Municipal Utility District 1

TO: BANC Commission RE: BANC Operator Report for April 2017 Operations:

• Normal BA operations • No significant BA issues • NWPP

o 1 contingency requiring activation of NWPP o 135.6 MW average generation lost o 135.6 MW maximum generation lost o All recoveries within 3.5 minutes

• USF o 8 of 30 days with instances of USF mitigation procedure utilized

▪ 7 days on Path 66 o No operational impact on BANC

Monthly Notes:

• No additional notes for April 2017

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Compliance Officer’s Report BANC Commission

May 2017

The following summarizes routine issues for the Commission’s information and consideration. Any major issues or action items will be identified separately on the Commission agenda for action. BA Compliance Issues:

• No significant operational Balancing Authority compliance events occurred.

• All required BA compliance reports and operating data were submitted to WECC.

• Routine periodic compliance reviews of selected BA operational actions and data confirm that all standard requirements reviewed are being met or exceeded.

• WECC granted BANC “Compliance Exceptions” for two Self-Logged items submitted in

Q1, 2017. A “Compliance Exception” becomes a permanent part of BANC’s compliance violation history; however, no fines or further enforcement actions will occur, and these matters will be closed once FERC approves. 1) CIP-006-6, R2: Loss of Visitor Escort in a High Impact Control Center. 2) INT-006-4, R1.: e-Tagging software automatically approved an invalid 5 MW tag (the tag was missing the required BA-to-BA adjacency).

BANC MCRC:

• The Members Compliance Review Committee (MCRC) met on May 22, 2017. MCRC members received a written report of all monthly compliance assurance activities and investigations. Reports from compliance event reviews that resulted in findings of full compliance with applicable standards are also shared with BANC members on an informational basis.

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BANC PC Committee Chair’s Report May 2017

The following summarizes Planning Coordinator-related issues for the Commission’s information and consideration. Any major issues or action items will be identified separately on the Commission agenda for action. BANC PC Committee Issues:

• SMUD made progress on the BANC PC Area 2017 System Assessment. SMUD

distributed a near final version of the study plan as well as the four base cases that will be used in the study. The base cases are out for the BANC PC participants to review and approve. Once approved, SMUD will begin the power flow studies. SMUD also began coordinating contingencies on adjacent systems, as required by the standard, with all adjacent Planning Coordinators and Transmission Planners.

• SMUD received data from Redding and Modesto in response to a request for steady-state data that is required to demonstrate compliance with the new MOD-033 reliability standard regarding model validation. SMUD anticipates completing the required analyses for SMUD, Redding, and Modesto by the July 1, 2017. SMUD is reaching out to WECC to discuss the applicability of this standard to Roseville, which only has one BES facility (the Fiddyment 230 kV bus).

• SMUD is currently working on demonstrating compliance evidence for PRC-006 regarding underfrequency load shedding. SMUD recently sent out a data request to the BANC PC participants for the requisite data with a due date of May 30, 2017.

• SMUD and Redding finalized the task order that provides the framework for the TP-related work SMUD will perform on behalf of Redding.

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GM Report BANC Commission Meeting

5/24/2017

I wanted to summarize routine issues for the Commission’s information and consideration. Any major issues or action items will be identified separately on the Commission agenda for action.

Outreach Efforts: Refer to GM outreach report provided under separate distribution. In addition, here are some other noteworthy items:

TID We continue to dialogue with TID regarding potential joint efforts on EIM participation. TID provided feedback that they have been given authority to work with BANC on potential EIM participation and possible joint use of the SMUD/BANC EMS.

LADWP/Seattle City Light/SRP Dialogue continues with these entities regarding EIM participation. LADWP received approval from its Board in March of the EIM Implementation Agreement with CAISO and is now forecasting approval from the City Council in May to participate in EIM. They are still shooting for a Spring 2019 go-live date. Seattle City Light received approval in November from the City Council to proceed with participation in EIM, and they are forecasting an April 2019 go-live date. SRP management received approval from its Board in February to participate in EIM and made its formal announcement in early May. They are currently forecasting “go-live” in spring 2020. Based upon the group’s discussions, we have agreed to continue to interact on an informal basis to make sure we are on the same page on EIM issues from a POU perspective.

POU Western Markets Initiative BANC continues to participate in this effort, which is being coordinated by APPA. The next face-to-face meeting of the group will be on 5/22/17 in Portland. The group continues to evaluate how best to represent the POUs in the ever-changing power markets in the West.

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Market Initiatives:

ADI/FRSG With the launch of the new BAAL approach, the BANC has suspended participation in ADI as of June 1, 2016. We anticipate that we will be withdrawing from ADI sometime in 2017. BANC continues to work with the NWPP on a joint effort for meeting the new frequency reserve requirements of NERC BAL-003, which was phased-in late 2016. Implementation results continue to look good.

EIM Participation The CAISO filed the BANC Implementation Agreement with FERC on 3/24/17. BANC did file at FERC in support of approval of the agreement. At this point we are not aware of any filings in opposition to approval of the agreement, though several parties made generic filings. The EIM Project Management support contract with Utilicast has been executed by SMUD. Utilicast was on board for a project kick-off meeting with SMUD and BANC on April 19, 2017. The formal BANC EIM project kick-off meeting with the CAISO was held on April 20, 2017. Utilicast is currently performing a “gap” analysis on both processes and technologies to identify any additional areas needed for supporting EIM implementation. We expect to see preliminary reports by late June. BANC and SMUD have met to discuss the initial outline of scope of services for the BANC/SMUD EIM Services Agreement. BBSW is in the process of drafting a formal agreement that we expect to bring to the Commission in the summer 2017 for approval. BANC, SMUD, and the other members continue to discuss the issue of internal bilateral trading within the BANC footprint once SMUD participates in EIM in 2019. We have outlined the scope of the problem, have held discussions with the CAISO to better understand the limitations on SMUD in EIM, and are shooting to return to the Commission in 3rd Quarter 2017 with some preliminary recommendations on how to proceed. BANC and TANC held discussions with the CAISO regarding IBAA relief. As a result of these discussions, the CAISO confirmed the following:

• They continue to believe that IBAA needs to be continued in order for them to identify accurate pricing for congestion;

• They feel that MEEAs provide relief for entities with generation resources to obtain proper compensation in the market. We discussed the concept of a

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BANC MEEA. The CAISO did not believe that a BANC stand-a-lone MEEA would work, but might consider a BANC MEEA with attachments for individual member resource providers;

• They acknowledged that the current IBAA does not provide relief for transmission owners (e.g. – TANC) who are not seeing proper compensation for transmission. The CAISO was willing to consider expanding the current Pacificorp arrangement (in which Pacificorp is allowed to identify an amount of transmission capacity they are willing to set aside for market transactions on a quarterly basis and receive CRRs in return, but without having to formally become a PTO). The CAISO is willing to consider expanding this program to TANC and to allow the set aside period to be reduced from quarterly to monthly.

BANC and TANC are discussing this internally and expect to hold additional discussions with the CAISO in the near future to pursue the IBAA issue further.

