01 Please supply any comments related to the Introduction, Definitions, or Background sections.
Shell Energy North America (US), L.P. (“Shell Energy”) appreciates the constructive conversations leading up to this business practice and thanks WPP for the opportunity to comment.
As a general matter, the document should include definitions of concepts and terms used, such as ‘unheld energy’ included in an appendix to the BPM thus avoiding the hassle of referencing the tariff. In addition, providing multiple examples of settlement calculations under different scenarios/pricing would avoid ambiguity.
02 Please supply any comments related to the Applicable Index Prices section.
Shell Energy generally supports using the applicable on peak / off-peak indices for Mid-Columbia (Mid-C) and Palo Verde; however, due to Washington Cap and Invest, there may be variability and inconsistency in how real-time prices are being reported for the Powerdex real-time Mid-C index. Powerdex may no longer be the appropriate real-time index to use for the Northwest Subregion.
In addition, language should be added which speaks to two items, the first being other formal indices which may be formed, e.g., Mid-C Non-Washington Sink. Secondly, successor pricing mechanisms applicable under organized market constructs.
03 Please supply any comments related to the Settlement Pricing Overview and Components introduction section.
Energy Declined is confusing nomenclature; suggest using ‘Energy Deployment’ settlement price instead. It is unclear if the Make Whole Adjustment will be calculated on an hourly or daily basis.
04 Please supply any comments related to the Settlement Pricing Overview and Components - Total Settlement Price section.
We understand WPP is using a CAISO concept for pricing total settlements; however, it is prudent to include background on this process in a BPM appendix because CAISO’s Hourly Shaping Factor is an esoteric concept.
05 Please supply any comments related to the Settlement Pricing Overview and Components - Holdback Settlement Price section.
Shell Energy suggest this section should state “The Holdback Settlement Price is the Total Settlement price less the Energy Deployed Settlement”.
06 Please supply any comments related to the Settlement Pricing Overview and Components – Energy Declined Settlement Price section.
Shell Energy suggests Energy Deployment Settlement [Energy Declined Settlement in the BPM draft] should consist of “the greater of the Total Settlement Price or the Real-Time Applicable Index Price for the hour” as this concept captures the (DA or RT, whichever is higher) opportunity costs incurred by surplus participants providing holdback.
07 Please supply any comments related to the Settlement Pricing Overview and Components - Application of Pricing and Quantities for Holdback Requirements and Energy Deployment Transactions section.
This section is generally hard to follow as it relates to the payment for energy deployments and the energy declined settlement price, please include examples.
08 Please supply any comments related to the Settlement Pricing Overview and Components - Make Whole Adjustment section.
The Washington CCA program applies carbon compliance costs for carbon emissions associated with, among other things, electricity imported or generated in Washington State. The Make Whole Adjustment should include a provision for surplus WRAP participants to recover direct carbon compliance costs associated with energy deployments to deficient entities inside Washington State. Shell Energy believes all WRAP energy deliveries would be treated as ‘unspecified imports’ under the Washington CCA, because the purchaser would not have a preexisting contract for specified or non-emitting deliveries of energy deployments. This is an issue which requires additional stakeholder discussion, and the BPM should speak to the process if another state in the WRAP footprint implements a carbon pricing scheme.
09 Please supply any comments related to the Settlement Pricing Overview and Components - Allocation of Holdback Settlement to Multiple Participants section.
This need for this concept isn’t immediately clear to Shell Energy.
10 Please supply any comments related to the Settlement Pricing Overview and Components - Transmission Service section.
No Comment
11 Please supply any comments related to the Settlement Pricing Overview and Components - Settlement Pricing for Subregions section.
It is unclear from section 4.8 if the intention for surplus participant A providing energy deployment and transmission (same participant) to deficient participant B be compensated the applicable index price for both the energy component and transmission or if the applicable index would be compensation for only the transmission component. Please include example calculations.
Will energy be deployed locally versus crossing regions in order to minimize transmission costs?
General Comment
Shell Energy North America (US), L.P. (“Shell Energy”) appreciates the constructive conversations leading up to this business practice and thanks WPP for the opportunity to comment.