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Key Take Away : There are 4 types of MISO transmission transactions : 1) Drive- In, 2) Drive-Within, 3) Drive-through, and 4) Drive-Out Speaker Notes: Drive-In refers to transactions that originate outside of the MISO footprint but are delivered to a point within MISO. Drive-Within refers to transactions that originate inside of the MISO footprint and are delivered to a point within MISO. Drive-Through refers to transactions that originate outside of the MISO footprint and are delivered to a point outside of the MISO footprint. Drive-Out refers to transactions that originate within MISO but are delivered to a point external to the MISO footprint. These transaction paths are an important factor during the TSR Integration process 4
Take Away : Firm PTP service employs a zonal rate for charges. Distribution to Transmission Owners follows a 2 component revenue distribution: 50% of the distribution is based on Transmission Investment The second 50% is based on Transaction Participation Factors. Firm and Non-Firm PTP service charges and distributions follow the same calculations. Speaker Notes: Services : Firm PTP is available in the following periods: Annual, Monthly, Weekly, or Daily Firm Point-to-Point Schedule 7 Service is calculated for Drive-In service in which the Sinks are internal to MISO. Another calculation is performed for Drive-Out and Drive-Through services in which the Point of Delivery is external to MISO. Rates: Firm PTP service employs a zonal rate for charges. Firm and Non-Firm Point-to-Point Transmission Service are both billed at the end of the month based on Reserved Capacity in MWs, not how much was scheduled Formula for Drive-In and Drive within Transactions: Zonal Rate * Reserved Capacity * Duration Formula for Drive-Out and Drive-Through : MISO System-wide Rate * Reserved Capacity * Duration 5
Drive-Out and Drive-Through rates can have different discounts at different interfaces. Currently most discounts are discontinued but may be offered at a future time. Revenue Distribution: Distribution to Transmission Owners follows a 2 component revenue distribution: 50% of the distribution is based on Transmission Investment; the second 50% is based on Transaction Participation Factors. Revenue Distribution Exceptions are noted as follows: Fully distributed to Host Zone Transmission Owner when: Retail Load served Reservation with Resources and Load in same Host Zone Delivery to Wholesale Requirements customer Fully Distributed to Border Transmission Owner when: Border Transmission Owner delivers from outside MISO to its Direct Connect Zone 5
Take Away : Firm PTP service employs a zonal rate for charges. Firm and Non-Firm PTP service charges and distributions follow the same calculations. Speaker Notes: Services : Non-Firm PTP is available in the following periods: Monthly, Weekly, Daily, Hourly Rates: Like Firm, Non-Firm PTP service employs a zonal rate for charges. billed at the end of the month based on Reserved Capacity in MWs. Formula for Drive-In and Drive within Transactions: Zonal Rate * Reserved Capacity * Duration Formula for Drive-Out and Drive-Through : MISO System-wide Rate * Reserved Capacity * Duration Drive-Out and Drive-Through rates can have different discounts at different interfaces. Currently most discounts are discontinued but may be offered at a future time. Revenue Distribution: Distribution to Transmission Owners follows a 2 component revenue distribution: 6
50% of the distribution is based on Transmission Investment; the second 50% is based on Transaction Participation Factors. Revenue Distribution Exceptions are noted as follows: Fully distributed to Host Zone Transmission Owner when: Retail Load served Reservation with Resources and Load in same Host Zone Delivery to Wholesale Requirements customer Fully Distributed to Border Transmission Owner when: Border Transmission Owner delivers from outside MISO to its Direct Connect Zone 6
Take Away: Network Integration Transmission Service (NITS) allows Network Customers to efficiently and economically utilize their Network resources (as well as other non-designated generation resources) to serve their Network Load located in the Transmission Owner s Local Balancing Authority or pricing zone. Speaker Notes: Network Integration Transmission Service (NITS) allows Network Customers to efficiently and economically utilize their Network resources to serve their Network Load located in the Transmission Owner s Local Balancing Authority or pricing zone. They may also use other non-designated generation resources NITS provides for the Transmission Owner s use of their Transmission Network. The MISO Tariff provides for two categories of Schedule 9 rates: Zonal rates and MISO system-wide rates. MISO provides Schedule 9 service equal to the Network Customer s monthly usage of MISO transmission system capacity and energy. As a result, billing for NITS differs from PtP, in that it requires coincident peak load data That means that the initial calculation will often include estimated data because of the delay in determining Network Load. By definition, a Network Customer s Network Load can only be determined after 7
