EIM Settlements Load Customer Training

September 13, 2016

2

EIM Settlements Customer Training

Review – EIM 101

EIM terminology

Participating / Non-Participating

Base Schedules and eTags

Settlements and Disputes

LAP / LMP and Losses

Instructed Imbalance Energy

Uninstructed Imbalance Energy

Timelines

Base Schedules

Settlements

Charge Codes explained

Scenarios

Additional resources for further information

Questions?

Appendix

3

PSE Fits Into An Expanding CAISO EIM Footprint

• The CAISO EIM went live with

PacifiCorp in November 2014.

• PSE is preparing to join the

CAISO EIM on October 1, 2016.

• Benefits are adding up:

As of Q2 2016, the EIM's

benefits total $88.2 million

since the western EIM began

on November 1, 2014.

4

PSE as EIM Entity is responsible for:

• Submitting balanced base schedules for all resources, loads, and

intertie transactions to CAISO.

• Resource dispatch

• Deploying regulation and maintaining BA Area Control Error (ACE)

to meet NERC balancing requirements

• Deploying contingency reserves (Spin, Supplemental Reserves) to

meet WECC reliability requirements

• Keeping CAISO’s Outage Management System (OMS) informed of

derates and outages.

• Processing settlement and paying CAISO invoices for imbalance

energy for all loads and non-participating resources and allocating

applicable charges to transmission customers.

5

What Does EIM mean to Load Customers?

Today EIM Customer

Action Required

Metering 15 or 60-minute

metering

No change.

Scheduling E-Tag No change.

Settlements Mid-C index

day-ahead prices.

LAP Hourly prices.

Bill

Frequency

Monthly

(around the 4th of

the month for the

prior month).

Monthly (around the 25th

of the month).

*Preliminary weekly data

reports for added

transparency.*

Customers must

provide PSE notice

of dispute 7 days

prior to CAISO

T+77B deadline.

EIM Terminology

7

Participating vs. Non Participating

8

Non-Participating Resource

Non-Participating Resource Customers will maintain their

relationship with PSE and will have limited interaction with

CAISO (to submit base schedules).

Charge Codes EIM Charge Codes

CAISO

Charge

Code

Charge Code DescriptionDaily or

MonthlyTime Interval Load

Gen

Resource

Interchange

e-Tags

EESC

(not

allocated)