WAPA: Market Engagement We are working with WAPA on integrating them in to the EIM implementation discussions. This includes EIM Phase 2 discussions with WAPA, MID, Redding, and Roseville. Based upon these discussions, the group has developed a set of “principles” for a possible Phase 2. In addition, the group has reviewed and concurred with the proposal from GridSME for additional evaluation work for a possible Phase 2. The final contract for this effort was approved by the Commission at the April meeting and has been executed with GridSME. GridSME has initiated its work. The goal is to have a concept by 3rd Quarter 2017 of how we would like to see Phase 2 proceed.

Peak Reliability: Aliso Canyon Peak/CAISO/LADWP/SCE are now focusing on assessments for summer 2017. Public meetings were scheduled to start the process for determining if Aliso Canyon can “restart”. Indications are that public opposition to restart of Aliso Canyon will be strong. At this stage, it is assumed that Aliso Canyon will not be available for use this summer, though there might be a possibility for “emergency” use.

Peak Interest in Overseeing Congestion Management for Western Interconnection Peak provided more clarification on this concept at the December Board meeting. The focus is on assisting the BAs and TOPs along with Peak in using the new Enhanced Curtailment Calculator (ECC) tool to better manage congestion in the Interconnection. Peak made it clear that they only intended to retain their role from a reliability perspective and would not perform economic re-dispatch functions. More work will be involved in defining this further.

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Peak MAC, Board, and Annual Meetings – June 6-8, 2017 These meetings will include a MAC 2018 Budget review on June 6, the Annual Meeting (where MAC representatives and director elections will be held) and the MAC meeting on June 7, and the Board meeting on June 8. These meetings will be held in Vancouver, WA. As part of the Annual Meeting, Peak is scheduling a panel discussion on the NERC/WECC Reliability Assessment of the Western Interconnection and next steps, which will include attendance by Gerry Cauley (NERC) and Jim Robb (WECC).

WECC WECC will be initiating its natural gas/electricity interface study later this year. Based upon further discussions with WECC, I have been asked to participate on the executive oversight committee for this effort. The goal is to have report out in the fall of 2018. WECC has received nine responses to its RFP for technical support for this effort and is currently evaluating the proposals. WECC held their annual Reliability Summit on May 2-3, 2017, in Portland, OR. It was well attended and focused on how to improve the culture of reliability.

CDWR Delta Pumping Load: BANC is coordinating with SMUD, CDWR, WAPA, and the CAISO regarding how the construction and pumping loads and ancillary services will be provided for this project. We have received informal feedback that CDWR intends to use SMUD for transmission service at the north end of the project and WAPA for the south end, but are still awaiting a formal announcement of their decision.

Strategic Initiatives: Refer to the 2017 Strategic Initiatives update, which is attached to this report.


Agenda Item 5A

1. Resolution 17-05-18 BANC/WAPA Dynamic Scheduling Operating Agreement and Dynamic Transfer Balancing Authority Operating Agreement Schedule 1 Amendment.

Braun Blaising Smith Wynne, P.C. Attorneys at Law

915 L Street, Suite 1480, Sacramento, California 95814

Telephone: (916) 326-5812 www.braunlegal.com

5/18/17

To: BANC Commission From: BANC Counsel RE: Authorization to Amend BANC-CAISO Dynamic Transfer Agreement

Schedule 1 & Execute Dynamic Scheduling Operating Agreement with WAPA

At the December 28, 2016 Commission meeting, the Balancing Authority of Northern

California (BANC) approved amendments to the Dynamic Transfer Balancing Authority Operating Agreement (DTBAOA) between BANC and the California Independent System Operator Corporation (CAISO) in order to facilitate the dynamic sale by the Sacramento Municipal Utility District (SMUD) of regulation to the CAISO.1 As part of those amendments, BANC and the CAISO added a new SMUD system resource to Schedule 1 of the DTBAOA.

Additionally, at the February 22, 2017 Commission meeting, BANC authorized the BANC General Manager to enter into a Dynamic Scheduling Operating Agreement (DSOA) with SMUD to address any potential North American Electric Reliability Corporation (NERC) liability based on SMUD's decision to sell regulation services (via dynamic scheduling, which is balancing authority-to-balancing authority) to the CAISO.2 Because the sale of regulation to the CAISO involves the exchange of balancing authority ACE obligations, it was determined appropriate to protect other BANC members from any potential penalties or compliance costs that could (albeit extremely unlikely) arise based on this commercial relationship between the CAISO and SMUD. The DSOA was designed to address this narrow NERC liability issue.

Since this decision, the Western Area Power Administration – Sierra Nevada Region (WAPA) has also determined to provide a similar commercial regulation product to the CAISO. The initial project will be deemed a pilot and will only be for the sale of 5 megawatts (MW) of regulation (up) to the CAISO.3 This may be subsequently increased if operational experience so dictates. In order to facilitate WAPA’s participation, BANC must 1) amend Schedule 1 to its DTBAOA to add the WAPA system resource; and 2) enter into a DSOA with WAPA to address any potential NERC/WECC liability specifically arising from WAPA’s provision of this service to the CAISO.

As to an amendment to Schedule 1, this may be done by the mutual written consent of BANC and the CAISO. Thus, we are seeking Commission approval to allow the General

1 BANC Resolution No. 16-10-08. 2 BANC Resolution No. 17-02-04. 3 Like the SMUD product, the regulation sale by WAPA will be effectuated by a transfer by the CAISO of its ACE obligation for the amount of the regulation signal, as limited to 5 MW.

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Manager to work with WAPA and the CAISO to make these changes to Schedule 1. Furthermore, because WAPA (or SMUD) may need to make future adjustments to Schedule 1 to either increase or decrease its system resource, we are also seeking authorization to allow the General Manager, in consultation with the BANC Operator, to make subsequent adjustments to Schedule 1, without further Commission approval. The General Manager shall update the Commission on any such requests as needed.

Regarding the BANC-WAPA DSOA, this will differ from the BANC-SMUD DSOA with respect to any monetary penalties for an actual violation. As you are likely aware, WAPA cannot be issued monetary sanctions from the Federal Energy Regulatory Commission for violations of NERC Reliability Standards. They must, however, follow any regulatory directives and/or mitigation issued by a Compliance Enforcement Authority. Thus, the BANC-WAPA DSOA will obligate WAPA to cooperate in any investigation and follow any such directives issued that arose due to a potential violation of Reliability Standards arising through its performance of sales of regulation under its pilot with the CAISO. The DSOA also provides for reimbursement for any costs incurred by BANC in order to meet its related compliance directives and/or obligations. Any final actual monetary sanctions issued will remain the liability of BANC and paid by BANC members in accordance with the BANC Member Agreement.

Accordingly, we are requesting that the Commission approve the attached resolution

authorizing the General Manager to take the aforementioned actions to enable WAPA sales of regulation to the CAISO, once the General Manager has reasonable assurance that WAPA has taken the necessary steps to meet BANC operational requirements, and future adjustments to Schedule 1 as described.

