PJM WEST RELIABILITY ASSURANCE AGREEMENT

Exhibit  10(e)(2)

 

 

PJM WEST RELIABILITY ASSURANCE AGREEMENT

 

Among

 

LOAD SERVING ENTITIES

 

in the

 

PJM WEST REGION

 

This version includes compliance Filings and FERC-approved revisions as of October 28, 2004.

 

 

 

PJM WEST

 

RELIABILITY ASSURANCE AGREEMENT

 

This PJM West RELIABILITY ASSURANCE AGREEMENT, (hereafter “Agreement”) dated as of this 14th day of March, 2001, by and among each entity that becomes a Party to this Agreement by executing a counterpart hereof, hereinafter referred to collectively as the “Parties” and individually as a “Party.”

 

WITNESSETH:

 

WHEREAS, PJM Interconnection, L.L.C., a Delaware limited liability company has amended its operating agreement (the “Amended Operating Agreement”) to extend its market administration and transmission system operator functional control service to utility systems located outside the current PJM Control Area; and

 

WHEREAS, certain entities desire to achieve the benefits of reliable electric service by becoming a party to the Amended Operating Agreement and by sharing certain operating reserve requirements and meeting other operating criteria; and

 

WHEREAS, the Amended Operating Agreement requires that every Load Serving Entity serving load within the PJM West Region become a Party to this Agreement; and

 

WHEREAS, each Party to this Agreement is a Load Serving Entity within the PJM West Region; and

 

WHEREAS, each Load Serving Entity is committing to share Capacity Resources with the other Parties to reduce the overall operating reserve requirements for the Parties while maintaining reliable service; and

 

WHEREAS, PJM Interconnection, L.L.C., is obligated under the Amended Operating Agreement to establish and administer a capacity credit market and perform other responsibilities in order to facilitate the ability of Load Serving Entities to meet their obligations under this Agreement; and

 

WHEREAS, each Load Serving Entity is committing to provide mutual assistance to the other Parties during Emergencies and to meet other obligations designed to achieve reliable electric service;

 

NOW THEREFORE, for and in consideration of the covenants and mutual agreements set forth herein and intending to be legally bound hereby, the Parties agree as follows:

 

ARTICLE 1 — DEFINITIONS

 

Unless the context otherwise specifies or requires, capitalized terms used herein shall have the respective meanings assigned herein or in the Schedules hereto for all purposes of

 

 

this Agreement (such definitions to be equally applicable to both the singular and the plural forms of the terms defined). Unless otherwise specified, all references herein to Articles, Sections or Schedules, are to Articles, Sections or Schedules of this Agreement. As used in this Agreement:

 

1.1 Accounted-For Obligation shall have the meaning set forth in Schedule 7.

 

1.1A [Reserved.]

 

1.2 Agreement shall mean this PJM West Reliability Assurance Agreement, together with all Schedules hereto, as amended from time to time.

 

1.3 Amended Operating Agreement shall mean the “Operating Agreement of PJM Interconnection, L.L.C.” as amended by action of the PJM Members Committee on February 8, 2001, as such agreement may be further amended from time to time.

 

1.4 Applicable Regional Reliability Council shall mean the reliability council for the region in which a Member operates.

 

1.4A ALM shall mean active load management in accordance with Schedule 5.2, and includes Qualified Interruptible Load.

 

1.4B ALM Factor shall mean that factor approved from time to time by the Reliability Committee for use in the determination of credit for ALM in accordance with Schedule 5.2.

 

1.4C Behind The Meter Generation refers to one or more generating units that are located with load at a single electrical location such that no transmission or distribution facilities owned or operated by any Transmission Owner or Electrical Distributor are used to deliver energy from the generating units to the load; provided, however, that Behind The Meter Generation does not include (i) at any time, any portion of such generating units[s]’ capacity that is designated as a Capacity Resource or (ii) in any hour, any portion of the output of the generating unit[s] that is sold to another entity for consumption at another electrical location or into the PJM Interchange Energy Market.

 

1.4D Black Start Capability shall mean the ability of a generating unit or station to go from a shutdown condition to an operating condition and start delivering power without assistance from the power system.

 

1.4E Capacity Credits shall mean the entitlement to a specified number of megawatts of Unforced Capacity for the purpose of satisfying capacity obligations imposed under this Agreement and that are acquired by a Party through bilateral purchase or pursuant to Schedule 11 of the Amended Operating Agreement, or any successor schedule.

 

 

1.5 Capacity Resources shall mean megawatts of net capacity from (i) owned or contracted for generating facilities, all of which are accredited to a Party pursuant to the procedures set forth in Schedules 9 and 10 for purposes of this Agreement and are committed to satisfy that Party’s obligations under this Agreement or (ii) net capacity from resources within the PJM Region not owned or contracted for by a party which are accredited to the PJM Region pursuant to the procedures set forth in Schedules 9 and 10 for purposes of this Agreement.

 

1.6 [Reserved.]

 

1.7 [Reserved.]

 

1.8 Control Area shall mean an electric power system or combination of electric power systems bounded by interconnection metering and telemetry to which a common generation control scheme is applied in order to:

 

 

 

 

 

 

 

1.9 [Reserved.]