Dollar

ImpactOATT Section

64600 FMM Instructed Imbalance Energy EIM Settlement Daily 15 minute X X Large Sch 9, 8.1

64700 Real Time Instructed Imbalance Energy EIM Settlement Daily 5 minute X X Large Sch 9, 8.1

64750 Real Time Uninstructed Imbalance Energy EIM Settlement Daily 5 min & hourly X X Large Sch 4,4R, 9, 8.2

6045 Overscheduling and Underscheduling Charge Daily Hourly X Medium 8.4.1, 8.4.2

4564 GMC-EIM Transaction Charge Daily 5 minute X X Medium Sch 1-A

67740 Real Time Congestion Offset EIM Daily 5 minute X X Medium 8.5.2

64770 Real Time Imbalance Energy Offset EIM Daily 5 minute X X Medium 8.5.1

69850 Real Time Marginal Losses Offset EIM Daily 5 minute X X Medium 8.5.3

64740 Real Time Unaccounted for Energy EIM Settlement Daily 5 minute X Medium 8.3

6046 Under Scheduling and Over Scheduling Allocation Daily Daily X Medium 8.4.3

8989 Daily Neutrality Adjustment Daily Daily/Hourly X X Small 8.5.4

3999 Default Invoice Interest Charge Monthly Daily X Small 8.5.8

2999 Default Invoice Interest Payment Daily Daily X Small 8.5.8

5912 Default Loss Allocation Daily Daily X Small 8.5.8

5025 Financial Security Posting (Collateral) Late Payment Penalty Daily Daily X Small 8.5.8

701 Forecasting Service Fee Monthly Monthly X Small 8.8

7999 Invoice Deviation Interest Allocation Daily Daily X Small 8.5.8

7989 Invoice Deviation Interest Distribution Daily Daily X Small 8.5.8

5024 Invoice Late Payment Penalty Daily Daily X Small 8.5.8

7056 Flexible Ramp Up Cost Allocation Daily Daily Small 8.5.6

7057 Monthly Flexible Ramp Supply Cost Allocation Reversal Monthly Monthly Small 8.5.6

7058 Monthly Flexible Ramp Supply Cost Allocation Monthly Monthly Small 8.5.6

8999 Monthly Neutrality Adjustment Monthly Monthly X X Small 8.5.4

66780 Real Time Bid Cost Recovery Allocation EIM Daily 5 minute X X Small 8.5.5

6478 Real Time Imbalance Energy Offset - System Daily 5 minute X X Small 8.5.1

5910 Shortfall Allocation Daily Daily X Small 8.5.8

5901 Shortfall Allocation Reversal Daily Daily X Small 8.5.8

5900 Shortfall Receipt Distribution Daily Daily X Small 8.5.8

4575 SMCR -Settlements, Metering, and Client Relations Daily Monthly X X Small Sch 1-A

10

Energy Imbalance Market Pricing

Today imbalance is settled at day-ahead Mid-C ICE Index prices.

In the EIM:

Generation and E-tag Changes

Settle at a 5 and 15 minute

Locational Marginal Price (LMP).

Load Changes Settle at an hourly

Load Aggregation Point (LAP).

Locational Marginal Price

(LMP)

Load Aggregation Point

(LAP)

These examples are not meant

to reflect actual resource or load

locations.

11

EIM Pricing – What is LMP ?

Energy Locational

+ Congestion = Marginal

+ Losses Price

(LMP)

Note: A Greenhouse Gas Component applies to Participating Resources.

12

EIM Pricing – What is LAP ?

Average Load

of PSE BA = Aggregation

LMPs Point

(LAP)

13

Changed Settlements Components

• Schedule 1A – EIM Administrative Costs

• Schedule 4 – Energy Imbalance

• Schedule 4R – Energy Imbalance for 449 customers

• Schedule 9 – Generator Imbalance

• Schedule 12 – Losses on WA area

• Currently a component of imbalance charge to 449

customers

• Schedule 12A – Losses on Southern Intertie and Colstrip

• Attachment O, Section 8 – Other EIM Charges

14

Washington Area Losses in the EIM

15

Imbalance – Uninstructed Load

• [anything here to use from CAISO training?] The difference

between…

And… Is… Billed on

Charge Code

Load – Base

Schedule

Meter Uninstructed

Imbalance Energy

(UIE)

64750

Timelines – Base Schedules

17

Base Schedules – Load and Generators

• A base schedule, which includes eTags, is forecast information for all resources, Interchange and Intrachange.

• Base schedules are due 7 days before each operating day.

• Modifications to the base schedule may be made at any time and at least one update must be provided by 10:00 AM on the day before the operating day.

• Final base schedule submitted no later than 77 minutes before each operating hour.

• Modifications to base schedule may be made up to 57 minutes before the operating hour.

18

Base Schedules

19

Base Schedule Timeline

T-77 T-60 T-57 T-57 T-40 T-37.5 T-22.5 T-7.5 T-2.5

Business

HR

Business

MIN

Submit base

schedule

1st

sufficiency

test results

published

Update base

schedule

E-tag dead-

line

Final

sufficiency

test run FMM run FMM award RTM run RT dispatch

0 0 22:43:00 23:00:00 23:03:00 23:03:00 23:20:00 23:22:05 23:37:05 23:52:05 23:57:05

0 5 23:57:05 0:02:05

0 10 0:02:05 0:07:05

0 15 23:37:05 23:52:05 0:07:05 0:12:05

0 20 0:12:05 0:17:05

0 25 0:17:05 0:22:05

0 30 23:52:05 0:07:05 0:22:05 0:27:05

0 35 0:27:05 0:32:05

0 40 0:32:05 0:37:05

0 45 0:07:05 0:22:05 0:37:05 0:42:05

0 50 0:42:05 0:47:05

0 55 0:47:05 0:52:05

1 0 23:43:00 0:00:00 0:03:00 0:03:00 0:20:00 0:22:05 0:37:05 0:52:05 0:57:05

20

Base Schedule Timelines

Forecast Data

Type

Method of

Supplying

Forecast Data

Initial

Submission

Deadline

Update

Submission

Deadline

Proposed Final

Submission

Deadline

Final Submission

Deadline

(Financially Binding)