Balancing Authority of Northern California Resolution 17-05-18

BANC / WAPA DYNAMIC SCHEDULING OPERATING AGREEMENT AND

DYNAMIC TRANSFER BALANCING AUTHORITY OPERATING AGREEMENT SCHEDULE 1 AMENDMENT

WHEREAS, the Balancing Authority of Northern California (“BANC”) was created by a Joint Powers Agreement (“JPA”) to, among other things, acquire, construct, maintain, operate, and finance Projects; and

WHEREAS, WAPA has decided to sell regulation services via dynamic scheduling to the CAISO; and

WHEREAS, BANC has approved certain amendments to the BANC-CAISO Dynamic Transfer

Balancing Authority Operating Agreement (“DTBAOA”) needed to facilitate dynamic schedules between BANC and the CAISO; and

WHEREAS, the sale of regulation to the CAISO involves the exchange of balancing authority ACE

obligations; and WHEREAS, BANC has determined that it is both prudent and equitable to protect other BANC

Members from any potential NERC/WECC compliance costs that could arise based on this commercial relationship between the CAISO and WAPA.


NOW, THEREFORE, BE IT RESOLVED that the Commissioners of the Balancing Authority of

Northern California hereby:

1. Approve an Amendment to Schedule 1 of the Dynamic Transfer Balancing Authority Operating Agreement to add a 5 MW WAPA system resource.

2. Approve the BANC/WAPA Dynamic Scheduling Operating Agreement, in substantially final form, and authorize and direct the General Manager to execute the Agreement once he is satisfied that WAPA has met BANC operational requirements.

3. Authorize the General Manager, upon consultation with the BANC Operator, to make subsequent adjustments to Schedule 1 of the DTBAOA without further Commission approval and to provide updates to any such adjustment to the Commission on an as needed basis.

PASSED AND ADOPTED by the Commissioners of the Balancing Authority of Northern California

this 24th day of May 2017, by the following vote:

Aye No Abstain Absent

Modesto ID Greg Salyer

City of Redding Barry Tippin

City of Roseville Michelle Bertolino

City of Shasta Lake Tom Miller

SMUD Arlen Orchard

TPUD Paul Hauser

_________________________________ _________________________________ Barry Tippin Attest by: C. Anthony Braun Chair Secretary

DYNAMIC SCHEDULING OPERATING AGREEMENT

BETWEEN THE


AND THE

UNITED STATES

DEPARTMENT OF ENERGY

WESTERN AREA POWER ADMINISTRATION

SIERRA NEVADA REGION

TABLE OF CONTENTS

1 PREAMBLE........................................................................................................................... 3

2 EXPLANATORY RECITALS ............................................................................................. 3

3 EFFECTIVE DATE AND TERM........................................................................................ 4

4 TERMINATION AND SURVIVING OBLIGATIONS ..................................................... 4 4.1 Termination .................................................................................................................................. 4 4.2 Surviving Obligations .................................................................................................................. 4

5 DEFINITIONS ....................................................................................................................... 4

6 VIOLATIONS OF RELIABILITY STANDARDS ARISING FROM REGULATION SALES ............................................................................................................................................ 5

6.1 Violations ...................................................................................................................................... 5 6.2 Costs Associated with a Plan or Directive ................................................................................. 6

7 DISPUTES .............................................................................................................................. 6

8 AMENDMENT ...................................................................................................................... 6

9 NOTICES ............................................................................................................................... 6

10 GOVERNING LAW .......................................................................................................... 7

11 NO THIRD PARTY BENEFICIARIES .......................................................................... 7

12 ASSIGNMENT ................................................................................................................... 7

13 CONTINGENT UPON APPROPRIATIONS AND AUTHORIZATION ................... 7

14 COVENANT AGAINST CONTINGENT FEE .............................................................. 7

15 CONTRACT WORK HOURS AND SAFETY STANDARDS ..................................... 8

16 EQUAL OPPORTUNITY EMPLOYMENT PRACTICES .......................................... 8

17 USE OF CONVICT LABOR ............................................................................................ 8

18 SIGNATURE CLAUSE..................................................................................................... 8

Appendix 1 – Notices ................................................................................................................. 1-1

BANC_ WAPA_Dynamic_Scheduling_Op_Agreement_05_18_17

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1 PREAMBLE

This Dynamic Scheduling Operating Agreement (Agreement) is entered into between the BALANCING AUTHORITY OF NORTHERN CALIFORNIA, a joint exercise of powers agency (JPA) organized under Section 6500 et seq., of the California Government Code, hereinafter called “BANC,” its successors and assigns; and the Western Area Power Administration – Sierra Nevada Region (WAPA), created and existing under the laws of the State of California and operating an Electric System within the BANC Balancing Authority Area. BANC and WAPA are hereinafter referred to individually as “Party” or collectively as the “Parties.”

2 EXPLANATORY RECITALS

2.1 WHEREAS, BANC and the California Independent System Operator Corporation (CAISO) are signatories to the Dynamic Transfer Balancing Authority Operating Agreement (DTBAOA), which enables dynamic transfer functionality between the BANC and CAISO Balancing Authority Areas;

2.2 WHEREAS, BANC and the CAISO have amended Schedule 1 of the DTBAOA to add WAPA system resources that will bid dynamically into the CAISO Balancing Authority Area;

2.3 WHEREAS, the CAISO and WAPA have entered into a CAISO pro forma “Dynamic Scheduling Agreement for Scheduling Coordinators” (DSASC) to establish the terms and conditions on which the CAISO and WAPA will discharge their respective duties and responsibilities under the CAISO Tariff;

2.4 WHEREAS, the DSASC allows WAPA to submit Dynamic Schedules to the CAISO for regulation service from the WAPA resources specified in Schedule 1 of the DTBAOA, which are located in the BANC Balancing Authority Area;

2.5 WHEREAS, the Parties are entering into this Agreement in order to clarify liability for any penalties related to violations of Reliability Standards applicable to the BANC Balancing Authority which are the result of a failure related to the facilitation of the regulation service provided to the CAISO through WAPA System Resources listed in DTBAOA Schedule 1;

2.6 WHEREAS, the Parties agree that any mitigation plan(s) or regulatory directive(s) issued by a Compliance Enforcement Authority associated with violations of Reliability Standards directly related to WAPA’s provision of regulation services to the CAISO pursuant to the DTBAOA and DSASC shall be solely the responsibility of WAPA, in accordance with the terms of this Agreement.


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NOW THEREFORE, in consideration of the mutual covenants set forth herein, the Parties agree as follows:

3 EFFECTIVE DATE AND TERM

This Agreement shall become effective as of the date of execution by both Parties and shall remain in full force and effect unless subsequently amended or terminated as provided herein.

4 TERMINATION AND SURVIVING OBLIGATIONS

4.1 Termination

This Agreement may be terminated by either Party upon thirty (30) days written notice to the other Party.