 

1.10 ECAR shall mean the reliability council under section 202 of the Federal Power Act, established pursuant to the East Central Area Reliability Coordination Agreement dated June 1, 1968, or any successor thereto.

 

1.11 Effective Date shall mean January 1, 2002 or such other date as is allowed by the FERC.

 

1.12 Electric Distributor shall mean an entity that owns, or leases with rights equivalent to ownership, electric distribution facilities that are providing electric distribution service to electric load within the PJM West Region or MAAC Control Zone.

 

1.13 Emergency shall mean (i) an abnormal system condition requiring manual or automatic action to maintain system frequency, or to prevent loss of firm load, equipment damage, or tripping of system elements that could adversely affect the reliability of an electric system or the safety of persons or property; or (ii) a fuel shortage requiring departure from normal operating procedures in order to minimize the use of such scarce fuel; or (iii) a condition that requires implementation of emergency procedures as defined in the PJM Manuals.

 

1.14 End-Use Customer shall mean a Member that is a retail end-user of electricity within the MAAC Control Zone or PJM West Region.

 

1.14A FERC shall mean the Federal Energy Regulatory Commission or any successor federal agency, commission or department.

 

 

1.15 Firm Point-To-Point Transmission Service shall mean Firm Transmission Service provided pursuant to the rates, terms and conditions set forth in Part II of the PJM Tariff.

 

1.16 Force Majeure shall mean any act of God, labor disturbance, act of public enemy, war, insurrection, riot, fire, storm or flood, explosion, breakage or accident to machinery or equipment, any curtailment, order, regulation or restriction imposed by governmental military or lawfully established civilian authorities, or any other cause beyond a Party’s control. No Party will be considered in default as to any obligation under this Agreement if prevented from fulfilling the obligation due to an event of Force Majeure. However, a Party whose performance under this Agreement is hindered by an event of Force Majeure shall make all reasonable efforts to perform its obligations under this Agreement.

 

1.17 [Reserved.]

 

1.17A [Reserved.]

 

1.18 [Reserved.]

 

1.18A Firm Transmission Service shall mean transmission service that is intended to be available at all times to the maximum extent practicable, subject to an Emergency, an unanticipated failure of a facility, or other event beyond the control of the owner or operator of the facility or the Office of the Interconnection.

 

1.18B Forecast LSE Obligation (MW) shall mean a Party’s obligation established pursuant to Section 6.1.2.

 

1.18C Forecast Pool Requirement shall mean the amount, stated in percent, equal to one hundred plus the percent reserve margin for the PJM Region required pursuant to this Agreement, as approved by the PJM Board, upon the recommendation of the Reliability Committee, pursuant to Schedule 4.

 

1.18D Full Requirements Service shall mean wholesale service to supply all of the power needs of a Load Serving Entity to serve end-users within the PJM Region that are not satisfied by its own generating facilities.

 

 

1.19 Generation Owner shall mean a Member that owns or leases with rights equivalent to ownership facilities for the generation of electric energy that are located within the MAAC Control Zone or PJM West Region. Purchasing all or a portion of the output of a generation facility shall not be sufficient to qualify a Member as a Generation Owner.

 

1.19A Generator Forced Outage shall mean an immediate reduction in output or capacity or removal from service, in whole or in part, of a generating unit by reason of a Emergency or threatened Emergency, unanticipated failure, or other cause beyond the control of the owner or operator of the facility, as specified in the relevant portions of the PJM Manuals. A reduction in output or removal from service of a generating unit in response to changes in market conditions shall not constitute a Generator Forced Outage.

 

1.19B Generator Maintenance Outage shall mean the scheduled removal from service, in whole or in part, of a generating unit in order to perform repairs on specific components of the facility, if removal of the facility qualifies as a maintenance outage pursuant to the PJM Manuals.

 

1.19C Generator Planned Outage shall mean the scheduled removal from service, in whole or in part, of a generating unit for inspection, maintenance or repair with the approval of the Office of the Interconnection in accordance with the PJM Manuals.

 

1.20 Good Utility Practice shall mean any of the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry during the relevant time period, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Good Utility Practice is not intended to be limited to the optimum practice, method, or act to the exclusion of all others, but rather is intended to include acceptable practices, methods, or acts generally accepted in the region.

 

1.21 [Reserved.]

 

1.21A Interval shall be the four-month period commencing June 1, the three-month period commencing October 1 , and the five-month period commencing January 1, provided, however, that solely for purposes of Schedule 17 in calendar year 2004, Interval shall include the one month period beginning May 1 rather than the five-month period beginning January 1.

 

1.21B Interval Deficiency Charge shall be equal to the Deficiency Rate established by the Reliability Committee multiplied by the number of days in each Interval.

 

 

1.22 Load Serving Entity or LSE shall mean any entity (or the duly designated agent of such an entity), including a load aggregator or power marketer, (i) serving end-users within the PJM West Region, and (ii) that has been granted the authority or has an obligation pursuant to state or local law, regulation or franchise to sell electric energy to end-users located within the PJM West Region. Load Serving Entity shall include any end-use customer that qualifies under state rules or a utility retail tariff to manage directly its own supply of electric power and energy and use of transmission and ancillary services.

