Change Request 2024-CRF-021

There are periods and paths where firm transmission is not available in any time period Forward Showing, preschedule or RealTime).  It follows that there are occasions when scheduling the delivery of energy (from a holdback) on non-firm transmission is the only option.  Curtailment of non-firm transmission and ensuing failure to deliver could result in a Failure to Deliver Charges. (Tariff section 20.6).

Section 20.7.3. of the Tariff provides a waiver process for participants who anticipate a failure to deliver.  If approved, the participant is not required to deliver holdback.    It is not clear if this waiver should apply or be approved for holdback scheduled on non-firm.   Of course, there are appropriate situations for a waiver due to lack of firm transmission (de-rates, outages), but if all lines are in service and firm is not available (this scenario) and tags cut w/out advance notice without a waiver a participant is exposed to large penalties.  Limiting holdback supply because of a lack of firm transmission may leave the program short capacity in the Operational window and is overly conservative since a large quantity of energy is delivered across non-firm transmission on a regular basis, and in fact WRAP energy delivered through non-firm schedules does not require a waiver.

Aside from the waiver, participants face Failure to Deliver penalties (Section 20.7.4) if non-firm schedules are reduced or cut entirely.   The stiffness of the penalty depends on whether another participant can “fully” cover the undelivered energy.  If fully covered the first failure is 5-times the higher of DA or RT index, if not covered, the first failure to deliver penalty is 25 times the higher of the DA or RT index.    These penalties have a 5-year cumulation period; a single hourly curtailment in year one starts the 5-year clock triggering higher penalties for the duration of the 5-year period.  A second curtailment of a single hour within the 5-year period could result in a penalty 50 times the higher of DA or RT index if another participant does not “fully” cover for curtailment.  (20 times index if another participant fully covers.)  Punitive.    Especially if participants tried but could not obtain firm transmission to deliver energy assigned by the program from a holdback in the operational window.    

Revenues from Failure to Deliver Penalties go to WRAP Schedule 1 costs if holdback fully covered by another participant.  If holdback not fully covered by other participants, revenues go to the entity who had the shortfall which was not covered.   The Tariff is not clear what happens if the shortfall is partially covered by another participant.

Finally, there are systems/markets in place today which cover failure to deliver scenarios in WECC:  On the physical replacement side we have Merchant Alerts, EIM, WPP reserve sharing group and EEA alerts.   Financially we have WPP and EIM settlements, and WSPP LDs.    In the absence of negligence or mal-intent, no need for a third WRAP penalty/settlement structure.

If the participant with the holdback obligation attempted to purchase short term firm in both the preschedule and real time, but only non-firm transmission was available (and secured), or the participant redirected firm PTP on an hourly basis to provide holdback but the child/children were non-firm;  then the Failure to Deliver Charges should be capped at higher of DA or RT index (no multiplier) and these events should be excluded from the Cumulative Delivery Failure Period tally.  

Either expressly add the afore-mentioned exemption language provided to Tariff Section 20.7.3 or to both Sections 20.7.4.1 and 20.7.4.2 of the Tariff.

Participant(s) who are long and attempting to provide holdback on firm transmission should not be punished for trying to deliver on firm, but not able to secure.    Conversely participants who are short should not be enriched by the revenue associated with penalties forced on participants who are not able to obtain firm transmission.

firm transmission is often not available and curtailments are possible.   The WRAP program is voluntary; exposing participants to penalty risk (at multipliers of current market value) due to the lack of availability of firm transmission, creates risk situation that will cause participants (and/or potential participants) to have high dollar risk scenarios could/will drive those entities away from the program.  Lacking ill intent or negligence, it is sustainable and logical for the WRAP to assign penalties in-line with actual costs when a participant has taken the measure possible to assure delivery even through non-firm transmission when firm simply is not available.