Avista violated its own tariff by requiring the Bonneville Power Administration to acquire firm point-to-point transmission service to deliver operating reserves from a resource located outside Avista’s balancing area to a BPA customer situated within, FERC said last week (EL20-36).

Under FERC’s pro forma Open Access Transmission Tariff, load-serving transmission customers must obtain operating reserves along with transmission service. Reserves can either be purchased from the transmission provider or a third party, or be self-supplied.

BPA purchases network transmission service from Avista to serve customer load located within the utility’s BA, an arrangement that historically included the purchase of operating reserves. In 2018, the federal power marketing administration notified Avista that it would begin to self-supply those reserves from its own generation outside the BA.

“This was the first instance in which an Avista transmission customer had opted to self-supply operating reserves,” FERC noted in its order Thursday.

Avista then informed BPA that it would need to acquire additional firm point-to-point transmission service to deliver the self-supplied reserves in the utility’s territory. The utility also noted it had revised its business practice manual to reflect the requirement.

BPA responded with a complaint to FERC, contending that the new self-supply business practice violates the Federal Power Act because:

• it is unduly discriminatory and preferential by imposing additional costs on BPA’s self-supplied operating reserves that are not applied to Avista’s reserves;
• it is unjust and unreasonable to require transmission customers to pay an additional charge to self-supply reserves; and
• Avista had not filed the business practice manual change with FERC under FPA Section 205.

BPA contended that it was delivering the same reserve product designated to meet the same contingencies, the only difference being the location of the supply. It also argued that there is no NERC reliability factor that justifies treating reserves from off-system resources differently from those originating from internal resources.

“Furthermore, Bonneville asserts that when Avista receives off-system operating reserves from the Northwest Power Pool Reserve Sharing Group, Avista does not procure additional firm point-to-point transmission service,” FERC noted.

Avista countered that, in order to be comparable to its supply of operating reserves and fully serve load, BPA’s reserves must be delivered to the AVA.SYS delivery point on the utility’s system, the point from which it deploys all operating reserves within its system.

Avista argued that it would not be sufficient for BPA to deliver those reserves to the AVA.BPAT delivery point, which represents the boundary between the entities’ systems, because it is considered neither a source nor sink.

Furthermore, Avista contended that BPA could not use its firm network transmission service to deliver the operating reserves from AVA.BPAT to AVA.SYS because the utility’s tariff stipulates that network transmission service is used to deliver capacity and energy from the customer’s designated network resources to its network loads, while the BPA generation being set aside as operating reserves would not be supplying network load.

BPA responded that the commission did not have to resolve the issue of where the operating reserves are delivered but should address Avista’s disparate treatment of each’s reserves. BPA said it would be willing to deliver its self-supplied reserves to any point as long as Avista’s resources are subject to the same requirements.

‘Inappropriate’ Restriction

In its order, FERC noted the proceeding contained no dispute about whether self-supplied operating reserves deployed from designated network resources within Avista’s BA can use a transmission customer’s existing network service and not be required to obtain additional service.

“Indeed, Avista acknowledges that it does not reserve and use additional transmission service for its own operating reserves,” the commission wrote.

The question, FERC clarified, is whether Avista may require that reserves outside its territory must obtain additional firm service.

“We find that the transmission used by operating reserves deployed from designated network resources — regardless of whether those resources are located within Avista’s balancing area or outside it — is part of the network transmission service for which the network transmission customer has paid,” FERC found.

The commission noted that a previous opinion determined that “operating reserves ‘are reservation services that do not require additional transmission.’”

“We are not persuaded by Avista’s arguments that the location of the operating reserves, or the fact that Bonneville lacks designated network resources within Avista’s balancing area, justifies the assessment of additional transmission charges for operating reserves that are provided in conjunction with taking transmission service,” the commission said.

FERC additionally ruled that Avista was violating its own tariff by not allowing network transmission service customers to use their service to deploy reserves from outside the BA.

“Specifically, section 28.3 of Avista’s tariff states that Avista ‘will provide firm transmission service over its transmission system to the network customer for the delivery of capacity and energy from its designated network resources to service its network loads on a basis that is comparable to the transmission provider’s use of the transmission system to reliably serve its native load customers,’” the commission said.

“Avista’s requirement to reserve and use additional firm point-to-point transmission service to transmit operating reserves deployed from designated network resources located outside of Avista’s balancing area inappropriately restricts the network transmission customer’s use of its network transmission service,” FERC continued.

But the commission would make not issue a determination over whether BPA’s operating reserves deployed from resources are eligible to use the existing transmission service.

“The record is unclear about whether the Bonneville resources from which it will deploy operating reserves meet the requirements to be designated as network resources under the Avista tariff, and nothing in this order finds that the resources that Bonneville wants to rely on for the operating reserves at issue are designated network resources under Avista’s tariff,” the commission concluded.