Generation

Forecast Data

BSAP T-7 days 10 a.m. before

Operating Day

T-77 minutes T-57 minutes

Interchange &

Intrachange

Forecast Data

(Trans

Customers with

resources or load

in PSE BAA)

E-Tags T-7 days 10 a.m. before

Operating Day

T-77 minutes T-57 minutes

Interchange

Forecast Data

(Trans

Customers

without

resources or

load in PSE

BAA)

E-Tags Not applicable Not applicable T-77 minutes T-57 minutes

Timelines - Settlements

22

Settlement Calendar

• CAISO Settlement calendar for EIM Markets

o Initial Settlement @ Trade Date (T) + 3 Business Days (B)

o Recalculation Settlement @ Trade Date + 12 Business Days

o Recalculation Settlement @ Trade Date + 55 Business Days

o Optional Recalculation Settlement @ Trade Date + 9 Months (M)

o Optional Recalculation Settlement @ Trade Date + 18 Months

o Optional Recalculation Settlement @ Trade Date + 35 Months

o Optional Recalculation Settlement @ Trade Date + 36 Months

o Optional Unscheduled Recalculation Settlement with 30 day notice

• Note: Resettlements can occur after the 36-month settlement. CAISO recently resettled the

first day of MRTU for the third time after the 36-month settlement was posted.

23

CAISO Disputes Calendar

CAISO supports disputes per the following timeline:

• Initial Settlement Trade Date (T) + 3 Business Days (B)

• Not Disputable.

• Recalculation Settlement @ T + 12 B

• All disputable except for estimated meter data through T + 26 B.

• Recalculation Settlement @ T + 55 B

• All disputable through T + 77 B.

• Optional Recalculation Settlement @ T + 9 Months (M)

• Only incremental values are disputable through T + 10 M.

• Optional Recalculation Settlement @ Trade Date + 18 M.

• Only incremental values are disputable through T + 19 M.

• Optional Recalculation Settlement @ Trade Date + 35 M

• Only incremental values are disputable for 7 calendar days.

• Optional Recalculation Settlement @ Trade Date + 36 M

• Not Disputable.

• Optional Unscheduled Recalculation Settlement with 30 day notice

• Only incremental values are disputable for 22 business days.

24

PSE Customer Disputes

• CAISO charge code allocation disputes between PSE and a Transmission Customer or Interconnection Customer, (Customer), will be resolved in accordance with the dispute resolution process set forth in PSE’s Open Access Transmission Tariff, (OATT).

• If a PSE Customer disputes a CAISO charge or pass through billed by PSE, the Customer can not dispute the charge directly with CAISO, but PSE can on their behalf.

• In order for PSE to meet CAISO dispute deadlines, Customers disputing CAISO charges must provide PSE appropriate supporting documentation 7 business days prior to CAISO’s deadline of T+77B (77 business days after disputed trade date). Email documentation to: Trans.Settlements@pse.com

• Common information requirements for supporting documentation:

• Trading Day and Settlement Period or Trading Hour(s)

• Charge Code

• Detailed description of dispute

• Supporting evidence in support of suggested correction

25

Customer Disputes, continued

• Notice of dispute between PSE and CAISO is posted on PSE’s OASIS within 5

days of initiating dispute with CAISO. Upon resolution of any dispute, PSE will

post notice on PSE’s OASIS within 5 days of resolution, including nature of

resolution and any settlement-related effects of the resolution on other

Customers.

• Further information may be found in PSE’s Open Access Transmission Tariff,

(OATT), the CAISO Settlements Business Practice Manual and PSE EIM Business

Practice Manual, all posted on PSE’s OASIS site.

