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Enron Mail |
The following are my comments on the draft interconnection agreement.
In the sixth "whereas" (page 1) (and Sections 3.4 and 5.1.6) the contract states that either the generating company or the generating company's customers are responsible for entering into a separate service for transmission service. In any given transaction this may be incorrect and therefore must be changed. Specifically, a third person may in fact be responsible for taking the transmission service and the generator may have no ability (or privity of contract) to require this entity to take transmission service from Sierra Pacific. For example, the generator may sell the power to Dynegy, who may sell it to Sierra Pacific who might then be buying the transmission service. The eighth "Whereas" (page 1) (and Sections 2.18, 3.1, 31.7, E.4.1, E.4.2, E.8.2, E.8.3, E.8.4, E.8.6, E.8.7, E.11.10, E.11.11, and E.12.) state the generating company is willing to maintain the generating facilities in accordance with good utility practice and enter into a WSCC Reliability Management System (RMS) Agreement. I would like to point out that some generators do not like to commit to the "good utility" practice standard or to be bound by the RMS agreement. Enron has signed the RMS Agreement. I doubt Sierra will be willing to sign this if we oppose the good utility practice standard. This is especially true because BPA is insisting on this standard in the context of negotiating RTO West and, in order for RTO West to form, BPA must agree to join. Enron is very interested in RTO West forming. If you want to oppose the Good Utility Practice standard, we had better develop a good rationale for being opposed to it and a justifiable alternative standard. Section 1.1 Contrary to our requests, this section still states that the agreement will become effective on the date which FERC permits it to become effective. This is not the way the OATT operates. Rather, if Enron and Sierra cannot develop a consensual interconnection agreement, Enron asks Sierra to file an unexecuted interconnection agreement with FERC (as we have done) and service begins pursuant to the terms and conditions of Sierra's open access tariff. Service here is governed by the transmission open access tariff because FERC has determined that interconnection is the receipt point portion of transmission service and that if a public utility does not have a separate tariff governing the procedure for requesting the interconnection portion of transmission service than the procedure established in the OATT applies. The FERC has determined that filings under Section 212 (and therefor 211) of the Federal Power Act are no longer necessary because the customer simply requests service under the OATT. Requiring the customer to wait until the FERC decides the agreement should become effective would completely undermine the purpose of Order No. 888. Section 1.2 After, "by both parties" add "however, if the parties cannot agree to execute this agreement, System Owner shall file this agreement unexecuted with FERC as provided by the terms of the OATT." Section 1.6.2 Three years advance written notice is too long. A reasonable notice period would be ____. Section 2.6, 2.7 and 2.8 EPMI opposes the definitions of "Applicable Laws" "Applicable Permits" and "Applicable Reliability Criteria" because, when combined with their use throughout the contract (in Sections 2.6, 3.5, 3.10, 3.11, 5.6.2, 5.6.3, 8.4.2, 11.8, E.2.8, E.3.3, E.4.1, E.4.3, E.4.4, and E.9.5) they subject EPMI to legal and regulatory risk by consenting to amendment of the contract by government action. Section 2.19 Section (i) of the definition of "Dispatch gives Sierra too much control over the generating unit by allowing it to redispatch for "the most reliable" supply. Change "the most reliable" to "a reliable" Section 2.31 Is inconsistent with Sierra's OATT. It should be written using the same words as the OATT. Section 2.52 The reference to Section 22.1 should be corrected to 21.1. Section 2.56 Definition of "System Integrity" is too broad. When combined with Section 3.13.2, it would require our generator to not "have an adverse impact on "maximiz[ing] the health, welfare, safety of personnel and the general public." While Sierra can voluntarily do so with its own facilities, there is no reliability or governmental requirement that we do so and we should not. Section 3.5 The proposed Use of "System Integrity" here is more fair assuming EPMI agrees to the "Good Utility Practice" standard. Section 3.7 Shouldn't the word "unplanned" be added before the word Outages? Section 3.8 EPMI opposes this provision to the extent that it would be directly assigned the cost of facilities that are being used by others. Section 3.10 The second sentence exposes EPMI to regulatory risk by allowing Sierra to add new facilities and charge them to EPMI. This risk is increased by the last sentence which allows Sierra to determine the need for such facilities in its sole discretion. Editorial note: the third to last sentence is missing a period. Section 3.13.2 See comments under Section 2.56. Section 4.1 EPMI opposes the first sentence because it gives Sierra an opportunity to have FERC order additional payments for the same level of service already provided by this contract. Accordingly, the words "or ordered by FERC" should be deleted. EPMI opposes the second sentence because it would allow Sierra, with FERC's approval, to allocate to EPMI costs incurred for Sierra property and for operation of Sierra's facilities Section 4.3 Should the words "generating company's applicable FERC-approved tariff" be changed to "Applicable Law?" Section 5.1.1 EPMI opposes the last sentence because it would presumably require EPMI to pay more than cost for any project whose scope does not increase by more than 10 percent. Under FERC's precedent, EPMI is only required to pay actual cost. Section 5.1.3 Nine months seems like to long a time to wait to provide a final invoice. The words "plus Interest" should be added after the words "difference" in the fourth sentence. Section 5.6.2 This section says essentially the same thing as Section 3.10 and EPMI opposes it for the same reasons. Section 6.4.3 Add period at end of sentence. Section 7.1 Delete period after the word "and" in last sentence. Section 8.1.4 Add period after "Interconnection Facilities." Section 8.4.2 EPMI opposes paying for all modifications to interconnection facilities to the extent that such modifications benefit Sierra or third parties. Section 8.7.2 Delete the word "and" on the seventh line. Section 9.1.1 See comments under Sections 2.56. Section 11.7 Delete "pen-nits" from last line on page and insert "permits." Section 11.8 After "remediation or abatement activity" insert "pay all fines, penalties, or compensations as required by law." Section 13.4 There should be a reciprocal provision for generators. Section 16.2 EPMI opposes "regulatory" Force Majeure. Section 16.6 This provision is too broad in that it allows the System Operator to evaluate the alternatives available to the EPMI. Section 17.9 Add the letter "y" after "and ma" on the second line. Section 19.2.1 Third to last line change "ahs" to "has." Section 19.3 Needs to be edited. Section 19.6 This section subjects EPMI to the regulatory risk of amendment to the interconnection agreement to conform to an RTO's requirements. Section 22.5 By law, System Operator should be required to file with FERC prior to terminating the connection. Section 31.8 This section exposes EPMI to regulatory risk because it allows Sierra to unilaterally file with FERC to change the terms and conditions of the interconnection contract. This is standard in utility tariffs and agreements and in fact is in the FERC's pro forma OATT under Order No. 888. Section 31.9 of the contract retains EPMI's rights to protest any unilateral filing by Sierra under Section 31.8 and seems to balance the rights given to Sierra in Section 31.8 by allowing EPMI to file a complaint challenging any of the rates, terms, or conditions, etc., of the interconnection agreement. Exhibit D D.1.1 EPMI should not be required to provide free station service to the extent it benefits Sierra Pacific or third parties. A higher level of service should not simply be at the election of the System Owner but rather at the agreement of the Parties. D.1.2 The phrase "Except under Applicable Law," should be added before the first sentence. D.2 EPMI opposes providing free VArs and opposing providing VArs at a level determined by Sierra's discretion. Accordingly, EPMI opposes this entire provision. If Sierra wishes to purchase VArs, EPMI would agree to provide ______ level of VArs at ____ rate. EPMI would also agree to provide VArs at Sierra's discretion, subject to this rate, in the case of an Emergency. Otherwise, EPMI would be foregoing the opportunity to provide real power (instead of VArs) to the market at a market-based rate, and it might be subject to having such transactions cut at Sierra's "discretion" without being assured the cost of cover. Accordingly, the rate standard of cost or foregone revenues would not be compensatory. D.3 EPMI opposes this provision to the extent that it could be read to require EPMI to provide free Black Start Service. D.4 Since the generator is not taking the delivery portion of transmission service, it is not required to buy or self provide any ancillary service including regulation and frequency response service of real-time load -following service. Accordingly, this provision should be deleted. D.5 EPMI opposes the second sentence of this paragraph and it should be deleted. Sierra should get ancillary services from the market. E.2 Change "minimized" to "minimize." E.2.4 Oppose requirement to notify Sierra of defects in generator "may affect System Integrity." E.4.1.3 EPMI opposes giving the Control Area Operator authority to "approve" Planned Outage Schedules. E.4.4 Once again EPMI would oppose the use of the term "System Integrity" here as too high as standard. E.6.5 The second sentence gives the Control Area Operator too broad authority to preclude Planned Outages. E.7.1 Add the word "the" on line 4 after "at." E.8.1 EPMI opposes requiring the Generator to receive prior Control Area Operator authorization to undertake any action that is "reasonably likely to have an adverse impact of System Integrity," especially adjustment of the amount of real and reactive power it delivers to the Transmission system under E.8.1.1. E.8.2.2 Because VArs could be sold as real power, System Control should not be allowed to "establish the range of voltages or voltage schedules." Rather, Sierra Pacific should negotiate with EPMI to buy the level of voltage support it requires. See also E.8.9 establishing power factors. E.8.4 EPMI does not have a problem with operating its AGC within WSCC limits but it will not be providing this Ancillary Service free to Sierra. We need to negotiate compensation. E.8.6 Giving Sierra "sole discretion" to determine "unacceptable deterioration of the quality of service over its Transmission System" is too broad. E.9.2 "Repots" should be "reports"
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