 

1.23 MAAC shall mean the Mid-Atlantic Area Council, a reliability council under § 202 of the Federal Power Act, established pursuant to the MAAC Agreement dated August 1, 1994, or any successor thereto.

 

1.23A MAAC Control Zone shall mean the aggregate of the Zones of Atlantic City Electric Company, Baltimore Gas and Electric Company, Delmarva Power and Light Company, Jersey Central Power and Light Company, Metropolitan Edison Company, PECO Energy Company, Pennsylvania Electric Company, PPL Electric Utilities Corporation, Potomac Electric Power Company, Public Service Electric and Gas Company and Rockland Electric Company, as shown on Schedule 14.

 

1.23B MAIN shall mean the Mid-America Interconnected Network, a reliability council under section 202 of the Federal Power Act established pursuant to the Amended and Restated Bylaws of MAIN dated January 8, 1998, or any successor thereof.

 

1.23C Member shall mean an entity that satisfies the requirements of Sections 1.24 and 11.6 of the PJM Operating Agreement. In accordance with Article 5 of this Agreement, each Party to this Agreement also is a Member.

 

1.23D Members Committee shall mean the committee specified in Section 8 of the PJM Operating Agreement composed of the representatives of all the Members.

 

1.24 NERC shall mean the North American Electric Reliability Council or any successor thereto.

 

1.25 Network Resources shall have the meaning set forth in the PJM Tariff.

 

1.26 Network Transmission Service shall mean transmission service provided pursuant to the rates, terms and conditions set forth in Part III of the PJM Tariff.

 

1.27 Office of the Interconnection shall mean the employees and agents of PJM Interconnection L.L.C., subject to the supervision and oversight of the PJM Board, acting pursuant to the Amended Operating Agreement.

 

1.28 Operating Agreement of PJM Interconnection, L.L.C. or Operating Agreement shall mean that certain agreement, dated April 1, 1997 and as amended and restated June 2, 1997 and as amended from time to time thereafter, among the members of the PJM Interconnection, L.L.C.

 

 

1.28A Operating Reserve shall mean the amount of generating capacity scheduled to be available for a specified period of an operating day to ensure the reliable operation of the PJM Region, as specified in the PJM Manuals.

 

1.28B Other Supplier shall mean a Member that is (i) a seller, buyer or transmitter of electric capacity or energy in, from or through the MAAC Control Zone or PJM West Region, and (ii) is not a Generation Owner, Electric Distributor, Transmission Owner or End-Use Customer.

 

1.28C Partial Requirements Service shall mean wholesale service to supply a specified portion, but not all, of the power needs of a Load Serving Entity to serve end-users within the PJM Region that are not satisfied by its own generating facilities.

 

1.29 Party shall mean an entity bound by the terms of this Agreement by executing a counterpart hereof.

 

1.29A Peak Party Load shall be the daily summation of the weather adjusted actual coincident summer peak for the previous summer of the end-users for which the Party was responsible on that billing date, as set forth in Schedule 7 of this Agreement.

 

1.29B Peak Season shall have the meaning set forth in Schedule 8.

 

1.29C Peak Season Maintenance shall have the meaning set forth in Schedule 8.

 

1.29D Peak Season Maintenance Obligation shall have the meaning set forth in Schedule 8.

 

1.30 PJM shall mean the PJM Board and the Office of the Interconnection.

 

1.31 PJM Board shall mean the Board of Managers of the PJM Interconnection, L.L.C., acting pursuant to the Amended Operating Agreement.

 

 

1.32 [Reserved.]

 

1.33 PJM Manuals shall mean the instructions, rules, procedures and guidelines established by the Office of the Interconnection for the operation, planning, and accounting requirements of the MAAC Control Zone, the PJM West Region, and the PJM Interchange Energy Market in a manner consistent with Applicable Regional Reliability Council standards.

 

1.34 PJM Open Access Transmission Tariff or PJM Tariff shall mean the tariff for transmission service in the PJM Region, as in effect from time to time, including any schedules, appendices, or exhibits attached thereto.

 

1.34A PJM Region shall mean the aggregate of the PJM West Region and the MAAC Control Zone.

 

1.35 PJM West Region shall mean the aggregate of the Zones of the West Transmission Owners.

 

1.35A Planning Period shall initially mean the 12 months beginning June 1 and extending through May 31 of the following year, or such other period approved by the Members Committee.

 

1.36 Qualified Interruptible Load shall mean load (including pumped storage hydroelectric generation in the pumping mode) subject by contract to interruption by the Transmission Provider and which qualifies as Active Load Management in accordance with Schedule 5.2.

 

1.37 RAA shall mean the reliability assurance agreement among the load-serving entities in the MAAC Control Zone, on file with FERC as PJM Rate Schedule FERC No. 27.

 

1.37A [Reserved.]

 

1.38 [Reserved.]

 

1.39 [Reserved.]