1. Energy Division Workshop on Tradable RECs April 23, 2010

2. Dynamic Transfer

3. Dynamic Transfer • Dynamic scheduling: allows the host balancing authority that is receiving the output of the facility to adjust the schedule and dispatch of the facility if there are fluctuations in its output. • Pseudo-ties: effectively transfers the generator electrically into the attaining balancing authority area, which treats the facility like internal generation; i.e., the attaining balancing authority provides “control area services” such as scheduling, balancing, and outage coordination.

4. Proposals for Verifying DT • An agreement from the CBAA verifying the arrangements (Dynamic Scheduling Agreement or Pseudo Participating Generator Agreement with the CBAA) [LS Power/PG&E/SCE*] • If the pro forma has not yet been executed, approval of the AL can be conditioned on a compliance filing to provide documentation when tariff is finalized. Project could be considered REC-only until documentation is provided [LS Power/PG&E] • Filing requirements shouldn’t have to change when tariff is in place [LS Power/Sempra] • Premature at this time to guess what is needed [SDGE] *The agreement must be for at least the MWs matching project’s capacity factor

5. Firm Transmission

6. Firm Transmission – Guiding Principles • Staff should consider the following when evaluating whether RPS contracts with firm transmission will be bundled contracts: • Bundled contracts enable energy from the renewable energy facility to serve CA load • A contract filed for CPUC review can be easily categorized as bundled or REC-only • Expand RPS procurement options and flexibility for retail sellers and developers • Regulatory certainty • Stable and reasonable electric rates • Transparent rules • Sustainable renewable energy market in the west • Grid reliability and efficient use of western grid

7. How do we define firm transmission? • FERC defines long-term firm point-to-point transmission service in Section 1.23 of the Open Access Transmission Tariff as having a term of one year or more [Iberdrola/LS Power/Newberry] • Firm transmission is defined as not interruptible for economic reasons [Sempra] • Instead of discussing this issue in terms of the quality of the transmission - firm vs non-firm transmission, PUC should be discussing whether energy is being scheduled as generated via a contiguous transmission path, from the generator to the delivery point. [PG&E] • CPUC shouldn’t make a distinction between long and short-term firm transmission [SCE]

8. Firm Transmission – Panel Qs • Discuss how Iberdrola’s proposal is or is not consistent with ED’s proposed guiding principles. • Is “firm transmission” the appropriate term to use to describe the additional type of transaction that could be considered bundled, or should staff be considering a broader concept? • What are the benefits and costs of requiring real-time scheduling vs. allowing a longer firming and shaping time period? Consider the environmental, economic, regulatory, market, and operational implications of real-time scheduling.

9. Firm Transmission – Panel Qs • How does the use of firm transmission or other scheduling alternatives affect the long-term development of a sustainable and robust regional renewable energy market? Consider California’s and external balancing authorities’ abilities to provide balancing services for intermittent resources. • What transactional parameters should be required if firm transmission transactions are considered bundled? For instance, the type, capacity and duration of transmission arrangements, contractual obligations of the buyer and seller for the RPS contract, and after-the-fact verification.