26

CAISO Dispute Timeline

* Submit dispute materials to PSE email: Trans.Settlements@pse.com

Statement

Published by MO

Settlement Dispute

Deadline [w/ CAISO]

Deadline for Notice to

PSE EIM Entity *

Settlement Dispute

Data

T+12B T+26B T+19B All but estimated

meter data

T+55B T+77B T+70B All

T+9M (T+194B) T+10M (T+216B) T+209B Incremental changes

only

EIM Charge Codes

28

Charge Code – Real Time Uninstructed Imbalance

CC Number: 64750 Dollar Impact: Large Occurrence: Daily

CC Name: Real Time Uninstructed Imbalance Energy EIM Settlement

CC Interval: 5 Minute

Calculated Against: All Resources and Loads

CC Application:

All resources and loads, participating and non-participating, will be settled for

uninstructed energy charges.

– All volume differences between hourly demand meter data and the sum of the base schedules will be settled at PSE’s hourly LAP.

29

Charge Code – Over and Under Scheduling Charge

CC Number: 6045 Dollar Impact: Medium Occurrence: Daily

CC Name: Overscheduling and Underscheduling Charge

CC Interval: Hourly Calculated Against: Balancing Authorities

CC Application: Overscheduling Penalties

Tier 1 Threshold Overscheduled > 5% of Base Schedule volume then Penalty = 25% x RT LAP LMP x All over scheduled volume

Tier 2 Threshold Overscheduled > 10% of Base Schedule volume then Penalty = 50% x RT LAP LMP x All over scheduled volume

Underscheduling Penalties

Tier 1 Threshold Underscheduled < 5% of Base Schedule volume then

Penalty = 25% x RT LAP LMP x All under scheduled volume

Tier 2 Threshold Underscheduled < 10% of Base Schedule volume then

Penalty = 100% x RT LAP LMP x All under scheduled volume

30

Metered Demand & Measured Demand

Measured Demand

• Metered demand plus export volumes from PSE

Balancing Authority Area.

Metered Demand

• Metered load volumes in PSE’s Balancing Authority Area.

Scenarios

32

Scenario – Interchange – Assumption 1

Assumptions:

1. There is no base schedule (tag) submitted.

2. Meter is 80 MW.

3. LAP is $50.

Settlement:

1. All energy is imbalance.

2. Losses are included in LAP.

3. Imbalance = Meter * LAP

80 MW * $50 = $4,000.

Load, LAP $50

PSE BA

33

Scenario – Interchange – Assumption 2

Assumptions:

1. Base schedule (tag) is submitted prior to T-57

for 75 MW.

2. Meter is 80 MW.

3. LAP is $50.

Settlement:

1. Losses on base schedule is paid by the load:

75 MW * loss rate * LAP =

75 MW*2.7%*$50 = $101.25 charge to customer.

2. Imbalance is calculated as:

(Schedule less Meter) * LAP =

(75 MW - 80 MW) * $50 = $250 charge to customer.

Load, LAP $50

POR on PSE BA border

PSE BA

34

Scenario – Interchange – Assumption 3

Assumptions:

1. Base schedule (tag) submitted prior to T-57 for 75 MW.

2. Tag was curtailed after T-57 down to 70 MW.

3. Meter is 70 MW.

4. LMP at POR is $30.

5. LAP is $50.

Settlement:

1. Losses on base schedule is paid by the load.

75 MW * loss rate * LAP =

75 MW*2.7%*$50 = $101.25 charge to load customer.

2. Load imbalance = Base Schedule – Meter.

(75 MW – 70 MW) * LAP =

(75 MW – 70 MW) * $50 = $250 payment to load customer.

3. eTag imbalance = T-57 eTag – final eTag

(75 MW – 70 MW) * LMP =

(75 MW – 70 MW) * $30 = $150 charge to tagging agent.

Load, LAP $50

POR on PSE BA border, LMP $30

PSE BA

Additional Information and Resources

36

How will Settlements billing work?

• Allocated EIM charges rolled up in Excel by Settlement date and

emailed weekly to Customers for use in reconciling PSE

statement.

• EIM-only statement sent out by PSE.

• All other (non-EIM) transmission billing follows existing procedure.