4.2 Surviving Obligations

Notwithstanding a Party’s right to terminate this Agreement, such termination shall not relieve WAPA of any obligations to follow a mitigation plan or any other regulatory directive issued by a Compliance Enforcement Authority arising during the term of this Agreement and to the extent associated with violations of Reliability Standards directly related to WAPA’s provision of regulation services to the CAISO pursuant to the DTBAOA and DSASC.

5 DEFINITIONS

5.1 Balancing Authority shall mean the responsible entity that integrates resource plans ahead of time, matches generation and load, maintains interchange with other Balancing Authority Areas, and maintains frequency in real time of the electric power systems.

5.2 Balancing Authority Area shall mean the collection of generation, transmission, and loads within the metered electrical boundaries of the Balancing Authority.

5.3 BANC Member Agreement shall mean the agreement entered into between BANC and the members of the BANC JPA which governs certain operational relationships between BANC and the BANC members, to apportion penalties, and otherwise share the other Balancing Authority obligations.

5.4 CAISO Tariff shall mean the CAISO’s open access transmission tariff filed with, and approved by, FERC, as that tariff may be amended from time-to-time.

5.5 Commission shall mean the “BANC Commission,” as established in the BANC Joint Powers Agreement, as that agreement may be amended from time-to-time.


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5.6 Compliance Enforcement Authority shall mean FERC, NERC, WECC, and any other agency, court, organization, or other entity or person duly authorized pursuant to law or regulation to: (a) audit or determine compliance with applicable Reliability Standards; or (b) impose, enforce, excuse, or rescind Penalties or otherwise take action binding on one or more Parties with respect to a finding of failure to comply with a Reliability Standard.

5.7 Dynamic Schedule shall have the meaning set forth in the CAISO Tariff.

5.8 FERC shall mean the “Federal Energy Regulatory Commission,” or its successor.

5.9 Host Balancing Authority Area shall mean the Balancing Authority in which the dynamic resource is connected to the electric grid. BANC is the Host Balancing Authority Area.

5.10 Internal Compliance Program shall mean the BANC Internal Compliance Program, approved by the Commission, as that program may be amended from time-to-time.

5.11 Internal Compliance Program Charter shall mean the BANC policy-level document outlining the Internal Compliance Program, which has been adopted by the Commission, as that program may be amended from time-to-time.

5.12 NERC shall mean the “North American Electric Reliability Corporation,” or its successor.

5.13 Reliability Standards shall mean those NERC Reliability Standards and WECC Regional Reliability Standards that have been approved by FERC under Section 215 of the Federal Power Act and WECC applicable Regional Criterion referenced in FERC-approved Reliability Standards.

5.14 Scheduling Coordinator shall have the same meaning as that used in the CAISO Tariff.

5.15 WECC shall mean the “Western Electricity Coordinating Council,” or its successor.

6 VIOLATIONS OF RELIABILITY STANDARDS ARISING FROM REGULATION SALES

6.1 Violations

BANC has adopted processes and procedures for its compliance program in its Internal Compliance Program Charter and BANC Member Agreement. Any potential or actual violations of Reliability Standards applicable to the BANC Balancing Authority which are the direct result of a failure related to BANC acting in its capacity as the Host Balancing Authority Area in the facilitation of the regulation service provided to the CAISO through WAPA resources listed in DTBAOA Schedule 1 shall be addressed in accordance with the Internal Compliance Program Charter and the BANC Member Agreement; provided,


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however, WAPA shall be responsible for its share of any final mitigation plan(s) or regulatory directive(s) issued by a Compliance Enforcement Authority associated with a violation, or violations, of Reliability Standards applicable to the Balancing Authority arising directly as the result of WAPA acting as the Scheduling Coordinator for the dynamically scheduled resources listed in DTBAOA Schedule 1. Additionally, BANC and WAPA will coordinate on the implementation of any such mitigation plan(s) or regulatory directive(s) issued by a Compliance Enforcement Authority. 6.2 Costs Associated with a Plan or Directive

A mitigation plan or any regulatory directive(s) issued by a Compliance Enforcement Authority associated with this Section 6 shall be followed by the Parties in accordance with that plan or directive; however, the compliance costs incurred by the Parties based upon the mitigation plan or directive shall be the sole responsibility of WAPA. Prior to expending any funds to implement a mitigation plan, the Parties shall determine the costs to implement the plan. After determining the costs of the plan, WAPA shall take necessary steps to obligate necessary funds, and such steps may include seeking any necessary appropriations from U.S. Congress. After completing the mitigation plan, BANC shall provide an itemization of costs under this Section 6.2 as part of BANC’s written request to WAPA for reimbursement. Such request shall be in accordance with Section 9 (Notices) of this Agreement.

7 DISPUTES

Disputes under this Agreement shall be first resolved by attempted negotiation between the program managers of the Parties. In the event this is unsuccessful, the Parties shall elevate the dispute to the highest executive levels. If such executive negotiation is unsuccessful, the dispute or disputes may be resolved by resort to a court of competent jurisdiction applicable to the Parties

8 AMENDMENT

This Agreement may be amended or otherwise modified only with the written agreement of the Parties.

9 NOTICES

Any notice, demand, or request in accordance with this Agreement, shall be in writing and shall be deemed properly served, given, or made if delivered in person or sent by first class United States mail, postage prepaid, by confirmed electronic facsimile, electronic mail confirmed by the recipient, or by prepaid commercial courier service to a Party via its representative or alternate representative at the address set forth in Appendix 1, unless otherwise provided in this Agreement. Any Party may at any time change the designation or address of a person specified


7

in Appendix 1 upon written notice to the other Party designated for such notice. Such a change to Appendix 1 shall not constitute an amendment to this Agreement.

10 GOVERNING LAW

The rights and obligations of the Parties and the interpretation and performance of this Agreement shall be governed by governed by and construed and interpreted in accordance with the substantive laws of the United States of America, as if executed and to be performed wholly within the State of California.

11 NO THIRD PARTY BENEFICIARIES

No right or obligation contained in this Agreement shall inure to the benefit of any person or entity not a Party to this Agreement. Nothing in this Agreement shall be construed to create any duty to, any standard of care with reference to, or any liability to any third party.

12 ASSIGNMENT

Either Party may make an assignment of its rights and obligations under this Agreement only after obtaining the written consent of the other Party, which consent shall not be unreasonably withheld.

13 CONTINGENT UPON APPROPRIATIONS AND AUTHORIZATION

Where activities provided for in the LOA extend beyond the current fiscal year, continued expenditures by WAPA are contingent upon Congress making the necessary appropriations required for the continued performance of WAPA’s obligations under the Agreement. In case such appropriation is not made, BANC hereby releases WAPA from its contractual obligations and from all liability due to the failure of Congress to make such appropriation.

14 COVENANT AGAINST CONTINGENT FEE

BANC warrants that no person or selling agency has been employed or retained to solicit or secure the contract upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established commercial or selling agencies maintained by BANC for the purpose of securing business. For breach or violation of this warranty, WAPA shall have the right to annul the Agreement without liability or in its discretion to deduct from the contract price or consideration the full amount of such commission, percentage, brokerage, or contingent fee.