the fact, when all Transmission Owners report the network customer s monthly peak loads coincident with their system s peak. (This may or may not be coincident to MISO s Peak Load.) This may take 30-60 days to recover data. As a result, monthly charges are billed with a 1 to 2 month lag. Estimated values are accepted when actual meter values are not available. When estimated values are used, true-ups occur in subsequent billing cycles. Peak Load Data is due the 1 st Business Day of the month by Midnight to be incorporated into the Day 2 run. Final Peak Load Data is due at Noon on the 3 rd Business Day of the month. If no data is available, the previous month s Peak Load data will be used. Revenue Distribution Zonal Transmission Owners receive all Schedule 9 Revenue collected for their zone. The application of the appropriate zonal rates is determined by MISO based on the location of the Sink listed in the OASIS Transmission Service reservation. Formula: Zonal Rate * Network Customer Network Load coincident with Customer s monthly Peak Load* Increment 7
Key Take Away : There are 3 main categories of Transmission Services: 1) Firm Point-to-Point 2) Non-Firm Point-to-Point, and 3) Network Integration Service. Speaker Notes: Acronyms on this slide: ATSI - American Transmission Service, Incorporated DEI Zone Duke Energy Indiana Zone after withdrawal of DEO and DEK. DEK Duke Energy Kentucky, Inc. DEO Duke Energy Ohio, Inc. MTEP - MISO Transmission Expansion Plan Three new schedules became effective January 1, 2012: Schedule 26-A: Multi-Value Project Usage Rate (MUR) This system-wide rate is charged to Monthly Net Actual Energy Withdrawals, Export Schedules, and Through Schedules. A Multi-Value Project is defined as one or more Network Upgrades that address a common set of Transmission Issues and satisfy Transmission Expansion Planning Protocols contained in Attachment FF of the EMT. Schedule 38 : MTEP Project Recovery for Duke Energy Ohio (DEO) and Duke Energy Kentucky. Following the withdrawal of DEO and DEK, the DEI Zone will be comprised of 8
Duke Indiana, Inc. Transmission Customers taking service in MISO, as well as ATSI, shall pay for a portion of the MTEP Projects of DEO and DEK effective January 1, 2012. DEO and DEK shall pay a portion of MTEP Projects also. 8
Key Take Away : The nature of Transmission Settlements does not require significant testing since the majority of transactions are entered through OASIS. Speaker Notes: Acronyms on this slide: FTP File Transfer Protocol MP Files Files containing Monthly Peak information SP Files Files containing pass through billing information at the request of Transmission Owners The nature of Transmission Settlements does not require significant testing since the majority of transactions are entered through OASIS. Activities include: Access MISO FTP site to prepare for sending Market Participant SP files from Transmission Owners. Access MISO FTP site to prepare for sending Market Participant Monthly Peak (MP) files from Transmission Owners. Review Subject Business Practices Manuals. Contact Client Service Representatives for questions and support. Attend Transmission Settlements Training Programs. New Market Participants can access the MISO FTP site and retrieve a test Statement to ensure that they will be able to receive and retrieve their 9
Statements. There are options for new participants to learn more about Transmission Settlements through attending training, perusing the applicable Business Practices Manuals (BPMs) and discussing questions with MISO Client Representatives. 9
Key takeaways: This presentation presents an overview of the integration activities and options involved in the work to compile, review and transfer the set of affected transmission services from the appropriate existing OASIS system to the MISO OASIS node as part of the effort to integrate new MISO load The MISO tariff will be expanded to include the Integrating Entity transmission facilities December 18, 2013. As is currently offered for existing member transmission facilities, the MISO tariff will be effective for both Network and Point-to-Point service on these newly transferred facilities. The MISO OASIS node will be configured to allow for reservations made on the MISO page of the MISO OASIS node to include the facilities of Integrating Entity/ITC Existing transmission service that currently resides on the Integrating Entity OASIS system will be consolidated and placed on the MISO page of the MISO OASIS node with MISO shown as the Transmission Provider. 10
Slide Notes: Phase 1: MISO will determine eligible Customers for transmission service and contact them about making appropriate registration arrangements. Transmission Customers must successfully complete all required application and registration processes to be eligible for Network and/or Point-to-Point transmission service under the MISO ASM tariff Phase 2: Transmission customers identified will complete Transmission Service Agreement registration process as a Market Participant including identification and registration of appropriate commercial pricing nodes Phase 3: MISO will transfer reservations currently on the Integrating entity s OASIS to the MISO node on the MISO OASIS. The customers desire to select any of the TSR conversion options must be communicated to MISO Tariff Administration Other Notes: The above process will be used to transition existing transmission service requests from the integrating entity when new transmission facilities are placed under the functional control of the MISO in accordance with MISO Transmission Owners Agreement. Network Service can be granted to any qualified LSE serving load (Drive in or 11