• New Settlements email Trans.Settlements@pse.com

• Look for “How to Read Your Bill” webinars in early 2017

37

Common EIM Acronyms

ACE Area Control Error

ADS Automated Dispatch System

BA Balancing Authority

BAA Balancing Authority Area

BPM Business Practice Manual

CAISO California Independent System Operator

DGAP Default Generation Aggregation Point

EESC EIM Entity Scheduling Coordinator

EIM Energy Imbalance Market

FMM Fifteen Minute Market

GMC Grid Management Charge

IIE Instructed Imbalance Energy

38

Common EIM Acronyms - continued

ISO Independent System Operator

LAP Load Aggregation Point

LMP Locational Marginal Price

LSE Load Serving Entity

MO Market Operator

OASIS Open Access Same Time Information System

PNODE Pricing Node

RTD Real Time Dispatch

SC Scheduling Coordinator

SQMD Settlement Quality Meter Data

UIE Uninstructed Imbalance Energy

VER Variable Energy Resource

39

Glossary

Ancillary Services Services necessary to support transmission capacity while maintaining reliable transmission operation.

Balancing Authority Area Collection of generation, transmission and loads within the metered boundaries of the Balancing Authority. (BAA)

CAISO State-chartered non-profit public benefit corporation and market operator for the Energy Imbalance Market.

Energy Imbalance Market Real-time market to manage transmission congestion and optimize energy procurement in order to balance supply and demand. (EIM)

EIM Area Combination of PSE’s BAA, the CAISO BAA, and the balancing authority areas of any other EIM entities.

EIM Entity A balancing authority entering in agreement with the market operator to enable EIM to occur in its balancing authority area.

Imbalance Energy Deviation of supply or demand from Base Schedule, as measured by metered load, metered generation, or real time Interchange/Intrachange schedules.

Instructed Imbalance Energy

Operational adjustments to Interchange or Intrachange; resource imbalances created by manual dispatch; or adjustment to resource imbalances. (IIE)

Load Aggregation Point Set of pricing nodes used for submission of bids and settlement of demand in the Energy Imbalance Market. (LAP)

40

Glossary - continued

Locational Marginal Price Marginal cost ($/MWh) of serving next increment of demand at that price node, consistent with existing transmission constraints. (LMP)

Manual Dispatch An operating order used to address reliability or operational issues in BAA not addressed through economic dispatch or congestion management.

Market Operator Entity responsible for operation, administration, settlement and oversight of Energy Imbalance Market. (MO)

Measured Demand Metered demand plus export volumes from PSE Balancing Authority Area.

Metered Demand Metered load volumes in PSE’s Balancing Authority Area.

Pricing Node Single network node where physical injection or withdrawal is modeled by the Market Operator, used in calculating LMP. (PNode)

Uninstructed Imbalance Energy

Difference between base schedule or manual dispatch and meter data; or difference between base schedule and actual hourly load. (UIE)

Variable Energy Resource Electricity production from energy source that is renewable, unable to be stored, and has variability beyond control of facility owner or operator. (VER)

41

PSE’s Transmission Website (OASIS)

http://www.oasis.oati.com/psei/index.html

EIM Information can be

found here

EIM Information can be

found here

Tariff Information can be

found here

42

PSE Information Links

• PSE’s Transmission Website (OASIS) http://www.oasis.oati.com/psei/index.html

• PSE Tariff http://www.oatioasis.com/PSEI/PSEIdocs/2016-09-01_PSE_currently_effective_OATT.pdf

• PSE EIM Business Practice Manual http://www.oatioasis.com/PSEI/PSEIdocs/PSE_EIM_BP_9-1-2016.pdf

• Transmission Settlements Email box:

Trans.Settlements@pse.com

• PSE EIM Email box:

EIM@pse.com

43

CAISO Information Links

• CAISO EIM Resources: http://www.caiso.com/informed/Pages/EIMOverview/Default.aspx

• CAISO Business Practice Manual: http://bpmcm.caiso.com/Pages/BPMDetails.aspx?BPM=Energy Imbalance Market

44

Questions

Appendix - Additional Information

46

CAISO Demand Settlement for EIM Entities

All loads submit meter data to OMAR.