8

15 CONTRACT WORK HOURS AND SAFETY STANDARDS

This LOA, to the extent that it is of a character specified in Section 103 of the Contract Work Hours and Safety Standards Act (Act), 40 U.S.C. § 3701, as amended or supplemented, is subject to the provisions of the Act, 40 U.S.C. §§ 3701-3708, as amended or supplemented, and to regulations promulgated by the Secretary of Labor pursuant to the Act.

16 EQUAL OPPORTUNITY EMPLOYMENT PRACTICES

Section 202 of Executive Order No. 11246, 30 Fed. Reg. 12319 (1965), as amended by Executive Order No. 12086, 43 Fed. Reg. 46501 (1978), as amended or supplemented, which provides, among other things, that BANC will not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin, is incorporated herein by reference the same as if the specific language had been written into the Agreement, except that Indian Tribes and tribal organizations may apply Indian preference to the extent permitted by Federal law.

17 USE OF CONVICT LABOR

BANC agrees not to employ any person undergoing sentence of imprisonment in performing the contract except as provided by 18 U.S.C. § 3622(c), as amended or supplemented, and Executive Order No. 11755, 39 Fed. Reg. 779 (1973), as amended or supplemented.

18 SIGNATURE CLAUSE

The signatories to this Agreement represent that they have been appropriately authorized to enter into this Agreement on behalf of the Party for whom they sign.


9

IN WITNESS THEREOF, the Parties have executed this Agreement and it is effective as of the Effective Date set forth in Section 3.


By: Name: James R. Shetler Title: General Manager Date:

Western Area Power Administration – Sierra Nevada Region

By: Name: Title: Date:

1-1 BANC_ WAPA_Dynamic_Scheduling_Op_Agreement_05_18_17/Appendix 1: Notices

Appendix 1 – Notices


Name of Primary Representative: James R. Shetler Title: General Manager Company: Balancing Authority of Northern California Address: P.O. Box 15830, MS D109 City/State/Zip Code: Sacramento, CA 95852-1830 Email Address: [email protected] Phone: (916) 870-3774 Fax:

Name of Alternative Representative: C. Anthony Braun Title: General Counsel Company: Braun Blaising Smith Wynne, P.C. Address: 915 L Street, Suite 1480 City/State/Zip Code: Sacramento, CA 95814 Email Address: [email protected] Phone: 916-326-5812 Fax: 916-441-4068

Western Area Power Administration – Sierra Nevada Region

Name of Primary Representative: Title: Company: Address: City/State/Zip Code: Email Address: Phone: Fax:

Name of Alternative: Representative: Title: Company: Address: City/State/Zip Code: Email Address:

Phone: Fax:

This Appendix 1 may be updated as needed by either Party without formal amendment to this Agreement. Any changes will be provided to all individuals listed herein. Email may be used to communicate the revisions.



SCHEDULE 1

DESCRIPTION OF DYNAMIC SCHEDULING RESOURCES

[Section 4.4.5]

A. Dynamic Scheduling System Resources Into the CAISO Balancing Authority Area

System Resource ID:

Description of System Resource(s):

Regulation Up

PMax Values1:

RANCHO_2_SMUDSYSDYN

System Resource as used in this Agreement means all of the supply resources identified in Schedule 1 of the Market Efficiency Enhancement Agreement between Sacramento Municipal Utility District (“SMUD”) and the CAISO (“MEEA”) and the supply resource’s respective distribution factors as determined pursuant to Schedule 2 of the MEEA, as these schedules may be amended from time to time.

125 MW CAISO Intertie: Rancho Seco 230-kV interconnection at the

Rancho Seco Substation

Host Balancing Authority Area:

Balancing Authority Area of Northern California

Intermediary Balancing Authority Areas:

N/A

1 This value represents the maximum amount of power that can be scheduled by the System Resource into the CAISO Balancing Authority Area, and is subject to limitation by Congestion on the scheduling path or System Emergencies that could reduce or eliminate the ability to schedule and transfer power from time-to-time.

Description of System Resource(s) including Associated Power Plants:

System Resource as used in this Agreement means Central Valley 1

System Resource ID:

WSNR_2_CVPDYN

PMax Values1: 5 MW

CAISO Intertie: (Cottonwood) CTW230

Intermediary Balancing Authority Areas:

N/A


Agenda Item 5B

1. Resolution 17-05-19 2017 Summer Load & Resources Assessment of the Balancing Authority of Northern California

Braun Blaising Smith Wynne, P.C. Attorneys at Law

915 L Street, Suite 1480, Sacramento, California 95814

Telephone: (916) 326-5812 www.braunlegal.com

5/19/17

To: BANC Commission From: BANC Counsel RE: Acceptance of 2017 BANC Summer Load & Resources Assessment

Included in the Commission packet for the May 24, 2017 BANC Commission telephonic meeting is the 2017 Summer Load and Resources Assessment. This document is produced by the Operating Committee. It includes a summary of expected conditions, including peak loads, generation availability, planned physical outages of generation and transmission, and other information. The information is included for individual members, each of the Sacramento Municipal Utility District and Westeran Area Power Administration sub-areas, as well as on a BANC-wide basis.

The Assessment includes a description of the solar eclipse that will occur this Summer

and the operational impacts on BANC. The Assessment concludes that BANC will be able to meet the load demand for the 2017

summer operating season. Because reliable grid operation is the central and paramount function of BANC, the

Commission is requested to acknowledge receipt and acceptance of the 2017 Summer Load and Resources Assessment by resolution.


2017 Summer Load & Resources Assessment of the Balancing Authority of Northern California

WHEREAS, the Balancing Authority of Northern California (“BANC”) was created by a Joint

Powers Agreement (“JPA”) to, among other things, acquire, construct, maintain, operate, and finance Projects; and

WHEREAS, the Operating Committee has produced the 2017 Summer Load & Resource Assessment (“Assessment”), which describes expected loads, resources, and operating conditions for the coming summer season.

WHEREAS, the Assessment concludes that system resources will be adequate to meet expected

load for the coming Summer season. NOW, THEREFORE, BE IT RESOLVED that the Commissioners of the Balancing Authority of

Northern California hereby acknowledges and accepts the Assessment. PASSED AND ADOPTED by the Commissioners of the Balancing Authority of Northern California

this 24th day of May 2017, by the following vote:

Aye No Abstain Absent

Modesto ID Greg Salyer

City of Redding Barry Tippin

City of Roseville Michelle Bertolino

City of Shasta Lake Tom Miller

SMUD Arlen Orchard

TPUD Paul Hauser

_________________________________ _________________________________ Barry Tippin Attest by: C. Anthony Braun Chair Secretary

BANC 2017 SUMMER LOAD & RESOURCES ASSESSMENT

Page 2 of 12

Table of Contents

1. Executive Summary ............................................................................................................................ 3

2. 2016 Summer Review ........................................................................................................................ 5

2.1 System Demand .......................................................................................................................... 5

2.2 System Generation ..................................................................................................................... 5

2.3 System Import.............................................................................................................................. 6