Drive within) inside integrating entity/miso foot print Point to Point service can be granted to any qualified Market Participant for Drive In, Drive Out, or Drive Through transmission service. Some mapping of information will be necessary in order to make the information conform to MISO methodology (e.g. PORs/PODs, sources/sinks, etc.). The intent of this mapping is to give the customers the same service they had requested previously, but to use consistent nomenclature. Pricing of the transmission service will also change to reflect MISO EMT transmission rates. Transmission Customers are expected to review the data on the MISO OASIS to ensure that the information was converted properly and to notify MISO of any real or perceived inconsistencies 11
Slide Notes: Existing PtP Drive Through service on the MISO OASIS that is designated for delivery to, and sinking in the integrating entity, can be converted to a single PtP Drive In transmission service reservation at the direction of the customer Existing PtP Drive Through service on the integrating entity OASIS that is designated for delivery to, and sinking in the MISO, can be converted to a single PtP Drive In transmission service reservation at the direction of the customer Existing PtP Drive Through service on the integrating entity OASIS having a point of receipt and a point of delivery not involving the MISO can be converted to a single PtP Drive through transmission service reservation at the direction of the customer Existing PtP service on the integrating entity OASIS that sinks outside the combined MISO and integrating entity footprint can be converted to PtP Drive-Out service under the MISO EMT and will be placed on the MISO OASIS. Important Note: To the extent that there is currently a corresponding TSR on the MISO OASIS that the customer was using in conjunction with the TSR on the integrating OASIS system, these TSRs can be combined into one TSR. Keep in mind that the TSR Integration process not only affects the integrating OASIS system, but also the current MISO OASIS transmission service setup Any reservations originally holding rollover rights under the integrating entity tariff will continue to hold those rights under the MISO EMT. 12
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Slide Notes: Unconfirmed and Active Transmission Reservations Unconfirmed and still active transmission service requests on the integrating entity OASIS Node will be consolidated and placed on the MISO OASIS node with MISO shown as the Transmission Provider. This process of consolidating these active, but not yet confirmed reservations will establish the MISO queue position based upon the transmission service request s queue time on the integrating entity OASIS Node All consolidated requests, with a Start Date prior to the integration date and an End Date after the integration date will be assigned a new Start Date (i.e. the actual integration date) on the MISO OASIS node. The purpose for making this change is to accurately reflect when these reservations begin settling under the MISO EMT. The original Start Date will be noted in the comment section of the TSR 16
Slide Notes: Basics of Grandfathered Agreements: FERC Order September 16, 2004, 108 FERC P 61,236 If Agreement pre-dates September 16, 1998: Section 38.8 of MISO tariff establishes GFA requirements Designate Responsible Entity, Scheduling Entity Select Option A, or C treatment under Section 38.8.3 If Carved Out, Section 38.8.4 applies Integrating entity will provide MISO with a list of grandfathered transmission service. MISO will place TSRs that are treated as carve-out transmission service on a new T.O. page on OASIS If applicable, service receiving Option A or C grandfathered treatment will be located on OASIS 17
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Slide Notes: Transmission services eligible for obtaining FTRs/ARRs in the Allocation Network Integration Transmission Service (NITS) valid during the Reference Year Yearly firm Point-to-Point (PTP) transmission service valid during the Reference Year Grandfathered Agreements (GFAs) An ARR is a Market Participant s entitlement to a share of the revenue generated in the annual FTR auctions Allocated to Market Participants based on firm historical usage of the MISO transmission system Can be a revenue or charge based on the annual FTR auction clearing price of the ARR path 19
