wspp inc. wspp
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WSPP Inc. wspp.org. 20 years of enabling competitive power markets …. Federal Energy Regulatory Commission December 18, 2006. Mission Statement. - PowerPoint PPT PresentationTRANSCRIPT
WSPP Inc. WSPP Inc. wspp.orgwspp.org
20 years of enabling competitive power markets …20 years of enabling competitive power markets …
Federal Energy Regulatory CommissionFederal Energy Regulatory CommissionDecember 18, 2006December 18, 2006
WSPP 20 years of enabling competitive power markets …WSPP 20 years of enabling competitive power markets …2
Mission Statement
To provide a catalyst for an efficient and robust wholesale electric power market that allows WSPP
members to effectively manage their power deliverability and price risk
WSPP 20 years of enabling competitive power markets …WSPP 20 years of enabling competitive power markets …3
• An organization made up members from all walks of the power industry
• An organization with a diverse membership– Buyers and sellers– Private, public and governmental entities – Financial institutions and aggregators– Regional, national and international– Wholesale and retail
Who are we?The most widely used wholesale electric power sales contract in the country …
Just to name a few …
WSPP 20 years of enabling competitive power markets …WSPP 20 years of enabling competitive power markets …4
What are we?
• Established by FERC in 1987 as a multi-state bulk power marketing experiment. The experiment was meant to test whether broader pricing flexibility for coordination and transmission services would promote increased efficiency, competition, and closer coordination of economy sales
• Accepted by FERC on a non-experimental basis in 1991
• Governed by a board of directors of all members comprising the Executive Committee (EC)
A 20 year old organization that has facilitated market evolution …
ExecutiveCommittee
(Board of Directors)
AdministrativeCommittee
OperatingCommittee
ContractingSub-Committee (OC)
OperatingAgent
LegalCounsel
AuditCommittee
WSPP 20 years of enabling competitive power markets …WSPP 20 years of enabling competitive power markets …5
Membership compositionOver 300 members from diverse market sectors …
Investor Owned Utilities
20%
Independent Power Producers
3%
Public Owned Utilities
32%
Retail Providers1%
Marketers &Financial
Instituations44%
WSPP 20 years of enabling competitive power markets …WSPP 20 years of enabling competitive power markets …6
Membership changes with the marketOver 300 members and growing …
0
25
50
75
100
125
150
175
200
225
250
275
300
325 16 New Members in 2006 (so far…)
Mirant Energy Trading, LLCClark County Public Utilities (Clark County PUD #1)Cinergy Marketing & Trading, LLPOld Lane Commodities, LPAlcoa Power Marketing, Inc.Safeway, Inc.Midwest Energy, Inc.Credit Suisse Energy, LLCCity of Alma, KSCity of Iola, KSCity of Scranton, KSCity of Wathena, KSKlickitat PUD (Klickitat County PUD #1)Central Arizona Water Conservation DistrictCity of Moreno Valley, CAPower and Water Resources
WSPP 20 years of enabling competitive power markets …WSPP 20 years of enabling competitive power markets …7
Geographical reach changes with membershipWe cut across almost all NERC Regions …
CA > 45
WA > 15
OR > 10
DC = 214
CT = 6
DE = 1
7
6
MA = 6
5
10
NJ = 1
9
> 35
9
MD=2
9
WSPP 20 years of enabling competitive power markets …WSPP 20 years of enabling competitive power markets …8
WSPP promotes open membershipMembership requirements create ease of market entry …
• All market participants are eligible• Designate a member to the Executive and Operating committees• Be a signatory to the WSPP Power Sales Agreement• Obtain FERC approval if jurisdictional• Maintain or contract for 24 hour scheduling coverage• Minimal membership fee
• The organization conducts at least three meetings annually of all members and more frequently to address contractual matters
• One member equals one vote regardless of size
• A 90% approval vote of the Executive Committee is required to amend the contract
Organizational requirements are minimal …
WSPP 20 years of enabling competitive power markets …WSPP 20 years of enabling competitive power markets …9
WSPP adds value …A proven industry standard ….
To the member:
• Access to over 300 contractual parties and growing
• Reduced transactional costs and improved risk management
• Standardized and widely accepted throughout the western markets
• Used in all active mediums – brokers, bilateral, electronic exchanges
• Not entity or geographically limited
• Body of case law supporting the contract
• Comfort – developed by members for members
WSPP 20 years of enabling competitive power markets …WSPP 20 years of enabling competitive power markets …10
WSPP adds value …A proven industry standard ….
To the market:
• Facilitates market liquidity
• Price discovery – Multiple buyers and sellers– Daily published indices
• Contributes to market efficiencies
• Increases system reliability through greater availability of generation
• Reduces end-user costs
• Can be used by centralized market participants to transact in the forward markets which enables greater risk management
WSPP 20 years of enabling competitive power markets …WSPP 20 years of enabling competitive power markets …11
Elements of the agreementThe product descriptions and contract provisions have already been agreed to...
Major components of the agreement:• Products
– Schedule A – Economy Energy Service – Schedule B – Unit Commitment Service – Schedule C – Firm Sales or Exchange Service
• Pricing– Market based
– Cost based
• Credit worthiness and assurances• Forced majeure• Non performance/damages • Dispute resolution process• Default/termination
WSPP 20 years of enabling competitive power markets …WSPP 20 years of enabling competitive power markets …12
Agreement usageTransacting with simplicity …
Executing a transaction is streamlined down to agreement on:
• Number of megawatts
• Point of delivery
• Delivery hours (on-peak or off-peak)
• Delivery timeframe (e.g. “July – September 2007”)
• Schedule (e.g. “WSPP Schedule C”)
• Price
Used to transact in various delivery periods:
• Real-time
• Pre-schedule
• Balance of month
• Prompt month
• Term
WSPP 20 years of enabling competitive power markets …WSPP 20 years of enabling competitive power markets …13
Strategic effortsMeeting the needs of its members …
Improving communications with members:• Website redevelopment• www.wspp.org
Positioning the organization for broader membership:• Changing the organizational name from: Western System Power Pool, Inc., to WSPP
Inc. to reflect national market presence and increase the appeal to eastern markets• Holding committee meetings in non-western locations
Maintaining the usability of the contract for its members:• Continue to evolve the contract to keep pace with changes in the energy marketplace
WSPP 20 years of enabling competitive power markets …WSPP 20 years of enabling competitive power markets …14
WSPP
Power
Sales
Agreement
Price
Discovery
Market
Liquidity
Risk
Management
Standard
Terms
WSPP looking forward to the next 20 years of enabling wholesale power markets …
WSPP 20 years of enabling competitive power markets …WSPP 20 years of enabling competitive power markets …15
Attendees
Jeff Atkinson (incoming Chairman)Public Utility District of Grant County(509) 754-5059 [email protected]
William Gaines (Vice Chairman)Superintendent / COOTacoma Power(253) [email protected]
Duane Farmer (current Chairman) Director of Fuels and Wholesale Market Policy Public Service Company of New Mexico
(505) 855-6200 [email protected]
Jim Lobdell (Secretary/Treasurer)VP Power Operations & Resource StrategyPortland General Electric(503) [email protected]
Bobby Campo (Operating Committee Chairman)Operating AgentWSPP(707) [email protected]
Arnie Podgorsky WSPP CounselWright & Talisman, P.C.(202) 393-1200