3. 2017 Summer Assessment ............................................................................................................... 7

3.1 Forecasted System Demand ..................................................................................................... 7

3.2 Forecasted System Generation ................................................................................................ 8

3.3 Forecasted System Import ........................................................................................................ 8

3.4 Forecasted System Supply & Demand Outlook ..................................................................... 9

3.5 Scheduled Generation/Transmission Outages .................................................................... 10

3.6 Potential Issues and Concerns ............................................................................................... 11

3.7 Preparation for the Solar Eclipse ............................................................................................ 11

3.8 Engineering Studies.................................................................................................................. 11

3.9 Conclusions................................................................................................................................ 12


Page 3 of 12

1. Executive Summary The Balancing Authority of Northern California (BANC) is a Joint Powers Authority (JPA) consisting of the Sacramento Municipal Utility District (SMUD), Modesto Irrigation District (MID), Roseville Electric (RSC), Redding Electric Utility (REU), City of Shasta Lake, and Trinity Public Utility District (TPUD). BANC assumed the Balancing Authority (BA) responsibilities on May 1, 2011 from SMUD that include the matching of generation to load and coordinating system operations with neighboring BAs – Bonneville Power Administration (BPA), Turlock Irrigation District (TID), and California Independent System Operator (CAISO). The Figure 1-1 below shows the geographical map of BANC system.

Figure 1-1: Geographical Map of BANC System


Page 4 of 12

There are two footprints within BANC – one being SMUD, and the other being Western Area Power Administration – Sierra Nevada Region (WASN) which includes WASN, MID, RSC, REU, Trinity PUD, and City of Shasta Lake. This BANC summer load and resources assessment report summarizes BANC’s estimated load demand, available generation, and energy imports for the 2017 summer operating season – June 1st, 2017 through October 31st, 2017. The forecasted total BANC peak load demand for 2017 summer is 4464 MW which is slightly higher than the actual 2016 BANC peak load of 4432 MW. The forecasted peak loads for the SMUD and WASN footprints are 2998 MW and 1466 MW, respectively. As of April 10, 2017, the United States Bureau of Reclamation’s (USBR) Central Valley Project (CVP) reservoirs were at approximately 115% of average which is 135% of 2016 and 175% of 2015 and the forecasted statewide snowmelt runoff is above 200% of an average water year. As of April 4, 2017, SMUD’s three storage reservoirs were at 95% of capacity, which is 133% of historical April average and 109% of the storage in April 2016, and are expected to be full in the summer. The inflow to storage is projected to be about 190% of median by the end of summer (2015 runoff to storage was only 46% of median.). Based on the current outage schedules, all the SMUD and CVP hydro resources (except 142 MW Shasta generation outage) are expected to be available during the entire 2017 summer peak season and the total hydro power production would be close to or even above the highest historical level. The California-Oregon Intertie (COI) is the major transmission path for BANC. Based on the seasonal study performed by the California Operating Sub-Committee (OSS), the 2017 COI summer operating nomogram under an “all-lines-in-service condition” is similar to 2016. The record wet 2016-2017 water season ended California’s five years drought. BANC projects sufficient generating and transmission capacity to meet the load demand and system reliability for 2017 summer, as shown in Table 1-1 below.

Table 1-1: 2017 Summer Supply & Demand Outlook

BANC SMUD Footprint

WASN Footprint

Existing Generation (MW) 4924 2060 2864 Generation Outage (MW) (142) 0 (142) Retired Generation (MW) 0 0 0

New Generation (MW) 3 3 0 Estimated Import (MW) 1566 1500 66 Total Net Supply (MW) 6351 3563 2788

Demand (MW) 4464 2998 1466

Operating Reserve Margin * (MW) 1887 565 1322 Operating Reserve Margin * (%) 42.3% 18.8% 90.2%

* The Operating Reserve Margin (MW) = Total Net Supply – Demand * The Operating Reserve Margin (%) = (Total Net Supply – Demand) / Demand


Page 5 of 12

2. 2016 Summer Review

2.1 System Demand The recorded BANC peak load demand for 2016 summer reached 4432 MW at 16:57 on July 27, 2016, which was 31 MW more than the BANC peak load of 2015 (4401 MW) and almost the same as the BANC peak load of 2014 (4431 MW), a result of the slow economic recovery from the recession and the increased installations of the behind-the-meter solar photovoltaic generation. Because BANC members are located in the different geographical areas, they did not reach the peak load at the same time. The members’ load levels at the BANC peak load moment are named as Simultaneous Peak Load and the individual members’ peak load levels over the year are named as Non-simultaneous Peak Load. On July 27, 2016, the Simultaneous Peak Load for SMUD footprint was 2966 MW and the Simultaneous Peak Load for WASN footprint was 1466 MW. The SMUD and WASN footprints peaked at the same hour on the same day but at different minutes. All the BANC members reached the individual Non-simultaneous Peak Loads on the same day – July 27, 2016. The Table 2-1 below shows the Simultaneous Peak Loads and Non-simultaneous Peak Loads and a comparison of 2016 actual Non-simultaneous Peak Loads vs. 2016 forecasted Non-simultaneous Peak Loads for BANC and all members.

Table 2-1: 2016 Simultaneous and Non-simultaneous Peak Loads vs. 2016 Forecasts

Non-simultaneous

Peak Load Forecast

(MW)

Actual Non-simultaneous

Peak Load (MW)

Non-simultaneous

Peak Load MW

Difference

Non-simultaneous

Peak Load %

Difference

Actual Simultaneous

Peak Load (MW)

BANC BA 4446 4443 -3 -0.1% 4432

SMUD 2986 2977 -9 -0.3% 2966

MID 689 661 -28 -4.1% 659

Roseville Electric 343 348 5 1.5% 347

REU 235 231 -4 -1.7% 231

Shasta Lake 31 34 3 9.7% 34

Trinity PUD 21 24 3 14.3% 24

WASN Footprint 1460 1466 6 0.4% 1466

2.2 System Generation A total 14 MW solar generation came online within the BANC BA footprint during 2016. BANC’s total generating capacity increased to 4924 MW. Table 2-2 shows generation levels for BANC members at the 2016 BANC peak load moment.


Page 6 of 12

Table 2-2: BANC Member Generation Levels at 2016 BANC Peak Load Moment

Generation (MW)

Simultaneous Peak Load

(MW) Generation Capacity

(MW) Gen Output

%

BANC BA 2970 4432 4924 60.3%

SMUD 1350 2966 2060 65.5%

MID 210 659 467 45.0%

Roseville Electric 152 347 288 52.8%

REU 98 231 187 52.4%

Shasta Lake 0 34 0 N/A

Trinity PUD 0 24 0 N/A

WASN Footprint 1620 1466 2864 56.6%

2.3 System Import With the completion of PG&E’s Palermo-Rio Oso 115 kV reconductoring project in 2014, the transfer capability of COI has been greatly improved since 2015 summer (up to 1175 MW increase under high Northern California Hydro condition). Table 2-3 shows individual simultaneous import levels for BANC members at the 2016 peak load moment.

