Subject: NERC's Control Area Position & GridSouth
From: [email-masked]
To: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Cc: [email-masked], [email-masked], [email-masked], [email-masked]
Date: Tue, 24 Jul 2001 11:19:29 -0700 (PDT)

NERC's Control Area Criteria Task Force (CACTF) paper on the Reliability Model "unbundles" definitionally the functions of a control area.  Today's control area is required under NERC policy to meet many reliability requirements for short-term, daily and real-time operations.   NERC CACTF identified 4 major areas of function:

1) Security Authority 
Performs short term security analysis for interchange schedules (between control areas)
Administers curtailment procedures (NERC TLR)

2) Interchange Authority
Responsible for maintaining a net of interchange schedules that balance at control area interfaces in real-time

3) Balancing Authority
Provides real-time dispatch to match energy demand and supply
Maintains performance measures such as frequency, and voltage requirements
Maintains accounting balance sheets for inadvertent energy between control areas

4) Transmission Service Provider
Offers transmission access through a tariff
Calculates ATC/TTC and other transfer capability amounts
Responsible for accounting line losses

5) Market Participants
Includes Purchasing Selling Entities, Generators, and Load Serving Entities

It is important to remember that the NERC CACTF Relibility Model describes only FUNCTIONs and does not attempt to restructure a vertically integrated control area that may perform any and all of these functions.

The CACTF developed these concepts and explored how to provide comparability and eliminate competitive advantages of control areas.  This entailed specifiying indpendence requirements on certain functions.  Unfortunately, in order to eliminate the competitive advantages, transmission companies (particularly SERC members and small municipalities) successfully argued that NERC lacked the authority to order or mandate restructuring of organizations to accomodate the CACTF model and its independence requirements.  

It is Enron's position at NERC that the Security Authority, Transmission Service Provider, and the Balancing Authoirity must be divorced of the market participants - i.e. - "independence".  Today, Enron and other entities have obtained certain control area advantages through formation of control areas to specifically obtain the abilities provided under the Interchange Authority.  It was the attempt of the CACTF to unbundle the control area such that all market participants had comparable access to the Interchange Authority advantages.

The Grid South problem:
Their current proposal is to have the RTO perform the Interchange Authority function.  For tags (PTP service) that are submitted that utilize the Grid South tariff, GridSouth will approve and clear those tags for scheduling.  However, the 3 existing control areas would continue to perform the control area functions for its own transactions and native load schedules (inadvertent accounting, balancing, and performance criteria CPS, remains in the control areas).  In other words, the proposal only delegates the bare minimum of control area functions to the GridSouth operator, those needed to administer the tariff for PTP service customers.  Except for the Secuirty Authority functions which will be performed by GridSouth, the operational advantages of control areas, will remain at the transmission company level. 

FERC must mandate the independence requirements and  force GridSouth members to restructure to remove all competitive advantages.

Charles Yeung
713-853-0348
pager 1-800-605-8249