FYI, from West desk trader John Malowney that is working on wholesale and retail physical.  I am having a 3:00 conf call this afternoon with AW Turner and Joe.  As you may have seen, PGE's first proposal was rejected.  (I can tell you the problems there if you haven't seen the order.)  In any event, I would welcome your thoughts on John's message.  Thanks.

-----Original Message-----
From: Malowney, John 
Sent: Thursday, October 18, 2001 5:25 PM
To: Nicolay, Christi L.
Subject: RE: Portland General Proposed Imbalance procedure


Not bad... it's difficult to identify what the Transmission Holders debits and or credits (cost exposure) would be as it does not reference a recognized indices such as the Mid-Columbia, it's settled after the fact, and the Transmission Holder is at the mercy of the LDC's incremental cost of their various generation units.  John 

-----Original Message-----
From: Nicolay, Christi L. 
Sent: Thursday, October 18, 2001 2:40 PM
To: Malowney, John
Subject: RE: Portland General Proposed Imbalance procedure


John -- This is what Duquense uses, which seems to be preferred when serving retail load.  What do you think about PGE using something like this?  Thanks.


SCHEDULE 4
	Energy Imbalance Service

Energy Imbalance Service is provided when a difference occurs between the scheduled and the actual delivery of energy to a load located within a Control Area over a single hour.  The Transmission Provider must offer this service when the transmission service is used to serve load within its Control Area.  The Transmission Customer must either purchase this service from the Transmission Provider or make alternative comparable arrangements to satisfy its Energy Imbalance Service obligation. 	

The charges for Energy Imbalance Service, for which there is no deadband or return of energy in kind, are as follows:

C	Schedules insufficient to meet load ?? For each hour in which the Transmission Customer schedules insufficient energy to meet its load in that hour, the Transmission Provider will charge the Transmission Customer the Incremen? tal Cost (as defined below) that the Transmis? sion Provider incurs to meet the load of the Transmission Customer in that hour.

C	Schedules in excess of load ?? For each hour in which the Transmission Customer schedules en? ergy in excess of its load for that hour, the Transmission Provider will reimburse the Trans? mission Customer the Decremental Cost (as de? fined below) that the Transmission Provider incurs to meet the load of the Transmission Customer in that hour. 

 
Incremental Cost to provide energy imbalance service shall be defined as the Transmission Provider's System Lambda (the out?of?pocket costs, measured in dollars per megawatt?hour, associated with producing the last MWH of energy on the Transmission Provider's system in a given hour, whether that energy is produced by owned generation or the purchase of power from a third party) to compen? 
 
sate for the under?delivery of electricity by the Trans? mission Customer for that hour.  

Decremental Cost to provide energy imbalance service shall be defined as the Transmission Provider's System Lambda (the out?of?pocket costs, measured in dollars per megawatt?hour, associated with producing the last MWH of energy on the Transmission Provider's system in a given hour, whether that energy is produced by owned generation or the purchase of power from a third party) to compen? sate for the over?delivery of electricity by the Trans? mission Customer for that hour.  

 

-----Original Message-----
From: Malowney, John 
Sent: Monday, October 15, 2001 3:23 PM
To: Nicolay, Christi L.
Subject: FW: Portland General Proposed Imbalance procedure
Importance: High


Christi;  The proposed settlement procedure does not seem to be that clear... usually LDC's allow participants either a percentage of pre-schedule or set MW volumes deviation which is cleared at the appropriate Index (Mid-C, COB etc.) and then any MW volumes outside the predetermined bandwidth would be settled at a percentage of the selected Index.  Montana Power Company (MPC) has an excellent working example.  John

-----Original Message-----
From: Foster, Chris H. 
Sent: Tuesday, October 09, 2001 4:45 PM
To: Malowney, John
Subject: FW: Portland General Proposed Imbalance procedure
Importance: High




-----Original Message-----
From: Nicolay, Christi L. 
Sent: Tuesday, October 09, 2001 3:22 PM
To: Foster, Chris H.
Subject: FW: Portland General Proposed Imbalance procedure
Importance: High


Thanks Chris.

-----Original Message-----
From: Nicolay, Christi L. 
Sent: Tuesday, October 09, 2001 5:14 PM
To: Herndon, Rogers; Misra, Narsimha; Aucoin, Berney C. ; Furrow, Dale;
Baughman, Edward D.; Black, Don
Cc: Novosel, Sarah; Lindberg, Susan
Subject: Portland General Proposed Imbalance procedure
Importance: High


EES and EPMI services folk -- We would like your comments on this imbalance proposal by Portland General (FYI--to the extent that FERC accepts Portland's proposal, it could be used as precedent for other utilities): 

PGE proposed a price to clear imbalances that was rejected by the FERC.  FERC told PGE to look to the Exelon order for guidance.  After an extension, the compliance filing is due Monday.  They have sought your reaction/comments.
 
 
 They had a discussion with FERC staff on how to comply.  
 
1.  Staff agreed that, under the Order, PGE could use the average spot price (excluding long term purchases) of purchases and sales in the hour before to clear imbalances (Schedule 4).
 
2. The PGE situation does not fit the Exelon model, because PGE does not have purchases and sales in every hour (apparently Exelon did).  FERC staff agreed the situation was different, but had no suggested solutions.  Staff requested that PGE propose "something" and the FERC would react.
 
3.  The something is -- A variant of the proposal recently approved for Pacific Corp (?):
 
PGE would use Mid C prices, but use PGE's actual daily load shape. [Apparently, Pacific Corp. proposed Mid C prices, but would use the load shape from California.  This load shape is quite different then PGE's and could lead to arbitrage opportunities against PGE by third-parties.]
 
4.  Right now PGE's traders and outside counsel disagree on the best approach.  The traders want to just propose/use the Mid C price proposal for all hours.  Outside counsel believes they should propose/use the average spot price proposal when PGE does make purchases and/or sales in the hour before and the Mid C proposal in other hours.
 
Do you have a preference?
 

-----Original Message-----
From: Novosel, Sarah 
Sent: Tuesday, October 09, 2001 1:26 PM
To: Nicolay, Christi L.
Subject: FW: Re: Energy Imbalance Tariff/compliance filing
Importance: High




-----Original Message-----
From: Hartsoe, Joe 
Sent: Tuesday, October 09, 2001 2:09 PM
To: Novosel, Sarah
Subject: FW: Re: Energy Imbalance Tariff/compliance filing
Importance: High



Sarah,  This is what A.W. sent me.  Joe
-----Original Message-----
From: Turner, AW 
Sent: Tuesday, October 09, 2001 11:11 AM
To: Hartsoe, Joe
Subject: Fwd: Re: Energy Imbalance Tariff



-----Original Message----- 
Date:  10/04/2001  09:41 am  (Thursday)  
From:  Joseph TAYLOR
To:  AW Turner;  BILL CASEY;  MICHELE FARRELL
Subject:  Re: Energy Imbalance Tariff

Sorry I was delayed with an other hot item.  Bill didn't like tying anything to prices derived in a different market (day ahead).  I'm leaning toward just using the shaped Dow Jones Non-Firm MC Index as published after the fact in the Wall street Journal.  Shaped hourly using our actual system load with the corresponding Index Price.  Attached is a spread sheet detailing the calculation with an example and a scan of how it is published.  Let me know what you think.

>>> MICHELE FARRELL 10/03/01 05:01PM >>>
Any new thoughts on what we should be proposing to FERC?   I think you were going to look at a method of shaping the Mid-C index and I was wondering how that was coming.