Table 2-3: BANC Member Import Levels at 2016 Peak Load Moment

Simultaneous

Import (MW)

Simultaneous Peak Load

(MW) Import/Load

Ratio

BANC BA 1462 4432 33.0%

SMUD 1616 2966 54.5%

MID 449 659 68.1%

Roseville Electric 195 347 56.2%

REU 133 231 57.6%

Shasta Lake 34 34 100%

Trinity PUD 24 24 100%

WASN Footprint -154 (export) 1466 -10.5% From Table 2-3, it is clear that all BANC members rely heavily on import to serve load demands (more than half of the load in SMUD, MID, RSC, and REU were served by imports). However, the USBR generation balanced out the load demand in WASN footprint.


Page 7 of 12

3. 2017 Summer Assessment

3.1 Forecasted System Demand The forecasted total BANC peak load for 2017 summer is 4464 MW, which is slightly higher than the actual 2016 BANC peak load of 4432 MW. Table 3-1 below shows the forecasted 2017 BANC peak load and the Non-simultaneous Peak Load demands for all BANC members.

Table 3-1: 2016 Forecasted Peak Load

2017 Forecasted Non-

simultaneous Peak Load (MW)

SMUD 2998

WASN Footprint 1466

MID 699 Roseville Electric 339

REU 227 Shasta Lake 33 Trinity PUD 22

2017 Forecasted BANC Peak Load 4464

The Figure 3-1 below shows a comparison of forecasted 2017 simultaneous peak load with the historical peak load since 2006 (all-time peak year) for BANC, SMUD, and WASN footprint.

Figure 3-1: 2017 Forecasted Peak Load vs. Historical Peak Load

4906

4673

4614

4278

4504

4275

4515

4474

4431

4401

4432

3299

3117

3098

2854

2995

2846

28743026

3008

2967

2977

1624

1546

1528

1457

1514

1441

1494

15281435

1460

1466

4464

2998

1466

1000

1500

2000

2500

3000

3500

4000

4500

5000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Pea

k Lo

ad (

MW

)

Year

BANC

SMUD

WASN

BANC 2017ForecastSMUD 2017ForecastWASN 2017Forecast


Page 8 of 12

The Figure 3-1 shows that all BANC members’ load demands started declining after the all-time peak in 2006 due to the economic recession. The load demands reached the lowest in 2011 and then started recovering. However, the load demands haven’t returned to 2008 levels due to the slow economic recovery and the increased installation of behind-the-meter solar photovoltaic generation. The forecasted BANC peak load for 2017 is slightly higher than the actual 2016 peak load but is still 3% lower than 2008.

3.2 Forecasted System Generation About 3 MW solar generation will be on line by summer 2017. BANC’s total generation capacity will increase to 4927 MW, of which, 2799 MW (56.8%) is hydro generation, 1961 MW (39.8%) is thermal generation, and 167 MW (3.4%) is solar generation.

As of April 10, 2017, the United States Bureau of Reclamation’s (USBR) Central Valley Project (CVP) reservoirs were at approximately 115% of average which is 135% of 2016 and 175% of 2015 and the forecasted statewide snowmelt runoff is above 200% of an average water year. As of April 4, 2017, SMUD’s three storage reservoirs were at 95% of capacity, which is 133% of historical April average and 109% of the storage in April 2016, and are expected to be full in the summer. The inflow to storage is projected to be about 190% of median by the end of summer (2015 runoff to storage was only 46% of median.). Based on the current outage schedules, all the SMUD and CVP hydro resources (except 142 MW Shasta generation outage) are expected to be available during the entire 2017 summer peak season and the total hydro power production would be close to or even above the highest historical level. Based on the historical generation data, the forecasted 2017 summer generation levels by fuel types at peak load condition for BANC and all members are shown in Table 3-2.

Table 3-2: 2017 Forecasted Generation at Peak Load Condition

Hydro Gen (MW)

Thermal Gen (MW)

Solar Gen (MW)

Total Gen (MW)

Non-simultaneous

Peak Load (MW)

Gen/Load Ratio

BANC BA 1175 1678 100 2953 4464 66.2%

SMUD 450 965 83 1498 2998 50.0%

MID 55 310 15 380 699 54.4%

Roseville Electric 0 234 0 234 339 69.0%

REU 0 169 0 169 227 74.4%

WASN Footprint 670 713 17 1400 1466 95.5%

3.3 Forecasted System Import A majority of transmission imports for BANC occur at COI. Based on the seasonal study performed by the California Operating Study Sub-committee (OSS), the 2017 COI summer operating nomogram under all-lines-in-service condition is similar to 2016. Table 3-3 shows estimated 2017 summer import levels for BANC members.


Page 9 of 12

Table 3-3: Estimated BANC Member Import Levels at 2017 Peak Load Condition

Import (MW)

Non-simultaneous Peak Load

(MW) Import/Load

Ratio

BANC BA 1566 4464 38.5%

SMUD 1500 2998 50.2%

MID 319 699 45.6%

Roseville Electric 105 339 31.0%

REU 58 227 25.6%

WASN Footprint 66 1466 4.5%

3.4 Forecasted System Supply & Demand Outlook The record wet 2016-2017 water season ended California’s five years drought. BANC projects sufficient generating and transmission capacity to meet the load demand and system reliability for 2017 summer, as shown in Table 3-4 and Table 3-5 below.

Table 3-4: 2017 Summer Supply & Demand Outlook

BANC SMUD Footprint

WASN Footprint

Existing Generation (MW) 4924 2060 2864 Generation Outage (MW) (142) (0) (142) Retired Generation (MW) 0 0 0

New Generation (MW) 3 3 0 Estimated Import (MW) 1566 1500 66 Total Net Supply (MW) 6351 3563 2788

Demand (MW) 4464 2998 1466

Operating Reserve Margin * (MW) 1887 545 1322 Operating Reserve Margin * (%) 42.3% 18.2% 90.2%

* The Operating Reserve Margin (MW) = Total Net Supply – Demand * The Operating Reserve Margin (%) = (Total Net Supply – Demand) / Demand

Table 3-5: 2017 Summer Supply & Demand Outlook for Other BANC Members

Generation

(MW) Import (MW)

Peak Load (MW)

MID 380 319 699

Roseville Electric 234 105 339

REU 169 58 227

Shasta Lake 0 33 33

Trinity PUD 0 22 22


Page 10 of 12

3.5 Scheduled Generation/Transmission Outages According to current information, BANC members do not have any major transmission or generation outages scheduled for June, July, and August. Although the 500 MW Sutter Energy Center (SEC) will be still offline for the entirety of 2017, studies showed that Sacramento Valley peak load can still be served while meeting all NERC/WECC Reliability Standards. There are some COI related major outages scheduled for early June and late October 2017. However, these outages should not affect BANC’s load serving capability, since the loads will be lower in October. Table 3-6 shows the major outages scheduled for 2017 summer.

