Common use of Reduced Data and Granularity Coarseness Clause in Contracts

Reduced Data and Granularity Coarseness. As centrally dispatched energy markets expand their footprint, two related changes occur with regard to the above process. In some cases, data previously sent to the IDC is no longer sent due to the fact that it is no longer tagged. In others, transactions remain tagged, but the increased market footprint results in an increase in granularity coarseness within the IDC; that is, the apparent Control Area boundary becomes the same as the market boundary so that what had been historically 30 or more Control Areas now appears as one. In the first change, transactions contained entirely within the market footprint are considered to be utilizing network service (even when the market spans multiple Control Areas). As such, there is no requirement for them to be tagged (or such requirement is waived by NERC), and therefore, no requirement that they be sent to the IDC. This is of concern from a reliability perspective, as the IDC will no longer have a large pool of transactions from which to provide relief, although the energy flows may remain consistent with those prior to the market expansion. In other words, flows subject to TLR curtailment prior to the market expansion are no longer available for that process. In the second change, the expansion of the footprint itself results in a dilution of the approximation utilized by the IDC. When a market region is relatively small (or isolated), the Control Area to Control Area approximation of that region’s impact on transmission constraints is acceptable; actions within the market footprint generally have a similar and consistent impact on all transmission facilities outside the footprint. However, when the market footprint expands significantly, and is co-mingled with non- market Control Areas, the ability to utilize the historic approximation of electrically representative flows fails to effectively predict energy flow. Impacts on external facilities can vary significantly depending on the dispatch of the resources within the market footprint. With regard to the IDC, this information is effectively lost within the expanded footprint, and results in an increase in the level of granularity coarseness, or a “loss of granularity.”

Reduced Data and Granularity Coarseness. As centrally dispatched energy markets expand their footprint, two related changes occur with regard to the above process. In some cases, data previously sent to the IDC is no longer sent due to the fact that it is no longer tagged. In others, transactions remain tagged, but the increased market footprint results in an increase in granularity coarseness within the IDC; that is, the apparent Control Area boundary becomes the same as the market boundary so that what had been historically 30 or more Control Areas now appears as one. In the first change, transactions contained entirely within the market footprint are considered to be utilizing network service (even when the market spans multiple Control Areas). As such, there is no requirement for them to be tagged (or such requirement is waived by NERC), and therefore, no requirement that they be sent to the IDC. This is of concern from a reliability perspective, as the IDC will no longer have a large pool of transactions from which to provide relief, although the energy flows may remain consistent with those prior to the market expansion. In other words, flows subject to TLR curtailment prior to the market expansion are no longer available for that process. In the second change, the expansion of the footprint itself results in a dilution of the approximation utilized by the IDC. When a market region is relatively small (or isolated), the Control Area to Control Area approximation of that region’s impact on transmission constraints is acceptable; actions within the market footprint generally have a similar and consistent impact on all transmission facilities outside the footprint. However, when the market footprint expands significantly, and is co-mingled with non- non-market Control Areas, the ability to utilize the historic approximation of electrically representative flows fails to effectively predict energy flow. Impacts on external facilities can vary significantly depending on the dispatch of the resources within the market footprint. With regard to the IDC, this information is effectively lost within the expanded footprint, and results in an increase in the level of granularity coarseness, or a “loss of granularity.”

Reduced Data and Granularity Coarseness. As centrally dispatched energy markets expand their footprint, two related changes occur with regard to the above process. In some cases, data previously sent to the IDC is no longer sent due to the fact that it is no longer tagged. In others, transactions remain tagged, but the increased market footprint results in an increase in granularity coarseness within the IDC; that is, the apparent Control Area control area boundary becomes the same as the market boundary so that what had been historically 30 or more Control Areas control areas now appears as one. In the first change, transactions contained entirely within the market footprint are considered to be utilizing network service (even when the market spans multiple Control Areas). As such, there is no requirement for them to be tagged (or such requirement is waived by NERC), and therefore, no requirement that they be sent to the IDC. This is of concern from a reliability perspective, as the IDC will no longer have a large pool of transactions from which to provide relief, although the energy flows may remain consistent with those prior to the market expansion. In other words, flows subject to TLR curtailment prior to the market expansion are no longer available for that process. In the second change, the expansion of the footprint itself results in a dilution of the approximation utilized by the IDC. When a market region is relatively small (or isolated), the Control Area control area to Control Area control area approximation of that region’s impact on transmission constraints is acceptable; actions within the market footprint generally have a similar and consistent impact on all transmission facilities outside the footprint. However, when the market footprint expands significantly, and is co-mingled with non- non-market Control Areascontrol areas, the ability to utilize the historic approximation of electrically representative flows fails to effectively predict energy flow. Impacts on external facilities can vary significantly depending on the dispatch of the resources within the market footprint. With regard to the IDC, this information is effectively lost within the expanded footprint, and results in an increase in the level of granularity coarseness, or a “loss of granularity.”