Market Participants can acquire ARRs and FTRs through a series of auctions and allocations. The monthly FTR Auction follows the Annual FTR Auction which follows the Annual ARR Allocation. Annual ARR Allocation Determines what ARRs can be allocated to each Market Participant. Market Participants that are eligible to participate can nominate ARRs to be considered for allocation by MISO. MISO then evaluates all submitted ARR requests and runs a simultaneous feasibility test to determine how many ARRs can be granted. The SFT runs for all 4 seasons and for peak and off peak time periods. Objectives of the Allocation Process 1. To hold existing Transmission Customers whole compared to their firm historical use of the Transmission System with respect to congestion-related charges under MISO Energy and Operating Reserve Market operation to the extent possible given the requirement of simultaneous feasibility, and to meet the reasonable needs of LSEs. 2. To reserve capacity on the Transmission System for GFAs that FERC ordered to be carved-out. 3. To provide an allocation of ARRs that is simultaneously feasible in a securityconstrained power flow that includes an appropriate representation of unscheduled loop flow from external Balancing Authority Areas ( BAA ), or a 20
seams agreement with External BAAs. 4. To provide an allocation of ARRs that is equitable and consistent with historical use of MISO s Transmission System (i.e., market footprint). MISO conducts annual and monthly FTR Auctions Annual FTR Auction MISO conducts Annual FTR Auctions to allow MISO to sell FTRs for the residual FTR capability of the Market Footprint and to facilitate the buying, selling, and reconfiguration of existing FTRs between Market Participants. The Annual FTR Auction is conducted immediately following the Annual ARR Allocation and consists of eight independent auctions for the Peak and the Off-Peak periods for four seasons. Monthly FTR Auction MISO conducts Monthly FTR Auctions to sell FTRs for the Adjusted Residual Monthly FTR Capability of the Market Footprint and to facilitate the buying and selling of existing FTRs between Market Participants. The monthly auction consists of two independent auctions: one for the Peak period and one for the Off-Peak period. All FTRs sold in monthly FTR Auctions have a term of one Month beginning on the first Day of the Month following the FTR Auction and are associated with either the Peak or the Off-Peak period. All Offers by FTR Holders to sell FTRs and all Bids to purchase FTRs must be submitted to MISO during the Monthly bidding period. Auction results will be made available before the start of the subject month. 20
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Background of ITC: Entergy, along with other affected entities is working towards joining MISO market. Stage 1: ITC is in the process of purchasing Entergy s transmission assets. When the deal closes, Entergy s transmission will come under MISO s functional control. Entergy is still outside of MISO Balancing Authority (BA) in Stage 1. Target date is July 1, 2013. Stage 2: Entergy and other affected entities will join MISO market and move into MISO BA. Anticipated December 2013. 38
Stage 1 MISO will work with Entergy, ITC, and customers to review existing TSRs to determine the proper conversions to remove pancaking. 1 month before the transition date, customer will follow new OASIS rules to submit request beyond the transition date only one TSR needed for each cross MISO-Entergy BA border transaction. Existing Service Agreements: Existing Entergy transmission service agreements will be assigned to MISO as non-conforming agreements customers don t need to fill out MISO agreement/spec sheets for each of their existing services. Customers still need to complete the umbrella MISO transmission service agreements for future transactions with MISO. 39
Slide Notes: Two OASIS nodes: Two OASIS nodes (from the same homepage) will exist during this interim period to ensure smoother transition MISO Midwest OASIS node and MISO Southern OASIS node. The latter is similar to today s Entergy OASIS. One stop shop: Transmission customers doing business cross the MISO BA and Entergy BA border will only need to submit one Transmission Service Request (TSR). 40
Stage 2 New entities will join MISO as Market Participant, Local Balancing Authority (LBA), and/or Transmission Owner. Very similar to previous new member integrations. One OASIS node: The MISO Southern Region OASIS node will retire, as well as other new member s existing OASIS. All TSRs will be migrated to a single MISO OASIS node. TSR conversion: Customers have a one-time chance to convert Point to Point service to Network service. Other TSRs that don t make sense within a market may be terminated too such as internal point to point services. MISO will work with Entergy, ITC, and customers to review existing TSRs to determine the proper conversions. 1 month before the transition date, customer will use MISO OASIS to submit request beyond the transition date. Existing Transmission Service Agreements: Existing transmission service agreements with a Transmission Provider who is joining MISO will be assigned to MISO as non-conforming agreements customers don t need to fill out MISO agreement/spec sheets for each of their existing services. Customers still need to complete the umbrella MISO transmission service agreements for future transactions with MISO. 41