CAISO uses 4 charge codes to perform load settlement for EIM entities:

CC 6478 is used to settled all EIM BA imbalance revenue neutrality. CAISO calculates the dollar differences between the instructed and uninstructed energy for all generation, demand and interties in a BA. The net difference is allocated to all demand in the BA.

CC 64740 is used to account for Unaccounted For Energy (UFE).

The difference between metered load and Base Schedule is settled in CC 64750.

47

Transmission Congestion in the EIM

Appendix - Real Time Work Flow

49

Real Time Work Flow

What are the major milestones and requirements of the Real-Time Workflow for all three players:

Intertie Schedules – The EESC is required to aggregated and submit directional Base

Schedules to CAISO for all BA Interties by T-75 with any adjustments submitted by T-40.

– The EESC will need to aggregate tags directionally, apply schedule ramping and submit 5 minute interval volumes to CAISO, including updates, through the upcoming 5 hours. These are referred to as Real-Time Schedules.

– The EESC will need to aggregate tags directionally after the hour has completed and submit an after the hour flow without ramping on a 5 minute interval basis. These volumes can be update to 168 hours after the hour concludes.

Tagged Schedules – All pending and approved intertie tags that will be included in Base

Scheduling must be submitted and seen by the EESC by T-57

– All tags must be submitted and approved by T-20 (note tags after T-57 are subject to imbalance charges).

50

Real Time Work Flow – EESC – BA

A typical hourly Real-Time workflow would resemble the following:

T - 90 to T - 75 One hour and 30 minutes before the start of the hour

– The BA will need to calculate Intertie Base Schedules and submit them to CAISO by T-75.

o Base Schedules are calculated directionally and may be rolled together to neighboring BAs.

o Intertie Schedules used in Base Schedules can be modified until T-57.

o Both approved and pending intertie schedules are included in calculating Base Schedules.

o CAISO does require group schedules into categories such as Mirror and ETSR besides the standing CAISO E-Tie and I-Tie.

51

Real Time Work Flow – EESC – Balancing Authority

A typical hourly Real-Time workflow would resemble the following: (Continued)

T - 55 to T - 40 55 minutes before the start of the hour. Items to be completed on or before T – 40:

– Review CAISO’s posted balancing results from the T-55 evaluation.

– Make any last minute Base Schedule balancing changes resulting from changes to forecasts and resource availabilities. Note CAISO’s forecasts for VER and Load lock at T-60.

– Make Base Schedule adjustments for balancing and flexible requirement changes to pass the CAISO tests.

52

Real Time Work Flow – EESC – Balancing Authority

A typical hourly Real-Time workflow would resemble the following: (Continued)

T - 75 to T - 55 One hour and 15 minutes before the start of the hour.

– The EESC will need to review CAISO T-75 test results (sufficiency & flex ramp). If changes are desired to the resource plan, typically they are communicated to the affiliate PRSC who would make the changes before they are locked out at T-55.

– The BA will need to update the Intertie Base Schedules and submit them to CAISO by T-55. Note these Schedules shouldn’t change after T-57.

53

Real Time Work Flow – EESC – Balancing Authority

T-40 to T+60

• Base Schedule changes are locked at T-40 for the EESC.

• The EESC will need to provide Real-Time Schedules to CAISO on a 5 minute basis by registered intertie through the next 5 hours. The schedules are aggregated by registered tie with ramping applied. After the hour concludes through T + 168 the EESC will need to provide the schedules aggregated, un-ramped.

• Although Bids and Base Schedules are locked, the EESC will need to keep CAISO OMS up to date as soon as possible for Non-Participating Resources. OMS data is used in CAISO’s clearing engine.

• The CAISO market clearing engine snaps the data from CAISO’s OMS at the time it starts calculating each market run.

• What can be changed in CAISO’s OMS:

– Outages & Derates

– Minimum and Maximum Limits

– Ramp Rates.

• CAISO starts each PRDT run 37.5 minutes before the start of the 15 minute interval and starts the RTD run 7.5 minutes before the start of the next 5 minute interval.