Common use of Problem Definition Clause in Contracts

Problem Definition. 1.1.1 The Nature of Energy Flows Energy flows are distinctly different from the manner in which the energy commodity is purchased, sold, and ultimately scheduled. In the current practice of “contract path” scheduling, schedules identify a source point for generation of energy, a series of wheeling agreements being utilized to transport that energy, and a specific sink point where that energy is being consumed by a load. However, due to the electrical characteristics of the Eastern Interconnection, energy flows are more dispersed than what is described within that schedule. This disconnect becomes of concern when there is a need to take actions on contract-path schedules to effect changes on the physical system (for example, the curtailment of schedules to relieve transmission constraints). In the Eastern Interconnection, much of this concern has been addressed through the use of the North American Electric Reliability Corporation (NERC) and/or North American Energy Standards Board (NAESB) TLR process. Through this process, Reliability Coordinators utilize the IDC to determine appropriate actions to provide that relief. The IDC bases its calculations on the use of transaction tags: electronic documents that specify a source and a sink, which can be used to estimate real power flows through the use of a network model. In order to change flows, the IDC is given a particular constraint and a desired change in flows. The IDC returns back all source to sink transactions that contribute to that constraint and specifies schedule changes to be made that will effect that change in flows. In other parts of the Eastern Interconnection, however, the use of centralized economic dispatch results in a solution that does not focus on changing entire transactions (effectively redispatching through the use of imbalance energy), but rather redispatch itself. In this procedure, the party attempting to provide relief does not need to know that a balanced source to sink transaction should be adjusted; rather, they are aware of a net generation to load balance and the impacts of different generators on various constraints. Bid-based security constrained central dispatch based on Locational Marginal Pricing is a regional implementation of this practice. Currently, these two practices are somewhat incompatible. Due to the electrical characteristics of the Interconnection and geographic scope of the regions, this incompatibility has been of limited concern. However, regional market expansion has begun to draw attention to this operational disjoint, as the expansion itself exacerbates the negative effects of the incompatibility.