Table 3-6: Scheduled Major Outages for 2017 Summer

Start Time End Time Outage Facility Short Description Outage Area Outage Impact

5/11/2017 6/22/2017 Malin-Round Mountain #2 500 kV line

Relay Replacement CAISO COI derated to 3300

MW

5/11/2017 6/9/2017 Olinda 500/230 kV bank KT1A

Annual inspection and maintenance

BANC No COI derate

2/15/2017 6/12/2017 Roseville Energy Park Plant Maintenance BANC 160 MW generation

reduction

5/22/2017 7/10/2017 Shasta Unit #1 Maintenance BANC 142 MW generation reduction

7/13/2017 8/25/2017 Shasta Unit #4 Maintenance BANC 142 MW generation reduction

6/9/2017 6/22/2017 Round Moutain-Table Mountain #2 500 kV line


CAISO COI derated to 3600 MW

9/5/2017 12/4/2017 Don Pedro Units #1~4 Maintenance BANC/TID 203 MW generation reduction

10/1/2017 3/31/2018 Westley-Parker and Walnut-Parker 230 kV lines

Tower painting BANC/TID MID/TID import reduction

1/15/2016 12/31/2017 Sutter Energy Center (500 MW)

Temporary shutdown CAISO

Import Capability Reduction for Sacramento Valley Area

10/11/2017 10/31/2017 Captain Jack-Olinda 500 kV line series cap PT8A/B


BANC COI derated to 2800 MW

10/31/2017 10/31/2017 Olinda-Tracy 500 kV line Annual inspection and maintenance

BANC COI derated to 3200 MW

9/18/2017 9/22/2017 Tracy Wash Annual maintenance BANC Temporary COI

derated


Page 11 of 12

3.6 Potential Issues and Concerns The record wet 2016-2017 water season ended California’s five years drought. There still would be an increased risk of wildfires, causing potential impacts to the availability of transmission lines and/or generating units. Especially, the wildfires in 500 kV line corridors pose a significant risk of derate on COI, and the wildfires in the mountain areas could affect the availability of hydro generating units. BANC members, especially SMUD, have coordinated with the related State and local agencies in preparation for potential wildfires by discussing the lessons learned from King Fire of 2014, developing procedures of emergency responding and contacting, and improving Business Continuity Plans.

3.7 Preparation for the Solar Eclipse It is forecasted that a total solar eclipse will pass over the United States from Florida to Pacific Northwest (Oregon, Idaho, etc.) on Monday, August 21, 2017. Northern California will be affected by a partial eclipse between 9:02 AM and 11:39 AM PPT. The max eclipse is forecasted to be at 10:17 AM with a maximum sun obscuration of 76%. The solar generation (both utility-scale and behind-the-meter) in BANC footprint will be affected by the reduction in solar radiation. By July 2017, the expected utility-scale solar generation capacity within BANC footprint will be about 166.8 MW and the estimated behind-the-meter (rooftop) solar generation capacity within BANC footprint is about 206.9 MW. With the available generation resources, BANC will be fully prepared to get through the solar eclipse smoothly. The Operations units within all BANC members are evaluating the impacts of the solar eclipse and will develop the corresponding operating plans.

3.8 Engineering Studies The BANC members coordinated with the neighboring BAs, TOPs, and Peak RC and performed the following engineering studies for 2017 summer:

• California Operating Study Sub-committee (OSS) • Sacramento Valley Study Group (SVSG) • Westley Transmission Study Group (WTSG)

The OSS study focuses on COI transfer capability and COI operating nomogram. the SVSG study focuses on identifying the Load Serving Capability (LSC) of Sacramento Valley area (SMUD and RSC) and developing operating nomograms, and the WTSG study focuses on identifying the import and export limits for MID and TID and developing operating nomograms. All studies concluded that BANC will be able to serve the load demand for the 2017 summer and meet all NERC/WECC Reliability Standards.


Page 12 of 12

3.9 Conclusions The slow economic recovery from recession and the increased installation of behind-the-meter solar photovoltaic generation results in a moderate estimated peak demand growth for 2017. The record wet 2016-2017 water season ended California’s five years drought. BANC will be able to meet the load demand for the 2017 summer operating season. The BANC/SMUD System Operators have been trained on the updated Operating Procedures to prepare them for the 2017 summer operations. Additionally, BANC has coordinated with the State and local agencies, Peak RC, and neighboring BAs and TOPs to ensure reliable operations for the 2017 summer under normal and emergency system conditions.


Agenda Item 5D

1. 2016-17 Strategic Plans

BANC2017StrategicPlan-Routine/OngoingInitiatives-May2017Update

2017RoutineInitiatives-1

No./Priority FocusArea Initiative Responsibility TargetDueDate Status1 INDEPENDENCE EffectivelyoverseetheBA JimShetler Ongoing SeemonthlyOperaions,

Medium operations. Compliance,&GMReports

2 Developlong-termsuccession JimShetler/Commission 4thQtr.2017Medium planforGeneralManager

3 OUTREACH Engageinindustryforums JimShetler Ongoing ContinueattendingPeak&Medium (WECC,Peak,NWPPA,etc.) WECCBoardmeetings&

NWPPExec.Forum4 CoordinatewithotherPOUBAs JimShetler Ongoing CoordinatingwithSCL,SRP,

Medium (Caandregionally) LADWP,&TIDonEIM

5 Outreachtoregulatoryand JimShetler/BBMS Ongoing ~AttendedCREPC/WIRABMedium legislativebodiesonkeyissues meeting4/12-14/17

~AttendedWECCReliabiltySummit5/2-3/17

6 ASSETS Identifyandimplementefforts ResourceCommittee Ongoing RFPforconsultanthelponMedium toimproveBANCmemberasset BANCIRPprocessinfinal

optimization&renewable memberreviewintegration

7 MEMBERSERVICES Identifyandoutreachto JimShetler Ongoing Continuefollow-onLow potentialnewBANCmembers discussionswithTIDon

EIM

BANC2017StrategicPlan-FocusedInitiatives-May2017Update

2017FocusedInitiatives-1

No./Priority FocusArea Initiative Responsibility TargetDueDate Status8 INDEPENDENCE ManageimplementationofEIM JimShetler Noearlierthan ~DevelopingEIMServices

High participationeffort Spring2019 Agreement.~SelectedUtilicastforEIMPMsupport.~EIMKick-offmeetingwithCAISO4/20/17~AddressingBilateraltradingissue~AddressingEIMdatasharingissue

9 OUTREACH Evaluateopportunitiesto JimShetler 4thQtr.2017Medium engageotherentitiesinmarket

development10 ASSETS DevelopBANCfootprint"IRP" ResourceCommittee 4thQtr.2017 RFPforconsultsupportin

Medium focusedonVERsfirming& finalmemberreviewrenewables.

11 MEMBERSERVICES ImplementPA/PCprojecttobe JimShetler/SMUD Dec-17 ~RegisteredasPCw/WECCHigh fullycompliant ~KickedoffPCdiscussions

withparticipants4/12/17~Finalizingstudyplan~Initiatiingbasecasestudy

regular meeting of the commissioners of...

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